ASSET
      PURCHASE AGREEMENT

     

    THIS
      AGREEMENT made as of the 28th
      day of
      May, 2008.

    


    BETWEEN:

     

    
      	
              Carleton
                International, Ltd., a Corporation created under the laws of the
                Province
                of New Brunswick (the “Purchaser”)

            
	
              and

            
	 
	
              Thomas
                Equipment, Inc. (formerly known as Thomas Equipment 2004, Inc.),
                a
                Corporation incorporated under the laws of the Province of New Brunswick
                (the “Vendor”)

            


    

    


    NOW
      THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants
      and agreements herein contained and the sum of $1.00 of lawful money of Canada
      and other good and valuable consideration paid by each of the parties hereto
      to
      each of the other parties hereto (the receipt and sufficiency of which are
      hereby acknowledged), it is agreed among the parties hereto as
      follows:

    


    ARTICLE
      1 – INTERPRETATION

    


    
      	
              1.1

            	
              Defined
                Terms.

            


    

    


    In
      this
      agreement and in the schedules hereto, unless there is something in the subject
      matter or context inconsistent therewith, the following terms and expressions
      will have the following meanings:

    


    (a) “Affiliate”
      of any person means any corporation which, directly or indirectly, is controlled
      by, controls or is under direct or indirect common control with such
      person;

    


    (b)
       “arm’s
      length” will have the meaning ascribed to such term under the Income
      Tax Act,
      S.C.
      1970-71-72, c.63 (Canada) 

    


    (c)
       “Assumed
      Contracts” means all contracts, agreements, orders, commitments and other
      engagements by or with third parties relating to the business which are included
      in the Purchased Assets, if any;

    


    (d) “Assumed
      Liabilities” means the liabilities of the Vendor which are to be assumed by the
      Purchaser pursuant to section 2.4 thereof;

    


    (e) “Business
      Day” means any day other than a day which is a Saturday, a Sunday or a statutory
      holiday in New Brunswick;   

    


    (f) “Closing
      Date” means May 31, 2008, or such other date as the Vendor and Purchaser may
      agree upon;

    


    (g) “Closing
      Time” means the time on the Closing date as the parties hereto may agree
      upon;


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    (h) “Control”
      means with respect to any corporation, the ownership of more than 50% of the
      voting shares of that corporation, including any shares which are voting only
      upon the occurrence of a contingency where such contingency has occurred and
      is
      continuing;

     

    (i) “Encumbrances”
      means mortgages, charges, pledges, security interests, and liens;

    


    (j) “Excluded
      Assets” means any assets listed in Schedule A hereto; 

    


    (k) “Interim
      Period” means the period from and including the date of this Agreement to and
      including the Closing Date; 

     

    (l) “Leases”
      means the leases and the agreements to lease under which the Vendor leases
      any
      of the Purchased Assets, as listed in Schedule I attached hereto;

    


    (m) “License
      Rights” means all license and distribution rights relating to the Purchased
      Assets described in Schedule L attached hereto;

    


    (n) “Person”
      means and includes any individual, corporation, partnership, firm, joint
      venture, syndicate, association, trust, government, governmental agency or
      board
      or commission or authority, and any other form of entity or organization;


    


    (o) “Purchase
      Price” means the amount set forth in section 2.5 hereof; 

    


    (p) “Purchased
      Assets” means the assets which are to be sold by the Vendor to the Purchaser
      pursuant to section 2.1 hereof;

    


    (q) “Warranty
      Claim” means a claim made by either the Purchaser or the Vendor based on or with
      respect to the inaccuracy or non-performance or non-fulfillment or breach of
      any
      representation or warranty made by either party contained in the Agreement
      or
      contained in any document or certificate given in order to carry out
      transactions contemplated hereby. 

    


    
      	
              1.2

            	
              Best
                of Knowledge.

            


    

    


    Any
      reference herein to “the best of the knowledge of the Vendor” shall mean the
      actual knowledge of the Vendor’s officers. 

    


    
      	
              1.3

            	
              Schedules.

            


    

    


    The
      schedules which are attached to this agreement are incorporated into this
      Agreement by reference and are deemed to be part hereof. 

    


    
      	
              1.4

            	
              Currency.

            


    

    


    Unless
      otherwise indicated, all dollar amounts referred to in this Agreement are in
      lawful money of the United States of America. 

    


    


    
      	
              1.5

            	
              Choice
                of Law and Attornment.

            


    

    


    This
      agreement shall be governed by and construed in accordance with the laws of
      the
      Province of New Brunswick and the laws of Canada applicable therein.


     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              1.6

            	
              Interpretation
                Not Affected by Headings or Party
                Drafting.

            


    


    The
      division of this Agreement into articles, sections, paragraphs, subparagraphs
      and clauses and the insertion of headings are for convenience of reference
      only
      and shall not affect the construction or interpretation of the Agreement. The
      Term “this Agreement”, “hereof”, “herein”, “hereunder” and similar expressions
      refer to this Agreement and the schedules hereto and not to the particular
      article, section, paragraph, subparagraph, clause or other portion hereof and
      include any agreement or instrument supplementary or ancillary hereto. Each
      party hereto acknowledges that it and its legal counsel have reviewed and
      participated in settling the terms of this Agreement, and the parties hereby
      agree that any rule of construction to the effect that any ambiguity is to
      be
      resolved against the drafting party shall not be applicable in the
      interpretation of this Agreement. 

    


    
      	
              1.7

            	
              Number
                and Gender.

            


    

    


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

    


    
      	 	
              (a)

            	
              words
                in the singular number include the plural and such words shall be
                construed as if the plural had been
                used;

            


    

    


    
      	 	
              (b)

            	
              words
                in the plural include the singular and such words shall be construed
                as if
                the singular had been used; and 

            


    

    


    
      	 	
              (c)

            	
              words
                importing the use of any gender shall include all genders where the
                context or party referred to so requires, and the rest of the sentence
                shall be construed as if the necessary grammatical and terminological
                changes had been made. 

            


    

    


    ARTICLE
      2 – PURCHASE, ASSIGNMENTS, TRANSFERS, AND APPOINTMENTS

    


    
      	2.1	
              Purchased
                Assets.

            


    

    


    On
      the
      terms and subject to the fulfillment of the conditions hereof, Vendor hereby
      agrees to sell, transfer and assign to Purchaser, and Purchaser hereby agrees
      to
      purchase and accept from Vendor, all assets owned or leased by Vendor, including
      but not limited to machinery, equipment, furniture and leasehold improvements,
      except the Excluded Assets listed on Schedule A.

    


    
      	2.2	
              Unassignable
                Contracts.

            


    

    


    If
      any
      rights, benefits or remedies (hereinafter, in this section, collectively called
      the “Rights”) under any Assumed Contracts are not assignable by the Vendor to
      the Purchaser without the consent of the other party hereto (hereinafter, in
      this section, called the “Third Party”) and such consent is not obtained, then,
      unless the Purchaser exercises its right under section 6.2 hereof:

    


    
      	 	
              (a)

            	
              The
                Vendor will hold the right for the benefit of the
                Purchaser;

            


    

    


    
      	 	
              (b)

            	
              The
                Vendor will, at the request and expense and under the direction of
                the
                Purchaser, in the name of the Vendor or otherwise as the Purchaser
                shall
                specify, take all such actions and do all such things as shall, in
                the
                opinion of the Purchaser, be necessary or desirable in order that
                the
                obligations of the Vendor under such Assumed Contracts may be performed
                in
                a manner such that the value of the Rights shall be preserved and
                shall
                enure to the benefit of the Purchaser and such that all moneys payable
                under the Assumed Contracts may be paid by the Purchaser.
                

