Exhibit 10.1

Execution Copy

DATED the 13th day of May, 2007.

BETWEEN

Brian Munro, John Johnson, John Benedictus, Marilyn Benedictus,

John McDonald, Martin Bouma, Brenda Bouma, Denis Norman,

Paul Leonard, Thomas Jackson, Brian Munro Family Trust,

John Johnson Family Trust, John Benedictus Family Trust,

Little Creek Farm Trust, Martin Bouma Family Trust,

Denis Norman Family Trust, Paul Leonard Family Trust,

and Tom Jackson Family Trust

- and -

TISI ACQUISITION INC.

- and -

TEAM INDUSTRIAL SERVICES, INC.

in respect of the Purchase by TISI Acquisition Inc. and Team Industrial
Services, Inc.

of

B. Munro Holdings Inc., J. Johnson Holdings Inc., J. Benedictus Holdings Inc.,

Little Creek Holdings Inc., M. Bouma Holdings Inc., D. Norman Holdings Inc.,

P. Leonard Holdings Inc. and Topher Holdings Inc.

- and -

Aitec Holdings Inc., Aitec License Inc., Aitec Inc., Aitec (Western) Inc., Aitec
Shareholding Inc., Aitec Investments Inc. and Weldsonix International Inc.

- and -

Aitec Investments USA Inc., Aitec USA Inc. and Weldsonix Inc. .

 

--------------------------------------------------------------------------------

SHARE PURCHASE AGREEMENT

 

--------------------------------------------------------------------------------

Fraser Milner Casgrain LLP

1 First Canadian Place

100 King Street West

Toronto, Ontario

M5X 1B2

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

ARTICLE 1 INTERPRETATION 1.1    Definitions    4 1.2    Recitals    17 1.3   
Accounting Principles    17 1.4    Governing Law; Attornment    18 1.5    Entire
Agreement; Amendment    18 1.6    Calculation of Time    18 1.7    Performance
on Holidays    18 1.8    Waiver of Rights    18 1.9    Knowledge    19 1.10   
Tender    19 1.11    Severability    19 1.12    Conflict    19 1.13    Consents
and Approvals    19 1.14    Remedies Cumulative    20 1.15    Additional Rules
of Interpretation    20 1.16    Schedules and Exhibits    21 ARTICLE 2 PURCHASE
AND SALE OF SHARES 2.1    Transaction Steps    23 2.2    Amount of Purchase
Prices    23 2.3    Estimated Canadian Purchase Price    24 2.4    Preparation
of Closing Balance Sheet    24 2.4.1    Initial Preparation    24 2.4.2   
Dispute Settlement    24 2.5    Payment of Purchase Prices    25 2.6   
Adjustments for Uncollectible Accounts Receivable    25 2.7    Settlement of
Litigation Matters    26 2.8    Delivery of Share Certificates    27 2.9   
Place of Closing    27 ARTICLE 3 REPRESENTATIONS AND WARRANTIES 3.1   
Representations and Warranties of the Canadian Vendors with respect to the Aitec
Business and the Aitec Subsidiaries    28 3.1.1    Incorporation and
Organization    28 3.1.2    Corporate Records    28 3.1.3    Qualification to do
Business    29 3.1.4    Authorized and Issued Capital    29

--------------------------------------------------------------------------------

3.1.5    Title to Shares    29 3.1.6    Investments    29 3.1.7    No Obligation
to Issue Securities    30 3.1.8    Conflicting Instruments    30 3.1.9   
Regulatory Approvals    30 3.1.10    Books and Records    31 3.1.11    Audited
Financial Statements    31 3.1.12    No Material Change    31 3.1.13    No
Liabilities    31 3.1.14    Aitec Business Carried on in Ordinary Course    32
3.1.15    No Guarantees    33 3.1.16    Non-Arm’s Length Transactions    34
3.1.17    Aitec Employees    34 3.1.18    Aitec Employee Benefit Plans    36
3.1.19    Debt Instruments    41 3.1.20    Real Property    41 3.1.21    Status
of Leased Property    41 3.1.22    Lease and Leased Property    42 3.1.23   
Personal Property    42 3.1.24    Equipment Leases    42 3.1.25    Licences and
Compliance with Applicable Laws    43 3.1.26    Sufficiency and Condition of
Assets    43 3.1.27    Insurance    43 3.1.28    Contracts    44 3.1.29   
Customers and Suppliers    45 3.1.30    Legal Proceedings    45 3.1.31   
Banking Information    46 3.1.32    Tax Matters    46 3.1.33    Accounts
Receivable    49 3.1.34    Environmental Matters    50 3.1.35    Intellectual
and Industrial Property    51 3.2    Representations and Warranties of the
Canadian Vendors with respect to the Canadian Vendors and the Canadian Holding
Companies    52 3.2.1    Formation of the Trusts Shareholders    53 3.2.2   
Authorization of Purchase by Canadian Vendors    53 3.2.3    Incorporation and
Organization of the Canadian Holding Companies    53 3.2.4    Corporate Records
   54 3.2.5    Authorized and Issued Capital    54 3.2.6    Title to Canadian
Purchased Shares    54 3.2.7    Investments    54 3.2.8    No Obligation to
Issue Securities    54 3.2.9    Conflicting Instruments    55 3.2.10    Books
and Records    55 3.2.11    No Liabilities    55 3.2.12    Business Carried On
   55 3.2.13    No Guarantees    56

 

ii

--------------------------------------------------------------------------------

3.2.14    Non-Arm’s Length Transactions    56 3.2.15    Canadian Employees    56
3.2.16    Debt Instruments    56 3.2.17    Contracts and Assets    56 3.2.18   
Legal Proceedings    57 3.2.19    Banking Information    57 3.2.20    Tax
Matters    57 3.2.21    Residence of the Canadian Vendors    59 3.3   
Representations and Warranties of the Canadian Purchaser    59 3.3.1   
Incorporation, Authority and Enforceability    59 3.4    Representations and
Warranties of the US Purchaser    59 3.4.1    Incorporation, Authority and
Enforceability    60 3.5    Interpretation    60 3.6    Commission    60 3.7   
Non-Waiver    60 3.8    Survival of Representations and Warranties of the
Canadian Vendors    60 3.9    Survival of Representations and Warranties of the
Canadian Purchaser    61 ARTICLE 4 OTHER COVENANTS OF THE PARTIES 4.1   
Covenants of the Canadian Vendors    62 4.1.1    Satisfy Conditions    62 4.1.2
   Investigations and Availability of Records    62 4.1.3    Consents and
Approvals    62 4.1.4    Amalgamation    63 4.1.5    Conduct of the Canadian
Business and the US Business    63 4.1.6    Canadian Employee Severance and
Termination    66 4.1.7    Payment of Accrued Bonuses    66 4.2    Covenants of
the Purchasers    66 4.2.1    Canadian Employee Severance and Termination    67
4.2.2    Tax Matters    67 4.2.3    E&O/Liability Insurance    68 4.2.4    Sale
of the Aitec Business    68 4.3    Mutual Covenants    68 4.3.1    Transaction
Steps    68 4.3.2    Cooperation    68 ARTICLE 5 CONDITIONS OF CLOSING 5.1   
Conditions for the Benefit of the Canadian Purchaser and US Purchaser    69
5.1.1    Representations, Warranties and Covenants of the Canadian Vendors
Regarding the Period Prior to the Amalgamation    69 5.1.2    Representations,
Warranties and Covenants of the Canadian Vendors as of the Closing Time    70
5.1.3    Amalgamation    70

 

iii

--------------------------------------------------------------------------------

5.1.4    Legal Opinion    70 5.1.5    No Adverse Change    71 5.1.6    Consents
   71 5.1.7    Regulatory Approvals    71 5.1.8    No Legal Proceedings    71
5.1.9    Resignations and Releases    71 5.1.10    Satisfaction with Due
Diligence    72 5.1.11    Closing Documents    72 5.1.12    New Employment
Agreements    72 5.1.13    Non-Competition and Non-Solicitation Agreements    72
5.1.14    Mutual Releases    73 5.1.15    Repayment of Debt Instruments and
Discharge of Encumbrances    73 5.1.16    Satisfaction Letters of Note Holders
   73 5.1.17    CIT Consents    73 5.1.18    Intercompany Accounts    73 5.1.19
   Board Approval    73 5.1.20    Holdback Agreement    73 5.1.21   
Representations and Warranties Insurance Policy    73 5.1.22    Unanimous
Shareholders Agreement    74 5.2    Conditions for the Benefit of the Canadian
Vendors    74 5.2.1    Payment of the Purchase Price    74 5.2.2    Mutual Full
and Final Releases    74 5.2.3    Closing Documents    74 5.2.4    No Legal
Proceedings    74 5.2.5    Truth of Representations and Warranties of the
Canadian Purchaser and the US Purchaser    75 5.2.6    Legal Opinion    75 5.2.7
   Holdback Agreement    75 5.2.8    Certain Employment Offers    76 5.2.9   
CIT Consents    76 5.3    Waiver    76 5.4    Failure to Satisfy Conditions   
76 5.5    Damage or Expropriation    76 ARTICLE 6 INDEMNIFICATION 6.1   
Indemnification by Canadian Vendors    77 6.2    Indemnification by the Canadian
Purchaser    78 6.3    Agency for Representatives    79 6.4    Notice of Third
Party Claims    79 6.5    Defence and Funding of Third Party Claims    79 6.6   
Assistance for Third Party Claims    80 6.7    Settlement of Third Party Claims
   80 6.8    Direct Claims    80 6.9    Failure to Give Timely Notice    81 6.10
   Reductions and Subrogation    81

 

iv

--------------------------------------------------------------------------------

6.11    Tax Effect    81 6.12    Payment and Interest    81 6.13    Limitation
   82 6.14    Additional Rules and Procedures    82 ARTICLE 7 MISCELLANEOUS 7.1
   Further Assurances    82 7.2    Public Announcements    83 7.3    Notices   
83 7.4    Time of the Essence    83 7.5    Costs and Expenses    83 7.6   
Effect of Closing    83 7.7    Counterparts    83 7.8    Assignment    84 7.9   
Parties in Interest    84 7.10    Third Parties    84

 

v

--------------------------------------------------------------------------------

THIS AGREEMENT dated the 13th day of May, 2007

BETWEEN:

 

  Brian Munro, an individual resident in the Town of Grimsby, Province of
Ontario, (“Munro”)   - and -   John Johnson, an individual resident in the Town
of Halton Hills, Province of Ontario, (“Johnson”)   - and -   John Benedictus,
individual residents in the City of Sarnia, Province of Ontario, (“J.
Benedictus”)   - and -   Marilyn Benedictus, individual residents in the City of
Sarnia, Province of Ontario, (“M. Benedictus”)   - and -   John McDonald, an
individual resident in the Town of Caledonia, Province of Ontario, (“McDonald”)
  - and -   Martin Bouma, individual residents in the City of Sarnia, Province
of Ontario, (“M. Bouma”)   - and -   Brenda Bouma, individual residents in the
City of Sarnia, Province of Ontario, (“B. Bouma”)   - and -   Denis Norman, an
individual resident in the City of Oshawa, Province of Ontario, (“Norman”)   -
and -   Paul Leonard, an individual resident in the City of Burlington, Province
of Ontario, (“Leonard”)   - and -

--------------------------------------------------------------------------------

  Thomas Jackson, an individual resident in the City of Hamilton, Province of
Ontario, (“Jackson”)   - and -   Brian Munro Family Trust, a trust formed under
the laws of Ontario by its trustees Brian Munro and Betty Lou Munro, (“Munro
Trust”)   - and -   John Johnson Family Trust, a trust formed under the laws of
Ontario by its trustees John Johnson and Peggy Johnson, (“Johnson Trust”)   -
and -   John Benedictus Family Trust, a trust formed under the laws of Ontario
by its trustees John Benedictus and Marilyn Benedictus, (“Benedictus Trust”)   -
and -   Little Creek Farm Trust, a trust formed under the laws of Ontario by its
trustee John McDonald, (“Little Creek Trust”)   - and -   Martin Bouma Family
Trust, a trust formed under the laws of Ontario by its trustees Martin Bouma and
Brenda Bouma, (“Bouma Trust”)   - and -   Denis Norman Family Trust, a trust
formed under the laws of Ontario by its trustee Denis Norman, (“Norman Trust”)  
- and -   Paul Leonard Family Trust, a trust formed under the laws of Ontario by
its trustee Paul Leonard, (“Leonard Trust”)   - and -   Tom Jackson Family
Trust, a trust formed under the laws of Ontario by its trustee Tom Jackson,
(“Jackson Trust”)  

- and -

 

2.

--------------------------------------------------------------------------------

  TISI ACQUISITION INC., a corporation incorporated under the laws of the
Province of Ontario,   (the “Canadian Purchaser”)   - and –   TEAM INDUSTRIAL
SERVICES, INC., a corporation incorporated under the laws of the State of Texas
  (the “US Purchaser”)

RECITALS:

1. Munro, McDonald, Norman, Leonard, Jackson, Johnson, J. Benedictus, M.
Benedictus, M. Bouma, and B. Bouma (collectively, the “Individual Shareholders”)
are, respectively, the registered and beneficial owners of all of the issued and
outstanding Class A and Class B Special Shares in the capital of each of B.
Munro Holdings Inc., Little Creek Holdings Inc. and D. Norman Holdings Inc.
(collectively, the “Major Holdcos”), and P. Leonard Holdings Inc., Topher
Holdings Inc., J. Johnson Holdings Inc., J. Benedictus Holdings Inc., and M.
Bouma Holdings Inc. (the “Minor Holdcos”, and together with the “Major Holdcos”
and Aitec Shareholding Inc., the “Canadian Holding Companies”);

2. Munro Trust, Little Creek Trust, Norman Trust, Leonard Trust, Jackson Trust,
Johnson Trust, Benedictus Trust and Bouma Trust (collectively, the “Trusts
Shareholders”) are respectively, the registered and beneficial owners of all of
the issued and outstanding Common Shares in the capital of each of the Canadian
Holding Companies;

3. Weldsonix International Inc. (the “US Vendor”) is the owner of all of the
issued and outstanding shares of Aitec Investments USA Inc., which owns all of
the issued and outstanding shares of Weldsonix Inc. and Aitec USA Inc., which
are collectively referred to as the “US Subsidiaries”;

4. The US Purchaser wishes to purchase and the US Vendor wishes to sell all of
the issued and outstanding shares in the capital of Aitec Investments USA Inc.
for the purchase price and upon the terms and conditions hereinafter set forth;

5. The Minor Holdcos are the direct owners of all of the issued and outstanding
shares of Aitec Shareholding Inc. Aitec Shareholding Inc. and the Major Holdcos
are the direct owners of all of the issued and outstanding shares of Aitec
Holdings Inc. Aitec Holdings Inc. is the direct owner of all of the issued and
outstanding shares of Aitec License Inc., which is the direct owner of all of
the issued and outstanding shares of each of Aitec Inc. and Aitec (Western) Inc.
The Trust Shareholders, together with Aitec Holdings Inc. are the direct owners
of all of the issued and outstanding shares of Aitec Investments Inc., which is
the direct owner of all of the issued and outstanding shares of Weldsonix
International Inc. Aitec Holdings Inc., Aitec License Inc., Aitec Inc., Aitec
(Western) Inc., Aitec Investments Inc. and Weldsonix International Inc. are
collectively referred to as the “Canadian Subsidiaries”;

 

3.

--------------------------------------------------------------------------------

6. The Canadian Vendors have agreed to cause the Canadian Holding Companies and
certain of the Canadian Subsidiaries to amalgamate immediately prior to the
Closing (the resulting corporation being “Amalco”);

7. The Canadian Purchaser wishes to purchase and the Canadian Vendors wish to
sell all of the issued and outstanding shares in the capital of Amalco for the
purchase price and upon the terms and conditions hereinafter set forth;

NOW THEREFORE in consideration of the premises and mutual agreements hereinafter
set out and of other consideration (the receipt and sufficiency of which are
acknowledged by each Party), the Parties agree as follows:

ARTICLE 1

INTERPRETATION

 

1.1 Definitions

In this Agreement:

“Accounting Records” means all of the books of account, accounting records and
other financial data and information, of the Canadian Holding Companies, the
Canadian Subsidiaries and the US Subsidiaries, and includes all records, data
and information stored electronically, digitally or on computer related media;

“Accounts Receivable” means the Canadian Accounts Receivable and the US Accounts
Receivable;

“Adjustment Date” means the third (3rd) Business Day after the Closing Working
Capital is finally determined in accordance with Section 2.4;

“Affiliate” means, with respect to any person, any other person that directly or
indirectly controls, is controlled by, or is under common control with that
other person. For purposes of this definition, a person “controls” another
person if that person directly or indirectly possesses the power to direct or
cause the direction of the management and policies of that other person, whether
through ownership of securities, by contract or otherwise and “controlled by”
and “under common control with” have similar meanings;

“Aitec Business” means the Canadian Business and the US Business;

“Aitec Employees” means the Canadian Employees and the US Employees;

“Aitec Employee Benefit Plans” means the Canadian Employee Benefit Plans and the
US Employee Benefit Plans;

“Aitec Holdings Group” means the Canadian Holding Companies and the Aitec
Subsidiaries;

“Aitec Subsidiaries” means the Canadian Subsidiaries and the US Subsidiaries;

 

4.

--------------------------------------------------------------------------------

“Agreement” means this share purchase agreement and all Schedules and Exhibits
attached hereto;

“Amalco” means the entity resulting from the amalgamation of the Amalgamating
Companies;

“Amalgamating Companies” means the Major Holdcos, the Minor Holdcos, Aitec
Shareholding Inc., Aitec Holdings Inc, Aitec Investments Inc., Weldsonix
International Inc. and Aitec License Inc.

“Amalgamation” means the amalgamation, to take place at the time set out in the
Transaction Steps, of the Amalgamating Companies pursuant to Section 174 of the
Business Corporations Act (Ontario) to continue as Amalco, with Amalco having
authorized capital consisting of an unlimited number of common shares and an
unlimited number of Class A Special Shares, of which 925,360 common shares and
6,049,917 Class A Special Shares of Amalco shall be validly issued and
outstanding as fully paid and non-assessable shares to each of the Canadian
Vendors, as more particularly described in Schedule 3.1.4;

“Applicable Law” means, in respect of any person, property, transaction or
event, any domestic or foreign statute, or law (including the civil and common
law), or ordinance, rule, regulation, treaty, restriction, regulatory policy,
standard, practice, directive, code, guideline, by-law (zoning or otherwise) or
Order of any Governmental Authority that applies in whole or in part to such
person, property, transaction or event, and includes Licences and consent
decrees to which the Canadian Vendors, the US Vendor, the Purchasers, the
Canadian Holding Companies, Aitec Subsidiaries or any other entities or persons,
as applicable, are a party or are otherwise subject, judgments, orders,
decisions and rulings of any Governmental Authority, and includes Environmental
Laws;

“Articles” means, with respect to any body corporate, the original or restated
articles of incorporation, certificate of incorporation, articles of amendment,
articles of amalgamation, articles of arrangement, articles of reorganization,
articles of revival, letters patent, memorandum of agreement, special Act or
statute and any other instrument or constating document by or pursuant to which
the body corporate is incorporated or comes into existence;

“Audited Financial Statements” means the combined audited financial statements
identified as “Combined Financial Statements of Aitec Holdings Group,
September 30, 2006”, and attached hereto as Schedule 1.1A;

“Books and Records” means the Accounting Records and all books, records, books
of account, sales and purchase records, lists of suppliers and customers, credit
and pricing information, personnel and payroll records, production, inventory
and accounts receivable data, formulae, business, engineering and consulting
reports and research and development information and plans and projections of or
relating to the Canadian Holding Companies, the Aitec Subsidiaries or the Aitec
Business, as applicable, and all other documents, files, records, maps, site
plans, surveys, soil and substratum studies, as–built drawings, appraisals,
electrical and mechanical plans and studies, correspondence, and other data and
information, financial or otherwise, which are relevant to the Canadian Holding
Companies, the Aitec Subsidiaries or the

 

5.

--------------------------------------------------------------------------------

Aitec Business, as applicable, including all data and information stored
electronically, digitally or on computer related media;

“Business Day” means a day other than a Saturday, Sunday or any other day on
which the principal chartered banks located in the City of Toronto or the major
banks located in the City of Houston are not open for the transaction of
domestic business during normal banking hours;

“Canadian Accounts Receivable” means accounts receivable of the Canadian
Subsidiaries;

“Canadian Business” means the business carried on by the Canadian Subsidiaries
consisting of non-destructive testing services to commercial and industrial
customers including in the resource, power, pulp and paper, steel,
pharmaceutical, pipeline and construction industries, from offices located at
Campbell River (British Columbia), Edmonton (Alberta), Red Deer (Alberta),
Calgary (Alberta), Grand Prairie (Alberta), Weyburn (Saskatchewan), Thunder Bay
(Ontario), Sarnia (Ontario), Kitchener (Ontario), Oakville (Ontario), Whitby
(Ontario), Dartmouth (Nova Scotia), Mount Pearl (Newfoundland), Vancouver
(British Columbia) and from satellite and field locations in various locations
which operate based on need and demand;

“Canadian Employee” means an individual who is employed by any of the Canadian
Subsidiaries, whether on a full-time or part-time or any other basis, and
whether active or inactive;

“Canadian Employee Benefit Plans” means all compensation, bonus, deferred
compensation, incentive compensation, share purchase, share appreciation, share
option, severance or termination pay, vacation pay, hospitalization or other
medical, health and welfare benefits, life or other insurance, dental, eye care,
disability, salary continuation, supplemental unemployment benefits,
profit-sharing, mortgage assistance, employee loan, employee discount, employee
assistance, counselling, pension, retirement or supplemental retirement benefit
plan, arrangement or agreement, including any defined benefit or defined
contribution pension plan and any group registered retirement savings plan, and
any other similar employee benefit plan, promise, arrangement or agreement,
whether oral or written, formal or informal, funded or unfunded, including
policies with respect to holidays, sick leave, long-term disability, vacations,
expense reimbursements and automobile allowances and rights to company-provided
automobiles, that are sponsored or maintained or contributed to or required to
be contributed to, by the Canadian Subsidiaries for the benefit of any of the
Canadian Employees, former employees or beneficiaries of any of them, whether or
not insured and whether or not subject to any Applicable Law, including without
limiting the foregoing, the NDT Industry Health and Welfare Plan, the NDT
Industry Pension Plan, the Aitec Holdings Inc. Employee Profit Sharing Plan and
a Registered Retirement Savings Plan; except that the term “Canadian Employee
Benefit Plans” shall not include any statutory plans with which the Canadian
Subsidiaries are required to comply, including the Canada/Quebec Pension Plan or
plans administered pursuant to applicable provincial health tax, workers’
compensation, workers’ safety and insurance and employment insurance
legislation;

 

6.

--------------------------------------------------------------------------------

“Canadian Holding Companies” means the Major Holdcos, Minor Holdcos and Aitec
Shareholding Inc.;

“Canadian Purchase Price” means the price payable by the Canadian Purchaser to
the Canadian Vendors for the Canadian Purchased Shares provided for in
Section 2.2(a);

“Canadian Purchased Shares” means all of the issued and outstanding shares of
Amalco;

“Canadian Purchaser” means TISI Acquisition Inc.;

“Canadian Subsidiaries” means Aitec Holdings Inc., Aitec License Inc., Aitec
Inc., Aitec (Western) Inc., Aitec Investments Inc. and Weldsonix International
Inc.

“Canadian Vendors” means the Individual Shareholders and the Trusts
Shareholders;

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. §9601 et seq.;

“CIT Consents” means the consents required to be given by CIT Financial Ltd.
under the following contracts with certain Aitec Subsidiaries in order to carry
out the transactions contemplated hereunder, which the Canadian Vendors
represent and warrant are the only agreements with CIT Financial Ltd. which
prohibit the payout of the Shareholder Loans by Amalco, as contemplated in the
Transaction Steps:

 

  (a) CIT Master Lease Agreement No. 790-0383418-001; and

 

  (b) CIT Master Lease Agreement No. 790-0393554-001;

“Claim” means any act, omission or state of facts, and any Legal Proceeding,
assessment, judgment, demand, settlement or compromise relating thereto, which
may give rise to a right to indemnification under Sections 6.1 or 6.2 or at law;

“Closing” means the completion of the sale to and purchase by the Canadian
Purchaser of the Canadian Purchased Shares and the completion of the sale to and
purchase by the US Purchaser of the US Purchased Shares, and all other
transactions contemplated by this Agreement that are to occur contemporaneously
therewith;

“Closing Date” means June 1, 2007 or such earlier or later date as may be agreed
upon in writing by the Parties;

“Closing Balance Sheet” means the combined balance sheet of the Aitec
Subsidiaries, the Major Holdcos and the Minor Holdcos as at the Closing Date,
upon completion of the Transaction Steps, prepared in accordance with generally
accepted accounting principles, consistently applied, and on the same basis as
the combined balance sheet for the year ended September 30, 2006 as set out in
the Audited Financial Statements, as finally determined in accordance with the
provisions of Section 2.4, provided, for certainty, that (i) the Closing Balance
Sheet shall exclude the accounts of Aitec Realty Inc. and (ii) the Closing
Balance Sheet

 

7.

--------------------------------------------------------------------------------

shall reflect a reserve equal to the Litigation Reserve in respect of the
Litigation Matters and an accrual bonus to be paid out pursuant to
Section 4.1.7;

“Closing Document” means any document or instrument delivered at or subsequent
to the Closing as provided in or pursuant to this Agreement;

“Closing Time” means 10:00 o’clock a.m. Toronto time on the Closing Date or such
other time on the Closing Date as the Parties agree in writing that the Closing
shall take place;

“Closing Working Capital” means the amount equal to the total of the combined
current assets of the Aitec Subsidiaries less the total of the combined current
liabilities of the Aitec Subsidiaries calculated on a basis consistent with the
Target Working Capital and, for these purposes, “current assets” and “current
liabilities” shall consist of assets and liabilities so classified on the
Closing Balance Sheet. For greater certainty, Closing Working Capital shall
exclude all Debt Instruments and all Intercompany Accounts, and each of the
Litigation Reserve and the bonus expense contemplated by Section 4.1.7 shall
each be considered a “current liability”;

“CNSC Licence” means the licence issued to Aitec Licence Inc. by the Canadian
Nuclear Safety Commission pursuant to the Nuclear Safety and Control Act
(Canada);

“Code” means the Internal Revenue Code of 1986 (26 U.S.C.), as amended;

“Collective Agreement” means any collective agreement, letter of understanding,
letter of intent or other written communication with any labour union or
employee association that governs the terms and conditions of employment of any
Aitec Employee;

“Confidentiality Agreement” means the Confidentiality, Non-Disclosure and
Non-Solicitation Agreement dated October 20, 2006 between Team Industrial
Services, Inc. and Aitec Holdings Inc.;

“Consent” means any consent, approval, permit, waiver, ruling, exemption, or
acknowledgement from any person (other than the Canadian Holding Companies or
the US Vendor) under the terms of any Contract, Lease or Equipment Lease issued
to or for the benefit of the Canadian Subsidiaries or the US Subsidiaries, as
applicable, which is provided for or required pursuant to the terms of such
Contract, Lease or Equipment Lease in connection with the sale of the Canadian
Purchased Shares to the Canadian Purchaser or the sale of the US Purchased
Shares to the US Purchaser and the completion of the other transactions
contemplated herein or which is otherwise necessary to permit the Parties to
perform their obligations or is otherwise required to permit the consummation of
the transactions as contemplated herein;

“Contracts” means all contracts, agreements, instruments and other legally
binding commitments or arrangements, written or oral, entered into by any of the
Canadian Holding Companies, Canadian Subsidiaries or US Subsidiaries, as the
context requires, including those listed or identified on any Schedule;

“Debt Instrument” means, in respect of any member of the Aitec Holdings Group or
Amalco, any bond, debenture, obligation to any Canadian Vendor (including

 

8.

--------------------------------------------------------------------------------

shareholder loans, but excluding any employment income owing in the ordinary
course), promissory note or other instrument evidencing indebtedness to any
person, other than any of the Aitec Subsidiaries or any Canadian Holding
Company, for services, products, borrowed money or other liability arising from
any cause, including Guarantees, and for certainty, excluding any Intercompany
Accounts and any Guarantee given by any member of the Aitec Holdings Group in
favour of another member, as well as “current liabilities”, as such term is
defined in “Closing Working Capital”;

“Direct Claim” means any Claim asserted against an Indemnitor by an Indemnitee
which does not result from a Third Party Claim;

“E&O/Liability Policy” means collectively Policy No. 04-GL-000655689 issued by
Mid-Continent Casualty Company and Policy No. 5463526 issued by Commerce
Industry Insurance Company of Canada, each of which are listed in Schedule
3.1.27, or some replacement insurance policy or policies with comparable
coverage to such policies and having retroactive endorsement, providing coverage
to the same persons, in the same jurisdictions, and for the same period prior to
Closing;

“Encumbrance” means any mortgage, charge, easement, encroachment, lien, adverse
claim, restrictive covenant, assignment by way of security, security interest of
any nature, servitude, pledge, hypothecation, security agreement, title
retention agreement, right of occupation, option or privilege or any agreement
to create any of the foregoing;

“Environment” means the environment, including the natural environment and all
its aspects (including ambient air, surface water, ground water, land surface or
subsurface strata), and including plant and animal, including human, health and
the ecosystem necessary to protect and promote such health;

“Environmental Laws” means, in respect of any person, property, transaction or
event, all applicable domestic, foreign, international, federal, state,
regional, county and local administrative, regulatory and judicial laws, rules,
statutes, codes, ordinances, regulations, binding interpretations, binding
policies, Licences, approvals, plans or authorizations, common law, treaty,
restriction, regulatory policy, standard, guideline, by-law (zoning or
otherwise) and any similar items that apply in whole or in part to such person,
property, transaction or event and is in effect on the date of this Agreement
and through the Closing Date and any Order or Legal Proceeding relating to
Hazardous Substances, the protection of human health, safety, the Environment or
occupational health and safety, including without limitation those pertaining to
(a) reporting, licensing, permitting, investigating, remediating and cleaning up
in connection with the presence or the threat of Hazardous Substances, (b) the
generation, manufacture, processing, distribution, emission use, re-use or
re-cycle, treatment, storage, disposal, transport, labelling, handling and the
like of Hazardous Substances; including, without limitation, with respect to the
U.S. Business, the following laws, as amended: (i) CERCLA; (ii) the Hazardous
Materials Transportation Control Act of 1970 (49 U.S.C. §§1802 et seq.);
(iii) RCRA; (iv) the Clean Water Act 33 U.S.C. §1251, et. seq.; (v) the Safe
Drinking Water Act (42 U.S.C. §§300h et seq.); (vi) the Clean Air Act (42 U.S.C.
§§1857 et seq.); (vii) the Solid Waste Disposal Act (42 U.S.C. §§6901 et seq.);
(viii) the Toxic Substances Control Act (15 U.S.C. §§2601 et seq.); (ix) the
Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C. §§11001 et
seq.); (x) the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
§§136 et seq.); (xi)

 

9.

--------------------------------------------------------------------------------

the Radon Gas and Indoor Air Quality Research Act (42 U.S.C. §§7401 et seq.);
(xii) the National Environmental Policy Act of 1975 (42 U.S.C. §§4321);
(xiii) the Rivers and Harbors Act of 1899 (33 U.S.C. §§401 et seq.); and
(xiv) the Oil Pollution Act of 1990 (33 U.S.C. §§1321 et seq.) and state and
local analogues thereof; (c) above-ground and underground storage tanks; and
(d) the manufacture, import; export, distribution, labelling. operation and
handling of devices and materials (including without limitation naturally
occurring materials) capable of emitting or generating radiation;

“Environmental Permits” means all Licences required under Environmental Laws;

“Equipment Leases” means all leases of personal property to which any of the
Canadian Holding Companies, Canadian Subsidiaries or US Subsidiaries, as the
context requires, are a party or under which it has rights, including those
listed on Schedule 3.1.24;

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
(29 U.S.C. §1001 et seq.);

“Escrow Agent” means, Scarfone Hawkins LLP, in its capacity as Escrow Agent
under the Holdback Agreement;

“Estimated Canadian Purchase Price” means the amount estimated as such in
Section 2.3;

“Fixed Assets” means those assets used by the US Vendor in the carrying-on of
its business, as at the date hereof, as listed on Schedule 4.3.1(a);

“Governmental Authority” means any domestic or foreign government, whether
federal, provincial, state, territorial or municipal; and any governmental
agency, ministry, department, Tribunal, commission, bureau, board or other
instrumentality exercising or purporting to exercise legislative, judicial,
regulatory or administrative functions of, or pertaining to, government;

“Gowan Matter” means any Legal Proceeding which may result from the redemption
by Aitec Holdings Inc. of 6000 Class ‘A’ shares registered in the name of Keith
Gowan on or about November 14, 2006;

“Guarantee” means any agreement, contract or commitment providing for the
guarantee, indemnification, assumption or endorsement or any like commitment
with respect to the obligations, liabilities (contingent or otherwise) or
indebtedness of any person;

“Hazardous Substance” means any material, waste or substance, whether toxic or
otherwise, and any solid, liquid, gas, odour, heat, sound, vibration, radiation
and the like, or any combination of them, exposure to which, or transportation,
storage, management, disposal, or release of which is prohibited, limited or
regulated by Environmental Law, or which is or may be toxic, hazardous, harmful
or which may or could pose a hazard to the Environment or human health or which
may impair or cause an adverse effect on the Environment;

 

10.

--------------------------------------------------------------------------------

“Holdback Agreement” means a holdback agreement to be entered into between each
of the Parties and the Escrow Agent, in respect of the Holdback Amount, in a
form agreeable to such parties, acting reasonably;

“Holdback Amount” means the amount of $500,000 to be held by the Escrow Agent in
accordance with the terms of the Holdback Agreement as security for any
shortfall between the Closing Working Capital and the Target Working Capital
and/or between Uncollectible Accounts Receivable and the allowance for doubtful
accounts as reflected on the Closing Balance Sheet;

“Income Tax Act” means, collectively, the Income Tax Act, R.S.C. 1985, 5th
Supplement, the Income Tax Application Rules, R.S.C. 1985, 5th Supplement, and
the Income Tax Regulations, in each case as amended to the date hereof;

“Indemnitee” means any Party and its Representatives entitled to indemnification
under this Agreement;

“Indemnitor” means any Party obligated to provide indemnification under this
Agreement;

“Indemnity Payment” means any amount of a Loss required to be paid pursuant to
Sections 2.7(a), 6.1 or 6.2;

“Independent Accountant” has the meaning ascribed thereto in subsection 2.4.2;

“Individual Shareholders” has the meaning ascribed thereto in the recitals to
this Agreement;

“Intellectual and Industrial Property” means, collectively, all intellectual
property used in whole or in part in, or required by the Canadian Subsidiaries
or the US Subsidiaries, as applicable in the context, for the carrying on by the
Canadian Subsidiaries or the US Subsidiaries, as applicable, of their respective
businesses both domestic and foreign and whether or not registered including:

 

  (a) all trade-marks, trade names, business names, styles, designs, graphics,
slogans, logos, service marks, brand names, internet domain names and
registrations and other commercial symbols and all applications therefore;

 

  (b) all patents (including divisions, reissues, renewals, re-examinations,
continuations, continuations in part and extensions) and all applications
therefor;

 

  (c) all copyrights, integrated circuit topographies, industrial designs and
other industrial property rights and all applications therefor;

 

  (d) all know-how, inventions, trade secrets, including business methodologies
and processes, confidential information and any licenced property or technology;
and

 

  (e)

all computer software and software systems and rights related thereto including
all related code, specifications, documentation, revisions, enhancements, and

 

11.

--------------------------------------------------------------------------------

 

modifications thereto and all data, databases and related documentation, in
whatever form and media,

and including those set forth in Schedule 3.1.35;

“Intellectual and Industrial Property Rights” means:

 

  (a) any and all proprietary rights anywhere in the world provided under:

 

  (i) patent law;

 

  (ii) copyright law;

 

  (iii) trademark law;

 

  (iv) design patent or industrial design law;

 

  (v) semiconductor chip or mask work law;

 

  (vi) trade secret law; or

 

  (vii) any other statutory provision or common law principle applicable to
rights to intellectual property which may provide a right in either:

 

  A. ideas, formulae, algorithms, concepts, inventions, technologies, software,
data compilations, drawings, specifications, confidential business information,
procedures or know-how generally, including without limitation, trade secret; or

 

  B. the expression or use of such ideas, formulae, algorithms, concepts,
inventions technologies, software, data compilations, drawings, specifications,
confidential business information, procedures or know-how; and

 

  (b) any and all applications, registrations, licences, sub-licences,
franchises, agreements or any other evidence of a right in any of the foregoing;

“Intercompany Accounts” means all receivables and payables owed between any
entities which are included in any of the following definitions: “Canadian
Holding Companies”, “Aitec Subsidiaries”, “Amalco” and Aitec Realty Inc.;

“Interested Person” means any present or former officer, director, shareholder
or employee of any of the Canadian Holding Companies, any of the Canadian
Subsidiaries, any of the US Subsidiaries or any person with which any of the
foregoing does not deal at arm’s length within the meaning of the Income Tax Act
or the Code;

“Interim Estimated Canadian Purchase Price” means an amount equal to $36,999,999
less any Debt Instruments at Closing (including, for certainty, such Debt
Instruments as are paid out pursuant to the Transaction Steps);

 

12.

--------------------------------------------------------------------------------

“Interim Period” means the period from and including the time of execution of
this Agreement to and including the Closing Time;

“Leased Property” means all right, title and interest of any of the Canadian
Holding Companies, Canadian Subsidiaries or US Subsidiaries, as the context
requires, in and to the subject matter (whether realty or personalty) of the
Leases and the Equipment Leases;

“Leases” means the real property leases and other rights of occupancy relating
to real property to which any of the Canadian Holding Companies, Canadian
Subsidiaries or US Subsidiaries, as the context requires, are a party or under
which it has rights, whether as lessor or lessee, including those set forth and
described in Schedule 3.1.22;

“Legal Proceeding” means any litigation, action, suit, investigation, hearing,
claim, complaint, grievance, arbitration proceeding or other proceeding,
including without limitation in respect of the Litigation Matters, and includes
any appeal or review and any application for same;

“Licence” means any licence, consent, guideline, permit, approval,
authorization, certificate directive, order, variance, registration, right,
grant, notice of intent, waiver, exemption, privilege, concession or franchise
issued, granted, conferred or otherwise created by any Governmental Authority
and includes, except where otherwise noted, the CNSC Licence and the US Nuclear
Licence;

“Licenced IP” has the meaning ascribed thereto in Subsection 3.1.35;

“Litigation Matters” means the ‘Andritz’ and ‘Rider’ matters described in
Schedule 3.1.30, as well as the Gowan Matter;

“Litigation Reserve” means $250,000;

“Loss” means any and all loss, liability (including without limitation strict
liability), damage, cost, expense, charge, fine, penalty or assessment,
resulting from or arising out of any Claim, including the costs and expenses of
any Legal Proceeding, assessment, judgment, settlement or compromise relating
thereto and all interest, fines and penalties and reasonable legal fees and
expenses incurred in connection therewith;

“Material Contracts” means Contracts, Leases and Equipment Leases identified
with an asterisk on Schedules 3.1.28, 3.1.22 and 3.1.24;

“Notes” means the promissory notes made by any member of the Aitec Holdings
Group, as detailed in Schedule 3.1.19; and “Note Holders” means the persons in
whose favour each of the Notes have been made, including, for certainty, Peter
Brady, Paul Simpson, Paul Simpson Family Trust, P. Simpson Holdings Inc., Roger
Caissie and Roger Caissie Family Trust;

“Order” means any order, directive, judgment, decree, award or writ of any
Tribunal;

“Owned IP” has the meaning ascribed thereto in Subsection 3.1.35;

 

13.

--------------------------------------------------------------------------------

“Parties” means the Canadian Vendors, the US Vendor, the Canadian Purchaser and
the US Purchaser and “Party” means any of them;

“Permitted Encumbrances” means:

 

  (a) inchoate or statutory liens for Taxes not at the time overdue but only if
the amount thereof at the Closing Date is taken into account as a current
liability in calculating the Closing Working Capital and inchoate or statutory
liens for overdue Taxes the validity of which any of the Canadian Holding
Companies, any of the Canadian Subsidiaries, or any of the US Subsidiaries, as
applicable are contesting in good faith but only for so long as such
contestation effectively postpones enforcement of any such liens or Taxes, and
only if the amount of such overdue Taxes at the Closing Date is taken into
account as a current liability in calculating the Closing Working Capital;

 

  (b) statutory liens incurred or deposits made in the ordinary course of
business of any of the Canadian Holding Companies, any of the Canadian
Subsidiaries, or any of the US Subsidiaries, as applicable in connection with
worker’s compensation, employment insurance, employer health tax, Canada Pension
Plan and similar legislation, but only to the extent that each such statutory
lien or deposit relates to amounts not yet due but only if the amount thereof at
the Closing Date is taken into account as a current liability in calculating the
Closing Working Capital;

 

  (c) liens and privileges arising out of any judgment with respect to which any
of the Canadian Holding Companies, any of the Canadian Subsidiaries, or any of
the US Subsidiaries, as applicable, intend to prosecute an appeal or proceedings
for review but only for so long as there is a stay of execution pending the
determination of such appeal or proceedings for review, and only if the amount
thereof at the Closing Date is taken into account as a current liability in
calculating the Closing Working Capital;

 

  (d) security given by any of the Canadian Holding Companies, any of the
Canadian Subsidiaries, or any of the US Subsidiaries, as applicable, to a public
utility or any Governmental Authority when required in the ordinary course of
business of such Company but only to the extent that the amount of the
obligation secured at the Closing Date is taken into account as a current
liability in calculating the Closing Working Capital ;

 

  (e) undetermined or inchoate construction or repair or storage liens arising
in the ordinary course of the business of any of the Canadian Holding Companies,
any of the Canadian Subsidiaries, or any of the US Subsidiaries, as applicable,
a claim for which has not been filed or registered pursuant to law or for which
notice in writing has not been given to such company, but only if the amount
thereof at the Closing Date is taken into account as a current liability in
calculating the Closing Working Capital; and

 

  (f) Other Encumbrances listed on Schedule 1.1B, which, for certainty, shall
only include such Encumbrances which the Purchasers will not require to be
discharged at or before Closing;

 

14.

--------------------------------------------------------------------------------

“Pre-Amalgamation Shares” means all of the issued and outstanding shares in the
capital of the Amalgamating Companies;

“Prime Rate” for any day means the rate of interest expressed as a rate per
annum that the Bank of Montreal establishes at its head office in Toronto,
Ontario as the reference rate of interest that it will charge on that day for
Canadian dollar demand loans to its customers in Canada and which it at present
refers to as its prime rate;

“Purchasers” means the Canadian Purchaser and the US Purchaser;

“Purchasers’ Advisors” means the directors, officers, employees, auditors, legal
counsel and fiscal and tax advisors of either of the Purchasers and any other
person authorized in writing by either of the Purchasers to represent it for
purposes of Subsection 4.1.2;

“RCRA” means the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et
seq.;

“Real Property” means the real and immoveable property owned by the Canadian
Subsidiaries or the US Subsidiaries, described in Schedule 3.1.20, and includes
all plant, buildings, structures, erections, improvements, appurtenances and
fixtures situate thereon or forming part thereof;

“Regulatory Approval” means any approval, consent, ruling, authorization,
notice, permit or acknowledgement that may be required from any person by
Applicable Law, the terms of any Licence or the conditions of any Order which is
required pursuant to such Applicable Law, Licence or Order in connection with
the sale of the Purchased Canadian Shares or the Purchased US Shares as
contemplated herein and the completion of the other transactions contemplated
herein or which is otherwise necessary to permit the Parties to perform their
obligations or is otherwise required to permit the consummation of the
transactions as contemplated herein;

“Release” includes any release or discharge of any Hazardous Substance,
including any burial, incineration, spray, injection, inoculation, abandonment,
deposit, spillage, leakage, seepage, pouring, emission, emptying, throwing,
dumping, placing, exhausting, escape, leach, migration, dispersal, dispensing or
disposal;

“Representations and Warranties Insurance Policy” means a representations and
warranties insurance policy, which may be purchased by the Canadian Purchaser
and/or the US Purchaser in respect of Canadian Claims and US Claims;

“Representative” means, in respect of an Indemnitee, each director, officer,
employee, agent, solicitor, accountant, professional advisor and other
representative of that Indemnitee and, in respect of the Canadian Purchaser,
also includes the Canadian Holding Companies, the Canadian Subsidiaries and
Amalco, and, in respect of the US Purchaser, also includes the US Subsidiaries;

“Shareholder Loans” means those loans to a member of the Aitec Holding Group
made by a Canadian Vendor set out in Schedule 3.1.19;

 

15.

--------------------------------------------------------------------------------

“Target Working Capital” means $11,274,584, which was calculated as set out on
Exhibit A;

“Tax” means all taxes, assessments, charges, dues, duties, rates, fees, imposts,
levies and similar charges of any kind lawfully levied, assessed or imposed by
any Governmental Authority under any applicable Tax Legislation, including, but
not limited to, U.S. and Canadian federal, state, provincial, territorial,
municipal and local, foreign or other income, capital, goods and services,
sales, use, consumption, excise, value-added, business, real property, personal
property, transfer, franchise, withholding, payroll or employer health taxes,
customs, import, anti-dumping or countervailing duties, Canada Pension Plan
contributions, employment insurance premiums, and provincial workers’
compensation payments, including any interest, penalties and fines associated
therewith;

“Tax Legislation” means, collectively, the Income Tax Act (Canada), the Code and
all federal, state, provincial, territorial, municipal, foreign, or other
governmental statutes imposing a Tax, including all treaties, conventions, case
law, bulletins (including, without limitation, interpretation bulletins),
circulars and releases, rules, regulations and Orders of any jurisdiction or any
Governmental Authority;

“Tax Returns” means any return (including any informational return) all reports,
elections, statements, and other documents filed or required to be filed under
the provisions of any Tax Legislation and any Tax forms required to be filed,
whether in connection with a U.S. or Canadian Tax return or not, under any
provisions of any applicable Tax Legislation;

“Third Party Claim” means any Claim asserted against an Indemnitee that is paid
or payable to, or claimed by, any person who is not a Party;

“Transaction Steps” means the transactions described in Schedule 4.3.1;

“Tribunal” means any court (including a court of equity), arbitrator or
arbitration panel and any other Governmental Authority, stock exchange,
professional or business organization or association or other body exercising
adjudicative, regulatory, judicial or quasi-judicial powers;

“Trusts Shareholders” has the meaning ascribed to it in the recitals;

“Unanimous Shareholders Agreement” means the unanimous shareholders agreement
between Aitec Shareholding Inc., Aitec Realty Inc., Aitec Investments Inc. and
Aitec Holdings Inc., and each of their respective shareholders, dated
January 20, 2005;

“Uncollectible Accounts Receivable” means such Accounts Receivable set out in
the notice sent to the Canadian Vendors pursuant to Section 2.6(b), if
applicable;

“US Accounts Receivable” means accounts receivable of the US Subsidiaries;

“US Business” means the business carried on by the US Subsidiaries consisting of
non-destructive testing services to commercial and industrial customers
including in the resource, power, pulp and paper, steel, pharmaceutical,
pipeline and construction industries, from

 

16.

--------------------------------------------------------------------------------

offices located at Houston, Texas, Daphne, Alabama, Everett, Washington and from
satellite and field locations in various locations which operate based on need
and demand;

“US Employee” means an individual who is employed by any of the US Subsidiaries,
whether on a full-time or part-time or any other basis, and whether active or
inactive;

“U.S. Employee Benefit Plans” means all “employee benefit plans,” within the
meaning of section 3(3) of ERISA (other than any plan which is exempt from Title
I of ERISA), for the employees or former employees of the US Subsidiaries or
their dependents, survivors or beneficiaries, which pertain to the U.S. Business
or cover the U.S. Employees and (a) which are currently maintained by US
Subsidiaries and pertain to the U.S. Business, (b) which were previously
maintained by the US Subsidiaries since January 1, 2000 and pertain to the U.S.
Business or (c) in which any of the US Subsidiaries, the Canadian Subsidiaries
or the Canadian Holding Companies is or was, within such period, a participating
employer, including without limiting the foregoing, the Central Pension Fund of
the International Union of Operating Engineers and Participating Employers, the
Trustee Health and Welfare Fund of the International Union of Operating
Engineers and Participating Employers, the Aitec USA Inc. 401(k) Plan; the Aitec
USA Inc. 401(k) Profit Sharing Plan, and the Administaff Health Related Benefit
Plan;

“US Nuclear Licence” means collectively those licenses listed in items 2 and 3
of Schedule 3.1.3;

“US Purchase Price” means one ($1.00) dollar;

“US Purchased Shares” means all of the issued and outstanding shares in the
capital of Aitec Investments USA Inc.;

“US Purchaser” means Team Industrial Services, Inc.;

“US Subsidiaries” means Aitec Investments USA Inc., Aitec USA Inc., and
Weldsonix Inc.;

“US Vendor” means Weldsonix International Inc.; and

“WARN Act” means the Worker Adjustment and Retraining Notification Act, 29
U.S.C. §2101, et. seq., as amended, and any regulations adopted thereunder.

 

1.2 Recitals

The Parties acknowledge and declare that the recitals in this Agreement are true
and correct.

 

1.3 Accounting Principles

Other than references to “US GAAP”, wherever in this Agreement reference is made
to generally accepted accounting principles or GAAP, such reference shall be
deemed to be to the generally accepted accounting principles from time to time
approved by the Canadian Institute of Chartered Accountants, or any successor
entity thereto, applicable as at the date on

 

17.

--------------------------------------------------------------------------------

which such principles are to be applied or on which any calculation or
determination is required to be made in accordance with generally accepted
accounting principles.

 

1.4 Governing Law; Attornment

This Agreement shall be construed, interpreted and enforced in accordance with,
and the rights of the Parties shall be governed by, the laws of the Province of
Ontario and the federal laws of Canada applicable therein (excluding any
conflict of law rule or principle of such laws that might refer such
interpretation or enforcement to the laws of another jurisdiction). Each Party
irrevocably submits to the exclusive jurisdiction of the courts of Ontario with
respect to any matter arising pursuant to, or relating to, this Agreement.
Notwithstanding the foregoing, all disputes arising under or in respect of this
Agreement, following the Closing (including in respect of any Claims), shall,
before being directed to a court of law, be subject to the dispute resolution
procedures set out in Schedule 1.4.

 

1.5 Entire Agreement; Amendment

This Agreement, together with the Confidentiality Agreement and the US Share
Purchase Agreement, constitutes the entire agreement between the Parties with
respect to the transactions herein contemplated and cancels and supersedes any
prior understandings, agreements, negotiations and discussions, written or oral,
between the Parties with respect thereto. There are no representations,
warranties, terms, conditions, undertakings or collateral agreements or
understandings, express or implied, between the Parties other than those
expressly set forth in this Agreement or in any Closing Document. This Agreement
may not be amended, supplemented or otherwise modified in any respect except by
written instrument executed by the Parties.

 

1.6 Calculation of Time

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

 

1.7 Performance on Holidays

If any act (including the giving of notice) is otherwise required by the terms
hereof to be performed on a day which is not a Business Day, such act shall be
valid if performed on the next succeeding Business Day.

 

1.8 Waiver of Rights

Any waiver of, or consent to depart from, the requirements of any provision of
this Agreement shall be effective only if it is in writing and signed by the
Party giving it, and only in the specific instance and for the specific purpose
for which it has been given. No failure on the part of any Party to exercise,
and no delay in exercising, any right under this Agreement shall operate as a
waiver of such right. No single or partial exercise of any such right shall
preclude any other or further exercise of such right or the exercise of any
other right.

 

18.

--------------------------------------------------------------------------------

1.9 Knowledge

Where any representation, warranty or other statement in this Agreement is
expressed to be made by the Canadian Vendors to their knowledge or is otherwise
expressed to be limited in scope to matters known to the Canadian Vendors, the
Canadian Holding Companies, the Canadian Subsidiaries or the US Subsidiaries or
of which the Canadian Vendors, the Canadian Holding Companies, the Canadian
Subsidiaries or the US Subsidiaries are aware, it shall mean such knowledge as
is actually known to any of the Canadian Vendors, or any officer or employee of
the Canadian Holding Companies, the Canadian Subsidiaries or the US Subsidiaries
who have overall responsibility for or knowledge of the matters relevant to such
statement, or which would have or should have come to the attention of any of
them if they had exercised that degree of care or diligence generally required
pursuant to the principal of commercial reasonableness, and the Canadian Vendors
hereby confirm that they have made appropriate inquiries of all such officers
and employees, but for further certainty, no independent inquiry with any third
party shall be required in order for the Canadian Vendors, the Canadian Holdings
Companies, the Canadian Subsidiaries or the US Subsidiaries to comply with their
obligation to exercise that degree of care or diligence generally required
pursuant to the principal of commercial reasonableness.

 

1.10 Tender

Any tender of documents or money hereunder may be made upon the Parties or their
respective counsel and money shall be tendered by official bank draft drawn upon
a Canadian chartered bank listed in Schedule 1 to the Bank Act (Canada) or by
negotiable cheque payable in Canadian funds and certified by a Canadian
chartered bank listed in Schedule 1 to the Bank Act (Canada).

 

1.11 Severability

Any provision in this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

 

1.12 Conflict

In the event of any conflict or inconsistency between the terms and conditions
in the body of this Agreement and those in any Schedule (including any agreement
entered into pursuant to this Agreement), the terms and conditions in the body
of this Agreement shall govern and take precedence and the Parties shall take
such steps as may be required or desirable to conform the conflicting or
inconsistent provisions thereof to this Agreement.

 

1.13 Consents and Approvals

Unless otherwise specified, where the consent or approval of a Party is
contemplated or required by the terms of this Agreement, that Party shall not
unreasonably delay or withhold the giving of such consent or approval after a
request therefor has been made by the other Party.

 

19.

--------------------------------------------------------------------------------

1.14 Remedies Cumulative

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

 

1.15 Additional Rules of Interpretation

 

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

 

  (b) The division of this Agreement into Articles, Sections, Subsections,
Schedules and other subdivisions, the inclusion of headings and the provision of
a table of contents are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement. The headings in the
Agreement are not intended to be full or precise descriptions of the text to
which they refer.

 

  (c) Unless something in the subject matter or context is inconsistent
therewith, references herein to an Article, Section, Subsection, paragraph,
clause, Schedule or Exhibit are to the applicable article, section, subsection,
paragraph, clause, Schedule or Exhibit of this Agreement.

 

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

 

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

 

  (f) Unless otherwise specified, all dollar amounts in this Agreement,
including the symbol “$”, refer to Canadian currency.