            


    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    
      	 	
              (c)

            	
              The
                Purchaser will promptly pay over to the Vendor all such moneys paid
                by the
                Vendor in respect of such Assumed Contracts;
                and

            


    

    


    
      	 	
              (d)

            	
              To
                the extent permitted by the Third Party and provided, in the Purchaser’s
                opinion, it would not be prejudicial to the Purchaser’s rights to do so,
                the Purchaser will perform the obligations under such Assumed Contracts
                on
                behalf of the Vendor, and will indemnify the Vendor against all
                liabilities, costs and expenses incurred by the Vendor in performing
                such
                obligations. 

            


    

    


    
      	2.3	
              Assumed
                Liabilities.

            


    

    


    On
      the
      terms and subject to the conditions herein contained, at the Closing Time
      Purchaser will assume and thereafter pay, perform, discharge and satisfy the
      following liabilities of the Vendor relating to the Purchased Assets, and will
      indemnify the Vendor against such liabilities:

    


    
      	 	
              (a)

            	
              all
                liabilities and obligations of the Vendor accruing on and after the
                Closing Date under the Assumed Contracts;
                and

            


    

    


    
      	 	
              (b)

            	
              all
                liabilities listed on Schedule C.

            


    

    


    
      	2.4	
              Retained
                Liabilities and Indemnity.

            


    

    


    The
      Purchaser will not assume and will not be liable for, and the Vendor will
      indemnify Purchaser from and against, all obligations, commitments and
      liabilities of and claims against the Vendor (whether absolute, accrued or
      contingent) relating to the Purchased Assets, except for the Assumed
      Liabilities. Without limiting the generality of the foregoing, it is agreed
      that
      the Purchaser will have no liability for any of the following obligations or
      liabilities: 

    


    
      	
            	(a)	
              all
                liabilities in respect of all indebtedness of the Vendor to all persons
                (other than the Assumed Liabilities referred to in paragraph 2.3
                hereof);
                

            


    

    


    
      	
            	(b)	
              all
                product liability claims and liabilities for warranty or product
                return
                claims relating to any product or service produced, sold, performed
                or
                delivered by Vendor prior to the Closing
                Date;

            


    

    


    
      	
            	(c)	
              all
                liabilities for all taxes, duties, levies, assessments and other
                such
                charges, including any penalties, interest and fines with respect
                thereto,
                payable by the Vendor to any federal, provincial, municipal or other
                government or governmental agency, authority, board, bureau or commission,
                domestic or foreign, including, without limitation, any taxes in
                respect
                of or measured by the sale, consumption or performance by the Vendor
                of
                any product or service prior to the Closing Date;
                

            


    

    


    
      	
            	(d)	
              all
                liabilities for salary, bonus, and other compensation and all liabilities
                under employee benefits plans of the Vendor relating to employment
                of all
                persons in the business prior to the Closing Date.
                

            


    

    


    
      	2.5	
              Purchase
                Price.

            


    

    


    The
      Purchase Price payable by the Purchaser to the Vendor for the Purchased Assets
      will be US$ one million, five hundred thousand dollars ($1,500,000.00).



    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    
      	2.6	
              Payment
                of Purchase Price.

            


    

    


    At
      Closing Time, the Purchaser will pay by bank wire transfer the Sum of
      US$1,000,000 (One Million Dollars). Also at Closing time, the Purchaser will
      issue to Vendor a junior note for the sum of US$500,000 (Five Hundred Thousand
      Dollars). Such note shall have a maturity date equal to the earlier of 1) The
      Purchaser’s closing on funding associated with the New Brunswick loan guarantee;
      or, 2) a term of six (6) months. At the maturity date or payment date, whichever
      is earlier, the note and accrued interest at a rate of ten percent (10%) per
      annum shall be payable in full.

    


    Payment
      shall be made directly to the following:

    

      
        	
                Bank:

              	
                Capital
                  One Bank, NA

              
	 	
                404
                  Fifth Ave, Suite 1

              
	 	
                New
                  York, NY 10017

              
	
                Account
                  No.:

              	
                270-406-0132

              
	
                ABA
                  No.:

              	
                021407912

              
	
                Account Name: 

              	
                LV
                  Administrative Services

              


      

    

     

    
      	2.7	
              Allocation
                of Purchase Price.

            


    

    


    The
      Purchase Price shall be allocated among the Purchased Assets in the manner
      mutually agreed upon by Vendor and Purchaser. The Vendor and the Purchaser
      shall
      file their respective tax returns prepared in accordance with such allocation.
      

    


    
      	2.8	
              Payment
                of Taxes.

            


    

    


    The
      Purchaser shall be liable for and shall pay all applicable federal and
      provincial sales taxes, land transfer taxes, goods and services taxes, excise
      taxes and all other taxes (other than income taxes of the Vendor), duties and
      other like charges property payable upon and in connection with the conveyance
      and transfer of the Purchased Assets to the Purchaser. The Vendor will do and
      cause to be done such things as are reasonably requested to enable the Purchaser
      to comply with such obligations in an efficient manner. 

    


    Under
      no
      circumstances shall the Purchaser be responsible for any taxes, fees or other
      obligations associated with the tax period(s) prior to the Closing
      Date.

    


    
      	2.9	
              Goods
                and Services Tax Exemption.

            


    

    


    (a) The
      Vendor hereby represents and warrants to the Purchaser that the Vendor is
      registered for purposes of Part IX of the Excise
      Tax Act,
      R.S.C.
      1985, c. E-13 (Canada) (hereinafter, in this section, called the “GST
      Legislation”);

    


    (b) The
      Purchaser hereby represents and warrants to the Vendor that the Purchaser is
      registered for the purposes of GST Legislation; 

    


    (c) If
      applicable, the Vendor and the Purchaser will jointly execute in prescribed
      form, and the Vendor will file within the required time, an election under
      s.
      167(1) of the Excise
      Tax Act
      (Canada)
      that no tax be payable pursuant to the GST Legislation with respect to the
      purchase and sale of the Purchased Assets hereunder; and, 

    


    (d) The
      Purchaser will indemnify the Vendor against any tax, interest or penalties
      arising from a determination that the conditions for filing the election
      pursuant to s. 167(1) of the Excise tax Act (Canada) have not been satisfied
      for
      any reason other than the inaccuracy of any of the representations and
      warranties made by the Vendor pursuant to paragraph (a) of this section.



    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    
      	2.10	
              Transfer
                of Employees. 

            


    

    


    Vendor
      will transfer to Purchaser certain of its employees (hereinafter to referred
      to
      as “the Transferring Employees”) listed on Schedule B attached hereto. Purchaser
      will employ the Transferring Employees in their current capacities or in
      promoted capacities with remuneration and benefits equal to or greater than
      their employment position with Vendor at Closing Time. All accrued benefits
      related to past service of the Transferring Employees will be assumed by
      Purchaser. Purchaser understands that Vendor cannot force any individual
      Transferring Employee to accept their respective employment transfer to
      Purchaser. In the event any individual Transferring Employee chooses not to
      be
      transferred to Purchaser, then Purchaser will not be obligated to employ such
      Transferring Employee and will not be responsible for any remuneration,
      severance pay, or benefits to such Transferring Employee. Schedule B also sets
      forth the names of all Transferring Employees who are now on disability,
      maternity or other authorized leave or who are receiving workers’ compensation
      or short-term or long-term disability benefits.

    


    
      	2.11	
              Agreements
                Regarding Intellectual Property.

            


    

    


    Vendor
      will provide Purchaser the ability to utilize the Thomas Equipment trademarks
      and tradenames on an exclusive basis for Purchaser’s agricultural and screener
      product lines. The exclusive rights will be subject to proper use and other
      provisions as to be described and mutually agreed upon in a separate license
      agreement to be completed within thirty days after the Closing Date of this
      Agreement. Purchaser will also be provided exclusive rights to all of Vendor’s
      trade secrets, industrial designs and product specifications related to the
      agricultural and screener product lines. The trademarks, tradenames, trade
      secrets, industrial designs and product specifications are hereinafter referred
      to in this Agreement as “the Intellectual Property”.