 

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

 

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

 

  (i)

Unless the context otherwise requires, references in this Agreement to a
“person” are to be broadly interpreted and shall include an individual (whether
acting as an executor, administrator, legal representative or otherwise), body
corporate,

 

20.

--------------------------------------------------------------------------------

 

unlimited liability company, partnership, limited liability partnership, joint
venture, trust, unincorporated association, unincorporated syndicate, any
Governmental Authority and any other legal or business entity.

 

  (j) The term “ordinary course”, when used in relation to the conduct by the
Canadian Subsidiaries of the Canadian Business, the conduct by the US
Subsidiaries of the US Business, the conduct of business by the Canadian Holding
Companies or any other person, means any transaction which constitutes an
ordinary day-to-day business activity, conducted in a commercially reasonable
and businesslike manner, having no unusual or special features, and, in the case
of the Canadian Subsidiaries, the US Subsidiaries and the Canadian Holding
Companies consistent with respective past practice and, in the case of any other
person, being such as a person of similar nature and size and engaged in a
similar business might reasonably be expected to carry out from time to time.

 

  (k) Unless otherwise defined herein, words or abbreviations which have
well-known trade meanings are used herein with those meanings.

 

1.16 Schedules and Exhibits

The following are the Schedules and Exhibits attached to and incorporated in
this Agreement by reference and deemed to be a part hereof (and for further
clarity, the Purchasers shall be deemed to have accepted, and the Canadian
Vendors shall have no liability in respect of, all matters listed or referred to
in the Schedules unless otherwise specifically provided for in this Agreement,
provided that information set out on any Schedule shall only qualify the
representations and warranties which refer to such Schedule):

 

Schedule 1.1A

   –    Audited Financial Statements

Schedule 1.4

   –    Dispute Resolution

Schedule 1.1B

   –    Permitted Encumbrances

Schedule 3.1.1A

   –    Jurisdiction of Aitec Business

Schedule 3.1.1B

   –    Dates of Articles of Incorporation of Canadian Holding Companies and
Aitec Subsidiaries

Schedule 3.1.3

   –    Licences Required for the Conduct of Aitec Business

Schedule 3.1.4

   –    Authorized and Issued Capital of Aitec Subsidiaries and Canadian Holding
Companies

Schedule 3.1.9

   –    Regulatory Approvals

Schedule 3.1.14

   –    Business Carried on by Aitec

Schedule 3.1.15

   –    Guarantees Given by Aitec Subsidiaries

Schedule 3.1.16

   –    Agreements and Arrangements with Interested Persons

 

21.

--------------------------------------------------------------------------------

Schedule 3.1.17

   –    Information Regarding Aitec Employees

Schedule 3.1.18

   –    Aitec Employee Benefit Plans

Schedule 3.1.19

   –    Debt Instruments

Schedule 3.1.20

   –    Real Property

Schedule 3.1.22

   –    Lease

Schedule 3.1.24

   –    Equipment Leases

Schedule 3.1.27

   –    Insurance Policies

Schedule 3.1.28

   –    Contracts

Schedule 3.1.29A

   –    Warranties, Repair Contracts and Other Obligations

Schedule 3.1.29B

   –    Top Ten Suppliers and Customers

Schedule 3.1.30

   –    Legal Proceedings

Schedule 3.1.31

   –    Banking Information

Schedule 3.1.32

   –    Tax Matters

Schedule 3.1.34

   –    Environmental Matters

Schedule 3.1.35

   –    Intellectual and Industrial Property

Schedule 3.2.11

   –    Liability of Canadian Holding Company

Schedule 4.1.5

   –    Capital Expenditures

Schedule 4.3.1

   –    Transaction Steps

Schedule 4.3.1(a)

   –    Fixed Assets

Schedule 5.1.10

   –    Key Managers of Aitec Subsidiaries

Schedule 5.1.15

   –    Excluded Debt Instruments

Schedule 5.1.18

   –    Excluded Intercompany Accounts

Schedule 7.3

   –    Notice Procedure

Exhibit A

   –    Target Working Capital Calculation

Exhibit B

   –    Form of Notice of Resignation to be Provided by Leonard and McDonald

 

22.

--------------------------------------------------------------------------------

Exhibit C

   –    Form of Resignations and General Releases

Exhibit D

   –    First Form of Non-Competition and Non-Solicitation Agreement

Exhibit E

   –    Second Form of Non-Competition and Non-Solicitation Agreement

ARTICLE 2

PURCHASE AND SALE OF SHARES

 

2.1 Transaction Steps

Subject to the terms and conditions of this Agreement, the Parties agree to
carry-out the Transaction Steps set out in Schedule 4.3.1, in the order set-out
therein, concurrently with Closing, and without limiting the generality of the
foregoing: (i) the Canadian Vendors agree to sell, transfer and assign the
Canadian Purchased Shares to the Canadian Purchaser and the Canadian Purchaser
agrees to purchase the Canadian Purchased Shares from the Canadian Vendors and
(ii) the US Vendor agrees to sell, transfer and assign the US Purchased Shares
to the US Purchaser and the US Purchaser agrees to purchase the US Purchased
Shares from the US Vendor.

 

2.2 Amount of Purchase Prices

 

  (a) Subject to the provisions of Sections 2.4 to 2.7, the aggregate price
payable by the Canadian Purchaser to the Canadian Vendors for the Canadian
Purchased Shares (the “Canadian Purchase Price”) is equal to the Interim
Estimated Canadian Purchase Price, and adjusted as follows, on a
dollar-for-dollar basis:

 

  (i) (A) plus the amount, if any, by which the Closing Working Capital exceeds
the Target Working Capital; or

(B) minus the amount, if any, by which the Target Working Capital exceeds the
Closing Working Capital;

and,

 

  (ii) (A) plus the amount by which the allowance for doubtful accounts (as
reflected in the Closing Balance Sheet) exceeds the Uncollectible Accounts
Receivable; or

(B) minus the amount by which the Uncollectible Accounts Receivable exceeds the
allowance for doubtful accounts (as reflected in the Closing Balance Sheet).

 

  (b) Subject to the provisions of Section 2.4 , the aggregate price payable by
the US Purchaser to the US Vendor for the US Purchased Shares is the US Purchase
Price.

 

23.

--------------------------------------------------------------------------------

2.3 Estimated Canadian Purchase Price

As soon as practicable prior to the Closing Time, and in any event no less than
three (3) Business Days prior to the Closing Date, the Canadian Vendors, acting
reasonably, shall provide to the Canadian Purchaser and the US Purchaser an
estimate of the Closing Working Capital, which estimate shall be based on the
month-end financial statements for the Aitec Subsidiaries most recently prepared
prior to such date in a manner consistent with the Audited Financial Statements
(copies of which shall also be provided). To the extent that such estimate of
Closing Working Capital exceeds or is less than the Target Working Capital, the
difference shall be added or subtracted, accordingly, from the Interim Estimated
Canadian Purchase Price; on a dollar-for-dollar basis, and the result shall be
the Estimated Canadian Purchase Price.

 

2.4 Preparation of Closing Balance Sheet

2.4.1 Initial Preparation

Promptly after the Closing Time, the Canadian Purchaser shall prepare, at the
Canadian Purchaser’s own expense, and in accordance with generally accepted
accounting principles, consistently applied, the Closing Balance Sheet as at the
completion of the Transaction Steps on the Closing Date and a calculation of
Closing Working Capital at that time, which calculations shall be audited by
Deloitte and Touche LLP. A draft of the Closing Balance Sheet and a draft
calculation of the Closing Working Capital shall be delivered to the Canadian
Vendors no later than such date as is ten (10) Business Days following the end
of the ninety (90) day period following the Closing Date. The Canadian Purchaser
shall permit representatives of the Canadian Vendors to be present at the
inventory counts and other procedures used in the preparation of the draft
Closing Balance Sheet and shall provide such representatives promptly with
copies of all working papers created in connection with such preparation and
access and to any portion of the Books and Records which the Canadian Vendors
deem necessary, acting reasonably, in order to allow them to verify the draft
closing balance sheets. If the Canadian Vendors do not give a notice of
disagreement in accordance with Subsection 2.4.2, the Canadian Vendors shall be
deemed to have accepted the draft Closing Balance Sheet and the draft
calculations of the Closing Working Capital prepared by the Canadian Purchaser,
which shall be final and binding on the Parties and the draft calculation of
Closing Working Capital shall constitute the Closing Working Capital for
purposes of this Agreement immediately following the expiry date for the giving
of such notice of disagreement.

2.4.2 Dispute Settlement

If the Canadian Vendors disagree with any item in the draft Closing Balance
Sheet or the draft calculation of the Closing Working Capital prepared pursuant
to Subsection 2.4.1, it shall give notice to the Canadian Purchaser, of such
disagreement no later than ten (10) Business Days after delivery of the draft
Closing Balance Sheet. Any notice of disagreement given by the Canadian Vendors
shall set forth in detail the particulars of such disagreement. The Parties
shall then use reasonable efforts to resolve such disagreement for a period of
thirty (30) days following the giving of such notice. If the matter is not
resolved by the end of such thirty (30) day period, then such disagreement shall
be submitted by the Parties to an accounting firm of recognized national
standing in Canada, which is independent of the Parties and which is

 

24.

--------------------------------------------------------------------------------

qualified to review such balance sheets and working capital calculations (the
“Independent Accountant”). If the Parties are unable to agree on the Independent
Accountant within a further 10 day period, any Party may apply under the
Arbitration Act, 1991 (Ontario) to have a court appoint such accounting firm.
The Independent Accountant shall, as promptly as practicable (but in any event
within forty-five (45) days following its appointment), make a determination of
the Closing Working Capital, based solely on written submissions submitted by
the Parties to the Independent Accountant. The decision of the Independent
Accountant as to the Closing Working Capital shall be final and binding upon the
Parties and shall constitute the Closing Working Capital for purposes of this
Agreement. The Canadian Purchaser and the Canadian Vendors shall each pay
one-half of the fees and expenses of the Independent Accountant with respect to
the resolution of any such dispute.

 

2.5 Payment of Purchase Prices

 

  (a) The Canadian Purchaser shall pay the Estimated Canadian Purchase Price,
less the Holdback Amount, to the Canadian Vendors, pro rata in accordance with
their respective holdings of the Canadian Purchased Shares, at the Closing Time
by certified cheque, bank draft or wire transfer of immediately available funds
to an account or accounts specified by the Canadian Vendors. On the Adjustment
Date (i) the Canadian Purchaser shall pay to the Canadian Vendors the amount by
which the Canadian Purchase Price (as then determined, namely without adjustment
for the Uncollectible Accounts Receivable provided for in Section 2.2(a)(ii))
exceeds the Estimated Canadian Purchase Price, if applicable, and in which case
(or should there be no difference between such figures) the Canadian Vendors
shall be paid $200,000 from the Holdback Amount, or (ii) the Canadian Vendors
shall pay to the Canadian Purchaser the amount, if any, by which the Estimated
Canadian Purchase Price exceeds the Canadian Purchase Price (as then determined,
namely without adjustment for the Uncollectible Accounts Receivable provided for
in Section 2.2(a)(ii)) which amount shall first be claimed by the Canadian
Purchaser against the Holdback Amount, and, thereafter, to the extent the
remaining Holdback Amount is greater than $300,000, such amount over $300,000
shall be paid to the Canadian Vendors, pro rata in accordance with their
respective holdings of the Canadian Purchased Shares, in any case by certified
cheque, bank draft or wire transfer of immediately available funds to an account
or accounts specified by the Canadian Vendors, together with interest thereon at
the Prime Rate from the Closing Date to the Adjustment Date.

 

  (b) The US Purchaser shall pay the US Purchase Price to the US Vendor, at the
Closing Time, by certified cheque, bank draft or cash.

 

  (c) For certainty no adjustment to the Canadian Purchase Price made pursuant
to this Section 2.5, or in respect of the Accounts Receivable as provided for in
Section 2.6, shall be considered a Claim or otherwise be subject to the
provisions of Article 6.

 

2.6 Adjustments for Uncollectible Accounts Receivable

 

  (a)

The Canadian Purchaser or the US Purchaser, as applicable, shall use
commercially reasonable efforts to collect the outstanding Canadian Accounts

 

25.

--------------------------------------------------------------------------------

 

Receivable and US Accounts Receivable for a period ending six (6) months
following the Closing Date. Payments received by the Canadian Purchaser or US
Purchaser, as applicable, in respect of such Accounts Receivable shall be
applied to the invoices to which such payments are related. The Canadian
Purchaser shall consider any reasonable requests made by the Canadian Vendors to
assist in collecting the Accounts Receivable, which efforts shall, in any case
be conducted under the supervision of the Canadian Purchaser.

 

  (b) At the end of such six (6) month period referred to in paragraph
(a) above, the Canadian Purchaser shall have the right, exercisable by way of
notice to the Canadian Vendors within ten (10) days thereafter, to surrender and
unilaterally assign to John McDonald, in Trust, on behalf of all of the Canadian
Vendors, all or less than all of the Accounts Receivable which have not been
collected to that date with the appropriate supporting documentation (which
shall include correspondence, notes of telephone calls with customers
(containing names of persons contacted, date and time of call and results of
conversation) and all related corporate and accounting documents.

 

  (c) To the extent the amount of Uncollectible Accounts Receivable assigned to
the Canadian Vendors pursuant to Section 2.6(b) is greater than the amount of
the allowance for doubtful accounts reflected on the Closing Balance Sheet, such
difference shall be paid to the Canadian Purchaser from the remaining portion of
the Holdback Amount, and the balance of the Holdback Amount, if any, shall be
paid to the Canadian Vendors. If the remaining Holdback Amount is insufficient
to pay the Canadian Purchaser, the Canadian Vendors shall forthwith pay such
shortfall amount to the Canadian Purchaser. To the extent the amount of
Uncollectible Accounts Receivable assigned by the Canadian Purchaser pursuant to
Section 2.6(b) is less than the allowance for doubtful accounts reflected on the
Closing Balance Sheet, such difference shall be paid, together with the
remaining portion of the Holdback Amount, to the Canadian Vendors pro rata in
accordance with their respective holdings of the Canadian Purchased Shares, by
certified cheque, bank draft or wire transfer of immediately available funds to
an account or accounts specified by the Canadian Vendors.

 

  (d) Notwithstanding the foregoing provisions of this Section 2.6, if at any
time within one hundred and eighty (180) days from the Closing Date any part or
all of the Aitec Business is sold to an arm’s length third party (and for such
purposes, Charles Pattillo shall be deemed to be an arm’s length third party),
then the Accounts Receivable which arose in connection with that portion of the
Aitec Business which is sold, less any allowance for doubtful accounts properly
attributable to such Account Receivable (as reflected on the Closing Balance
Sheet), shall be deemed to have been collected for the purposes of this
Section 2.6, and no adjustment to the Canadian Purchase Price may be made in
respect of any such Accounts Receivable.

 

2.7 Settlement of Litigation Matters

 

  (a) 

(a) Within one (1) calendar month following the final settlement of the
Litigation Matters, the Canadian Purchaser shall determine the costs and
expenses

 

26.

--------------------------------------------------------------------------------

 

it or Amalco incurred in respect of the Litigation Matters on and after the
Closing Date (in this paragraph (a) the “Litigation Costs and Expenses”) and
notify John McDonald thereof, on behalf of the Canadian Vendors. To the extent
the amount of Litigation Costs and Expenses is greater than the Litigation
Reserve, such excess shall forthwith be paid to the Canadian Purchaser by the
Canadian Vendors; such liability to pay being a joint and several liability of
the Canadian Vendors (provided that such amount shall be set-off by any amount
which the Canadian Purchaser is required to reimburse the Canadian Vendors for
pursuant to Article 6). To the extent the amount of Litigation Costs and
Expenses is less than the Litigation Reserve, such deficiency shall forthwith be
paid to John McDonald, in Trust, on behalf of the Canadian Vendors, by the
Canadian Purchaser, by certified cheque, bank draft or wire transfer of
immediately available funds to an account or accounts specified by John
McDonald, in Trust (provided that such amount shall be set-off by any amount
which the Canadian Vendors are required to reimburse the Canadian Purchaser for
pursuant to the provisions of Section 6.5, whether or not such reimbursement is
then due). For the purposes of this paragraph (a) “final settlement” shall mean
a settlement of all claims as between the parties to such Litigation Matter and
a full release of Amalco and any member of the Aitec Holdings Group involved in
such Litigation Matter, or a final judgment of a court of competent jurisdiction
where any right of appeal from such judgment has expired or been exhausted.
Notwithstanding the foregoing, should the Litigation Costs and Expenses exceed
the Litigation Reserve prior to the final settlement, each time such excess
reaches $100,000, an accounting for such amount shall be sent to John McDonald,
and the Canadian Vendors shall forthwith reimburse the Purchasers for such
amount.

 

  (b) Defence of the Litigation Matters shall be assumed by the Canadian
Vendors, and shall otherwise be carried out in accordance with the provisions of
Sections 6.5, 6.6, 6.7, 6.10 and 6.11.

 

2.8 Delivery of Share Certificates

 

  (a) The Canadian Vendors shall transfer and deliver to the Canadian Purchaser
at the Closing Time share certificates representing the Canadian Purchased
Shares duly endorsed in blank for transfer, or accompanied by irrevocable
security transfer powers of attorney duly executed in blank.

 

  (b) The US Vendor shall transfer and deliver to the US Purchaser at the
Closing Time share certificates representing the US Purchased Shares duly
endorsed in blank for transfer, or accompanied by irrevocable security transfer
powers of attorney duly executed in blank.

 

2.9 Place of Closing

The Closing shall take place at the Closing Time at the offices of Fraser Milner
Casgrain LLP, Suite 4200, 1 First Canadian Place, Toronto, Ontario, or at such
other place as may be agreed upon by the Canadian Vendors and the Canadian
Purchaser and the US Purchaser.

 

27.

--------------------------------------------------------------------------------

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Canadian Vendors with respect to the
Aitec Business and the Aitec Subsidiaries

The Canadian Vendors hereby jointly and severally represent and warrant,
respectively, to the Canadian Purchaser, in respect of the Canadian Business and
the Canadian Subsidiaries and to the US Purchaser in respect of the US Business
and the US Subsidiaries, as set out in this Section 3.1 and acknowledge that the
Purchasers are relying on such respective representations and warranties in
connection with the respective transactions contemplated in this Agreement. The
representations and warranties of the Canadian Vendors set out in this
Section 3.1 are not assignable by either of the Canadian Purchaser or the US
Purchaser to any other person, including any future purchaser of any part or all
of the current Aitec Business from any one or more of the Canadian Purchaser or
the US Purchaser.

3.1.1 Incorporation and Organization

Each Aitec Subsidiary is a corporation duly incorporated or continued and
subsisting under the laws of its jurisdiction of incorporation or continuance.
The respective jurisdiction of incorporation or continuance, and the respective
jurisdictions, if any, in which each Aitec Subsidiary carries on its business
are set out in Schedule 3.1.1A. No proceedings have been taken or authorized by
any Canadian Vendor or any Aitec Subsidiary or by any other person with respect
to the bankruptcy, insolvency, liquidation, dissolution or winding up of any
Aitec Subsidiary or with respect to any amalgamation, merger, consolidation,
arrangement or reorganization of, or relating to, any Aitec Subsidiary (other
than as contemplated herein) nor, to the knowledge of the Canadian Vendors, have
any such proceedings been taken by any other person. True and complete copies of
the Articles and all by-laws of each Aitec Subsidiary are contained in the
minute book of each Aitec Subsidiary made available to the Purchasers. The
Articles and the by-laws of each Aitec Subsidiary constitute all of the Articles
and by-laws of each Aitec Subsidiary, are complete and correct and are in full
force and effect. There are no shareholders’ agreements or unanimous
shareholders’ agreements (other than the Unanimous Shareholder Agreement)
governing the affairs of any Aitec Subsidiary or the relationship, rights and
duties of their respective shareholders nor are there any voting trusts, pooling
arrangements or other similar agreements with respect to the ownership or voting
of any shares of any Aitec Subsidiary. Schedule 3.1.1B sets out the dates of the
Articles of each Aitec Subsidiary and of any amendment thereto. No articles of
amendment have been filed or authorized by the shareholders of any Aitec
Subsidiary since the dates set forth in Schedule 3.1.1B with respect to each
Aitec Subsidiary.

3.1.2 Corporate Records

The minute books of each Aitec Subsidiary and other corporate records made
available to the Purchasers for review have been maintained in accordance with
Applicable Law and contain, without limitation, complete and accurate copies of
all by-laws of each Aitec Subsidiary and minutes of all meetings of, and
resolutions passed by, the shareholders, directors and committees of directors
since the respective dates of incorporation of each Aitec Subsidiary. All such
meetings were duly called and held and all such by-laws and resolutions were
duly

 

28.

--------------------------------------------------------------------------------

passed or enacted. The share certificate book, register of shareholders,
register of transfers and register of directors of each Aitec Subsidiary are
complete, accurate and current.

3.1.3 Qualification to do Business

Each Aitec Subsidiary has the necessary corporate power, authority and capacity
to own or lease and use its property and assets and to carry on the Aitec
Business as now being conducted by it and is registered, licenced or otherwise
qualified to carry on the Aitec Business in each jurisdiction in which the
nature of the Aitec Business as carried on by it or the property or assets owned
or leased or used by it makes such qualification necessary. The respective
jurisdictions in which each Aitec Subsidiary owns or leases property or assets
or carries on Aitec Business is set forth in Schedule 3.1.1A. Each Aitec
Subsidiary possesses all Licences required for the conduct of the Aitec Business
and all such licences are listed in Schedule 3.1.3.

3.1.4 Authorized and Issued Capital

The authorized and issued capital of each Aitec Subsidiary is set forth in
Schedule 3.1.4. No other securities have been issued by the Aitec Subsidiaries
and immediately prior to the Amalgamation, no other securities will have been
issued. All of the Shares of the Aitec Subsidiaries have been validly issued and
are outstanding as fully paid and non-assessable shares. Following the
Amalgamation, the authorized and issued capital of Amalco shall be as indicated
in Schedule 3.1.4. At Closing, all of the Canadian Purchased Shares shall have
been validly issued and will be outstanding as fully paid and non-assessable
shares.

3.1.5 Title to Shares

The registered and beneficial ownership of the Pre-Amalgamation Shares and the
US Purchased Shares are as detailed in Schedule 3.1.4 and the registered owners
thereof now have good and marketable title to such shares; immediately prior to
the Amalgamation, the registered owners shall have good and marketable title to
the Pre-Amalgamation Shares and the US Purchased Shares; immediately prior to
Closing, the registered owners shall have good and marketable title to the
Canadian Purchased Shares and the US Purchased Shares; and on Closing, the
Canadian Purchaser shall acquire good and marketable title to the Canadian
Purchased Shares and the US Purchased Shares, in each of the foregoing cases
free and clear of all Encumbrances. At Closing, there will not be any
restrictions of any kind on the transfer of the Canadian Purchased Shares except
those set out in the Articles of Amalco; and there will not be any restrictions
of any kind on the transfer of the US Purchased Shares except those set out in
the Articles of Aitec Investments USA Inc. Other than as contemplated herein, no
person has, or has any right capable of becoming, any agreement, option,
understanding or commitment for the purchase or other acquisition from the
registered owners of any of the Pre-Amalgamation Shares and US Purchased Shares,
and on Closing no such right shall exist in respect to the Canadian Purchased
Shares and the US Purchased Shares.

3.1.6 Investments

None of the Aitec Subsidiaries has agreed to acquire any business entity or any
shares or other equity ownership or interest and none is subject to any
obligation or requirement

 

29.

--------------------------------------------------------------------------------

to provide funds to or to make any investment in any business or person by way
of loan, capital contribution, equity purchase or otherwise.

3.1.7 No Obligation to Issue Securities

There are no agreements, options, warrants, rights of conversion or other rights
pursuant to which any of the Aitec Subsidiaries are, or may become, obligated to
issue any shares or other securities; and at Closing, no such agreements or
rights shall exist in respect of Amalco.

3.1.8 Conflicting Instruments

Neither the entering into of this Agreement by the Parties, nor the entering
into of any agreement or other instrument contemplated hereby nor the completion
of the transactions herein contemplated nor the performance by the Canadian
Vendors and the US Vendors of their respective obligations hereunder will:
(a) conflict with, or result in the breach or violation of or default under, or
cause the acceleration of any obligations of any of the Aitec Subsidiaries
under, any of the terms and provisions of (i) any Applicable Law, (ii) the
Articles of any of the Aitec Subsidiaries or their respective by-laws or any
resolution of the directors or shareholders of any of the Aitec Subsidiaries; or
(iii) subject to obtaining any Consent or Regulatory Approval which may be
required thereunder in connection with the completion of the transactions herein
contemplated, any Licence (other than the CNSC Licence and US Nuclear Licence,
in connection with which the obligation to obtain any consent being that of the
Purchasers), Order or agreement, contract or commitment, written or oral to
which any Aitec Subsidiaries is a party or by which any of them is bound;
(b) subject to obtaining any Consent, relieve any other party to any Contract,
Lease or Equipment Lease of that party’s obligations thereunder or enable it to
terminate its obligations thereunder; (c) subject to obtaining any Consent,
cause any of the Aitec Subsidiaries to lose any rights under any Contract, Lease
or Equipment Lease or any right to a government grant or tax credit or refund
(other than tax consequences applicable generally upon a change of control); or
(d) result in the creation of any lien or encumbrance on any of the property or
assets of any of the Aitec Subsidiaries.

3.1.9 Regulatory Approvals

Except as set forth in Schedule 3.1.9, no Regulatory Approval or registration or
filing with, notice to, or waiver from any Governmental Authority or other
person is required to be obtained or made by the US Vendor or the Canadian
Vendor or any Canadian Holding Company or any Aitec Subsidiary: (a) in
connection with the execution, delivery and performance by the US Vendor or the
Canadian Vendor of their respective obligations under this Agreement or the
Closing Documents or the consummation of the transactions contemplated hereby;
(b) to avoid the loss of any Licence relating to the Aitec Business; or (c) to
permit any of the Aitec Subsidiaries to carry on the Aitec Business after the
Closing as the Aitec Business is currently carried on by such Aitec Subsidiary.
Notwithstanding the foregoing, the Canadian Vendors make no representation or
warranty or assurance whatsoever that the Excluded Licenses listed on Schedule
3.1.9 or those licenses where additional filings are required as listed on
Schedule 3.1.9 will remain validly issued or in full force and effect for any
period following the Closing given that such licences remain at the discretion
of the licensing agency. It shall be the Purchasers’ obligation to obtain
consent from such licensing agencies for all such Excluded

 

30.

--------------------------------------------------------------------------------

Licenses and Licenses for which additional filings are required, all as
identified on Schedule 3.1.9. Further, the Canadian Vendors make no
representation or warranty in respect of the applicability of the Competition
Act (Canada) to the transactions contemplated herein.

3.1.10 Books and Records

The Canadian Vendors have made available to the Purchasers all Books and
Records. All material financial transactions of the Aitec Subsidiaries have been
accurately recorded in the Accounting Records in accordance with sound business
and financial practice and the Accounting Records accurately reflect the basis
for the financial condition and the revenues, expenses and results of operations
of the Aitec Subsidiaries as of and to the date hereof. All Books and Records
are in the full possession and exclusive control of and are owned exclusively by
the Canadian Holding Companies or the Aitec Subsidiaries and are not dependent
upon any computerized or other system or device that is not exclusively owned by
or used under licence by, or controlled by the Aitec Subsidiaries.

3.1.11 Audited Financial Statements

The Audited Financial Statements are complete and correct, have been prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with those of preceding periods and present fairly and accurately:

 

  (a) all of the assets, liabilities (whether accrued, absolute, contingent,
matured or unmatured or otherwise) and the financial condition of the companies
set out therein; and

 

  (b) the revenues, earnings and results of operations of the companies set out
therein on a consolidated basis,

in each case as of the date and throughout the period indicated.

3.1.12 No Material Change

Since September 30, 2006, there has been no change in the Aitec Business or in
the operations, affairs, prospects or condition (financial or otherwise) of any
of the Aitec Subsidiaries, including any such change arising as a result of any
change in Applicable Law, revocation of any Licence or as a result of fire,
explosion, accident, casualty, labour problem, flood, drought, riot, storm, act
of God or otherwise, except for changes occurring in the ordinary course of
business and which, either individually or in the aggregate, have not materially
adversely affected and will not materially adversely affect the Aitec Business
or the operations, affairs, prospects or condition (financial or otherwise) of
the Aitec Subsidiaries.

3.1.13 No Liabilities

The Aitec Subsidiaries do not have any liabilities (whether accrued, absolute,
contingent or otherwise, matured or unmatured) except:

 

  (a) liabilities disclosed on, reflected in or provided for in the Audited
Financial Statements;

 

31.

--------------------------------------------------------------------------------

  (b) liabilities disclosed or referred to in this Agreement; and

 

  (c) liabilities incurred in the ordinary course of the Aitec Business and
attributable to the period since September 30, 2006, which are not, either
individually or in the aggregate, materially adverse to the Aitec Business, or
to the operations, affairs, prospects or condition (financial or otherwise) of
any of the Aitec Subsidiaries.

3.1.14 Aitec Business Carried on in Ordinary Course

Since September 30, 2006, the Aitec Business has been carried on in the ordinary
course, consistent with past practice and, in particular and without limitation,
none of the Aitec Subsidiaries has, except as set out in Schedule 3.1.14:

 

  (a) transferred, assigned, sold or otherwise disposed of any of its assets
except in the ordinary course of the Aitec Business;

 

  (b) incurred or assumed any obligation or liability (fixed or contingent)
other than obligations or liabilities included in the Audited Financial
Statements, liabilities otherwise disclosed or referred to in this Agreement,
and current liabilities incurred since September 30, 2006 in the ordinary course
of the Aitec Business;

 

  (c) settled any liability or Legal Proceeding pending against it or any of its
assets;

 

  (d) discharged or satisfied any lien or encumbrance, or paid any obligation or
liability (fixed or contingent) other than liabilities included in the Audited
Financial Statements, current liabilities incurred since September 30, 2006, in
the ordinary course of the Aitec Business, scheduled payments under loan
agreements and other Contracts and deposits to operating accounts (and the
resulting reductions to operating lines of credit);

 

  (e) suffered an operating loss or any extraordinary loss;

 

  (f) made any material change in the method of billing customers or the credit
terms made available to customers;

 

  (g) made any material change with respect to any method of management
operation or accounting in respect of the Aitec Business;

 

  (h) waived, cancelled or written off, or agreed or become bound to waive,
cancel or write off, any rights, claims or accounts receivable other than in the
ordinary course of the Aitec Business;

 

  (i) hired or dismissed any non-unionized employee whose annual salary exceeds
$75,000.00 per annum;

 

  (j)

except as disclosed in Schedule 3.1.17 increased the compensation paid or
payable to its Aitec Employees or changed the benefits to which such Aitec
Employees and former employees are entitled under any Aitec Employee Benefit
Plans, created any new Aitec Employee Benefit Plans or modified, amended or
terminated any existing Aitec Employee Benefit Plans for any such employees
other than increases or changes made in the ordinary course of the Aitec
Business

 

32.

--------------------------------------------------------------------------------

 

consistent with past practice or made any amendment to, or terminated, any
benefits to Aitec Employees;

 

  (k) created or permitted to exist any Encumbrance on any of its assets other
than a Permitted Encumbrance and other than purchase money security interests on
assets leased pursuant to leases;

 

  (l) modified, amended or terminated any Contract or waived or released any
right which it has or had, other than in the ordinary course of the Aitec
Business;

 

  (m) declared or paid any dividend or declared or made any other distribution
or return of capital in respect of any of its shares (or been deemed under the
Income Tax Act or the Code, as applicable, to have done so) or purchased,
redeemed or otherwise acquired any of its shares or agreed to do so;

 

  (n) entered into or become bound by any written or oral contract, agreement or
arrangement, or made or authorized any capital expenditure other than in the
ordinary course of the Aitec Business or involving or which may result in the
payment of money by any of the Aitec Subsidiaries of an amount in excess of
$50,000.00 with respect to any one transaction or an amount in excess of
$500,000.00 with respect to all transactions;

 

  (o) had a supplier terminate, or communicate to any Aitec Subsidiary the
intention or threat to terminate, its relationship with such Aitec Subsidiary,
or the intention to reduce substantially the quantity of products or services it
sells to such Aitec Subsidiary or the intention to increase the prices it
charges for goods or services it sells to such Aitec Subsidiary, except in the
case of suppliers whose sales to the Aitec Subsidiaries are not, in the
aggregate, material to the Aitec Business or to the financial condition of the
Aitec Subsidiaries;

 

  (p) had any customer terminate, or communicate to any Aitec Subsidiary the
intention or threat to terminate, its relationship with such Aitec Subsidiary,
or the intention to reduce substantially the quantity of products or services it
purchases from such Aitec Subsidiary, or its dissatisfaction with the products
or services sold by such Aitec Subsidiary, except in the case of customers whose
purchases from the Aitec Subsidiaries are not, in the aggregate, material to the
Aitec Business or to the financial condition of the Aitec Subsidiaries; or

 

  (q) made any payment to any Interested Person except for usual employee
reimbursements and compensation paid in the ordinary course of the Aitec
Business; or

 

  (r) authorized or agreed or otherwise become committed to do any of the
foregoing.

3.1.15 No Guarantees

Except as disclosed in Schedule 3.1.15 the Aitec Subsidiaries have neither given
nor agreed to give, nor are they parties to or bound by or subject to any
Guarantee.

 

33.

--------------------------------------------------------------------------------

3.1.16 Non-Arm’s Length Transactions

No Interested Person is indebted to any of the Aitec Subsidiaries nor are any of
the Aitec Subsidiaries indebted to any Interested Person, except such
indebtedness as is disclosed in Schedule 3.1.16, and except for usual employee
reimbursements and compensation paid in the ordinary and normal course of the
Aitec Business. Except as described in Schedule 3.1.16 and except for Contracts
of employment, none of the Aitec Subsidiaries is a party to any Contract with
any Interested Person. No Interested Person: (a) owns, directly or indirectly,
in whole or in part, any property that any of the Aitec Subsidiaries use in the
operation of the Aitec Business; or (b) has any cause of action or other claim
whatsoever against, or is owed any amount by any of the Aitec Subsidiaries in
connection with the Aitec Business, except for any liabilities reflected in the
Audited Financial Statements and claims in the ordinary course of business such
as for accrued expense reimbursements, vacation pay and benefits under the Aitec
Employee Benefit Plans.

3.1.17 Aitec Employees

 

  (a) Schedule 3.1.17 contains the names of all Aitec Employees and their
general regional location of their employment, a list of all written contracts
with Aitec Employees, and a list of all Collective Agreements. Schedule 3.1.17
also contains a list of all persons receiving compensation for work or services
provided to any of the Aitec Subsidiaries who are not Aitec Employees and
particulars of their terms of engagement. Schedule 3.1.17 also lists names of
all Aitec Employees currently on leave and in receipt of disability benefits,
workplace safety and insurance/workers compensation benefits, and Aitec
Employees currently on pregnancy or parental leave or other leave, together with
the type of leave and their expected return date, if known.

 

  (b) Except as disclosed in Schedule 3.1.17, none of the Aitec Subsidiaries is
a party to or bound by or subject to any Collective Agreement, nor has any Aitec
Subsidiary made any commitment to, or conducted any negotiation or discussion
with, any labour union or employee association with respect to any future
agreement or arrangement, is required to recognize any labour union or employee
association representing its employees or any agent having bargaining rights for
its employees and, to the knowledge of the Canadian Vendors, there is no current
attempt to organize, certify or establish any labour union or employee
association with respect to Aitec Employees nor has there been any attempt to do
so during the period of five (5) years preceding the date hereof.

 

  (c) None of the Canadian Vendors has reason to believe that any Aitec
Employee, save and except for those disclosed on Schedule 3.1.17, would
terminate his or her employment as a result of or in anticipation of the
transactions herein contemplated. General relations between the Aitec
Subsidiaries and their respective Aitec Employees are good and there is no
present, pending or, to the Canadian Vendors’ knowledge, threatened labour
strike, dispute, slowdown or work stoppage.

 

  (d)

Except as set out in Schedule 3.1.17, none of the Aitec Subsidiaries has any
Aitec Employee who is not a member of a union bargaining unit and whose

 

34.

--------------------------------------------------------------------------------

 

employment cannot be terminated upon provision of reasonable notice or pay in
lieu of reasonable notice. None of the Aitec Subsidiaries is liable to any Aitec
Employee or former employee for any damages under any Applicable Law or any
agreement or arrangement relating to any Employee Benefit Plan, except as set
out in Schedule 3.1.17.

 

  (e) None of the Aitec Subsidiaries is in arrears in the payment of wages,
salary, commissions, overtime pay, bonuses, vacation pay and expense
reimbursement and any other amounts owing to Aitec Employees or any payments
relating to Aitec Employees in respect of any Aitec Employee Benefit Plans or
under Applicable Law, other than the normal payment of wages one week in
arrears, by the Aitec Subsidiaries (save and except for Aitec (Western) Inc.
which pays its salaried staff semi-monthly in arrears, and Aitec USA Inc. and
Weldsonix Inc. which pay their staff bi-weekly in arrears) and accrued vacation
pay and bonuses.

 

  (f) Except as set out in Schedule 3.1.17, none of the Aitec Employees are
entitled to any carried-over or accrued vacation time or vacation pay relating
to any time prior to January 1, 2007.

 

  (g) Except as set out in Schedule 3.1.17, none of the Aitec Subsidiaries has
any employee on leave or in receipt of disability benefits, applicable workplace
safety and insurance/workers’ compensation benefits.

 

  (h) Except as set out in Schedule 3.1.17, there are no outstanding
assessments, penalties, fines, liens, charges, surcharges, or other amounts due
or owing by any of the Aitec Subsidiaries pursuant to any workplace safety and
insurance legislation or similar legislation in any jurisdiction in which the
Aitec Subsidiaries carry on business and none of the Aitec Subsidiaries have
been reassessed in any material respect under such legislation during the past
three (3) years and no audit is currently being performed pursuant to any
applicable workplace safety and insurance legislation. There are no claims or
potential claims which may materially adversely affect the accident cost
experience of any of the Aitec Subsidiaries.

 

  (i) The Canadian Vendors have provided to the Purchasers all orders and
inspection reports under applicable Occupational Health and Safety legislation
(“OHSA”) relating to the Aitec Subsidiaries for three (3) years immediately
preceding the Closing Date. There are no charges pending under OHSA or any other
statute in respect of any of the Aitec Subsidiaries.

 

  (j) There are no claims, complaints or proceedings by any of the Aitec
Employees or any other person against the Aitec Subsidiaries under any human
rights, employment standards, pay equity, occupational health and safety,
workplace safety and insurance/workers’ compensation or any other
employment-related statute or regulation.

 

  (k) None of the Aitec Subsidiaries have engaged in any unfair labour practice
and no unfair labour practice complaint, grievance or arbitration proceeding is
pending or, to the Aitec Subsidiaries’ knowledge, threatened against any of the
Aitec Subsidiaries.

 

35.

--------------------------------------------------------------------------------

  (l) No labour strike, dispute, work slowdown or stoppage has occurred against
any of the Aitec Subsidiaries within the last five (5) years.

 

  (m) To the knowledge of the Canadian Vendors, and other than as set out in
paragraph (c) above, none of the Aitec Employees who have an annual salary of at
least $75,000.00 per year intend to end their employment with any Aitec
Subsidiary with a period ending six (6) months following the Closing Date.

 

  (n) U.S. Employment Law Issues:

 

  (i) US Vendor has complied in all material respects with the Applicable Laws
relating to the employment of labour. At the date of this Agreement or in the
ordinary course of business following the date of this Agreement, all
obligations of US Vendor to its employees for compensation, vacation pay and
time, health and welfare plans, qualified and non qualified compensation plans,
pensions, and severance obligations and liabilities to employees arising by
virtue of the actions contemplated in this Agreement have been or will be
satisfied by US Vendor or accrued on the Books and Records. US Vendor is not
delinquent in the payment of withholding or other payroll Taxes or workers
compensation assessments or penalties.

 

  (ii) There is no unfair labour practice, charge or complaint against US Vendor
relating to employees or former employees who work or worked for US Vendor
pending or, to the knowledge of US Vendor, threatened before the National Labour
Relations Board. There is not now and there has not occurred, nor to the
knowledge of the Canadian Vendors is there presently threatened, a labour
strike, petition for representation, slowdown, work stoppage or lockout against
US Vendor.

 

  (iii) No charges against US Vendor with respect to any employee or former
employee of US Vendor are pending before the Equal Employment Opportunity
Commission or any state, local or foreign agency responsible for the prevention
of unlawful employment practices. US Vendor has complied with, and has not
incurred any liability under, the WARN Act and any regulations adopted
thereunder.

 

  (iv) US Vendor has not and at the Closing Time will not have violated the WARN
Act or any similar state or local legal requirement.

 

  (v) Except as listed on Schedule 3.1.17, none of the US Subsidiaries is a
party to a collective bargaining agreement.

3.1.18 Aitec Employee Benefit Plans

The Canadian Vendors represent and warrant in connection with the Aitec Employee
Benefit Plans, provided that the representations contained in subsection
3.1.18(d), 3.1.18(e), 3.1.18(f), 3.1.18(g), 3.1.18(i), 3.1.18(j), 3.1.18(k),
3.1.18(n), 3.1.18(o), 3.1.18(v)(i), 3.1.18(v)(iv), 3.1.18(v)(vi) and 3.1.18(p)
shall not apply to the Aitec Employee Benefit Plans listed as “Multiemployer
Aitec Employee Benefit Plans” on Schedule 3.1.18 as follows:

 

36.

--------------------------------------------------------------------------------

  (a) Copies of each written Aitec Employee Benefit Plan, as amended to the date
hereof, as well as summary descriptions of the Aitec Employee Benefit Plans
provided to Aitec Employees and former employees of any Aitec Subsidiary, annual
information reports and investment reports and any Aitec Employee Benefit Plans’
financial statements and statements of investment policies and procedures have
been provided to or made available to the Purchasers. In the case of each
unwritten Aitec Employee Benefit Plan, a written description thereof which
accurately describes all material provisions of such Aitec Employee Benefit
Plan, as amended to the date hereof, has been provided to or made available to
the Purchasers. There have been no promised improvements, increases or changes
to the benefits provided under any Aitec Employee Benefit Plan.

 

  (b) The Central Pension Fund of the International Union of Operating Engineers
and Participating Employers, the NDT Industry Pension Fund, the Aitec USA Inc.
401(k) Plan, the Aitec USA Inc. 401(k) Profit Sharing Plan, the Aitec Holdings
Inc. Employee Profit Sharing Plan and a Registered Retirement Savings Plan for
certain Canadian Employees are the only pension plans, registered or
unregistered, under which Aitec Employees accrue pension benefits and under
which benefits are provided to former employees, and none of the Canadian
Subsidiaries or, except as described in this subsection, US Subsidiaries has
ever participated in a defined benefit pension plan.

 

  (c) Schedule 3.1.18 lists and describes each of the Aitec Employee Benefit
Plans in which Aitec Employees and/or former employees of the Aitec Subsidiaries
participate.

 

  (d) Each Aitec Employee Benefit Plan is, and has been, established, registered
(where desirable or required), administered and invested, in compliance with:

 

  (i) the terms of such Aitec Employee Benefit Plan;

 

  (ii) all Applicable Law;

 

  (iii) any Collective Agreement;

 

  (iv) every agreement (past or present) relating to the benefits provided under
each such Aitec Employee Benefit Plan; and

 

  (v) all understandings, written or oral, between the Aitec Subsidiaries and
any of their respective predecessors, and the Aitec Employees and former
employees of the Aitec Subsidiaries.

 

  (e)

No fact or circumstance exists which would adversely affect the tax-exempt
status of any Aitec Employee Benefit Plan; and none of the Canadian Vendors, the
Canadian Holding Companies, the Aitec Subsidiaries or any agent of any of them,
has received, in the last three years, any notice from any person questioning or
challenging such compliance (other than in respect of any claim for benefit
payments in the ordinary course related solely to such a person who is an

 

37.

--------------------------------------------------------------------------------

 

individual), and none of the Canadian Vendors, the Canadian Holding Companies,
the Aitec Subsidiaries or any agent of any of them has any knowledge of any such
notice from any person questioning or challenging such compliance beyond the
last three years.

 

  (f) All obligations under the Aitec Employee Benefit Plans (whether pursuant
to the terms thereof, Applicable Law or otherwise) have been satisfied, and
there are no outstanding defaults or violations thereunder by the Canadian
Vendors, the Canadian Holding Companies, the Aitec Subsidiaries or the
administrator of any Aitec Employee Benefit Plan, or by any agent of any of
them, that could result in or give rise to any liability to any of the Aitec
Subsidiaries, nor do any of the Canadian Vendors, the Canadian Holding Companies
or any of the Aitec Subsidiaries have any knowledge of any such default or
violation by any other party to any Aitec Employee Benefit Plan. For greater
certainty, all returns, filings, reports and disclosures relating to the Aitec
Employee Benefit Plans required pursuant to the terms of the Aitec Employee
Benefit Plans, Applicable Law or regulatory authorities have been timely filed
or distributed in accordance with all requirements.

 

  (g) Where required by Applicable Law or pursuant to the Aitec Employee Benefit
Plan, each Aitec Employee Benefit Plan has been fully funded or fully insured
pursuant to methodology appropriate to the Aitec Employees and former employees
or the Aitec Subsidiaries and the Aitec Business.

 

  (h) All employer payments, contributions or premiums required to be remitted
or paid to or in respect of each Aitec Employee Benefit Plan by the Canadian
Vendors, the Canadian Holding Companies, or the Aitec Subsidiaries have been
remitted and paid in a timely fashion in accordance with the terms thereof and
all Applicable Law, and no Taxes or penalties could be levied or are owing or
exigible against the Canadian Vendors, the Canadian Holding Companies, or the
Aitec Subsidiaries under or in respect of any Aitec Employee Benefit Plans.

 

  (i) There is no investigation, examination, proceeding, action, suit or claim
(other than routine claims for benefits) pending or threatened involving any
Aitec Employee Benefit Plan or its assets, and no facts exist which presently or
after notice or lapse of time or both could reasonably be expected to give rise
to any such investigation, examination, proceeding, action, suit or claim (other
than routine claims for benefits).

 

  (j) No event has occurred respecting any Aitec Employee Benefit Plan which
would entitle any person, including but not limited to any regulator (without
the consent of the appropriate Aitec Subsidiary) to wind-up or terminate or
require the wind up or termination of any Aitec Employee Benefit Plan, in whole
or in part.

 

  (k) In respect of each Aitec Employee Benefit Plan that is funded, in whole or
in part, no person has withdrawn any funds from any such Aitec Employee Benefit
Plan, taken any contribution holidays in respect of any Aitec Employee Benefit
Plan or paid any expenses from any Aitec Employee Benefit Plan except in
accordance with the terms of such Aitec Employee Benefit Plan, the trusts or
other funding media which govern such plan and Applicable Law.

 

38.

--------------------------------------------------------------------------------

  (l) All employee data necessary to administer each Aitec Employee Benefit Plan
in respect of the Aitec Employees and former employees of the Aitec Subsidiaries
and their beneficiaries is in the possession of the Aitec Subsidiaries, and is
complete, correct and in a form which is sufficient for the proper
administration of the Aitec Employee Benefit Plans in respect of such Aitec
Employees, former employees and their beneficiaries.

 

  (m) None of the Aitec Employee Benefit Plans, other than pension plans,
provides post-employment or post-retirement benefits to or in respect of the
Aitec Employees or any former employees of the Aitec Subsidiaries or to or in
respect of the beneficiaries of such Aitec Employees and former employees,
except for benefits paid during the applicable period of notice of termination
of employment.

 

  (n) None of the Aitec Employee Benefit Plans requires or permits a retroactive
increase in premiums or payments, and the level of insurance reserves, if any,
under any insured or self-insured Aitec Employee Benefit Plans is reasonable and
sufficient to provide for all incurred but unreported claims.

 

  (o) None of the Canadian Vendors, the Canadian Holding Companies and the Aitec
Subsidiaries, and no agent of any of them, is in breach of any contractual or
fiduciary obligation with respect to the administration of the Aitec Employee
Benefit Plans or the trusts or other funding media relating thereto.

 

  (p) There exists no liability in connection with any former benefit plan
relating to the Aitec Employees or former employees of the Aitec Subsidiaries
and their beneficiaries that has terminated and all procedures for termination
of each such former benefit plan has been properly followed in accordance with
the terms of such former benefit plan and Applicable Law.

 

  (q) Neither the execution of this Agreement nor the consummation of any of the
transactions contemplated in this Agreement will:

 

  (i) result in any payment (including without limitation bonus, golden
parachute, retirement, severance, unemployment compensation, or other benefit or
enhanced benefit) becoming payable under any Aitec Employee Benefit Plans;

 

  (ii) increase any benefits otherwise payable under any Aitec Employee Benefit
Plans;

 

  (iii) entitle any Aitec Employee to any job security or similar benefit or any
enhanced benefits; or

 

  (iv) result in the acceleration of the time of payment or vesting of any
benefits otherwise payable under any Aitec Employee Benefit Plans, or result in
any Aitec Employee Benefit Plans becoming terminable other than at the sole and
unfettered discretion of the Aitec Subsidiaries.

 

  (r)

The data provided by the Canadian Vendors and the Aitec Subsidiaries to the
Purchasers in connection with the Aitec Employees and former employees of the

 

39.

--------------------------------------------------------------------------------

 

Aitec Subsidiaries and the Subsidiaries and their beneficiaries, including the
demographic data and information relating to such persons, was true, accurate
and complete in all material respects on the date that it was provided to the
Purchasers and remains true, accurate and complete in all material respects as
of the date hereof.

 

  (s) None of the Canadian Vendors, the Canadian Holding Companies, or the
Canadian Subsidiaries has any liability or potential liability in respect of the
acts or omissions of any employees, directors, or officers of the Canadian
Vendors, the Canadian Holding Companies, or the Canadian Subsidiaries in
connection with those individuals’ obligations and duties as trustees of any of
the Canadian Employee Benefit Plans.

 

  (t) The booklets, brochures, summaries, descriptions and manuals prepared for,
and circulated to, the Aitec Employees and former employees of the Aitec
Subsidiaries and their beneficiaries concerning each Aitec Employee Benefit
Plan, together with all written communications of a general nature provided to
such persons, accurately describe the benefits provided under each such Aitec
Employee Benefit Plan referred to therein.

 

  (u) The Canadian Vendors, the Canadian Holding Companies, and the Aitec
Subsidiaries have complied with their obligations in respect of the Aitec
Employee Benefit Plans listed on Schedule 3.1.18.

 

  (v) Additional US Representations

 

  (i) Each of the U.S. Employee Benefit Plans disclosed in Schedule 3.1.18 has
been duly adopted as required and operated in material compliance with its
provisions and is in material compliance with all applicable requirements of
ERISA and the Code;

 

  (ii) Except as disclosed on Schedule 3.1.18, each U.S. Benefit Plan which is
intended to be a qualified plan under Section 401(a) of the Code has received a
favourable determination of, or opinion letter from, the Internal Revenue
Service, as applicable, to that effect. To the knowledge of the Canadian
Vendors, no event has occurred which would cause the loss of qualification under
Section 401(a) of the Code or the imposition of any liability, penalty or Tax
thereunder with respect to the operation of such U.S. Benefit Plan;

 

  (iii) Except as disclosed on Schedule 3.1.18, none of the U.S. Employee
Benefit Plans is a “multiemployer plan” (within the meaning of Section 3(37) or
4001 of ERISA or a “multiple employer plan” within the meaning of Section 413(c)
of the Code) or a defined benefit pension plan subject to Title IV of ERISA or
Section 412 of the Code;

 

  (iv)

Except as set forth in Schedule 3.1.18 and as required under Section 4980B of
the Code and Sections 601 through 608 of ERISA, no U.S. Benefit Plan provides
health or life insurance benefits for retirees or future

 

40.

--------------------------------------------------------------------------------

 

retirees. Each of US Vendor’s group health plans provides the continuation of
coverage requirements set forth in Section 4980B of the Code and in Regulation
§1.162-26 thereunder and Sections 601 through 609 of ERISA and they have been
administered in material compliance therewith.

 

  (v) Except as disclosed on Schedule 3.1.18, the consummation of the
transaction will not result in an increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any benefits or
compensation payable to or in respect of any individual and there is no amount
payable to any person on account of the transaction except as otherwise provided
herein. In addition, no amounts payable under the U.S. Employee Benefit Plans
listed in Schedule 3.1.18 or any other arrangement between the Company and any
individual will fail to be deductible for federal income tax purposes by virtue
of Section 280G of the Code.

 

  (vi) Schedule 3.1.18 contains a list of each U.S. Employee Benefit Plan which
provides nonqualified deferred compensation and may be subject to Section 409A
of the Code, and each such plan is either exempt from Section 409A of the Code
under current Internal Revenue Service guidance or has been operated in good
faith compliance with Section 409A of the Code and the Internal Revenue Service
guidance issued thereunder.

3.1.19 Debt Instruments

Except as set forth and described in Schedule 3.1.19, none of the Aitec
Subsidiaries is a party to or bound by or subject to any Debt Instrument or any
agreement, contract or commitment to create, assume or issue any Debt Instrument
and no Debt Instrument or Encumbrance which any Aitec Subsidiary is a party to
or bound by or subject to is dependent upon the Guarantee of or any security
provided by any other person.

3.1.20 Real Property

Except as set forth and described in Schedule 3.1.20, no Aitec Subsidiary owns
or has ever owned any real or immoveable property.

3.1.21 Status of Leased Property

 

  (a) To the best knowledge of the Canadian Vendors, all of the plant,
buildings, structures, erections, improvements, appurtenances and fixtures
(collectively in this Section 3.1.21 “buildings and structures”) situate on or
forming part of the Leased Property and used by the Aitec Subsidiaries in the
operation of the Aitec Business are in good operating condition and in a state
of good maintenance and repair, are adequate and suitable for the purposes for
which they are currently being used and each of the Aitec Subsidiaries have
adequate rights of ingress and egress to and from all of its buildings and
structures for the operation of the Aitec Business in the ordinary course.

 

41.

--------------------------------------------------------------------------------

  (b) There is nothing owing by any of the Aitec Subsidiaries in respect of the
supply to or the use by it of water, gas, electrical power or energy, steam or
hot water, or other utilities (except for current accounts the payment dates of
which have not yet passed).