    


    
      	2.12	
              Agreements
                Regarding Activities During Interim Period.


            


    

    


    On
      or
      about the date of this Agreement and prior to Closing Time, Vendor will stop
      production of products for sale and will conduct a physical inventory count
      of
      all inventory items and other physical assets and will segregate them between
      what is or will be owned by Vendor and Purchaser. Labor and other related costs
      to conduct the inventory and segregation activities during the Interim Period
      will be split equally between Vendor and Purchaser.

    


    
      	2.13	
              Agreements
                Regarding Appointment of Purchase as
                Dealer.

            


    

    


    Upon
      the
      Closing Date or within a reasonable timeframe thereafter, Vendor will appoint
      Purchaser as a dealer of Vendor’s skidsteer products in those markets including
      Grand Falls NB, Florenceville NB, Prince Edward Island, and Presque Isle Maine
      under Vendor’s standard dealer terms and conditions; however, appointment of
      Purchaser as a dealer in Presque Isle is conditioned upon successful
      termination/resignation of our Vendor’s current dealer for that region with
      Maine Potato Growers (“MPG”). Vendor will apply it best efforts to affect such
      termination/resignation of MPG. Upon mutual agreement Vendor may also appoint
      additional dealerships in other territories for Vendor so long as such
      dealership appointments are not in direct competition with Vendor’s other
      existing dealerships in those territories. The Vendor and Purchaser will enter
      into separate dealership agreements which will set forth all related terms
      and
      conditions.

    


    
      	2.14	
              Agreements
                Regarding Post Closing Services.

            


    

    


    Vendor
      and Purchaser acknowledge that for a period of time subsequent to Closing that
      access to each other’s employees, computer systems, phone systems, office
      equipment, furniture and leaseholds will be necessary for transition purposes.
      Vendor and Purchaser will enter into a separate services agreement which will
      set forth all related terms and conditions for the sharing of employees,
      computer systems, office equipment, furniture, leaseholds and facilities. Vendor
      will also be permitted to use a portion of the facility in Centereville to
      continue its operations as outlined in a sublease between Vendor and Purchaser
      dated as of January 1, 2008.


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    


    
      	2.15	
              Agreements
                Regarding Outsourcing Production.

            


    

    


    Subsequent
      to the Closing Date Vendor desires to have Purchaser manufacture skidsteers
      for
      Vendor on a nonexclusive basis. Vendor and Purchaser will enter into a separate
      outsourcing agreement which will set forth all related terms and conditions
      for
      the manufacture of skidsteers for Vendor.

    


    ARTICLE
      3 – REPRESENTATIONS AND WARRANTIES

    


    
      	
              3.1

            	
              Representations
                and Warranties by the Vendor.

            


    

    The
      Vendor hereby represents and warrants to the Purchaser as follows, and confirms
      that the Purchaser is relying upon the accuracy of each and every such
      representation and warranty in connection with the purchase of the Purchased
      Assets and the completion of the other transactions hereunder:

    


    (a) Corporate
      Authority and Binding Obligation. The Vendor has good right, full corporate
      power and absolute authority to enter into this Agreement and to sell, assign
      and transfer the Purchased Assets to the Purchaser in the manner contemplated
      herein and to perform all of the Vendor’s obligations under this Agreement. The
      Vendor and its board of directors have taken all necessary or desirable actions,
      steps and corporate and other proceedings to approve or authorize, validly
      and
      effectively, the entering into, and the execution, delivery and performance
      of
      this agreement and the sale and transfer of the Purchased Assets by the Vendor
      to the Purchaser. This Agreement is a legal, valid and binding obligation of
      the
      Vendor, enforceable against the Vendor in accordance with its terms subject
      to
      (i) bankruptcy, insolvency, moratorium, reorganization and other laws relating
      to or affecting the enforcement of creditors’ rights generally, and (ii) the
      fact that equitable remedies, including the remedies of specific performance
      and
      injunction, may only be granted in the discretion of a court. 

    


    (b) No
      other
      Purchase Agreements. No person has any agreement, option, understanding or
      commitment, or any right or privilege (whether by law, preemptive or
      contractual) capable of becoming an agreement, option or commitment, for the
      purchase or other acquisition from the Vendor of any of the Purchased Assets,
      or
      any rights or interest therein, other than in the ordinary course of business.
      

    


    (c) Contractual
      and Regulatory Approvals. Except as specified in Schedule D attached hereto,
      the
      Vendor is not under any obligation, contractual or otherwise, to request or
      obtain the consent of any person and no permits, licenses, certifications,
      authorizations or approvals of, or notifications to, any federal, provincial,
      municipal or local government or governmental agency, board, commission or
      authority are required to be obtained by the Vendor in connection with the
      execution, delivery or performance by the Vendor of the Agreement or the
      completion of any of the transactions contemplated herein; 

    


    (d) Not
      used.


    


    (e) Status
      and Governmental Licenses.

    


    (i) The
      Vendor is a corporation duly incorporated and validly subsisting in all respects
      under the laws of its jurisdiction of incorporation. The Vendor has all
      necessary corporate power to own its property and to carry on its business
      as it
      is now being conducted. 


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    (ii)
       The
      Vendor holds all necessary licenses, registrations and qualifications in each
      jurisdiction in which it owns or leases any of the Purchased Assets.


     

    (f) Compliance
      with Constating Documents, Agreements and Laws. The execution, delivery and
      performance of this Agreement and each of the other agreements contemplated
      or
      referred to herein by the Vendor, and the completion of the transaction
      contemplated hereby, will not constitute or result in a violation, breach or
      default, or cause the acceleration of any obligation which are included in
      the
      Assumed Liabilities, under:

    


    (i) any
      term
      or provision of any of the articles, by-laws or other constating document of
      the
      Vendor;

    


    (ii) subject
      to obtaining the contractual consents referred to on schedule D hereof, the
      terms of any indenture, agreement (written or oral), instrument or understanding
      or other obligation or restriction to which the Vendor is a party or by which
      it
      is bound, including, without limitation, any of the Assumed Contracts;
      or

    


    (iii) subject
      to obtaining the regulatory consents referred to in Schedule D hereof, any
      term
      or provision of any of the Licenses or any order of the Court, governmental
      authority or regulatory body or any law or regulation of any jurisdiction in
      which the Purchased Assets are located. 

    


    (g) Liabilities.
      There are no liabilities (contingent or otherwise) of the Vendor of any kind
      whatsoever in respect of which the Purchaser may become liable on or after
      the
      consummation of the transactions contemplated by the Agreements, except the
      Assumed Liabilities. 

     

    (h) Tax
      Matters.

    
      	 	 	 


    

    (i) For
      purposes of the Agreement, the term “Governmental Charges” means and includes
      all taxes, customs duties, rates, levies, assessments, reassessments and other
      charges, together with all penalties, interest and fines with respect thereto,
      payable to any federal, provincial, municipal, local or other government or
      governmental agency, authority, board, bureau or commission, domestic or
      foreign. 

    
      	 	 	 


    

    (ii) Except
      as
      set forth in Schedule E, (i) the Vendor has paid all Governmental Charges with
      respect to the Purchased Assets which are due and payable by it on or before
      the
      date thereof; (ii) there are no actions, suits, proceedings, investigations,
      inquiries or claims now pending or made or, to the best of Vendor’s knowledge,
      threatened against the Vendor in respect of Governmental Charges with respect
      to
      the Purchased Assets; and (iii) the Vendor has withheld from each amount paid
      or
      credited to any person the amount of Governmental Charges related to the
      transfer of the Purchased Assets to the proper tax or other receiving
      authorities within the time required under applicable legislation.