3.1.22 Lease and Leased Property

No Aitec Subsidiary is a party to or bound by or subject to nor has any Aitec
Subsidiary agreed or become bound to enter into any real property lease or other
right of occupancy relating to real property, whether as lessor or lessee,
except for the Leases set forth and described in Schedule 3.1.22, in which is
accurately specified the parties to and dates of each of the Leases, particulars
of any requirement thereunder for any Consent or Regulatory Approval in
connection with the change of control and amalgamation of each Aitec Subsidiary
herein contemplated, and the locations (including municipal addresses) of the
Leased Property. Each Lease is valid and subsisting and in good standing, there
is no default thereunder, nor is there any dispute between any Aitec Subsidiary
and any landlord or tenant or any other party under or in connection with any
Lease and any Aitec Subsidiary is entitled to all rights and benefits under the
Lease and none of the Aitec Subsidiaries has (save and except for the sublease
of a portion of the Davis Road, Oakville property by Aitec Inc. to R-Metrics
Ltd.) sublet, assigned, licenced or otherwise conveyed any rights in the Lease
or the property subject thereto to any other person. Neither any Aitec
Subsidiary nor, to the Canadian Vendors’ knowledge, any other party thereto is
in breach of any of the provisions of any Lease and (subject to obtaining any
Consents and Regulatory Approvals to the change in control and amalgamation of
the Aitec Subsidiaries herein contemplated) the completion of the transactions
herein contemplated will not afford any of the parties to any Lease or any other
person (other than the Aitec Subsidiaries) the right to terminate any Lease nor
will the completion of the transactions herein contemplated result in any
additional or more onerous obligation on any Aitec Subsidiary under any Lease.
Other than as set out in Schedule 3.1.22, no Lease has been amended since
September 30, 2006.

3.1.23 Personal Property

Except for property subject to an Equipment Lease, each of the Aitec
Subsidiaries are the owners of all of its personal property used in the Aitec
Business with good and marketable title thereto free of any Encumbrance other
than Permitted Encumbrances and other than Encumbrances set out in Schedule
3.1.28 (which Encumbrances shall be discharged at or before Closing).

3.1.24 Equipment Leases

The Equipment Leases listed or identified on Schedule 3.1.24 are the only leases
of personal property to which any Aitec Subsidiary is a party. All of the
Equipment Leases are in full force and effect and no default exists on the part
of any of the Aitec Subsidiaries, or, to the knowledge of the Canadian Vendors,
on the part of any of the other parties thereto. The entire interest of each of
the Aitec Subsidiaries under each of the Equipment Leases to which it is a party
or by which it is bound is held by such Aitec Subsidiary free and clear of any
Encumbrances, except for Permitted Encumbrances and any Encumbrance set out in
Schedule 3.1.28, and all payments due under the Equipment Leases have been duly
and punctually paid

 

42.

--------------------------------------------------------------------------------

and all obligations to be discharged or performed under the Equipment Leases
have been fully discharged and performed in accordance with the terms of the
Equipment Leases.

3.1.25 Licences and Compliance with Applicable Laws

Each of the Aitec Subsidiaries possesses all Licences necessary to carry on the
Aitec Business and each of the Aitec Subsidiaries has conducted and is
conducting the Aitec Business in compliance with Applicable Law and is not in
breach of any provision of Applicable Law. All Licences of the Aitec
Subsidiaries are valid and subsisting and in good standing and there is no
default thereunder. None of such Licences (a) contains any burdensome term,
provision, condition or limitation which has or could have an adverse effect on
any Aitec Subsidiary or the Aitec Business, or (b) except as specifically
disclosed in this Agreement, requires any Regulatory Approval in connection with
the completion of the transactions herein contemplated or in order to maintain
such Licence in full force and effect and in good standing after Closing.

3.1.26 Sufficiency and Condition of Assets

The assets owned, Licenced or leased by the Aitec Subsidiaries constitute all of
the property and assets necessary to carry on the Aitec Business as it is
currently carried on, are free of material defects and include all proprietary
rights, Intellectual and Industrial Property Rights and other property and
assets, tangible and intangible, used in connection with the Aitec Business. All
tangible assets used in the Aitec Business (save and except for obsolete assets,
assets retained for parts, unused assets, and assets not included on any balance
sheet of any of the Aitec Subsidiaries) are in good operating condition and in a
state of good repair and maintenance, reasonable wear and tear excepted.

3.1.27 Insurance

 

  (a) The Aitec Subsidiaries maintain fire (with extended risk and casualty
coverage), liability, use and occupancy insurance with reputable and sound
insurers covering their property and assets and protecting the Aitec Business in
such amounts and against such losses and claims as are generally maintained for
comparable businesses and properties. Schedule 3.1.27 sets forth and describes
all insurance policies currently maintained by the Aitec Subsidiaries, including
a brief description of the type of insurance, the name of the insurer, policy
number, coverage limits, expiration date and annual premiums. Each of such
insurance policies is valid and subsisting and in good standing, there is no
default thereunder and each Aitec Subsidiary which is an insured party
thereunder is entitled to all rights and benefits thereunder.

 

  (b)

Schedule 3.1.27 sets forth and describes all pending claims under any of such
insurance policies and identifies the most recent inspection reports, if any,
received from insurance underwriters as to the condition or insurance value of
the insured property and assets, copies of which have been made available to the
Purchasers. None of the Aitec Subsidiaries have failed to give any notice or
present any claim under any of such insurance policies in due and timely
fashion. To the knowledge of the Canadian Vendors, there are no circumstances
which might entitle any Aitec Subsidiary to make a claim under any of such
insurance

 

43.

--------------------------------------------------------------------------------

 

policies or which might be required under any of such insurance policies to be
notified to the insurers.

 

  (c) None of such insurance policies is subject to any special or unusual terms
or restrictions or provides for a premium in excess of the stipulated or normal
rate. No notice of cancellation or non-renewal with respect to, nor disallowance
of any claim under, any of such insurance policies has been received by any
Aitec Subsidiary. Except as set out on Schedule 3.1.27, to the knowledge of the
Canadian Vendors, there are no circumstances or occurrences which would or might
form the basis of a material increase in premiums for the current insurance
coverage maintained by any Aitec Subsidiary.

3.1.28 Contracts

None of the Aitec Subsidiaries is a party to any outstanding Contract, or bound
by or subject to any Contract except for:

 

  (a) the Leases;

 

  (b) the Equipment Leases;

 

  (c) service contracts on office equipment;

 

  (d) agreements and arrangements with respect to Aitec Employees, Aitec
Employee Benefit Plans and persons receiving compensation for work or services
provided to such Aitec Subsidiary set forth and described in Schedule 3.1.17 and
3.1.18;

 

  (e) Guarantees and Debt Instruments set forth and described in Schedules
3.1.15 and 3.1.19, respectively;

 

  (f) Permitted Encumbrances set forth and described in Schedule 1.1B;

 

  (g) Agreements and Arrangements with Interested Persons set forth and
described in 3.1.16;

 

  (h) the insurance policies set forth and described in Schedule 3.1.27;

 

  (i) the contracts listed or identified on Schedule 3.1.28, including any
Encumbrances which are not Permitted Encumbrances;

 

  (j) service and other contracts with their customers, whether oral or written,
entered into in the ordinary course of business;

 

  (k) the agreements and arrangements relating to Licensed IP set forth and
described in Schedule 3.1.35; and

 

  (l) contracts, agreements or arrangements which are either terminable by the
applicable Aitec Subsidiary upon thirty (30) day’s notice or less or which
create a liability for the applicable Aitec Subsidiary of less than ten thousand
dollars ($10,000.00);

 

44.

--------------------------------------------------------------------------------

and, except as disclosed in the Schedules referred to in this Subsection 3.1.28,
no Consent is required nor is any notice required to be given under any Contract
from any party thereto or any other person in connection with the completion of
the transactions herein contemplated in order to maintain all rights of any
relevant Aitec Subsidiary under any such Contract. The Contracts are all in good
standing and in full force and effect with no amendments except as disclosed on
Schedule 3.1.28 and such relevant Aitec Subsidiary is entitled to all rights and
benefits thereunder. The copies of all outstanding written Contracts, including
any amendments thereto or extensions thereof, made available to the Purchasers
for inspection are true and complete copies of the originals and all of the
Contracts and such amendments or extensions are valid and binding obligations of
the parties thereto enforceable in accordance with their respective terms. Such
relevant Aitec Subsidiary has complied with all terms of the outstanding
Contracts to which it is a party, has paid all amounts due thereunder, has not
waived any rights thereunder and no default or breach exists in respect thereof
on the part of any of the parties thereto and no event has occurred which, after
the giving of notice or the lapse of time or both, would constitute such a
default or breach. All amounts payable to such relevant Aitec Subsidiary under
the Contracts are still due and owing to such relevant Aitec Subsidiary and no
right of set-off has been claimed. Schedule 3.1.28 also sets forth all material
quotations, orders or tenders for contracts which remain open for acceptance.
None of the Aitec Subsidiaries is a party to any Contract which it does not have
the capacity to perform, including the necessary personnel (subject to normal
labour shortages applicable to the industry, in which the Aitec Business is
carried on, in general), equipment and supplies. No purchase commitment of any
Aitec Subsidiary is in excess of its normal business requirements or is not
terminable by any Aitec Subsidiary without penalty on 30 days notice or less,
except as set out in Schedule 3.1.28.

3.1.29 Customers and Suppliers

Except as set forth and described in Schedule 3.1.29A, there are no outstanding
warranties, repair contracts or other maintenance obligations with or to
customers or other users of the products or services of the Aitec Subsidiaries
and none of the Aitec Subsidiaries is required to provide any bonding or other
financial security arrangements in connection with any transactions with any of
its customers or suppliers, whether or not in the ordinary course of the Aitec
Business. None of the Aitec Subsidiaries has any agreement, contract or
commitment for sales of its products or services at prices involving prospective
losses. The top ten (10) suppliers and customers for each of the Aitec
Subsidiaries is listed in Schedule 3.1.29B.

3.1.30 Legal Proceedings

Except as set forth and described in Schedule 3.1.30 there is no Legal
Proceeding (whether or not purportedly on behalf of any Aitec Subsidiary) in
progress, pending or, to the Canadian Vendors’ knowledge, threatened against or
affecting any Aitec Subsidiary before or by any Tribunal. To the knowledge of
the Canadian Vendors, there are no grounds on which any such Legal Proceeding
might be commenced with any reasonable likelihood of success. Except as set
forth and described in Schedule 3.1.30 there is no Order outstanding against or
affecting any Aitec Subsidiary.

 

45.

--------------------------------------------------------------------------------

3.1.31 Banking Information

Schedule 3.1.31 sets forth the name and location (including municipal address)
of each bank, trust company or other institution in which each Aitec Subsidiary
has an account, money on deposit or a safety deposit box, the account number and
the name of each person authorized to draw thereon or to have access thereto and
the name of each person holding a power of attorney from each Aitec Subsidiary
and a summary of the terms thereof.

3.1.32 Tax Matters

 

  (a) Taxes and Tax Returns

Each Aitec Subsidiary has duly filed in the prescribed manner and within the
prescribed time (or permitted extensions of time as detailed in Schedule 3.1.32)
all Tax Returns required to be filed by it and such Tax Returns are correct and
complete and each Aitec Subsidiary has made complete and accurate disclosure in
such Tax Returns and in all materials accompanying such Tax Returns, except in
respect of a particular Tax Return to the extent that it may have been modified
in a subsequent Tax Return. Each Aitec Subsidiary has paid all Taxes due and
payable by it, including all Taxes shown on all Tax Returns filed by it as being
due and payable and all Taxes payable under any assessment or reassessment.

 

  (b) Liabilities for Taxes

The Audited Financial Statements fully reflect and the Closing Balance Sheet
shall fully reflect as of Closing for the Aitec Subsidiaries accrued liabilities
for all Taxes for the Aitec Subsidiaries which are not yet due and payable and
for which Tax Returns are not yet required to be filed. No re-examination of any
Tax Return of any Aitec Subsidiary by a Governmental Authority is currently in
progress. Except as set forth and described in Schedule 3.1.30, there is no
Legal Proceeding, assessment, re-assessment or request for information
outstanding or, to the knowledge of the Canadian Vendors, threatened against the
Aitec Subsidiaries with respect to Taxes or any matters under discussion with
any Governmental Authority relating to Taxes. No Action has ever been initiated
or threatened by a Governmental Authority in a jurisdiction where an Aitec
Subsidiary does not file Tax Returns that it is or may be subject to taxation by
that jurisdiction. There are no Encumbrances on any of the assets of any Aitec
Subsidiary that arose in connection with any failure (or alleged failure) to pay
any Tax.

 

  (c) Waivers

Except as set out in Schedule 3.1.32, there are no agreements, waivers or other
arrangements providing for an extension of time with respect to any assessment
or reassessment of Tax, the filing of any Tax Return or the payment of any Tax
by any Aitec Subsidiary. Each Aitec Subsidiary has received Notices of
Assessment for all taxation years as indicated on Schedule 3.1.32. Only the
fiscal years subsequent to the years set out in Schedule 3.1.32 remain open for
the reassessment of Tax. No Aitec Subsidiary has waived any statute of
limitations to pay any Tax.

 

  (d) Withholding and Instalments

Each Aitec Subsidiary has withheld from each payment made by it the amount of
all Taxes and other deductions required under any applicable Tax Legislation to
be withheld

 

46.

--------------------------------------------------------------------------------

therefrom and has remitted all such amounts withheld and paid all instalments of
Taxes due and payable before the date hereof to the relevant Governmental
Authority within the time prescribed under any applicable Tax Legislation.

 

  (e) GST and Sales Tax Matters

Each Aitec Subsidiary has complied with all registration, reporting, collection
and remittance requirements in respect of all federal, provincial and state Tax
Legislation in respect of sales tax, including the Excise Tax Act (Canada), the
Retail Sales Tax Act (Ontario) the Social Services Tax Act (British Columbia)
and similar US state sales tax statutes. The Canadian Subsidiaries have all
invoices, purchase orders, and all such other documents as are necessary to
report any claim for input tax credits or refunds claimed or to be claimed
pursuant to the Excise Tax Act (Canada).

 

  (f) Documents Provided

Each Aitec Subsidiary has provided to the Purchasers copies of all Tax Returns
for all fiscal periods for which the relevant limitation period in any Tax
Legislation has not expired, all elections, designations, undertakings, notices
of determination of loss, all working papers, calculations, and schedules of
each Aitec Subsidiary relating thereto, together with all communications
relating thereto from any Governmental Authority under or pursuant to such Tax
Legislation, and the response, if any, of each Aitec Subsidiary to such
communication. Each Aitec Subsidiary has provided to the Purchasers copies of
all agreements, contracts, minutes, and any other documents relating to any
transaction with a party who does not deal at arm’s-length (within the meaning
of the Income Tax Act and the Code) with each Aitec Subsidiary, which has
occurred in any taxation year that remains open for reassessment as indicated
above in paragraph (c) of this Subsection 3.1.32.

 

  (g) Outstanding Amounts and Reserves

There are no circumstances existing which could result in the application of any
of sections 78 to 80.04 of the Income Tax Act or any equivalent provincial Tax
Legislation to any of the Aitec Subsidiaries and give rise to a liability for
Taxes.

 

  (h) Non-Arm’s Length Transactions

Except as set out on Schedule 3.1.32, none of the Aitec Subsidiaries has entered
into any transaction (including any acquisition or disposition of assets or the
receipt or provision of any services) with a person with whom the Aitec
Subsidiary did not deal at arm’s length for the purposes of the Income Tax Act
and the Code, where such transaction was not for fair market value consideration
and on arm’s length terms and conditions.

 

47.

--------------------------------------------------------------------------------

  (i) Transfer Pricing

For each transaction between a Canadian Subsidiary and a person not resident in
Canada with whom the Canadian Subsidiary was not dealing at arm’s length for the
purposes of the Income Tax Act during a taxation year commencing after 1998, the
Canadian Subsidiary has made or obtained records or documents that meets the
requirements of paragraphs 247(4)(a) to (c) of the Income Tax Act and did so
before the earlier of the time prescribed under those paragraphs and the date
hereof.

For each transaction between a US Subsidiary and a person not resident in the
United States with whom the US Subsidiary was not dealing at arm’s length for
the purposes of the Code, the US Subsidiary has made or obtained records or
documents that meets the requirements of section 482 of the Code and did so
before the earlier of the time prescribed under those paragraphs and the date
hereof.

 

  (j) U.S. Activities

None of the Canadian Subsidiaries owns a United States real property interest
within the meaning of section 897(c)(1)(A) of the Code. None of the Canadian
Subsidiaries conduct a trade or business in the United States of America or own
any assets on which the gain on the sale of the asset would be effectively
connected or treated as effectively connected with the conduct of a trade or
business in the U.S. within the meaning of section 882(b)(2) of the Code, except
for Weldsonix International Inc. The Canadian Subsidiaries do not own any United
States property within the meaning of section 956 of the Code, other than the
intercompany receivables from Weldsonix Inc. and Aitec USA, Inc.

No Aitec Subsidiary has filed a consent under Code Section 341(f) concerning
collapsible corporations.

No Aitec Subsidiary has made any payments, is obligated to make any payments, or
is a party to any Contract that under certain circumstances could obligate it to
make any payments that will not be deductible under Code Sections 162(m) or
280G.

No Aitec Subsidiary has been a United States real property holding corporation
within the meaning of Code Section 897(c)(2) during the applicable period
specified in Code Section 897(c)(1)(A)(ii).

Each Aitec Subsidiary has disclosed on its Tax Returns (i) all positions taken
therein that could give rise to a substantial understatement of federal income
Tax within the meaning of Code Section 6662 and (ii) all “reportable
transactions” as defined in the Treasury Regulations.

No Aitec Subsidiary is a party to any Tax allocation or sharing Contract.

No Aitec Subsidiary (i) has been a member of an affiliated group filing a
consolidated federal income tax return (other than a group the common parent of
which was Aitec Investments USA Inc.) or (ii) has any Liability for the Taxes of
any Person (other than each Aitec Subsidiary) under Treas. Reg. Section 1.1502-6
or similar Law, as a transferee or successor, by Contract, or otherwise.

 

48.

--------------------------------------------------------------------------------

The unpaid Taxes of the US Subsidiaries (i) did not, as of the date of the
Audited Financial Statements, and will not, as of the dated of the Closing
Balance Sheet, exceed the reserve for Tax Liability (rather than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) set forth on the face of any interim financial statements (rather than
in any notes thereto) and (ii) do not exceed that reserve as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the US Subsidiaries in filing their Tax Returns.

Except as set forth on Schedule 3.1.32, no item of income or gain reported for
financial accounting purposes in any period before Closing will be included in
taxable income for any later period, and no Aitec Subsidiary will have any
taxable income or gain as a result of prior intercompany transactions that have
been defined and that will be taxed as a result of the Transaction Steps.

None of the assets of the Aitec Subsidiaries is (i) required to be or are being
depreciated under the alternative depreciation system of Code section 168(g)(2),
(ii) subject to Code section 168(f), or (iii) property that the Purchasers will
be required to treat as “tax exempt use property” within the meaning of Code
section 168(h)(l). Except as described on Schedule 3.1.32, no Aitec Subsidiary
has issued any “industrial development bonds” as contemplated in the Internal
Revenue Code of 1954, as amended prior to the enactment of the Code, or “private
activity bonds” within the meaning of Code section 141 or other tax exempt
financings to acquire or lease assets of the Aitec Subsidiary.

No Aitec Subsidiary has made an election under Code section 179.

No Aitec Subsidiary has an excess loss account (as defined in Treasury
regulation section 1.1502-19) with respect to the stock of any Subsidiary.

No Aitec Subsidiary has entered into a gain recognition agreement as
contemplated in the Treasury regulations promulgated under Code section 367.

No Aitec Subsidiary has participated in an international boycott, as
contemplated in the Code.

No Aitec Subsidiary has or has previously had a permanent establishment in a
foreign country other than Canada or the United States.

 

  (k) Employee Profit Sharing Program

Profit sharing payments on any previous open year tax return (as set out in
Schedule 3.1.32), have satisfied the qualifications for deductibility pursuant
to subsection 144(5) of the Income Tax Act; and all compliance related thereto
has been satisfied pursuant to regulation 212 of the Income Tax Act.

3.1.33 Accounts Receivable

The Accounts Receivable recorded on the Audited Financial Statements and in the
Accounting Records, which reflect a reasonable reserve in respect thereof for
doubtful

 

49.

--------------------------------------------------------------------------------

accounts calculated in accordance with generally accepted accounting principles
consistently applied, have arisen in the ordinary course of the Aitec Business,
are bona fide and good, valid, enforceable and collectible (subject to such
reasonable reserve) and no claim for set-off or counterclaim has been made.

3.1.34 Environmental Matters

 

  (a) Except as disclosed in Schedule 3.1.34, each Aitec Subsidiary carries on
and has carried on the Aitec Business and operates and maintains its properties
and assets used in the Aitec Business in compliance with all Environmental Laws
and, to the knowledge of the Canadian Vendors, there are no facts, violations,
circumstances or conditions, including any potential or actual Release that
could give rise to a notice or event of non-compliance by any Aitec Subsidiary
with any Environmental Law or that are likely to result in an adverse effect
upon the Environment.

 

  (b) Except as disclosed on Schedule 3.1.34, each Aitec Subsidiary has all
Environmental Permits required for it to operate its portion of the Aitec
Business and to own, use and operate the properties and assets used in its
operation of the Aitec Business. Each Environmental Permit held by the Aitec
Subsidiaries is valid, subsisting and in good standing, and the relevant Aitec
Subsidiary is not in default or breach of any such Environmental Permit and no
proceeding is pending or threatened and no grounds exist to revoke or amend any
such Environmental Permit.

 

  (c) Except as set out in Schedule 3.1.34, no Aitec Subsidiary has used any of
the Real Property or Leased Property (which term shall include, for the purposes
of this Section 3.1.34 only, any real property previously owned, leased,
occupied or used by any Aitec Subsidiary), or permitted them to be used, to
generate, manufacture, use, re-cycle, store, transport, handle, emit, Release,
refine, treat, dispose, produce or process Hazardous Substances except in
compliance with all Environmental Laws and Environmental Permits.

 

  (d) Except as set out in Schedule 3.1.34, no Aitec Subsidiary nor any other
person responsible under Environmental Laws for acts of any Aitec Subsidiary has
been convicted of an offence or been subjected to any Legal Proceeding or been
subject to any Order or sanction requiring investigation, remedial or corrective
action, clean-up or remediation of any property, equipment, asset or real
property or been fined or otherwise sentenced for non-compliance with any
Environmental Laws, and has not settled any prosecution or other proceeding
short of conviction in connection therewith.

 

  (e)

No Aitec Subsidiary has caused or permitted the Release of any Hazardous
Substance at, on, in, from, about or under the Real Property, Leased Property or
any real property previously owned, leased, occupied or used by any member of
the Aitec Holdings Group, or the Release of any Hazardous Substance off-site of
the Leased Property or any real property previously owned, leased, occupied or
used by any member of the Aitec Holdings Group, except in compliance with
Environmental Laws and with Environmental Permits. No part of the Real

 

50.

--------------------------------------------------------------------------------

 

Property or Leased Property has ever been used by any Aitec Subsidiary or, to
the knowledge of the Aitec Subsidiaries, by any other person as a waste
treatment, processing, storage, handling, disposal site or landfill. All
Hazardous Substances used by any Aitec Subsidiaries or resulting from the Aitec
Business have been handled, transported, disposed of and stored by the Aitec
Subsidiaries in compliance with Environmental Laws and Environmental Permits
held by the Aitec Subsidiaries and have not been shipped or disposed of by any
of the Aitec Subsidiaries outside of Canada or the U.S. nor sent or brought
across the U.S.-Canada border by or on behalf of any Aitec Subsidiary except in
compliance by such Aitec Subsidiary with Environmental Laws and Environmental
Permits.

 

  (f) Except as set out in Schedule 3.1.34, no Aitec Subsidiary has received
notice or demand, nor do the Canadian Vendors have knowledge of any facts,
circumstances or conditions that could give rise to any notice or demand that
any Aitec Subsidiary is potentially responsible for any remedial or other
corrective action required to be made under any Environmental Law with respect
to the Aitec Business (including any real property previously owned, leased or
used by any Aitec Subsidiary).

 

  (g) The Canadian Vendors have provided the Purchasers with copies of all
analyses and data in respect of the Environment and all reports pertaining to
any environmental assessments, reviews or audits relating to the Aitec Business,
its property and assets (including any real property previously owned, leased,
occupied or used by the Aitec Subsidiaries) that were obtained by, or are or
with reasonable efforts could be in the possession or control of, the Canadian
Vendors or the Aitec Subsidiaries.

 

  (h) Except as set out in Schedule 3.1.34, no underground or above-ground
storage tanks are or have been located on any Real Property or Leased Property
or real property previously owned, leased, occupied or used by any of the Aitec
Subsidiaries.

 

  (i) Except as set out in Schedule 3.1.34, no building, structure, equipment or
improvement owned, leased, installed, occupied, or used by any of the Aitec
Subsidiaries contains, to the best of the knowledge of the Canadian Vendors, any
friable asbestos or polychlorinated biphenyls.

 

  (j) The Canadian Vendors have no knowledge of any Hazardous Substance
originating from any adjoining or neighbouring properties which has or has the
potential to or is suspected to be migrating onto, into or under the Real
Property or Leased Property or otherwise affecting the Aitec Business.

3.1.35 Intellectual and Industrial Property

 

  (a)

Schedule 3.1.35 sets forth and describes all of the Aitec Subsidiaries’
Intellectual and Industrial Property and specifies, for each item, whether the
Aitec Subsidiaries’ Intellectual and Industrial Property (including all
Intellectual and Industrial Property Rights pertaining thereto) is owned by the
Aitec Subsidiaries (in this Section “Owned IP”) or whether the Aitec
Subsidiaries’ Intellectual and

 

51.

--------------------------------------------------------------------------------

 

Industrial Property is used by the Aitec Subsidiaries under a licence agreement
or arrangement from another person (in this Section “Licenced IP”).

 

  (b) Except as set forth and described in Schedule 3.1.35, all of the Owned IP
is valid and subsisting, is owned by the Aitec Subsidiaries with good and
marketable title thereto free of any Encumbrance and the relevant Aitec
Subsidiaries have the unencumbered right to use (where use includes the ability
to modify, market, licence, and any other activity associated with the term
“use”, all without restriction of any kind from any third person (in this
Section “Use”)) the Owned IP.

 

  (c) Except as set out in Schedule 3.1.35 the Aitec Subsidiaries have taken all
necessary and appropriate steps to protect and preserve the confidentiality of
all the Owned IP not otherwise protected by patents, patent applications or
copyright (in this Section “Confidential Property”).

 

  (d) Each licence agreement or arrangement with respect to Licenced IP is in
good standing and in full force and effect and there is no default thereunder.

 

  (e) No person has commenced, or provided notice of intention to commence, any
Legal Proceeding against any member of the Aitec Holdings Group claiming
infringement, adverse ownership, invalidity, lack of distinctiveness or conflict
with respect to any of the Owned IP or the Licenced IP.

 

  (f) To the knowledge of the Canadian Vendors, the conduct of the Aitec
Business by the Aitec Subsidiaries and their use of the Owned IP and the
Licenced IP do not conflict with, infringe upon or violate and are not alleged
by any person to conflict with, infringe upon or violate the Intellectual and
Industrial Property Rights of any other person.

 

  (g) The Aitec Subsidiaries have taken commercially reasonable steps to
maintain the secrecy of all trade secrets and other confidential information of
the Aitec Subsidiaries and all confidential information obtained from third
parties, including by entering into non-disclosure agreements with all third
parties to whom disclosure of confidential information and trade secrets is
made, prior to such disclosure. Except as set forth and described in Schedule
3.1.35, all such non-disclosure agreements are in good standing and in full
force and effect, none of the Aitec Subsidiaries nor any of the Canadian Vendors
are aware of any breach of any such non-disclosure agreement.