    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    (i)
       Litigation.
      

    


    Except
      for the matters herein referred to in Schedule F attached hereto, there are
      no
      actions, suits or proceedings, judicial or administrative (whether or not
      purportedly on behalf of the Vendor) pending or, to the best of the knowledge
      of
      the Vendor, threatened, by or against or affecting the Vendor which relate
      to
      Purchased Assets, at law or in equity, or before or by any court or any federal,
      provincial, municipal or other governmental department, commission, board,
      bureau, agency or instrumentality, domestic or foreign. Except for the matters
      referred to in Schedule F there are no grounds on which any such action, suit
      or
      proceeding might be commenced with any reasonable likelihood of success.


     

    (j) Environmental
      Matters.

    


    (i) For
      the
      purposes of this Agreement, the following terms and expressions shall have
      the
      following meanings:

    


    (1) “Environmental
      Laws” means all applicable statutes, regulations, ordinances, by-laws and codes
      and all international treaties and agreements, now or hereafter in existence
      in
      Canada (whether federal, provincial or municipal) and in the United States
      (whether federal, state or local) relating to the protection and preservation
      of
      the environment, occupational health and safety, product safety, product
      liability or Hazardous Substances, including, without limitation, the
Canadian
      Environmental Protection Act,1999
      R. S. C.
      1985 c.16 (4th
      Supp.),
      as amended from time to time (“the CEPA”).

    


    (2) “Environmental
      Permits” includes all orders, permits, certificates, approvals, consents,
      registrations, and licenses issued by any authority of competent jurisdiction
      under Environmental Laws. 

    


    (3) “Hazardous
      Substances” means collectively, any contaminant (as defined in the CEPA), toxic
      substances (as defined in the CEPA), dangerous goods (as defined in the
Transportation
      of Dangerous Goods Act,
      R.S.C.
      1985, c. T-17 (Canada), as amended from time to time) or pollutant or any other
      substance which when released to the natural environment is likely to cause,
      at
      some immediate or future time, material harm or degradation to the natural
      environment or material risk to human health.  

    


    (4) “Release”
      means any release, spill leak, emission, discharge, leach, dumping, escape
      or
      other disposal which is or has been made in contravention of any Environmental
      Laws. 

    


    (ii) To
      the
      best of Vendor’s knowledge, except as disclosed in Schedule G attached hereto,
      the Purchased Assets, and the use, maintenance and operation thereof have been
      and are in compliance with all Environmental Laws. The Vendor has complied
      with
      all reporting and monitoring requirements under all Environmental Laws. The
      Vendor has not received any notice of any non-compliance with any Environmental
      Laws, and the Vendor has never been convicted an offence for non-compliance
      with
      any Environmental Laws or been fined or otherwise sentenced or settled such
      prosecution short of conviction. 

    


    (iii) To
      the
      best of Vendor’s knowledge, except as disclosed in Schedule G, there are no
      Hazardous Substances located in or on any of the Purchased Assets, and no
      Release of any Hazardous Substances has occurred in or from the Purchased
      Assets. 


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    (iv) Without
      limiting the generality of the foregoing,  to
      the
      best of Vendor’s knowledge, the Vendor has obtained all Environmental Permits
      necessary to own, use and operate the Purchased Assets. To the best of Vendor’s
      knowledge all Environmental Permits may be validly transferred and will be
      transferred, to the Purchaser, at Purchaser’s sole expense, at the closing. No
      such permits shall become void or voidable as a result of the consummation
      of
      the transaction contemplated hereby; and no consent to such transaction is
      required to maintain said Environmental Permits in full force and effect.


    


    (v) The
      Vendor agrees to assist the Purchaser with filing all necessary applications
      and
      transferring or obtaining all necessary Environmental Permits at Purchaser’s
      sole expense.

    


    (vi) To
      the
      best of Vendor’s knowledge, except as disclosed in Schedule G, there are no
      underground or surface storage tanks or urea formaldehyde foam insulation,
      asbestos, polychlorinated biphenyls (PCBs) or radioactive substances located
      in
      or on any of the Purchased Assets. To the best of Vendor’s knowledge, the Vendor
      is not responsible for any clean-up or corrective action under any Environmental
      Laws related to the Purchased Assets. To the best of Vendor’s knowledge there
      has never been conducted or caused to be conducted an environmental audit,
      assessment or study of any of the Purchased Assets. 

    


    (k) Titles
      to
      assets. The Vendor is the owner of and has good and marketable title to all
      of
      the Purchased Assets, except for the encumbrances described in Schedule H,
      attached hereto, all of which will be discharged prior to the conveyance of
      the
      Purchased Assets to the Purchaser at the Closing Time. 

    


    (l) Work
      Orders and deficiencies. There are no outstanding work orders, non-compliance
      orders, deficiency notices or other such notices relative to the Purchased
      Assets which have been issued by any regulatory authority, police or fire
      department, sanitation, environment, labour, health or other environmental
      authorities or agencies. There are no matters under discussion with any such
      department or authority relating to work orders, non-compliance orders,
      deficiency notices or other such notices. The Purchased Assets are not being
      used or operated in a manner which is in contravention of any statute,
      regulation, rule, code, standard or policy.

    


    (m) Leases
      of
      Personal Property. Schedule I attached hereto describes all leases of the
      Purchased Assets. Complete and correct copies of those leases have been made
      available to the Purchaser. The Vendor is entitled to all rights and benefits
      as
      lessee under those leases, and the Vendor has not sublet, assigned, licensed
      or
      otherwise conveyed any rights in the leases or in the property leased thereunder
      to any other person. All payments and other obligations required to be paid
      and
      performed by the Vendor under those leases have been duly paid and performed.
      The Vendor is not in material default in any of its obligations under those
      leases; and, to the best of the knowledge of the Vendor, none of the lessors
      or
      any other parties to those leases are in material default of any of their
      obligations under those leases. The Vendor is entitled to assign all of its
      rights and interest under those leases and in and to the property leased
      thereunder to the Purchaser subject to obtaining the consents referred to in
      Schedule I attached hereto. Subject to obtaining such consents, the terms and
      conditions of those leases will not be affected by, nor will any of those leases
      be in default of, the completion of the transaction contemplated hereunder.
      


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    (n) Intellectual
      Property. 

    


    (i) 
      The
      Vendor has good and valid title to all of the Intellectual Property, free and
      clear of any and all encumbrances, except in the case of any Intellectual
      Property licensed to the Vendor as disclosed in Schedule J. Complete and correct
      copies of all agreements whereby any rights in any of the Intellectual Property
      have been granted or licensed to the Vendor have been made available to the
      Purchaser. No royalty or other fee is required to be paid by the Vendor to
      any
      other person in respect of the use of any of the Intellectual Property except
      as
      provided in such agreements included in schedule J. The Vendor has protected
      its
      rights in the Intellectual Property in the manner and the extent described
      in
      Schedule J. Except as indicated in Schedule J, the Vendor has the right to
      use
      all of the Intellectual Property. Complete and correct copies of all agreements
      whereby any rights in any of the Intellectual Property have been granted or
      licensed by the Vendor to any other person has been made available to the
      Purchaser. The Vendor is entitled to assign any or all of its rights and
      interest in and to the Intellectual Property to the Purchaser subject to
      obtaining any applicable third party consents.

    


    (iii) Subject
      to obtaining the aforesaid consents, and except as disclosed in Schedule J
      there
      are no restrictions in the ability of the Vendor or any successor to or assignee
      for the Vendor to use and exploit all rights in the Intellectual Property.
      All
      statements contained in all applications for registration of the Intellectual
      Property, if any, were true and correct as of the date of such applications.
      

    


    (iv) To
      the
      best of Vendor’s knowledge, the use of the Intellectual Property does not
      infringe, and the Vendor has not received a notice, complaint, threat or claim
      alleging infringement of, any patent, trademark, trade name, copyright,
      industrial design, trade secret or other intellectual property or proprietary
      right of any other person, and the use of the Intellectual Property does not
      include any activity which may constitute passing off. 

    


    (o) Affiliates.
      No part of the Purchased Assets are owned or operated by an Affiliate of the
      Vendor.

    


    (p) Warranties
      and Discounts. Except as described in Schedule K attached hereto, there are
      no
      obligations under warranty or discount arrangements for which the Purchaser
      may
      become liable, except those included in the Assumed Liabilities.

    


    (q) Licenses,
      Agency and Distributorship Agreements. 

    


    Schedule
      L attached hereto lists all agreements to which the Vendor is a party or by
      which it is bound under which the right to manufacture, use or market any
      product, service, technology, information, data, computer hardware or software
      or other property included in the Purchased Assets has been granted, licensed
      or
      otherwise provided to the Vendor or by the Vendor to any other person or under
      which the Vendor has been appointed or any person has been appointed by the
      Vendor as an agent, distributor, licensee or franchisee for any of the
      foregoing. Complete and correct copies of all of the agreements relating to
      the
      License Rights have been made available to the Purchaser. The Vendor is entitled
      to assign all of its interest in the License Rights to the Purchaser subject
      to
      obtaining any applicable third party consents. None of the agreements relating
      to the License Rights grant to any person any authority to incur any liability
      or obligation or to enter into any agreement on behalf of the
      Vendor.


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    (r)
       Outstanding
      Agreements.

    


    The
      Vendor is not a party to or bound by any outstanding or executory agreement,
      contract or commitment, whether written or oral, relating to the Purchased
      Assets, except for:

    


    
      	 	
              (i)

            	
              any
                contract, lease or agreement described or referred to in this Agreement
                or
                in the schedules hereto; and,

            


    

    


    
      	 	
              (ii)

            	
              any
                contract, lease or agreement made in the ordinary course of the routine
                daily affairs under which the Vendor has a financial obligation of
                less
                than $10,000 per annum and which can be terminated by the Vendor
                without
                payment of any damages, penalty or other amount by giving not more
                than
                180 days notice.

            


    

    


    Complete
      and correct copies of each of the contract, leases and agreements have been
      made
      available to the Purchaser.

    


    (s) Good
      Standing of Agreements.

    


    To
      the
      best of Vendor’s knowledge, the Vendor is not materially in default or breach of
      any of its obligations under any one or more contracts, agreements (written
      or
      oral), commitments, indentures or other instruments to which it is a party
      or by
      which it is bound relating to the Purchased Assets, and there exists no state
      of
      facts which, after notice or lapse of time or both, would constitute such a
      material default or breach. All such contracts, agreements, commitments,
      indentures and other instruments are now in good standing and in full force
      and
      effect, the Vendor is entitled to all benefits thereunder and, to the best
      of
      the knowledge of the Vendor, the other parties to such contracts, agreements,
      commitments, indentures and other instruments are not in material default or
      breach of any of their obligations thereunder. There are no contracts,
      agreements, commitments, indentures or other instruments relating to the
      Purchased Assets under which the Vendor’s rights or the performance of its
      obligations are dependent upon or supported by the guarantee of or any security
      provided by any other person.

    


    (t) (not
      used)

     

    (u) Employment
      Agreements.

    


    The
      Vendor is not a party to any written or oral employment, service or consulting
      agreement relating to any one or more of the Transferring Employees, except
      for
      oral employment agreements which are of indefinite term and without any special
      arrangements or commitments with respect to the continuation of employment
      or
      payment of any particular amount upon termination of employment. There are
      no
      Transferring Employees of the Vendor who cannot be dismissed upon such period
      of
      notice as is required by law in respect of a contract of hire for an indefinite
      term.

    


    (v) Labour
      Matters and Employment Standards.

     

    (i)
      The
      Vendor is not subject to any agreement with any labour union or employee
      association and has not made any commitment to or conducted negotiations with
      any labour union or employee association with respect to any future agreement
      and, to the best of the knowledge of the Vendor, there is no current attempt
      to
      organize, certify or establish any labour union or employee association, in
      relation to any of the Transferring Employees.


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    (ii)
      There are no existing or, to the best of the knowledge of the Vendor,
      threatened, labour strikes or labour disputes, grievances, controversies or
      other labour troubles affecting the Transferring Employees.

    


    (iii)
      The
      Vendor has complied with all applicable laws, rules, regulations and orders
      relating to employment of the Transferring Employees including those relating
      to
      wages, hours, collective bargaining, occupational health and safety, workers’
hazardous materials, employment standards, pay equity and workers’ compensation.
      There are no outstanding charges or complaints against the Vendor relating
      to
      unfair labour practices or discrimination or under any legislation relating
      to
      Transferring Employees. 

    


    (w) Employee
      Benefit and Pension Plans.

    


    (i)
       Except
      as
      listed in Schedule M attached hereto, the Vendor does not have, and is not
      subject to any present or future obligation or liability under, any pension
      plan, deferred compensation plan, retirement income plan, stock option or stock
      purchase plan, profit sharing plan, bonus plan or policy, employee group
      insurance plan, hospitalization plan, disability plan, or other employee benefit
      plan, program, policy or practice, formal or informal, with respect to any
      of
      the Transferring Employees, other than the Canada Pension Plan R.S.C. 1985,
      c.
      C-8, and other similar health plans. Vendor has made available to Purchaser
      general policies, procedures and work-related rules in effect with respect
      to
      Transferring Employees, whether written or oral, including but not limited
      to
      policies regarding holidays, sick leave, vacation, disability and death
      benefits, termination and severance pay, automobile allowances and rights to
      company-provided automobiles and expense reimbursements. (The plans, programs,
      policies, practices and procedures are hereinafter collectively called the
      “Benefit Plans”). Complete and correct copies of all documentation establishing
      or relating to the Benefit Plans or, where such Benefit Plans are oral
      commitments, written summaries of the terms thereof, and the most recent
      financial statements and actuarial reports related thereto and all reports
      and
      returns in respect thereof filed with any regulatory agency within three years
      prior to the date hereof have been made available to the Purchaser.


    


    (ii) The
      pension plans included in the Benefit Plans, if any, are registered under and
      are in compliance with all applicable federal and provincial legislation and
      all
      reports, returns and filings required to be made thereunder have been made.
      Such
      pension plans have been administered in accordance with their terms and the
      provisions of applicable law. Each pension plan is a defined contribution plan
      and has been funded in accordance with the requirements of such plans.


    


    (iii) There
      are
      no pending claims by any Transferring Employee covered under the Benefit Plans
      or by any other person which allege a breach of fiduciary duties or violation
      of
      governing law or which may result in liability to the Vendor and, to the best
      of
      the knowledge of the Vendor, there is no basis for such a claim. There are
      no
      Transferring Employees who are receiving from the Vendor any pension or
      retirement payments or who are entitled to receive any such payments not covered
      by a pension plan to which the Vendor is a party. 


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      (x)Insurance.
        

    

    


    Vendor
      currently maintains insurance on the Purchased Assets. Complete and correct
      copies of all such insurance policies have been made available to Purchaser.
      Such insurance policies are in full force and effect and Vendor is not in
      default with respect to the payment of any premium or compliance with any of
      the
      provisions contained in any such insurance policy. To the best of the knowledge
      of the Vendor, there are no circumstances under which the Vendor would be
      required to or, in order to maintain its coverage, should give any notice to
      the
      insurers under any such insurance policies which has not been given. The Vendor
      has not received notice from any of the insurers regarding cancellation of
      such
      insurance policies. The Vendor has not failed to give any notice of or to
      present any claim under any such insurance policy in due and timely fashion.
      The
      Vendor has not received notice from any of the insurers denying any claim.
      