 

3.2 Representations and Warranties of the Canadian Vendors with respect to the
Canadian Vendors and the Canadian Holding Companies

Each of the Canadian Vendors hereby represent and warrant to the Canadian
Purchaser, on a joint and several basis, in respect of the Canadian Vendors and
the Canadian Holding Companies, as set out in this Section 3.2 and acknowledge
that the Canadian Purchaser is relying on such representations and warranties in
connection with the transactions contemplated in this Agreement.

 

52.

--------------------------------------------------------------------------------

3.2.1 Formation of the Trusts Shareholders

Each Trusts Shareholder is a trust duly formed, organized, and subsisting under
the laws of the Province of Ontario and has the power, authority and capacity to
execute and deliver this Agreement, to own such portion of the Pre-Amalgamation
Shares attributed to it on Schedule 3.1.4, to sell the Canadian Purchased Shares
to the Canadian Purchaser as herein contemplated and to perform its other
obligations hereunder.

3.2.2 Authorization of Purchase by Canadian Vendors

The execution and delivery of this Agreement by the Canadian Vendors and the
completion of the transactions herein contemplated have been duly and validly
authorized by all necessary action on behalf of the Trusts Shareholders, and
this Agreement has been duly and validly executed and delivered by the Canadian
Vendors and is a valid and binding obligation of the Canadian Vendors
enforceable against the Canadian Vendors in accordance with its terms. There is
no Legal Proceeding in progress, pending, or, to the knowledge of the Canadian
Vendors, threatened against or affecting the Canadian Vendors or affecting the
title of the Canadian Vendors to any of the Pre-Amalgamation Shares and will not
affect title to the Canadian Purchased Shares prior to the Closing at law or in
equity or before or by any Tribunal and, to the knowledge of the Canadian
Vendors, there are no grounds on which any such Legal Proceeding might be
commenced with any reasonable likelihood of success nor is there any Order
outstanding against or affecting the Canadian Vendors which, in any such case,
affects adversely or might affect adversely the ability of the Canadian Vendors
to enter into this Agreement or to perform its obligations hereunder.

3.2.3 Incorporation and Organization of the Canadian Holding Companies

Each Canadian Holding Company is a corporation duly incorporated, organized and
subsisting under the laws of the Province of Ontario. No proceedings have been
taken or authorized by the Canadian Vendors or the Canadian Holding Companies or
by any other person with respect to the bankruptcy, insolvency, liquidation,
dissolution or winding up of the Canadian Holding Companies or with respect to
any amalgamation, merger, consolidation, arrangement or reorganization of, or
relating to, the Canadian Holding Companies nor, to the knowledge of the
Canadian Vendors, have any such proceedings been taken by any other person. True
and complete copies of the Articles of the Canadian Holding Companies and all
by-laws of the Canadian Holding Companies are contained in the minute book of
the Canadian Holding Companies made available to the Canadian Purchaser. The
Articles and the by-laws of the Canadian Holding Companies constitute all of the
Articles and by-laws of the Canadian Holding Companies, are complete and correct
and are in full force and effect. There are no shareholders’ agreements or
unanimous shareholders’ agreements (other than the Unanimous Shareholders
Agreement) governing the affairs of the Canadian Holding Companies or the
relationship, rights and duties of their respective shareholders nor are there
any voting trusts, pooling arrangements or other similar agreements with respect
to the ownership or voting of any shares of the Canadian Holding Companies.
Schedule 3.1.1B sets out the dates of the Articles of the Canadian Holding
Companies and of any amendment thereto. No articles of amendment have been filed
or authorized by the shareholders of the Canadian Holding Companies since the
dates set forth in Schedule 3.1.1B with respect to the Canadian Holding
Companies.

 

53.

--------------------------------------------------------------------------------

3.2.4 Corporate Records

The minute books of the Canadian Holding Companies and other corporate records
made available to the Canadian Purchaser for review have been maintained in
accordance with Applicable Law and contain, without limitation, complete and
accurate copies of all by-laws of the Canadian Holding Companies and minutes of
all meetings of, and resolutions passed by, the shareholders, directors and
committees of directors since the respective dates of incorporation of the
Canadian Holding Companies. All such meetings were duly called and held and all
such by-laws and resolutions were duly passed or enacted. The share certificate
book, register of shareholders, register of transfers and register of directors
of the Canadian Holding Companies are complete, accurate and current.

3.2.5 Authorized and Issued Capital

The authorized capital of the Canadian Holding Companies consists of those
shares set out in Schedule 3.1.4, which shares have been validly issued and are
outstanding as fully paid and non-assessable shares. No other securities have
been issued by any Canadian Holding Company and no other securities will have
been issued immediately prior to the Amalgamation.

3.2.6 Title to Canadian Purchased Shares

The Canadian Vendors are the registered and beneficial owner of all of the
issued and outstanding shares of each of the Canadian Holding Companies free and
clear of any Encumbrances. The Canadian Vendors now have good and marketable
title to the shares of the Canadian Holding Companies; immediately prior to the
Amalgamation shall have good and marketable title to the shares of the Canadian
Holding Companies, and on Closing the Canadian Purchaser shall acquire good and
marketable title to the Canadian Purchased Shares, in each case free and clear
of all Encumbrances. Other than as contemplated herein, no person has, or has
any right capable of becoming, any agreement, option, understanding or
commitment for the purchase or other acquisition from the Canadian Vendors of
any of the shares of the Canadian Holding Companies.

3.2.7 Investments

The Canadian Holding Companies have no subsidiaries other than the Canadian
Subsidiaries and do not own, directly or indirectly, any shares in the capital
of any body corporate other than the Canadian Subsidiaries nor do they have any
equity or ownership interest in any other business or person and have not agreed
to acquire any subsidiary or any such shares or other equity ownership or
interest. None of the Canadian Holding Companies is subject to any obligation or
requirement to provide funds to or to make any investment in any business or
person by way of loan, capital contribution or otherwise.

3.2.8 No Obligation to Issue Securities

There are no agreements, options, warrants, rights of conversion or other rights
pursuant to which the Canadian Holding Companies are, or may become, obligated
to issue any shares or other securities.

 

54.

--------------------------------------------------------------------------------

3.2.9 Conflicting Instruments

Neither the entering into of this Agreement by the Parties, nor the entering
into of any agreement or other instrument contemplated hereby nor the completion
of the transactions herein contemplated nor the performance by the Canadian
Vendors of its obligations hereunder will conflict with, or result in the breach
or violation of or default under, or cause the acceleration of any obligations
of the Canadian Holding Companies under, any of the terms and provisions of
(i) any Applicable Law, (ii) the Articles of the Canadian Holding Companies or
their by-laws or the Articles, by-laws or Memorandums of Trust of the Trusts
Shareholders or any resolution of the directors or shareholders of the Canadian
Holding Companies; or except for obtaining any Consent or Regulatory Approval
which may be required thereunder in connection with the completion of the
transactions herein contemplated, (a) any Licence (other than the CNSC Licence
and the US Nuclear Licence, the obligation to obtain any consent in connection
with such licenses being that of the Purchasers), Order or agreement, contract
or commitment, written or oral to which any of the Canadian Holding Companies or
the Canadian Vendors are a party or by which any of them is bound; (b) relieve
any other party to any Contract, Lease or Equipment Lease of that party’s
obligations thereunder or enable it to terminate its obligations thereunder;
(c) cause the Canadian Holding Companies to lose any rights under any Contract,
Lease or Equipment Lease or any right to a government grant or tax credit or
refund; or (d) result in the creation of any lien or encumbrance on any of the
property or assets of the Canadian Holding Companies.

3.2.10 Books and Records

In respect of the Canadian Holding Companies, all material financial
transactions of the Canadian Holding Companies have been accurately recorded in
the Accounting Records in accordance with sound business and financial practice
and the Accounting Records accurately reflect the basis for the financial
condition and the revenues, expenses and results of operations of the Canadian
Holding Companies and the Canadian Subsidiaries as of and to the date hereof.
All Books and Records are in the full possession and exclusive control of and
are owned exclusively by the Canadian Holding Companies and are not dependent
upon any computerized or other system or device that is not exclusively owned
and controlled by the Canadian Holding Companies.

3.2.11 No Liabilities

Except as set out in Schedule 3.2.11, none of the Canadian Holding Companies has
any liabilities (whether accrued, absolute, contingent or otherwise, matured or
unmatured).

3.2.12 Business Carried On

The only business that is or has ever been carried on by each Canadian Holding
Company is holding its respective portion of the Canadian Purchased Shares. Each
Canadian Holding Company has conducted and is conducting its business in
compliance with Applicable Law in all material respects and is not in breach of
any provision of Applicable Law in any material respect.

 

55.

--------------------------------------------------------------------------------

3.2.13 No Guarantees

None of the Canadian Holding Companies has given nor agreed to give, nor is it a
party to or bound by or subject to any Guarantee except as indicated in the
Schedules to this Agreement.

3.2.14 Non-Arm’s Length Transactions

No Interested Person is indebted to the Canadian Holding Companies nor are the
Canadian Holding Companies indebted to any Interested Person, except such
indebtedness as is disclosed in Schedule 3.1.16, and except for usual employee
reimbursements and compensation paid in the ordinary and normal course of the
Canadian Business. Except as described in Schedule 3.1.16, none of the Canadian
Holding Companies are a party to any Contract with any Interested Person. No
Interested Person: (a) owns, directly or indirectly, in whole or in part, any
property that the Canadian Holding Companies use in the operation of their
Canadian Business; or (b) has any cause of action or other claim whatsoever
against, or is owed any amount by the Canadian Holding Companies in connection
with the Canadian Business, except for any claims in the ordinary course of
business such as for accrued expense reimbursements, vacation pay and benefits
under the Aitec Employee Benefit Plans, and except as set out in Schedule
3.1.18. Since September 30, 2006 no payment has been made to any Interested
Person outside the ordinary course of business, except as set out in Schedule
3.1.16.

3.2.15 Canadian Employees

None of the Canadian Holding Companies (i) has or has ever had any employees and
its directors and officers receive no remuneration or compensation from the
respective Canadian Holding Company and do not participate in the Aitec Employee
Benefit Plans in their capacities as officers and directors of the Canadian
Holding Companies (although they do participate in their capacities as employees
of the Aitec Subsidiaries); (ii) is a party to a collective agreement or any
arrangement or understanding with any trade union or employee association; and
(iii) has and/or is engaged in any unfair labour practice and no unfair labour
practice complaint, grievance or arbitration proceeding is pending or, to the
Canadian Vendors’ knowledge, threatened against any Canadian Holding Company. No
trade union or employee association holds any bargaining rights with respect to
any Canadian Holding Company, or has applied or, to the Canadian Vendors’
knowledge, has threatened to apply to be certified with respect to any Canadian
Holding Company.

3.2.16 Debt Instruments

Except as described in Schedule 3.1.19, none of the Canadian Holding Companies
are a party to or bound by or subject to any Debt Instrument or any agreement,
contract or commitment to create, assume or issue any Debt Instrument and no
Debt Instrument or Encumbrance which the Canadian Holding Companies is a party
to or bound by or subject to is dependent upon the Guarantee of or any security
provided by any other person.

3.2.17 Contracts and Assets

Other than as contemplated herein, or as set out in Schedule 3.1.28, none of the
Canadian Holding Companies is a party to or bound by, or has ever been a party
to or bound by,

 

56.

--------------------------------------------------------------------------------

any agreement, contract, or commitment, written or oral. Other than its portion
of the Canadian Purchased Shares, no Canadian Holding Company owns or has ever
owned, legally or beneficially, any property or assets.

3.2.18 Legal Proceedings

Except as set forth and described in Schedule 3.1.30, there is no Legal
Proceeding (whether or not purportedly on behalf of any of the Canadian Holding
Companies) in progress, pending or, to the Canadian Vendors’ knowledge,
threatened against or affecting any of the Canadian Holding Companies before or
by any Tribunal. To the knowledge of the Canadian Vendors, there are no grounds
on which any such Legal Proceeding might be commenced with any reasonable
likelihood of success. There is no Order outstanding against or affecting any of
the Canadian Holding Companies.

3.2.19 Banking Information

Schedule 3.1.31 sets forth the name and location (including municipal address)
of each bank, trust company or other institution in which the Canadian Holding
Companies have an account, money on deposit or a safety deposit box and the name
of each person authorized to draw thereon or to have access thereto and the name
of each person holding a power of attorney from the Canadian Holding Companies
and a summary of the terms thereof.

3.2.20 Tax Matters

 

  (a) Taxes and Tax Returns

Except as set forth and described in Schedule 3.1.32, each of the Canadian
Holding Companies has duly filed in the prescribed manner and within the
prescribed time all Tax Returns required to be filed by it and such Tax Returns
are correct and complete and the Canadian Holding Companies has made complete
and accurate disclosure in such Tax Returns and in all materials accompanying
such Tax Returns, except in respect of a particular Tax Return to the extent
that it may have been modified in a subsequent Tax Return. Each of the Canadian
Vendors hereby covenants and agrees to cause, prior to Closing, the filing of
any Tax Returns of any Canadian Holding Companies which have not been so duly
filed as indicated on such Schedule. Each of the Canadian Holding Companies has
paid all Taxes due and payable by it, including all Taxes shown on all Tax
Returns filed by it as being due and payable and all Taxes payable under any
assessment or reassessment.

 

  (b) Liabilities for Taxes

Each of the Canadian Holding Companies has not accrued liabilities for Taxes
which are not yet due and payable and for which Tax Returns are not yet required
to be filed. No re-examination of any Tax Return of the Canadian Holding
Companies by a Governmental Authority is currently in progress. Except as set
forth and described in Schedule 3.1.32, there is no Legal Proceeding,
assessment, re-assessment or request for information outstanding or, to the
knowledge of the Canadian Vendors or the Canadian Holding Companies, threatened
against the Canadian Holding Companies with respect to Taxes or any matters
under discussion with any Governmental Authority relating to Taxes.

 

57.

--------------------------------------------------------------------------------

  (c) Waivers

Except as set forth and described in Schedule 3.1.32 there are no agreements,
waivers or other arrangements providing for an extension of time with respect to
any assessment or reassessment of Tax, the filing of any Tax Return or the
payment of any Tax by the Canadian Holding Companies. Each of the Canadian
Holding Companies has received Notices of Assessment for all taxation years
indicated in Schedule 3.1.32. Only the fiscal years subsequent to those years
specified in Schedule 3.1.32 remain open for the reassessment of Tax.

 

  (d) Withholding and Instalments

Each of the Canadian Holding Companies has withheld from each payment made by it
the amount of all Taxes and other deductions required under any applicable Tax
Legislation to be withheld therefrom and has remitted all such amounts withheld
and paid all instalments of Taxes due and payable before the date hereof to the
relevant Governmental Authority within the time prescribed under any applicable
Tax Legislation.

 

  (e) GST and Sales Tax Matters

Each of the Canadian Holding Companies has complied with all registration,
reporting, collection and remittance requirements in respect of all federal and
provincial Tax Legislation in respect of sales tax, including the Excise Tax Act
(Canada), the Retail Sales Tax Act (Ontario), and the Social Services Tax Act
(British Columbia). The Canadian Holding Companies have all invoices, purchase
orders, and all such other documents as are necessary to report any claim for
input tax credits or refunds claimed or to be claimed pursuant to the Excise Tax
Act (Canada) by the Canadian Holding Companies.

 

  (f) Documents Provided

The Canadian Holding Companies have provided to the Canadian Purchaser copies of
all Tax Returns of the Canadian Holding Companies for all fiscal periods for
which the relevant limitation period in any Tax Legislation has not expired, all
elections, designations, undertakings, notices of determination of loss, all
working papers, calculations, and schedules of the Canadian Holding Companies
relating thereto, together with all communications relating thereto from any
Governmental Authority under or pursuant to such Tax Legislation, and the
response, if any, of the Canadian Holding Companies to such communication. The
Canadian Holding Companies have provided to the Canadian Purchaser copies of all
agreements, contracts, minutes, and any other documents relating to any
transaction with a party who does not deal at arm’s-length (within the meaning
of the Income Tax Act) with the Canadian Holding Companies, which has occurred
in any taxation year that remains open for reassessment as indicated above in
paragraph (c) of this Subsection 3.1.32.

 

  (g) Outstanding Amounts and Reserves

There are no circumstances existing which could result in the application of any
of sections 78 to 80.04 of the Income Tax Act or any equivalent provincial Tax
Legislation to the Canadian Holding Companies and give rise to a liability for
Taxes.

 

  (h) Non-Arm’s Length Transactions

 

58.

--------------------------------------------------------------------------------

Except as set out on Schedule 3.1.16, none of the Canadian Holding Companies has
entered into any transaction (including any acquisition or disposition of assets
or the receipt or provision of any services) with a person with whom the
Canadian Subsidiary did not deal at arm’s length for the purposes of the Income
Tax Act, where such transaction was not for fair market value consideration and
on arm’s length terms and conditions.

(i) U.S. Activities of Canadian Holding Companies

None of the Canadian Holding Companies owns an interest in United States real
property within the meaning of section 897(c)(1)(A) of the Code. None of the
Canadian Holding Companies conduct a trade or business in the United States of
America or own any assets on which the gain on the sale of the asset would be
effectively connected or treated as effectively connected with the conduct of a
trade or business in the U.S. within the meaning of section 882(b)(2) of the
Code. The Canadian Holding Companies do not own any United States property
within the meaning of section 956 of the Code.

3.2.21 Residence of the Canadian Vendors

None of the Canadian Vendors is a “non-resident” of Canada within the meaning of
the Income Tax Act.

 

3.3 Representations and Warranties of the Canadian Purchaser

The Canadian Purchaser represents and warrants to the Canadian Vendors as set
out in this Section 3.3 and acknowledges that the Canadian Vendors are relying
on such representations and warranties in connection with the transactions
contemplated in this Agreement.

3.3.1 Incorporation, Authority and Enforceability

The Canadian Purchaser is a corporation duly incorporated and subsisting under
the laws of the Province of Ontario and has the corporate power and capacity to
enter into this Agreement, to purchase the Canadian Purchased Shares from the
Canadian Vendors as herein contemplated and to perform its other obligations
hereunder. The execution and delivery of this Agreement and the completion of
the transactions herein contemplated have been duly and validly authorized by
all necessary corporate action on behalf of the Canadian Purchaser and this
Agreement has been duly and validly executed and delivered by the Canadian
Purchaser and is a valid and binding obligation of the Canadian Purchaser
enforceable against the Canadian Purchaser in accordance with its terms.

 

3.4 Representations and Warranties of the US Purchaser

The US Purchaser represents and warrants to the Canadian Vendors as set out in
this Section 3.4 and acknowledges that the US Vendor is relying on such
representations and warranties in connection with the transactions contemplated
in this Agreement.

 

59.

--------------------------------------------------------------------------------

3.4.1 Incorporation, Authority and Enforceability

The US Purchaser is a corporation duly incorporated and subsisting under the
laws of the State of Texas and has the corporate power and capacity to enter
into this Agreement, to purchase the US Purchased Shares from the US Vendor as
herein contemplated and to perform its other obligations hereunder. The
execution and delivery of this Agreement and the completion of the transactions
herein contemplated have been duly and validly authorized by all necessary
corporate action on behalf of the US Purchaser and this Agreement has been duly
and validly executed and delivered by the US Purchaser and is a valid and
binding obligation of the US Purchaser enforceable against the US Purchaser in
accordance with its terms.

 

3.5 Interpretation

Each representation and warranty made by a Party in this Agreement shall be
treated as a separate representation and warranty in respect of each statement
made and the interpretation of any statement made shall not be restricted by
reference to or inference from any other statement made in a representation and
warranty of such Party.

 

3.6 Commission

Each Party represents and warrants to the other Parties that such other Parties
will not be liable for any brokerage commission, finder’s fee or other similar
payment in connection with the transactions contemplated hereby because of any
action taken by, or agreement or understanding reached by, that Party. The
Canadian Vendors will be responsible for payment of any fees charged by CIBC
Commercial Banking.

 

3.7 Non-Waiver

No investigations made by or on behalf of the Canadian Purchaser at any time
shall waive, diminish the scope of or otherwise affect any representation or
warranty made by the Canadian Vendors in this Agreement or in any Closing
Document.

 

3.8 Survival of Representations and Warranties of the Canadian Vendors

The representations and warranties of the Canadian Vendors contained in this
Agreement and in any Closing Document and in any agreement, certificate,
affidavit, statutory declaration or other document delivered or given pursuant
to this Agreement or any Closing Document shall survive the Closing and,
notwithstanding the Closing or any investigation made by or on behalf of either
of the Purchasers with respect thereto, shall continue in full force and effect
for the benefit of each of the Purchasers provided, however, that no claim in
respect thereof shall be valid unless it is made within the following time
periods:

 

  (a)

in the case of a claim in respect of the representations or warranties relating
to the incorporation of any of the Canadian Holding Companies or any of the
Aitec Subsidiaries, the authorization of this Agreement by the Canadian Vendors
and the enforceability of their obligations hereunder, the authorized and issued
capital of the Canadian Holding Companies or any of the Aitec Subsidiaries,
title of the Canadian Vendors to the Amalco Shares, title of the US Vendor to
the US Purchased Shares and title of the Canadian Holding Companies and the
Aitec

 

60.

--------------------------------------------------------------------------------

 

Subsidiaries to their respective property and assets; as well as in the case of
a claim in respect of a representation or warranty based on fraud, including a
claim relating to any Tax liability of any of the Canadian Holding Companies or
any of the Aitec Subsidiaries based on any misrepresentation made or fraud
committed in filing a Tax Return or supplying information for purposes of any
applicable Tax Legislation, and for which a reassessment has been issued under
subparagraph 152(4)(a)(i) of the Tax Act or under a similar provision of other
applicable Tax Legislation there shall be no time limit within which such a
claim may be made;

 

  (b) in the case of a claim in respect of a representation or warranty relating
to a Tax matter, other than a claim in respect of misrepresentation made or
fraud committed in filing a Tax Return or supplying information for the purposes
of any applicable Tax Legislation, and for which a reassessment has been issued
under subparagraph 152(4)(a)(i) of the Income Tax Act or under a similar
provision of other applicable Tax Legislation within a period commencing on the
Closing Date and ending on the date which is 90 days after the last applicable
limitation period under any applicable Tax Legislation expires with respect to
any taxation year which is relevant in determining any liability under this
Agreement with respect to Tax matters;

 

  (c) in the case of a claim in respect of a representation or warranty relating
to an Environmental Law matter, within a period of five (5) years from the
Closing Date; and,

 

  (d) in the case of a claim in respect of any other representation or warranty
within a period of two (2) years from the Closing Date;

and any such claim as aforesaid shall be made in accordance with the provisions
set forth in Article 6 and, upon the expiry of the relevant limitation period
referred to in clauses (a) through (d) of this Section 3.8 the Canadian Vendors
shall have no further liability to the Canadian Purchaser with respect to the
representations or warranties referred to in such clauses, respectively, except
in respect of claims which have theretofore been made in accordance with the
provisions set forth above.

 

3.9 Survival of Representations and Warranties of the Canadian Purchaser

The representations and warranties of the Canadian Purchaser contained in this
Agreement and in any Closing Document and in any agreement, certificate,
affidavit, statutory declaration or other document delivered or given pursuant
to this Agreement or any Closing Document shall survive the Closing and,
notwithstanding the Closing or any investigation made by or on behalf of the
Canadian Vendors with respect thereto, shall continue in full force and effect
for the benefit of the Canadian Vendors provided, however, that no claim in
respect thereof shall be valid unless it is made within the following time
periods:

 

  (a) in the case of a claim in respect of the representations and warranties
set forth in Subsections 3.3.1 and 3.4.1, there shall be no time limit within
which such a claim may be made; and

 

61.

--------------------------------------------------------------------------------

  (b) in the case of a claim in respect of any other representation and
warranty, within a period of two (2) years from the Closing Date;

and any such claim shall be made in accordance with the provisions set forth in
Article 6 and, upon the expiry of the relevant limitation period, the Canadian
Purchaser shall have no further liability to the Canadian Vendors with respect
to any of such representations or warranties, except with respect to claims
which have been properly made in accordance with the provisions set forth above.

ARTICLE 4

OTHER COVENANTS OF THE PARTIES

 

4.1 Covenants of the Canadian Vendors

The Canadian Vendors hereby jointly and severally covenant and agree with the
Canadian Purchaser as set out in this Section 4.1.

4.1.1 Satisfy Conditions

Each of the Canadian Vendors shall use commercially reasonable efforts to cause
each of the conditions set forth in Section 5.1 to be satisfied prior to the
Closing Time.

4.1.2 Investigations and Availability of Records

During the Interim Period, the Canadian Vendors shall permit the Purchasers’
Advisors, representatives of the Purchasers’ lenders and representatives of the
provider of the Representations and Warranties Insurance Policy, if applicable,
to have reasonable access subject to the terms of the Confidentiality Agreement,
during regular business hours and upon reasonable notice to the property and
assets of the Canadian Holding Companies, the Canadian Subsidiaries and the US
Subsidiaries, including the Books and Records, and to the Canadian Employees and
US Employees who are managers to make such investigations of the Canadian
Business and US Business, as applicable, and the property and assets of the
Canadian Subsidiaries and US Subsidiaries and their legal, financial and tax
condition and their compliance with Environmental Laws and other Applicable Laws
as the Canadian Purchaser and the US Purchaser, as applicable, deems necessary
or desirable; provided that such investigations shall be carried out during
normal business hours and without undue interference with the operations of the
Canadian Subsidiaries and the US Subsidiaries subject to the requirements of
Applicable Laws (in particular, in respect of press release requirements), and
without disclosing to third parties the existence, nature or terms and
conditions of the transactions contemplated by this Agreement, and the Canadian
Vendors shall co-operate fully in facilitating such investigations and shall
furnish copies of all such documents and materials relating to such matters as
may be reasonably requested by or on behalf of the Canadian Purchaser.

4.1.3 Consents and Approvals

Commencing forthwith after the date hereof the Canadian Vendors shall use all
reasonable efforts to obtain, at or prior to the Closing Time, all Consents and
Regulatory Approvals (except in connection with the Excluded Licenses and
Licenses for which additional filings are required, all as indicated in Schedule
3.1.9, which shall be the responsibility of the Purchasers to obtain,

 

62.

--------------------------------------------------------------------------------

provided that the Canadian Vendors shall take commercially reasonable steps to
facilitate the Canadian Purchaser’s efforts to transfer or have reissued such
Licences or such steps as may otherwise be required to ensure the availability
of such Licences to the Aitec Business following Closing).

4.1.4 Amalgamation

The Canadian Vendors shall sign all such resolutions and documents and do all
acts, deeds and things necessary or desirable to complete the Amalgamation
immediately prior to the Closing.

4.1.5 Conduct of the Canadian Business and the US Business

 

  (a) During the Interim Period, the Canadian Vendors shall cause the Canadian
Subsidiaries, the US Subsidiaries and the Canadian Holding Companies, to the
extent applicable:

 

  (i) to carry on the Canadian Business and the US Business, as applicable, in
the ordinary course (except as may be otherwise required or contemplated by the
provisions of this Agreement) and in compliance with Applicable Law and to
perform its obligations under all Contracts, Leases and Equipment Leases;

 

  (ii) to preserve the Canadian Business and the US Business, as applicable, and
the goodwill of suppliers, customers and others having business relations with
the Canadian Subsidiaries and US Subsidiaries and maintain in full force and
effect all Intellectual and Industrial Property Rights owned by and all licence
agreements or arrangements with respect to the Intellectual and Industrial
Property;

 

  (iii) to retain the services of the present executives, Canadian Employees and
US Employees, consultants and advisors of or to it (except as may be otherwise
required or contemplated by the provisions of this Agreement and except in the
ordinary course of business);

 

  (iv) to continue in full force and effect the insurance coverage referred to
in Subsection 3.1.27, to take out such additional insurance as may be required
in the ordinary course of the Canadian Business and the US Business, as
applicable, or as may be reasonably requested and paid for by the Canadian
Purchaser or the US Purchaser, as applicable, and to give all notices and
present all claims under all insurance policies in a due and timely fashion and
promptly advise the Canadian Purchaser or US Purchaser, as applicable, in
writing of any such claims;

 

  (v)

to prepare and file in a timely manner all Tax Returns required to be filed by
it prior to the Closing Date and pay all Taxes required under any applicable Tax
Legislation to be paid by it prior to the Closing Date for any taxation year
ending on or before the Closing Date, and to ensure that all such Tax Returns
are true, correct and complete and that such Tax

 

63.