    


    
      (y)Non-Arm’s
        Length Matters. 

    

    


    With
      respect to the Purchased Assets, the Vendor is not a party to or bound by any
      agreement with, is not indebted to, and no amount is owing to the Vendor by,
      any
      of the Affiliates of the Vendor. 

    


    
      (z)Government
        Assistance. 

    

    


    Schedule
      N attached hereto describes all agreements, loans, other funding arrangements
      and assistance programs (collectively called “Government Assistance Programs”)
      which have been provided to the Vendor related to the Purchased Assets from
      any
      federal, provincial, municipal or other government or governmental agency,
      board, commission or authority, domestic or foreign (collectively called
“Government Agencies”). Complete and correct copies of all documents relating to
      the Government Assistance Programs have been made available to the Purchaser.
      The Vendor has performed all of its obligations under the Governmental
      Assistance Programs, and no basis exists for any Government Agencies to seek
      payment or repayment of any amount or benefit provided under any of the
      Government Assistance Programs, except as indicated on Schedule N.

     

    
      
        (aa)
          Compliance
          with Laws. 

      

    

    


    In
      relation to the Purchased Assets, the Vendor is not in violation of any federal,
      provincial or other law, regulation or order of any government or governmental
      or regulatory authority, domestic or foreign. 

    


    
      (bb)Vendor’s
        Residency. 

    

    


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

    


    
      (cc)Copies
        of
        Documents. 

    

    


    Complete
      and correct copies (including all amendments) of all contracts, leases and
      other
      documents referred to in this Agreement or any schedule hereto have been made
      available to the Purchaser. 

    


    
      (dd)Disclosure.
        

    

    


    No
      representation or warranty contained in this section 3.1, and no statement
      contained in any schedule, certificate, list, summary or other disclosure
      document provided or to be provided to the Purchaser pursuant hereto, or in
      connection with the transactions contemplated hereby, contains or will contain
      any untrue statement of a material fact, or, to the best of Vendor’s knowledge,
      omits or will omit to state any material fact which is necessary in order to
      make the statements contained therein not misleading. 


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    


    
      	3.2	
              Representations
                and Warranties by the Purchaser.

            


    

    


    The
      Purchaser hereby represents and warrants to the Vendor as follows, and confirms
      that the Vendor is relying upon the accuracy of each of such representations
      and
      warranties in connection with the sale of the Purchased Assets and the
      completion of the other transactions hereunder:

     

    
      
        (a)
          Corporate
          Authority and Binding Obligation. 

      

    

    


    The
      Purchaser is a corporation duly incorporated and validly subsisting in all
      respects under the laws of its jurisdiction of incorporation. The Purchaser
      has
      good right, full corporate power and absolute authority to enter into this
      agreement and to purchase the Purchased Assets from the Vendor in the manner
      contemplated herein and to perform all the Purchaser’s obligations under this
      Agreement. The Purchaser and its shareholders and board of directors have taken
      all necessary or desirable actions, steps and corporate and other proceedings
      to
      approve or authorize, validity and effectively, the entering into of, and the
      execution, delivery and performance of, this Agreement and the purchase of
      the
      Purchased Assets by the Purchaser from the Vendor. This agreement is a legal,
      valid and binding obligation of the Purchaser, enforceable against it in
      accordance with its terms subject to bankruptcy, insolvency, moratorium,
      reorganization and other laws relating to or affecting the enforcement of
      creditors’ rights generally and the fact that equitable remedies, including the
      remedies of specific performance and injunction, may only be granted in the
      discretion of a court. 

    


    
      
        (b)
          Contractual
          and Regulatory Approvals. 

      

    

    


    Purchaser
      is not under any obligation, contractual or otherwise to request or obtain
      the
      consent of any person, and no permits, licenses, certifications, authorizations
      or approvals of, or notification to, any federal, provincial, municipal or
      local
      government or governmental agency, board, commission or authority are required
      to be obtained by the Purchaser in connection with the execution, delivery
      or
      performance by the Purchaser of this Agreement or the completion of any of
      the
      transactions contemplated herein. Complete and correct copies of any agreements
      under which the Purchaser is obligated to request or obtain any such consent
      have been provided to the Vendor. 

    


    
      
        (c)
          Compliance
          with Constating Documents, Agreements and Laws. 

      

    

    


    The
      execution, delivery and performance of this Agreement and each of the other
      agreements contemplated or referred to herein by the Purchaser, and the
      completion of the transaction contemplated hereby, will not constitute or result
      in a violation or breach of or default under any term or provision of any of
      the
      articles, by-laws or other constating documents of the Purchaser, the terms
      of
      any indenture, agreement (written or oral), instrument or understanding or
      other
      obligation or restriction to which the Purchaser is a party or by which it
      is
      bound, or subject to obtaining the regulatory consents, any term or provision
      of
      any licences, registrations or qualification of the Purchaser or any order
      of
      any Court, governmental authority or regulatory body or any applicable law
      or
      regulation of any jurisdiction.

    


    
      
        (d)
          Copies
          of
          Documents. 

      

    

    


    Complete
      and correct copies (including all amendments) of all Vendor contracts, leases
      and other documents referred to in this Agreement or any schedule hereto have
      been made available to the Purchaser by the Vendor. 


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    


    ARTICLE
      4 – SURVIVAL AND LIMITATIONS OF REPRESENTATIONS AND WARRANTIES

    


    
      	4.1	
              Survival
                of Warranties by the Vendor.

            


    

    


    The
      representations and warranties made by the Vendor and contained in this
      Agreement, or contained in any document or certificate given in order to carry
      out the transactions contemplated hereby, will survive the closing of the
      purchase of the Purchased Assets provided for herein and, notwithstanding such
      closing or any investigation made by or on behalf of the Purchaser or any other
      person or any knowledge of the Purchaser or any other person, shall continue
      in
      full force and effect for the benefit of the Purchaser, subject to the following
      provisions of this section. No Warranty Claim may be brought by the Purchaser
      after the date which is 360 days following the Closing Date.

    


    After
      the
      expiration of the period of time aforesaid, the Vendor will be released from
      all
      obligations and liabilities in respect of the representations an warranties
      made
      by the Vendor and contained in this Agreement or in any document or certificate
      given in order to carry out the transaction contemplated hereby except with
      respect to any claims made by the Purchaser in writing prior to the expiration
      of such period and subject to the rights of the Purchaser to make any claim
      permitted by paragraph (b) of this section. 

    


    
      	4.2	
              Survival
                of Warranties by Purchaser.

            


    

    


    The
      representations and warranties made by the Purchaser and contained in this
      Agreement or contained in any document or certificate given in order to carry
      out the transactions contemplated hereby will survive the closing of the
      purchase and sale of the Purchased Assets provided for herein and,
      notwithstanding such closing or any investigation made by or on behalf of the
      Vendor or the Shareholder or any other person or any knowledge of the Vendor
      or
      the Shareholder or any other person, shall continue in full force and effect
      for
      the benefit of the Vendor provided that no Warranty Claim may be brought by
      the
      Vendor after the date which is 360 days following the Closing Date.


    


    
      	4.3	
              Limitations
                on Warranty Claims.

            


    

    


    (a) The
      Purchaser shall not be entitled to make a Warranty Claim if the Purchaser has
      knowledge prior to the Closing Time of the inaccuracy, non-performance,
      non-fulfillment or breach which is the basis for such Warranty Claim and the
      Purchaser competes the transactions hereunder notwithstanding such inaccuracy,
      non-performance, non-fulfillment or breach. 