--------------------------------------------------------------------------------

 

Returns and all materials accompanying such Tax Returns reflect complete and
accurate disclosures, provided that no such Tax Returns shall be finalized or
filed without first seeking comments of the Canadian Purchaser in respect
thereof;

 

  (vi) to pay within the time prescribed by any applicable Tax Legislation any
required instalments of Taxes;

 

  (vii) to make adequate provision in its Books and Records, for the Taxes which
relate to any taxation year or part thereof ending or arising before the Closing
Date or ending as a consequence of the Closing which are not yet due and payable
and for which Tax Returns are not yet required to be filed;

 

  (viii) to withhold from each payment made by it the amount of all Taxes and
other deductions required under any applicable Tax Legislation to be withheld
therefrom and to pay all such amounts withheld to the relevant taxing or other
authority within the time prescribed under any applicable Tax Legislation; and

 

  (ix) to refrain from entering into any arrangements to provide for an
extension of time with respect to any assessment or reassessment of Tax, the
filing of any Tax Return or the payment of any Tax by it without the prior
written consent of the Canadian Purchaser or US Purchaser, as applicable.

 

  (b) During the Interim Period, each of the Canadian Vendors shall ensure that
none of the Canadian Holding Companies, Canadian Subsidiaries and US
Subsidiaries (except as may be otherwise required or contemplated by the
provisions of this Agreement), without the prior written consent of the Canadian
Purchaser or US Purchaser, as applicable:

 

  (i) become(s) a party to or bound by or subject to any new agreement, contract
or commitment with any employee or independent contractor of any of the Canadian
Subsidiaries or US Subsidiaries, other than in the ordinary course, or with any
Interested Person or amends or concurs in the amendment of any such existing
agreement, contract or commitment or makes or authorizes any payment to or for
the benefit of any Interested Person at a rate greater than as described in
Subsection 3.1.19 other than such as is required or contemplated by an existing
policy or practice as to periodic review of Aitec Employee Benefit Plans and US
Employee Benefit Plans;

 

  (ii) makes any capital expenditure (except in the ordinary course of the
Canadian Business or US Business, as applicable, pursuant to existing
commitments disclosed on Schedule 4.1.5), nor authorizes any new capital
expenditure in excess of $100,000 in the aggregate;

 

  (iii)

becomes a party to or bound by or subject to any new agreement or arrangement
with respect to Canadian Employee Benefits or US Employee

 

64.

--------------------------------------------------------------------------------

 

Benefits (other than an employment or personal services agreement or arrangement
which is terminable by any of the Canadian Subsidiaries or US Subsidiaries
without liability on no more than thirty (30) days’ notice) or amends or concurs
in the amendment of or increases any payment or obligation under any existing
agreement or arrangement with respect to Aitec Employee Benefit Plans or US
Employee Benefit Plans other than such as is required or contemplated by an
existing policy or practice as to periodic review of Aitec Employee Benefit
Plans or US Employee Benefit Plans;

 

  (iv) takes any step to dissolve, wind-up or otherwise affect its continuing
corporate existence or amalgamate or merge with any person or amend the Canadian
Subsidiaries’ or the US Subsidiaries’ Articles or by-laws, except the
Amalgamation;

 

  (v) makes any loan to or investment in any other person;

 

  (vi) becomes a party to or bound by or subject to any new Debt Instrument or
amends or concurs in the amendment of or prepays or varies the terms of any
indebtedness or other obligation under any existing Debt Instrument;

 

  (vii) becomes a party to or bound by or subject to any Guarantee;

 

  (viii) except as required pursuant to the terms of an Aitec Employee Benefit
Plans or a US Employee Benefit Plans, declares or pays any dividend or other
distribution (whether out of capital or surplus or otherwise) on any of its
outstanding securities or redeems, purchases or otherwise acquires any of its
outstanding securities;

 

  (ix) purchases, sells or leases any property or assets other than in the
ordinary course of business;

 

  (x) cancels, waives or varies the terms of any debt owing to or any claim or
right of such Canadian Subsidiary or US Subsidiary;

 

  (xi) except as required pursuant to the terms of an Aitec Employee Benefit
Plans or US Employee Benefit Plans, issues any shares or other securities or
makes any change in the number or class of or rights attached to any issued or
unissued shares of its capital stock or grants, issues or makes any option,
warrant, subscription, convertible security or other right or commitment to
purchase or acquire any shares of its capital stock or other securities;

 

  (xii) incurs any obligation or liability except in the ordinary course of
business or makes, authorizes or accepts any early payment of any existing
obligation or liability;

 

65.

--------------------------------------------------------------------------------

  (xiii) creates or permits the creation of any new Encumbrance on any of its
property or assets (except for any Permitted Encumbrance) or amends or concurs
in the amendment of any such existing Encumbrance;

 

  (xiv) terminates, transfers, assigns, modifies or changes, or grants any
rights under, any Intellectual and Industrial Property Rights;

 

  (xv) changes or alters the physical content or character of any inventories of
the Canadian Business or US Business so as to materially affect the nature of
such businesses or materially and adversely change the value of such inventories
from that reflected in the Audited Financial Statements; or

 

  (xvi) takes or refrains from taking any other action that would cause any of
the representations and warranties of the Canadian Vendors under this Agreement
or any Closing Document to be false or misleading;

nor agrees or becomes bound to do any of the foregoing.

4.1.6 Canadian Employee Severance and Termination

The Canadian Vendors shall assume all liability for all employee severance,
termination and related costs associated with the termination by Amalco and/or
any member of the Aitec Holdings Group of any of its employees at or prior to
the Closing, who are Canadian Vendors.

4.1.7 Payment of Accrued Bonuses

On or before the Closing Date, the Canadian Vendors shall cause to be paid out
and be fully satisfied all accrued bonus or incentive obligations owing by the
Aitec Subsidiaries to Canadian Employees and US Employees up to the Closing
Date. The Canadian Vendors understand that the Canadian Purchaser and US
Purchaser intend to implement new incentive compensation plans effective
immediately following the Closing Date. The Canadian Vendors agree to hold each
of the Canadian Purchaser, the US Purchaser, and the Aitec Subsidiaries harmless
from any liability for payments or obligations relating to bonus or incentive
compensation up to the Closing Date, other than as reflected on the Closing
Balance Sheet. To the extent such accrued amounts cannot be so paid, they shall
be properly accrued and reflected on the Closing Balance Sheet. In addition, the
Purchasers shall cause all profit from the Aitec Holdings Group (other than the
US Subsidiaries) in respect of the period from October 1st to the Closing Date
to be paid by way of bonus to the Individual Shareholders as soon as possible
following final completion of the Closing Balance Sheet, provided such amounts
are reflected as additional payroll obligations on the Closing Working Capital.

 

4.2 Covenants of the Purchasers

The Canadian Purchaser and the US Purchaser do hereby covenant and agree with
the Canadian Vendors as set out in Section 4.2:

 

66.

--------------------------------------------------------------------------------

4.2.1 Canadian Employee Severance and Termination

 

  (a) The Canadian Vendors shall assume no liability for any employee severance,
termination and related costs associated with the termination by and at the
direction of Amalco or the US Subsidiaries of any employees of Amalco and/or the
US Subsidiaries at or following the Closing, done at the direction of the
Canadian Purchaser or the US Purchaser, as applicable.

 

  (b) Immediately prior to Closing, McDonald and Leonard shall submit a written
notice of resignation from employment with each of the Aitec Subsidiaries with
which each such person is employed at such time, in the form set out as Exhibit
B, such resignation to be effective ninety (90) days after the Closing Date or
such later date as may be mutually agreed between the Purchasers and each of
McDonald and Leonard, as applicable, and McDonald and Leonard shall continue
working until such date. The employment of McDonald and Leonard shall end on the
effective date of such resignation. The Canadian Purchaser and US Purchaser, as
applicable, shall ensure that McDonald and Leonard receive their current salary
and benefits up to the effective date of such resignation. McDonald and Leonard
hereby agree that they are not entitled to any notice, pay in lieu of notice,
severance or any other payments in relation to the cessation of their
employment, given that they have voluntarily resigned from their employment. The
Vendors agree to hold each of the Canadian Purchaser, the US Purchaser and the
Aitec Subsidiaries harmless from any liability for such notice, pay in lieu of
notice, severance or any other payments.

 

  (c) At Closing, each of the Individual Shareholders shall also enter into
non-competition and non-solicitation agreements contemplated by Sections 5.1.12
and 5.1.13.

4.2.2 Tax Matters

 

  (a) The Canadian Purchaser and the US Purchaser, as applicable, shall cause
the Canadian Holding Companies, the Canadian Subsidiaries and the US
Subsidiaries from and after the Closing Date to retain all Books and Records
relating to any period ending on or prior to the Closing Date for a period of
three (3) years following the Closing Date or the end of any applicable
statutory retention requirement, in respect of any document, whichever is later.
So long as such books and records and other documents, information and files are
retained by the Canadian Holding Companies, Canadian Subsidiaries and US
Subsidiaries, as applicable, pursuant to the provisions hereof, the Canadian
Vendors shall have the right, for the purpose of filing any Tax Returns as
required under this Agreement and for the purpose of contesting any assessment
or reassessment for Tax in accordance with the provisions of Article 6 to
inspect and make copies of the same at the expense of the Canadian Vendors
during normal business hours and upon reasonable notice.

 

  (b)

After Closing, the Canadian Purchaser and the US Purchaser, as applicable,
agrees to cause Amalco and the US Subsidiaries to cooperate in a commercially
reasonable manner with the Canadian Vendors and the Canadian Vendors’ agents,

 

67.

--------------------------------------------------------------------------------

 

representatives and auditors for the purposes of the preparation of the Canadian
Vendors’ accounts and tax returns and in providing all information required for
legal, filing and regulatory purposes. Without limiting the generality of the
foregoing, the Canadian Purchaser and the US Purchaser, as applicable, shall,
upon reasonable notice, cause Amalco and the US Subsidiaries to provide the
Canadian Vendors, their agents, representatives and auditors reasonable access
during normal business hours to all Books and Records necessary for the
preparation of such accounts and tax returns and for gathering the required
information for legal, filing and regulatory purposes together with the
assistance of those employees of Amalco and the US Subsidiaries that the
Canadian Vendors may reasonably request; provided that the Canadian Vendors
shall pay proper and reasonable compensation to such companies for the
assistance of such employees.

 

  (c) Income Tax Returns in respect of the fiscal year ending immediately prior
to the Closing Date for Amalco, the Canadian Holding Companies, the Canadian
Subsidiaries and US Subsidiaries shall be prepared by the Canadian Purchasers,
provided that the Canadian Vendors shall be afforded an opportunity to review
and comment on such Tax Returns.

4.2.3 E&O/Liability Insurance

The Purchasers shall maintain E&O/Liability Insurance coverage for a period of
two years following the Closing Date. If the Purchasers fail to maintain the
E&O/Liability Insurance for such period, then the Canadian Vendors shall have no
obligation to indemnify the Purchasers pursuant to this Agreement to the extent
any matter would have been insured by the E&O/Liability Insurance if it had been
properly maintained.

4.2.4 Sale of the Aitec Business

Prior to Closing, other than with Charlie Pattillo and his partners and
advisors, the Purchasers shall not solicit any offers from or engage in any
negotiations with any person who is not a Party in respect of the sale of all or
any part of the Aitec Business.

 

4.3 Mutual Covenants

Each Party hereby covenants and agrees with the other Party as follows (and, in
the case of the Canadian Vendors, on a joint and several basis):

4.3.1 Transaction Steps

The Parties covenant and agree to carry-out the Transaction Steps set out in
Schedule 4.3.1 in the order set out therein.

4.3.2 Cooperation

The Parties shall cooperate fully in good faith with each other and their
respective Representatives in connection with any steps required to be taken as
part of their respective obligations under this Agreement.

 

68.

--------------------------------------------------------------------------------

ARTICLE 5

CONDITIONS OF CLOSING

 

5.1 Conditions for the Benefit of the Canadian Purchaser and US Purchaser

The transactions herein contemplated, including the carrying out of the
Transaction Steps in accordance with the terms of this Agreement, are subject to
the conditions precedent set out in this Section 5.1, each of which is hereby
declared to be for the exclusive benefit of the Canadian Purchaser and US
Purchaser, as applicable. Each of such conditions is to be satisfied in full at
or prior to the Closing Time. The Canadian Vendors covenant and agree to use
their best efforts to cause each of such conditions to be fulfilled at or prior
to the Closing Time.

5.1.1 Representations, Warranties and Covenants of the Canadian Vendors
Regarding the Period Prior to the Amalgamation

(a) All representations and warranties of the Canadian Vendors made in or
pursuant to this Agreement shall have been true and correct in all material
respects on the date hereof and shall be true and correct in all material
respects immediately prior to the Amalgamation with the same force and effect as
if such representations and warranties had been made immediately prior to the
Amalgamation provided that all representations and warranties of the Canadian
Vendors made in or pursuant to this Agreement that contain an express
materiality qualification shall have been true and correct in all respects on
the date hereof and shall be true and correct in all respects immediately prior
to the Amalgamation as if such representations and warranties had been made
immediately prior to the Amalgamation; subject to such modifications, if any, to
be made to the representations and warranties set forth in Sections 3.1 and 3.2
as a consequence of the operation of the Canadian Business and US Business in
the ordinary course and the completion of the Amalgamation and all Transaction
Steps to be completed prior to the Amalgamation.

(b) The Canadian Vendors shall have performed or complied with, in all material
respects, all obligations, covenants and agreements contained in this Agreement
to be performed by them at or prior to the Amalgamation.

(c) As evidence of the satisfaction of the conditions in paragraphs 5.1.1(a) and
5.1.1(b), the Canadian Vendors shall deliver to the Canadian Purchaser at the
Closing Time a certificate of the Canadian Vendors confirming the matters in
paragraphs 5.1.1(a) and 5.1.1(b) and to the effect that immediately prior to the
Amalgamation all other conditions set forth in this Section 5.1 have been
satisfied. The certificate shall be signed by each Canadian Vendor.
Notwithstanding the foregoing, the receipt of such certificate and the
completion of the transactions herein contemplated shall not constitute a waiver
(in whole or in part) of, or have the effect of modifying or qualifying in any
way, any of the representations and warranties of the Canadian Vendors made (or,
for purposes of Section 6.1, deemed to have been made) in or pursuant to this
Agreement, each of which shall survive the Closing and remain in full force and
effect for the benefit of the Canadian Purchaser and the US Purchaser as
provided in Section 3.8.

 

69.

--------------------------------------------------------------------------------

5.1.2 Representations, Warranties and Covenants of the Canadian Vendors as of
the Closing Time

(a) All representations and warranties of the Canadian Vendors made in or
pursuant to this Agreement shall have been true and correct in all material
respects on the date hereof and shall be true and correct in all material
respects at the Closing Time with the same force and effect as if such
representations and warranties had been made at and as of the Closing Time
provided that all representations and warranties of the Canadian Vendors made in
or pursuant to this Agreement that contain an express materiality qualification
shall have been true and correct in all respects on the date hereof and shall be
true and correct in all respects at the Closing Time as if such representations
and warranties had been made at and as of the Closing Time, with such
modifications to the representations and warranties set forth in Sections 3.1
and 3.2 as a consequence of the operation of the Canadian Business and the US
Business in the ordinary course and the completion of the Amalgamation and the
Transaction Steps which are to occur prior thereto.

(b) The Canadian Vendors shall have performed or complied with, in all material
respects, all obligations, covenants and agreements contained in this Agreement
to be performed by it at or prior to the Closing Time.

(c) As evidence of the satisfaction of the conditions in paragraphs 5.1.2(a) and
(b), the Canadian Vendors shall deliver to the Canadian Purchaser at the Closing
Time a certificate of the Canadian Vendors confirming the matters in paragraphs
5.1.2(a) and (b) and to the effect that as of the Closing Time all other
conditions set forth in this Section 5.1.2 have been satisfied. The certificate
shall be signed by each Canadian Vendor. Notwithstanding the foregoing, the
receipt of such certificate and the completion of the transactions herein
contemplated shall not constitute a waiver (in whole or in part) of, or have the
effect of modifying or qualifying in any way, any of the representations and
warranties of the Canadian Vendors made (or, for purposes of Section 6.1, deemed
to have been made) in or pursuant to this Agreement, each of which shall survive
the Closing and remain in full force and effect for the benefit of the Canadian
Purchaser as provided in Section 3.8.

5.1.3 Amalgamation

The Amalgamation shall have been completed by the Canadian Vendors in a manner
satisfactory to the Canadian Purchaser, acting reasonably, prior to the Closing.

5.1.4 Legal Opinion

A legal opinion of Scarfone Hawkins LLP in respect of each of the Canadian
Vendors, the Canadian Holding Companies, the Canadian Subsidiaries and Amalco
dated the Closing Date and in a form satisfactory to the Purchasers, acting
reasonably, shall have been received by the Canadian Purchaser at the Closing
Time. In rendering such opinion, counsel may rely as to the laws of
jurisdictions other than the Province of Ontario upon the opinions of counsel
qualified to practise in such jurisdictions satisfactory to the Canadian
Purchaser.

 

70.

--------------------------------------------------------------------------------

5.1.5 No Adverse Change

Since September 30, 2006 there shall have been no change in the Canadian
Business, or in the operations, affairs, prospects or condition (financial or
otherwise) of any of the Canadian Subsidiaries (except as otherwise provided for
or disclosed in this Agreement) which, in the reasonable opinion of the Canadian
Purchaser, would have a material adverse effect on the Canadian Subsidiaries or
on the Canadian Business.

5.1.6 Consents

All Consents necessary to keep the Material Contracts, Leases and Equipment
Leases in full force and effect and to enable Amalco and the Aitec Subsidiaries
to continue to enjoy all rights and benefits thereunder shall have been granted,
obtained and received unconditionally or on terms satisfactory to the
Purchasers, acting reasonably.

5.1.7 Regulatory Approvals

All Regulatory Approvals required to keep the Licences held by any of the Aitec
Subsidiaries in good standing and to otherwise enable the Aitec Subsidiaries to
continue to enjoy all rights and benefits thereunder and to carry on the Aitec
Business after the Closing in the same manner as it is currently carried on
shall have been granted, obtained and received unconditionally or on terms
satisfactory to the Purchasers, acting reasonably, save and except with respect
to the those Licences listed under the heading “Excluded Licences” and “Other
Filings Required” in Schedule 3.1.9, provided that the Canadian Vendors shall
take commercially reasonable steps to facilitate the Purchaser’s efforts to
transfer or have reissued such Licences or such steps as may otherwise be
required to ensure the availability of such Licences to the Aitec Business
following Closing.

5.1.8 No Legal Proceedings

No Order shall have been made and no Legal Proceeding shall have been commenced
or shall be pending or threatened against Amalco, the Canadian Vendors or the US
Vendor which adversely affects or would adversely affect the title of Amalco or
the Canadian Vendors or the US Vendor to the Canadian Purchased Shares or US
Purchased Shares, as applicable, or which enjoins, restricts or prohibits, or
which asserts a claim or seeks a remedy that would have the effect of enjoining,
restricting or prohibiting the completion of the transactions herein
contemplated, or which, in the result, could prohibit or materially restrict any
of the Canadian Subsidiaries from carrying on the Canadian Business or any of
the US Subsidiaries from carrying on the US Business in the ordinary course
after Closing.

5.1.9 Resignations and Releases

Resignations of (i) all of the Individual Shareholders as directors and officers
(but not as employees) and (ii) Munro as an employee, from each of the Canadian
Holding Companies, Aitec Subsidiaries and Amalco, as required, together with an
executed general release of such companies from each of them with respect to all
claims against any of such companies up to the Closing Time substantially in the
form of Exhibit C, shall have been executed and delivered.

 

71.

--------------------------------------------------------------------------------

5.1.10 Satisfaction with Due Diligence

Each of the Canadian Purchaser and the US Purchaser shall have been furnished
with reports and opinions satisfactory to it, acting reasonably, as to the
results of the investigations conducted by the Canadian Purchaser’s
Representatives or the US Purchaser’s Representative as contemplated by this
Agreement and such reports and opinions shall not have disclosed any matter
which the Canadian Purchaser or US Purchaser, as applicable, considers to be
materially adverse to the Canadian Business, Amalco or the Canadian
Subsidiaries, in the case of the Canadian Purchaser, or the US Business or the
US Subsidiaries, in the case of the US Purchaser, or its decision to acquire the
Canadian or US Purchased Shares, as applicable. In addition, each of the
Canadian Purchaser and the US Purchaser shall have completed its own due
diligence investigation and such investigations shall not have disclosed any
matter which they consider to be materially adverse to the Canadian Business,
Amalco or the Canadian Subsidiaries, in the case of the Canadian Purchaser, or
to the US Business or the US Subsidiaries, or their respective decision to
acquire the Canadian or US Purchased Shares. Each of the Purchasers shall be
satisfied with their discussions with the key managers of the Aitec Subsidiaries
listed on Schedule 5.1.10.

5.1.11 Closing Documents

Each of the Canadian Purchaser and US Purchaser shall have received such other
opinions, agreements, certificates, affidavits, statutory declarations,
instruments of transfer and other documentation reasonably required by such
Party to implement the transactions herein contemplated, all of which shall be
satisfactory in form and substance to counsel for the Canadian Purchaser and the
US Purchaser, acting reasonably.

5.1.12 New Employment Agreements

 

  (a) New written employment agreements, in form satisfactory to the Purchasers,
shall have been executed and delivered by all employees listed on Schedule
3.1.17 with whom there currently exists a written employment agreement.

 

  (b) Resignations of spouses of any Individual Shareholder who is employed by
any Aitec Subsidiary shall have been executed and delivered by such spouses.

5.1.13 Non-Competition and Non-Solicitation Agreements

 

  (a) Non-competition and non-solicitation agreements between Weldsonix Inc,
Aitec USA Inc, Aitec Inc., Aitec (Western) Inc., Team Industrial Services, Inc.
and TISI Acquisition Inc., on the one hand, and the Canadian Vendors (except J.
Benedictus, M. Bouma, Jackson, Johnson and Norman), on the other hand, in the
form attached hereto as Exhibit D, shall have been executed and delivered.

 

  (b) Non-competition and non-solicitation agreements between Weldsonix Inc.,
Aitec USA Inc., Aitec Inc., Aitec (Western) Inc., Team Industrial Services, Inc.
and TISI Acquisition Inc., on the one hand, and J. Benedictus, M. Bouma,
Jackson, Johnson and Norman, on the other hand, in the form attached hereto as
Exhibit E, shall have been executed and delivered

 

72.

--------------------------------------------------------------------------------

5.1.14 Mutual Releases

Each of the Canadian Vendors and the spouses of each Individual Shareholder
shall have executed and delivered full and final mutual releases between each of
them and Amalco and the Aitec Holdings Group.

5.1.15 Repayment of Debt Instruments and Discharge of Encumbrances

At Closing, the Canadian Vendors shall have tendered proof of the repayment of
all Debt Instruments, other than Debt Instruments listed on Schedule 5.1.15, or
a payout letter from the applicable creditor, in form satisfactory to the
Canadian Purchaser, and a release, termination or discharge of, or an
undertaking to release, terminate or discharge, in form satisfactory to the
Canadian Purchaser, acting reasonably, any related security or Encumbrance
thereon, as well as any other Encumbrance which is not a Permitted Encumbrance.

5.1.16 Satisfaction Letters of Note Holders

Satisfaction letters, in form satisfactory to the Purchasers, acting reasonably,
confirming that no amounts are owing to any of the Note Holders by any member of
the Aitec Holdings Group or Amalco, shall have been executed and delivered by
each of the Note Holders.

5.1.17 CIT Consents

CIT Consents, in forms satisfactory to the Purchasers, acting reasonably, shall
have been received.

5.1.18 Intercompany Accounts

All Intercompany Accounts shall have been paid and satisfied as between the
relevant parties, except as set forth and described in Schedule 5.1.18.

5.1.19 Board Approval

The Canadian Purchaser and the US Purchaser shall each have obtained the
approval from its Board of the Directors with respect to the transactions herein
contemplated.

5.1.20 Holdback Agreement

The Holdback Agreement shall have been executed and delivered by each of the
Canadian Vendors;

5.1.21 Representations and Warranties Insurance Policy

The Canadian Purchaser shall have obtained the Representations and Warranties
Insurance Policy, with the terms and conditions thereof being satisfactory to
the Canadian Purchaser. Premiums in respect of such policy shall be paid for by
the Canadian Purchaser, US Purchaser or one of their respective Affiliates.

 

73.

--------------------------------------------------------------------------------

5.1.22 Unanimous Shareholders Agreement

The Unanimous Shareholders Agreement shall have been terminated.

 

5.2 Conditions for the Benefit of the Canadian Vendors

The transactions herein contemplated, including the sale and purchase of the
Canadian Purchased Shares and the US Purchased Shares in accordance with the
terms of this Agreement, are subject to the conditions precedent set out in this
Section 5.2, each of which is hereby declared to be for the exclusive benefit of
the Canadian Vendors and may be waived by them. Each of such conditions is to be
satisfied in full at or prior to the Closing Time unless waived. Each of the
Canadian Purchaser and the US Purchaser covenants and agrees to use its
respective best efforts to cause each of such conditions to be fulfilled at or
prior to the Closing Time.

5.2.1 Payment of the Purchase Price

The Canadian Purchase Price and the US Purchase Price shall have been tabled for
payment.

5.2.2 Mutual Full and Final Releases

Each of the Canadian Vendors and the spouses of all Individual Shareholders
shall have received full and final mutual releases between each of them and each
of Amalco and the Aitec Holdings Group provided that the Canadian Vendors who
are partners of Salta Holdings shall not be released, in such capacity, in
respect of any liabilities Salta Holdings owes to Amalco pursuant to the
Oakville Lease set out in Section 3.1.16.

5.2.3 Closing Documents

The Canadian Vendors shall have received such other opinions, agreements,
certificates, affidavits, statutory declarations, instruments of transfer and
other documentation reasonably required by the Canadian Vendors to implement the
transactions herein contemplated, all of which shall be satisfactory in form and
substance to counsel for the Canadian Vendors, acting reasonably.

5.2.4 No Legal Proceedings

No Order shall have been made and no Legal Proceeding shall have been commenced
or shall be pending or threatened against Amalco and/or the Canadian
Subsidiaries which adversely affects or would adversely affect the title of the
Canadian Vendors to the Canadian Purchased Shares or title of the US Vendor to
the US Purchased Shares or which enjoins, restricts or prohibits, or which
asserts a claim or seeks a remedy that would have the effect of enjoining,
restricting or prohibiting the completion of the transactions herein
contemplated, or which, in the result, could prohibit or materially restrict any
of the Canadian Subsidiaries or US Subsidiaries from carrying on the Canadian
Business or the US Business, as applicable, in the ordinary course after
Closing.

 

74.

--------------------------------------------------------------------------------

5.2.5 Truth of Representations and Warranties of the Canadian Purchaser and the
US Purchaser

(a) The representations and warranties of each of the Canadian Purchaser and the
US Purchaser made in or pursuant to this Agreement shall have been true and
correct in all material respects on the date hereof and shall be true and
correct in all material respects at the Closing Time with the same force and
effect as if such representations and warranties had been made at and as of the
Closing Time.

(b) Each of the Canadian Purchaser and the US Purchaser shall have performed or
complied with, in all material respects, all obligations, covenants and
agreements contained in this Agreement to be performed by it at or prior to the
Closing Time.

(c) As evidence of the satisfaction of the conditions in paragraph 5.2.5(a) and
(b), each of the Canadian Purchaser and the US Purchaser shall deliver to the
Canadian Vendors at the Closing Time a certificate of the Purchasers confirming
the matters in paragraphs 5.2.5(a) and (b) and to the effect that as of the
Closing Time all other conditions set forth in this Section 5.2.5 have been
satisfied. The certificate shall be signed by a senior officer of the Canadian
Purchaser and the US Purchaser. Notwithstanding the foregoing, the receipt of
such certificate and the completion of the transactions herein contemplated
shall not constitute a waiver (in whole or in part) of, or be interpreted to
modify or qualify in any way, any of the representations and warranties of the
Canadian Purchaser or US Purchaser made in or pursuant to this Agreement, each
of which shall survive the Closing and remain in full force and effect for the
benefit of the Canadian Vendors as provided in Section 3.9.

5.2.6 Legal Opinion

 

  (a) A legal opinion of Fraser Milner Casgrain LLP dated the Closing Date in
respect of the Canadian Purchaser and being substantially in a form satisfactory
to the Canadian Vendors, acting reasonably, shall have been received by the
Canadian Vendors at the Closing Time. In rendering such opinion, counsel may
rely as to the laws of jurisdictions other than the Province of Ontario upon the
opinions of counsel qualified to practise in such jurisdictions satisfactory to
the Canadian Vendors.

 

  (b) A legal opinion of Locke Liddell & Sapp LLP dated the Closing Date in
respect of the US Purchaser and being substantially in a form satisfactory to
the Canadian Vendors, acting reasonably, shall have been received by the
Canadian Vendors at the Closing Time. In rendering such opinion, counsel may
rely as to the laws of jurisdictions other than the State of Texas upon the
opinions of counsel qualified to practise in such jurisdictions satisfactory to
the Canadian Vendors.

5.2.7 Holdback Agreement

The Holdback Agreement shall have been executed and delivered by each of the
Canadian Purchaser and the US Purchaser.

 

75.

--------------------------------------------------------------------------------

5.2.8 Certain Employment Offers

The Canadian Purchaser shall have caused the applicable Canadian Subsidiary to
have offered continued employment, on terms comparable to those received by
similarly situated Team employees, to each of Jackson, Norman, Johnson, J.
Benedictus and M. Bouma.

5.2.9 CIT Consents

CIT Consents, in forms satisfactory to the Canadian Vendors, acting reasonably,
shall have been received.

 

5.3 Waiver

Either Party may waive, in whole or in part, by notice to the other Party, any
condition set forth in this Article 5 which is for its benefit. No waiver by a
Party of any condition, in whole or in part, shall operate as a waiver of any
other condition. The waiver in whole or in part by either Party of any condition
requiring the accuracy of a representation or warranty or the performance of or
compliance with a covenant shall not affect the right of that Party to
indemnification under Article 6 for any Loss suffered or incurred by that Party
based upon that misrepresentation or breach of warranty or upon the failure to
observe or perform that covenant.

 

5.4 Failure to Satisfy Conditions

If any condition set forth in Sections 5.1 or 5.2 is not satisfied at the
Closing Time, or if it becomes apparent that any such condition cannot be
satisfied at the Closing Time, the Party entitled to the benefit of such
condition (the “First Party”) may terminate this Agreement by notice in writing
to the other Party and in such event:

 

  (a) unless the other Party can show that the condition or conditions which
have not been satisfied and for which the First Party has terminated this
Agreement are reasonably capable of being performed or caused to be performed by
the First Party or have not been satisfied by reason of a default by the First
Party hereunder, the First Party shall be released from all obligations
hereunder; and

 

  (b) unless the First Party can show that the condition or conditions which
have not been satisfied and for which the First Party has terminated this
Agreement are reasonably capable of being performed or caused to be performed by
the other Party or have not been satisfied by reason of a default by the other
Party hereunder, then the other Party shall also be released from all
obligations hereunder;

provided however that no release of obligations under this Section 5.4 shall
release either Party from any obligation under Section 3.6, Subsection 4.2.1,
Section 7.2 or Section 7.5.

 

5.5 Damage or Expropriation

If, prior to the Closing Time, all or any substantial portion of the property or
assets of the Aitec Subsidiaries are destroyed or substantially damaged by fire
or other hazard or

 

76.

--------------------------------------------------------------------------------

shall be expropriated or seized by any Governmental Authority or any other
person in accordance with Applicable Law, or if notice of any such expropriation
or seizure shall have been given in accordance with Applicable Law, the
Purchasers shall have the option, exercisable by notice to the Canadian Vendors
given prior to the Closing Date:

 

  (a) to terminate this Agreement and not complete the transactions herein
contemplated, in which case the Purchasers shall be released from all
obligations hereunder except those set forth in Section 3.6, Subsection 4.2.1,
Section 7.2 and Section 7.5 as of and from the giving of such notice; or

 

  (b) to complete the transactions herein contemplated with a reduction of the
Canadian Purchase Price and the US Purchase Price by the net amount equal to the
cost of repair, or, if expropriated or seized or if destroyed or damaged beyond
repair, by the net amount equal to the replacement cost of the property or
assets so expropriated, seized, damaged or destroyed, after taking into account
all proceeds of any insurance or compensation for such destruction, damage,
expropriation or seizure received by any of the Aitec Subsidiaries.

If any loss, damage or claim for which insurance is carried by the Canadian
Holding Companies, Canadian Subsidiaries or US Subsidiaries arises during the
Interim Period, the Canadian Purchaser or US Purchaser, as applicable, as a
condition of Closing, shall each be entitled to be satisfied that the insurers
recognize the claim of the Canadian Holding Companies, Canadian Subsidiaries or
US Subsidiaries, as applicable, for payment in accordance with the terms of the
relevant insurance policies.

ARTICLE 6

INDEMNIFICATION

 

6.1 Indemnification by Canadian Vendors

Each of the Canadian Vendors shall indemnify, defend and save harmless, on a
joint and several basis, the Purchasers and each of their Representatives from
and against any and all Loss suffered or incurred by them, as a direct or
indirect result of, or arising in connection with or related in any manner
whatsoever to, subject to the limitations set out in Section 6.13:

 

  (a) subject to Section 3.8, any misrepresentation or breach of warranty made
or given by the Canadian Vendors in this Agreement, in any Closing Document or
in any other document delivered pursuant to this Agreement or any Closing
Document;

 

  (b) subject to paragraph (d) below, any failure by any of the Canadian Vendors
to observe or perform any covenant or obligation contained in this Agreement,
any Closing Document (or in any document delivered pursuant to this Agreement or
any Closing Document), and for certainty, the beneficiaries of covenants made by
Individual Shareholders under the non-competition and non-solicitation
agreements entered into pursuant to Section 5.1.13 shall be entitled to seek
such additional remedies as made available to such beneficiaries in accordance
with such agreements;

 

  (c)

any Legal Proceeding against any member of the Aitec Holdings Group or Amalco
initiated prior to or after the Closing Time, and not disclosed on Schedule

 

77.

--------------------------------------------------------------------------------

 

3.1.30, which is based on an act or omission of the Canadian Vendors or any
member of the Aitec Holdings Group prior to the Closing Time; and

and, without limiting the generality of the provisions of Sections 6.1(a) and
(b), the indemnity provided for in this Section 6.1 shall also extend to the
following matters, without the limitations set out in Section 6.13(b):

 

  (d) the failure by the Canadian Vendors to reimburse the Canadian Purchaser
for any amounts owing by them (in respect of the Litigation Matters) pursuant to
Section 2.7;

 

  (e) any Environmental Matter listed on Schedule 3.1.34; and

 

  (f) any claim against any member of the Aitec Holdings Group, its predecessors
or Amalco initiated prior to or following the Closing Time whether or not
disclosed in any Schedule in respect of Aitec Realty Inc. or otherwise in
respect of the ownership by it of the Real Properties located at 15 Keefer Rd.
St. Catharines, Ontario and 450 McGregor Road, Sarnia, Ontario.

Notwithstanding the Closing and the delivery of the certificate pursuant to
paragraph 5.1.1(c), for the purposes of the Canadian Purchaser’s right to be
indemnified as provided in this Section 6.1 (but subject to the limitations in
Section 6.13), the said certificate shall be deemed to repeat the
representations and warranties of the Canadian Vendors made in this Agreement on
and as of the Closing Date as if then made without qualification as to
materiality, except for the representations and warranties expressly so
qualified in this Agreement, with such modifications as a consequence of the
operation of the Canadian Business and US Business in the ordinary course.

 

6.2 Indemnification by the Canadian Purchaser

The Canadian Purchaser shall indemnify, defend and save harmless the Canadian
Vendors and each of the Canadian Vendors’ Representatives from and against any
and all Loss suffered or incurred by them, as a direct or indirect result of, or
arising in connection with or related in any manner whatsoever subject to the
limitations set out in Sections 6.13(a) and 6.13(c):

 

  (a) subject to Section 3.9, any misrepresentation or breach of any warranty
made or given by the Canadian Purchaser in this Agreement, in any Closing
Document or in any document delivered pursuant to this Agreement or any Closing
Document;

 

  (b) any failure by the Canadian Purchaser to observe or perform any covenant
or obligation contained in this Agreement, in any Closing Document or in any
document delivered pursuant to this Agreement or any Closing Document; and,

 

  (c) any damages of a Third Party against the Canadian Vendors or any Canadian
Vendors’ Representatives for any damage, loss, claim, action, cause of action,
or costs arising from the operation of the Canadian Business subsequent to
Closing, provided that such claim cannot be the subject of a claim of the
Purchaser or its Representatives under the provisions of Section 6.1.

 

78.

--------------------------------------------------------------------------------

6.3 Agency for Representatives

Each Party agrees that it accepts each indemnity in favour of any of its
Representatives as agent and trustee of that Representative. Each Party agrees
that the other Party may enforce an indemnity in favour of any of that Party’s
Representatives on behalf of that Representative.

 

6.4 Notice of Third Party Claims

If an Indemnitee receives notice of the commencement or assertion of any Third
Party Claim, the Indemnitee shall give the Indemnitor reasonably prompt notice
thereof, but in any event no later than 10 Business Days after receipt of such
notice of such Third Party Claim. Such notice to the Indemnitor shall describe
the Third Party Claim in reasonable detail and shall indicate, if reasonably
practicable, the estimated amount of the Loss that has been or may be sustained
by the Indemnitee.

 

6.5 Defence and Funding of Third Party Claims

The Indemnitor may participate in or assume the defence of any Third Party Claim
by giving notice to that effect to the Indemnitee not later than 30 days after
receiving notice of that Third Party Claim (the “Notice Period”). The
Indemnitor’s right to do so shall be subject to the rights of any insurer or
other party who has potential liability in respect of that Third Party Claim.
The Indemnitee shall co-operate in good faith in the defence of each Third Party
Claim, even if the defence has been assumed by the Indemnitor and may
participate in such defence assisted by counsel of its own choice at its own
expense. If the Indemnitee has not received notice within the Notice Period that
the Indemnitor has elected to assume the defence of such Third Party Claim, the
Indemnitee may, at its option, elect to settle or compromise the Third Party
Claim or assume such defence, assisted by counsel of its own choosing and the
Indemnitor shall be liable for all reasonable costs and expenses paid or
incurred in connection therewith and any Loss suffered or incurred by the
Indemnitee with respect to such Third Party Claim. If the Indemnitor elects to
assume the defence of a Third Party Claim under this Section 6.5, the Indemnitor
shall not be deemed to have accepted its liability for such claim. In the case
where the Canadian Vendors are the Indemnitor and have elected to assume the
defence of a Third Party Claim, then the Purchasers shall nonetheless be
required to fund all costs and expenses of defending such Third Party Claims as
provided below in this Section 6.5 subject to a reconciliation between the
Purchasers and the Canadian Vendors when there is a final settlement of such
Third Party Claim For the purposes of this Section 6.5 “final settlement” shall
mean a settlement of all claims as between the parties to such Third Party Claim
and a full release of Amalco and any member of the Aitec Holdings Group involved
in such Third Party Claims, or a final judgment of a court of law where any
right of appeal from such judgment has expired or been exhausted. The Purchasers
shall fund all costs and expenses of defending the Third Party Claim (which for
greater certainty, shall not include the defence of any Litigation Matters for
the purposes of this Section 6.5) until such costs and expenses, in the
aggregate, together with any other Eligible Claims made pursuant to Sections
6.1(a), (b) or (c), exceed the $200,000.00 minimum set out in Section 6.13(b),
at which point the Purchasers shall be entitled to claim all such Eligible
Claims in accordance with Section 6.13(b), provided that, following the initial
claim for amounts over $100,000 as contemplated by Section 6.13(b), the
Purchasers shall be entitled to request reimbursement from, and send an
accounting to, John McDonald on behalf of

 

79.

--------------------------------------------------------------------------------

the Canadian Vendors for the amount of any such additional costs and expenses
whenever the aggregate of such costs and expenses amount to at least $25,000.00,
or at least every three (3) months thereafter, whichever is first to occur.
Whenever the Canadian Vendors are required to reimburse the Purchasers pursuant
to this Section 6.5, the amount which they are required to reimburse the
Purchasers for shall be set off by any amount which the Purchasers are required
to reimburse the Canadian Vendors for pursuant to Section 2.7(a) as a result of
a reconciliation between the Litigation Reserve and the Litigation Costs and
Expenses arising from the final settlement of one or more of the Litigation
Matters.

 

6.6 Assistance for Third Party Claims

The Indemnitor and the Indemnitee will use all reasonable efforts to make
available to the Party which is undertaking and controlling the defence of any
Third Party Claim (the “Defending Party”),

 

  (a) those employees and other persons whose assistance, testimony or presence
is necessary to assist the Defending Party in evaluating and in defending any
Third Party Claim; and

 

  (b) all documents, records and other materials in the possession of such Party
reasonably required by the Defending Party for its use in defending any Third
Party Claim,

and shall otherwise cooperate with the Defending Party. The Indemnitor shall be
responsible for all reasonable expenses associated with making such documents,
records and materials available and for all reasonable expenses of any employees
or other persons made available by the Indemnitee to the Indemnitor hereunder,
which expense shall not exceed the actual cost to the Indemnitee associated with
such employees and other persons.

 

6.7 Settlement of Third Party Claims

If an Indemnitor elects to assume the defence of any Third Party Claim as
provided in Section 6.5, the Indemnitor shall not be liable for any legal
expenses incurred by the Indemnitee in connection with the defence of such Third
Party Claim following the receipt by the Indemnitee of notice of such
assumption. However, if the Indemnitor fails to take reasonable steps necessary
to defend diligently such Third Party Claim within 30 days after receiving
notice from the Indemnitee that the Indemnitee believes on reasonable grounds
that the Indemnitor has failed to take such steps, the Indemnitee may, at its
option, elect to assume the defence of and to negotiate, settle or compromise
the Third Party Claim assisted by counsel of its own choosing and the Indemnitor
shall also be liable for all reasonable costs and expenses paid or incurred in
connection therewith. The Indemnitor shall not, without the prior written
consent of the Indemnitee, enter into any compromise or settlement of a Third
Party Claim, which would lead to liability or create any other obligation,
financial or otherwise, on the Indemnitee.

 

6.8 Direct Claims

Any Direct Claim shall be asserted by giving the Indemnitor reasonably prompt
written notice thereof, but in any event not later than 10 days after the
Indemnitee becomes aware of such Direct Claim. The Indemnitor shall then have a
period of 30 days within which to

 

80.

--------------------------------------------------------------------------------

respond in writing to such Direct Claim. If the Indemnitor does not so respond
within such 30 day period, the Indemnitor shall be deemed to have rejected such
Claim, and in such event the Indemnitee shall be free to pursue such remedies as
may be available to the Indemnitee subject to the dispute resolution procedures
set out in Schedule 1.4. Notwithstanding the foregoing, no written notice of any
Direct Claim shall be made until the minimum Losses amount set out in
Section 6.13(b) shall have been met.

 

6.9 Failure to Give Timely Notice

A failure to give timely notice as provided in this Article 6 shall not affect
the rights or obligations of any Party except and only to the extent that, as a
result of such failure, any Party which was entitled to receive such notice was
deprived of its right to recover any payment under its applicable insurance
coverage or was otherwise directly and materially damaged as a result of such
failure.

 

6.10 Reductions and Subrogation

If the amount of any Loss at any time subsequent to the making of an Indemnity
Payment in respect of that Loss is reduced by any recovery, settlement or
otherwise under or pursuant to any insurance coverage, or pursuant to any claim,
recovery, settlement or payment by or against any other person, the amount of
such reduction (less any costs, expenses (including Taxes) or premiums incurred
in connection therewith), shall promptly be repaid by the Indemnitee to the
Indemnitor. Upon making a full Indemnity Payment, the Indemnitor shall, to the
extent of such Indemnity Payment, be subrogated to all rights of the Indemnitee
against any third party that is not an Affiliate of the Indemnitee in respect of
the Loss to which the Indemnity Payment relates. Until the Indemnitee recovers
full payment of its Loss, any and all claims of the Indemnitor against any such
third party on account of such Indemnity Payment shall be postponed and
subordinated in right of payment to the Indemnitee’s rights against such third
party. Without limiting the generality or effect of any other provision hereof,
the Indemnitee and Indemnitor shall duly execute upon request all instruments
reasonably necessary to evidence and perfect such postponement and subordination
and the Indemnitee shall assign all claims against Third Parties which the
Indemnitor can pursue in order to seek recovery in connection with any indemnity
payment made by it to the Indemnitee.

 

6.11 Tax Effect

If any Indemnity Payment received by an Indemnitee would constitute taxable
income to such Indemnitee, the Indemnitor shall pay to the Indemnitee at the
same time and on the same terms, as to interest and otherwise, as the Indemnity
Payment an additional amount sufficient to place the Indemnitee in the same
after-Tax position as it would have been if the Indemnity Payment had been
received tax-free.

 

6.12 Payment and Interest

All Losses shall bear interest at a rate per annum equal to the Prime Rate,
calculated and payable monthly, both before and after judgment, with interest on
overdue interest at the same rate, from the date that the Indemnitee disbursed
funds, suffered damages or losses or

 

81.

--------------------------------------------------------------------------------

incurred a loss, liability or expense in respect of a Loss, to the date of
payment by the Indemnitor to the Indemnitee.

 

6.13 Limitation

 

  (a) No Claims may be asserted by the Canadian Purchaser or the Canadian
Vendors unless and until such Claim has a value of at least $2,000 (an “Eligible
Claim”).

 

  (b) No Claims may be asserted by the Canadian Purchaser or the Canadian
Purchaser’s Representatives under paragraph 6.1(a), 6.1(b) or 6.1(c) unless and
until the aggregate of all Eligible Claims, exceeds Two Hundred Thousand Dollars
($200,000), in which event the Purchaser can claim, from the first dollar above
One Hundred Thousand Dollars ($100,000) of such Eligible Claims, as applicable.

 

  (c) The Canadian Vendors’ aggregate liability for Eligible Claims shall be
limited to the Canadian Purchase Price.

 

6.14 Additional Rules and Procedures

 

  (a) If any Third Party Claim is of a nature such that the Indemnitee is
required by Applicable Law to make a payment to any person (a “Third Party”)
with respect to such Third Party Claim before the completion of settlement
negotiations or related Legal Proceedings, the Indemnitee may make such payment
and the Indemnitor shall, subject to the provisions of Section 6.5, forthwith
after demand by the Indemnitee, reimburse the Indemnitee for any such payment.
If the amount of any liability under the Third Party Claim in respect of which
such a payment was made, as finally determined, is less than the amount which
was paid by the Indemnitor to the Indemnitee , the Indemnitee shall, forthwith
after receipt of the difference from the Third Party, pay such difference to the
Indemnitor;

 

  (b) The Indemnitee and the Indemnitor shall co-operate fully with each other
with respect to Third Party Claims, shall keep each other fully advised with
respect thereto (including supplying copies of all relevant documentation
promptly as it becomes available) and shall each designate a senior officer who
will keep himself informed about and be prepared to discuss the Third Party
Claim with his counterpart and with counsel at all reasonable times.

ARTICLE 7

MISCELLANEOUS

 

7.1 Further Assurances

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

 

82.

--------------------------------------------------------------------------------

7.2 Public Announcements

Except to the extent required by Applicable Law, each Party agrees that no
disclosure or public announcement regarding this Agreement or the transactions
contemplated hereby shall be made by either Party without the prior written
consent of the other Party.

 

7.3 Notices

 

  (a) Any notice, direction or other communication (in this Section, a “notice”)
required or permitted to be given to a Party shall be in writing and shall be
sufficiently given if delivered personally, mailed or transmitted by facsimile
as set out in Schedule 7.3.

 

  (b) Any notice delivered personally, shall be deemed to have been given and
received on the day on which it was delivered, if delivered prior to 5:00 p.m.
(recipient’s time) on a Business Day; otherwise on the first Business Day
thereafter. Any notice mailed shall be deemed to have been given and received on
the third Business Day after it was mailed, provided that if the Party giving
the notice knows or ought reasonably to know of disruptions in the postal system
that might affect the delivery of mail, such notice shall not be mailed but
shall be given by personal delivery or facsimile transmission. Any notice
transmitted by facsimile shall be deemed to have been given and received on the
day of its transmission if the machine from which it was sent receives the
answerback code of the Party to whom it was sent prior to 5:00 p.m. (recipient’s
time) on such day; otherwise on the first Business Day thereafter.

 

  (c) Either Party may change its address for service from time to time by
notice given to each of the other Party in accordance with the foregoing
provisions.

 

7.4 Time of the Essence

Time shall be of the essence of this Agreement.

 

7.5 Costs and Expenses

Each Party shall be responsible for all costs and expenses (including the fees
and disbursements of legal counsel, bankers, investment bankers, accountants,
brokers and other advisors) incurred by it in connection with this Agreement and
the transactions contemplated herein.

 

7.6 Effect of Closing

All provisions of this Agreement shall remain in full force and effect
notwithstanding the Closing, subject only to the limitation periods specified in
Sections 3.8 and 3.9 and the related indemnities in Article 6.

 

7.7 Counterparts

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

 

83.

--------------------------------------------------------------------------------

evidence its execution of an original counterpart of this Agreement, a Party may
send a copy of its original signature on the execution page hereof to the other
Party by facsimile or electronic mail transmission, and such transmission shall
constitute delivery of an executed copy of this Agreement to the receiving
Party.

 

7.8 Assignment

This Agreement may not be assigned by any of the Canadian Vendors without the
prior written consent of the Canadian Purchaser and the US Purchaser, but may be
assigned by the Canadian Purchaser or the US Purchaser prior to the Closing Date
without the consent of the Canadian Vendor to an Affiliate of the Canadian
Purchaser or the US Purchaser, as applicable, provided that such Affiliate
enters into a written agreement with the Canadian Vendor to be bound by the
obligations, covenants and agreements contained in this Agreement in all
respects and to the same extent as the Canadian Purchaser or US Purchaser, as
applicable, and provided that the Canadian Purchaser or US Purchaser, as
applicable, shall continue to be bound by all such obligations, covenants and
agreements to the extent that such Affiliate fails to perform the same.

 

7.9 Parties in Interest

This Agreement shall enure to the benefit of and be binding upon the Parties and
their respective successors and permitted assigns.

 

7.10 Third Parties

Except as specifically set forth or referred to herein, nothing herein is
intended or shall be construed to confer upon or give to any person, other than
the Parties and their respective successors and permitted assigns, any rights or
remedies under or by reason of this Agreement.

[Signature pages follow]

 

84.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF this Agreement has been executed by the parties hereto.

 

SIGNED, SEALED AND DELIVERED   )      in the presence of:   )          )       
  )     

 

  )   

/s/ Brian Munro

Witness   )    Brian Munro     )      SIGNED, SEALED AND DELIVERED   )      in
the presence of:   )          )          )     

 

  )   

/s/ John Johnson

Witness   )    John Johnson     )      SIGNED, SEALED AND DELIVERED   )      in
the presence of:   )          )          )     

 

  )   

/s/ John Benedictus

Witness   )    John Benedictus     )      SIGNED, SEALED AND DELIVERED   )     
in the presence of:   )          )          )     

 

  )   

/s/ Marilyn Benedictus

Witness   )    Marilyn Benedictus   )    SIGNED, SEALED AND DELIVERED   )     
in the presence of:   )          )          )     

 

  )   

/s/ John McDonald

Witness   )    John McDonald   )   

 

85.

--------------------------------------------------------------------------------

SIGNED, SEALED AND DELIVERED    )   in the presence of:    )      )      )  

 

   )  

/s/ Martin Bouma

Witness    )   Martin Bouma    )  

 

SIGNED, SEALED AND DELIVERED    )   in the presence of:    )      )      )  

 

   )  

/s/ Brenda Bouma

Witness    )   Brenda Bouma    )  

 

SIGNED, SEALED AND DELIVERED    )   in the presence of:    )      )      )  

 

   )  

/s/ Denis Norman

Witness    )   Denis Norman    )  

 

SIGNED, SEALED AND DELIVERED    )   in the presence of:    )      )      )  

 

   )  

/s/ Paul Leonard

Witness    )   Paul Leonard    )  

 

SIGNED, SEALED AND DELIVERED    )   in the presence of:    )      )      )  

 

   )  

/s/ Thomas Jackson

Witness    )   Thomas Jackson    )  

 

86.

--------------------------------------------------------------------------------

BRIAN MUNRO FAMILY TRUST, by its trustees Per:  

/s/ Brian Munro

  Brian Munro Per:  

/s/ Betty Lou Munro

  Betty Lou Munro JOHN JOHNSON FAMILY TRUST, by its trustees Per:  

/s/ John Johnson

  John Johnson Per:  

/s/ Peggy Johnson

  Peggy Johnson JOHN BENEDICTUS FAMILY TRUST, by its trustees Per:  

/s/ John Benedictus

  John Benedictus Per:  

/s/ Marilyn Benedictus

  Marilyn Benedictus LITTLE CREEK FARM TRUST, by its trustee Per:  

/s/ John McDonald

  John McDonald

 

87.

--------------------------------------------------------------------------------

MARTIN BOUMA FAMILY TRUST, by its trustees Per:  

/s/ Martin Bouma

  Martin Bouma Per:  

/s/ Brenda Bouma

  Brenda Bouma DENIS NORMAN FAMILY TRUST, by its trustee Per:  

/s/ Denis Norman

  Denis Norman PAUL LEONARD FAMILY TRUST, by its trustee Per:  

/s/ Paul Leonard

  Paul Leonard TOM JACKSON FAMILY TRUST, by its trustee Per:  

/s/ Thomas Jackson

  Thomas Jackson TISI ACQUISITION INC. By:  

/s/ Gregory T. Sangalis

 

Gregory T. Sangalis

TEAM INDUSTRIAL SERVICES, INC. By:  

/s/ Philip J. Hawk

 

Philip J. Hawk

 

88.