    


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

    


    (i) any
      insurance proceeds available to the Purchaser in relation to the matter which
      is
      the subject of the Warranty Claim, and

    


    (ii) the
      value
      of any related, determinable tax benefit realized, or to be realized within
      5
      years following the date of incurring such cost or loss, by the Purchaser in
      relation to the matter which is the subject of the Warranty Claim.

    


    (c)
       The
      Purchaser shall not be entitled to make any Warranty Claim until the aggregate
      amount of all damages, losses, liabilities and expenses incurred by the
      Purchaser as a result of all misrepresentations and breaches of warranties
      contained in this Agreement or contained in any document or certificate given
      in
      order to carry out the transactions contemplated hereby, after taking into
      account paragraph (b) of this section is equal to $250,000. After the aggregate
      amount of such damages, losses, liabilities and expense incurred by the
      Purchaser exceeds $250,000 the Purchaser shall only be entitled to make Warranty
      Claims to the extent that such aggregate amount, after taking into account
      the
      provisions of paragraph (b) of this section, exceeds $250,000.


    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    


    (d)
       Notwithstanding
      any other provisions of this Agreement or of any agreement, certificate or
      other
      document made in order to carry out the transactions contemplated hereby, the
      maximum aggregate liability of the Vendor together in respect of all Warranty
      Claims by the Purchaser will be limited to the Purchase Price.

    


    ARTICLE
      5 – COVENANTS

    


    
      	5.1	
              Covenants
                by the Vendor.

            


    

    


    


    
      
        (a)
          Transfer
          of Purchased Assets. 

      

    

    


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

    


    
      
        (b)
          General
          Conveyance. 

      

    

    


    At
      the
      Closing Time, the Vendor will deliver to the Purchaser good and marketable
      title
      to and exclusive possession of the Purchased Assets, free and clear of any
      and
      all Encumbrances. At the Closing Time, the Vendor will execute and deliver
      to
      the Purchaser one or more forms of general conveyance or bills of sale in
      respect of the assignment, conveyance, transfer and delivery of the Purchased
      Assets to the Purchaser in form acceptable to the Purchaser.

     

    
      (c)Transfer
        of Assumed Contracts. 

    

    


    Within
      30
      days after the Closing Time, the Vendor will deliver to the
      Purchaser:

    


    (i)
       an
      executed original of each of the Assumed Contracts which it has in its
      possession;

    


    (ii) one
      or
      more forms of assignment of the Assumed Contracts in form acceptable to the
      Purchaser, and

    


    (iii) consents
      to the assignment of all of the Assumed Contracts under which consent is
      required executed by all persons whose consent is required in form acceptable
      to
      the Purchaser.

    


    
      (d)Post-Closing
        Access. 

    

    


    After
      the
      Closing Date, upon reasonable notice, the Vendor shall give to the
      representatives, employees, counsel and accountants of the Purchaser, access,
      during normal business hours, to the business records which relate to periods
      prior to the Closing Date and will permit such persons to examine and copy
      such
      records to the extent reasonably requested by the Purchaser in connection with
      the preparation of tax and financial reporting matters, audits, legal
      proceedings, governmental investigations and other business purposes. However,
      the Vendor shall not be obliged to take any action pursuant to this subsection
      that would unreasonably disrupt the normal course of its business, violate
      the
      terms of any contract to which it is a party or to which the Vendor or any
      of
      its assets is subject or to grant access to any of its proprietary, confidential
      or classified information.


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    


    
      	5.2	
              Covenants
                by the Purchaser.

            


    

    


    The
      Purchaser covenants to the Vendor that it will do or cause to be done the
      following:

    


    
      (a)Confidentiality.
        

    

    


    Prior
      to
      the Closing Time and, if the transaction contemplated hereby is not completed,
      at all times after the Closing Time, the Purchaser will keep confidential all
      information obtained by it relating to the business, except such information
      which:

    


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

    


    (ii) Is
      generally available to the public, other than as a result of a disclosure by
      the
      Purchaser, or 

    


    (iii) Is
      made
      available to the Purchaser on a non-confidential basis from a source other
      than
      the Vendor or its representatives.

    


    The
      Purchaser further agrees that such information will be disclosed only to those
      of its employees and representatives of its advisors who need to know such
      information for the purposes of evaluating and implementing the transaction
      contemplated hereby. Notwithstanding the foregoing provisions of this paragraph,
      the obligation to maintain the confidentiality of such information will not
      apply to the extent that disclosure of such information is required in
      connection with governmental or other applicable filings relating to the
      transactions hereunder, provided that in such case, unless the Vendor otherwise
      agrees, the Purchaser will, if possible, request confidentiality in respect
      of
      such governmental or other filings. If the transactions contemplated hereby
      are
      not consummated for any reason the Purchaser will return forthwith, without
      retaining any copies thereof, all information and documents obtained from the
      Vendor.

    


    
      (b)Transferring
        Employees.

    

    


    (i) At
      or
      before the Closing Time, the Purchaser will offer transfer of employment to
      the
      Transferring Employees of the Vendor included on Schedule B on terms not less
      favourable than those provided to and on which such employees were employed
      by
      the Vendor on the date hereof. Employees who do not accept such transfer of
      employment shall be referred to herein as “Refusing Employees”.

    


    (ii) The
      Vendor will remain responsible and liable for all amounts which have accrued
      to
      all employees of the Vendor prior to the Closing Date who are not Transferring
      Employees or who are Refusing Employees including, without limitation, all
      salary, bonus, employee benefits and vacation pay. In addition, the Vendor
      will
      be liable for all severance payments, damages for wrongful dismissal and all
      related costs payable in respect of the termination by the Vendor of the
      employment of the employees of the Vendor prior to the Closing Time. Purchaser
      shall become responsible after Closing for any amount due to any Transferring
      Employee who shall accept Purchaser’s offer of transfer of
      employment.


    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    


    (iii) Post-Closing
      Access. After the Closing Date, upon reasonable notice, the Purchaser shall
      give
      to the representatives, employees, counsel and accountants of the Vendor,
      access, during normal business hours, to the business records which relate
      to
      periods prior to the Closing Date and will permit such persons to examine and
      copy such records to the extent reasonably requested by the Vendor in connection
      with the preparation of tax and financial reporting matters, audits, legal
      proceedings, governmental investigations and other business purposes. However,
      the Purchaser shall not be obliged to take any action pursuant to this
      subsection that would unreasonably disrupt the normal course of its business,
      violate the terms of any contract to which it is a party or to which the
      Purchaser or any of its assets is subject or to grant access to any of its
      proprietary, confidential or classified information.

    


    
      	5.3	
              Agreements
                Regarding Retirement Plans.

            


    

    


    Effective
      as of the Closing Date, the Vendor will assign to the Purchaser, and the
      Purchaser will adopt and assume and will thereafter be entitled to and bound
      by,
      all of the Vendor’s rights, duties, liabilities and obligations under all
      retirement plans for Transferring Employees of the Vendor listed in Schedule
      O
      and under all agreements and documents constituting or relating to such plans.
      The parties will cooperate in preparing and filing all documents and in
      obtaining all approvals of all governmental authorities required to give effect
      to the foregoing as soon as possible.

    


    ARTICLE
      6
      - CONDITIONS

    


    
      	6.1	
              Conditions
                to the Obligations of the
                Purchaser.

            


    

    


    Notwithstanding
      anything herein contained the obligation of the Purchaser to complete the
      transactions provided for herein will be subject to the fulfillment of the
      following conditions at or prior to the Closing Time, and the Vendor covenants
      to use its best efforts to ensure that such conditions are
      fulfilled.

    


    
      (a)Accuracy
        of Representations and Warranties and Performance of
        Covenants.

    

    


    The
      representations and warranties of the Vendor contained in this Agreement or
      in
      any documents delivered in order to carry out the transactions contemplated
      hereby shall be true and accurate on the date hereof and at the Closing Time
      with the same force and effect as though such representations and warranties
      had
      been made as of the Closing Time (regardless of the date as of which the
      information in this Agreement or in any schedule or other document made pursuant
      hereto is given). In addition, the Vendor shall have substantially complied
      with
      all covenants and agreements herein agreed to be performed or caused to be
      performed by it at or prior to the Closing Time.

    


    
      (b)Material
        Adverse Changes. 

    

    


    During
      the Interim Period there will have been no change in the condition of the
      Purchased Assets, however arising, except changes which have occurred in the
      ordinary course of business and which, individually or in the aggregate, have
      not affected and may not affect the condition of the Purchased Assets in any
      material adverse respect. Without limiting the generality of the foregoing,
      during the Interim Period, no damage to or destruction of any material part
      of
      the Purchased Assets shall have occurred, whether or not covered by insurance.
      


    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    


    
      (c)No
        Restraining Proceedings. 

    

    


    No
      order,
      decision or ruling of any court, tribunal or regulatory authority having
      jurisdiction shall have been made, and no action or proceeding shall be pending
      or threatened which, in the opinion of counsel to the Purchaser, is likely
      to
      result in an order, decision or ruling to disallow, enjoin, prohibit or impose
      any limitations or conditions on the purchase and sale of the Purchased Asset
      contemplated hereby or the right of the purchaser to own the Purchased Assets.
      

    


    
      (d)Consents.
        

    

    


    All
      consents required to be obtained in order to carry out the transactions
      contemplated hereby in compliance with all laws and agreements binding upon
      the
      parties hereto shall have been obtained. 

    


    
      	6.2	
              Waiver
                or Termination by Purchaser.

            


    

    


    The
      conditions contained in section 6.1 hereof are inserted for the exclusive
      benefit of the Purchaser and may be waived in whole or in part by the Purchaser
      at any time. The Vendor acknowledges that the waiver by the Purchaser of any
      condition or any part of any condition shall constitute a waiver only of such
      condition or such part of such condition, as the case may be, and shall not
      constitute a waiver of any covenant, agreement, representation or warranty
      made
      by the Vendor herein that corresponds or is related to such condition or such
      part of such condition, as the case may be. If any of the conditions contained
      in section 6.1 hereof are not fulfilled or complied with as herein provided,
      the
      Purchaser may, at or prior to the Closing Time at its option, rescind this
      Agreement by notice in writing to the Vendor and in such event the Purchaser
      shall be released from all obligations hereunder and, unless the condition
      or
      conditions which have not been fulfilled are reasonably capable of being
      fulfilled or caused to be fulfilled by the Vendor, then the Vendor shall also
      be
      released from all obligations hereunder. 

    


    
      	6.3	
              Conditions
                to the Obligations of the Vendor.

            


    

    


    Notwithstanding
      anything herein contained, the obligations of the Vendor to complete the
      transactions provided for herein will be subject to the fulfillment of the
      following conditions at or prior to the Closing Time, and the Purchaser will
      use
      its best efforts to ensure that such conditions are fulfilled. 

    


    (a) Accuracy
      of Representations and Warranties and Performance of Covenants. The
      representations and warranties of the Purchaser contained in this Agreement
      or
      in any document delivered in order to carry out the transactions contemplated
      hereby will be true and accurate on the date hereof and at the Closing Time
      with
      the same force and effect as though such representations and warranties had
      been
      made as of the Closing Time (regardless of the date as of which the information
      in this Agreement or any such schedule or other document made pursuant hereto
      is
      given). In addition, the Purchaser shall have complied with all covenants and
      agreements herein agreed to be performed or caused to be performed by it at
      or
      prior to the Closing Time. 

    


    (b) No
      Restraining Proceedings. No order, decision or ruling of any court, tribunal
      or
      regulatory authority having jurisdiction shall have been made, and no action
      or
      proceeding shall be pending or threatened which, in the opinion of counsel
      to
      the Vendor , is likely to result in an order, decision or ruling, to disallow,
      enjoin or prohibit the purchase and sale of the Purchased Assets contemplated
      hereby. 

    


    (c) Consents.
      All consents required to be obtained in order to carry out the transactions
      contemplated hereby in compliance with all laws and agreements binding upon
      the
      parties hereto shall have been obtained. 


    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    


    
      	6.4	
              Waiver
                or Termination by Vendor. 

            


    

    


    The
      conditions contained in section 6.3 hereof are inserted for the exclusive
      benefit of the Vendor and may be waived in whole or in part by the Vendor at
      any
      time. The Purchaser acknowledges that the waiver by the Vendor of any condition
      or any part of any condition shall constitute a waiver only of such condition
      or
      such part of such condition, as the case may be, and shall not constitute a
      waiver of any covenant, agreement, representation or warranty made by the
      Purchaser herein that corresponds or is related to such condition or such part
      of such condition, as the case may be. If any of the conditions contained in
      section 6.3 hereto are not fulfilled or complied with as herein provided, the
      Vendor may, at or prior to the Closing Time at its option, rescind this
      Agreement by notice in writing to the Purchaser and in such event the Vendor
      shall be released from all obligations hereunder and, unless the condition
      or
      conditions which have not been fulfilled are reasonably capable of being
      fulfilled or caused to be fulfilled by the Purchaser, then the Purchaser shall
      also be released from all obligations hereunder. 

    


    ARTICLE
      7
      - CLOSING

    


    
      	7.1	
              Closing
                Arrangements.

            


    

    


    Subject
      to the terms and conditions hereof, the transactions contemplated herein shall
      be closed at the Closing Time at the offices of McInnes Cooper located at Barker
      House, Suite 600, 570 Queen Street, Fredericton NB or at such other place or
      places as may be mutually agreed upon by the Vendor and the Purchaser.


    


    
      	7.2	
              Documents
                to be Delivered. 

            


    

    


    At
      or
      before the Closing Time, the Vendor shall execute or cause to be executed,
      and
      shall deliver, or cause to be delivered, to the Purchaser all documents,
      instruments and things which are to be delivered by the Vendor pursuant to
      the
      provisions of this Agreement, and the Purchaser shall execute, or cause to
      be
      executed, and shall deliver or cause to be delivered, to the Vendor all cheques
      or bank drafts and all documents, instruments and things which the Purchaser
      is
      to deliver or to cause to be delivered pursuant to the provisions of this
      Agreement. 

    


    ARTICLE
      8
      - INDEMNIFICATION 

    


    
      	8.1	
              Indemnity
                by the Vendor.

            


    

    


    (a) The
      Vendor hereby agrees to indemnify and save the Purchaser harmless from and
      against any claims, demands, actions, causes of action, damages, loss,
      deficiency, cost, liability and expense which may be made or brought against
      the
      Purchaser or which the Purchaser may suffer or incur as a result of, in respect
      of or arising out of: 

    


    (i) any
      non-performance or non-fulfillment of any covenant or agreement on the part
      of
      the Vendor contained in this Agreement or in any document given in order to
      carry out the transactions contemplated hereby;

    


    (ii) any
      misrepresentation, inaccuracy, incorrectness or breach of any representation
      or
      warranty made by the Vendor contained in this Agreement or contained in any
      document or certificate given in order to carry out the transactions
      contemplated hereby; and

    


    (iii) all
      costs
      and expenses including, without limitation, legal fees on a solicitor and client
      basis, incidental to or in respect of the foregoing. 


    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    


    
      	
            	(b)	
              The
                obligations of indemnification by the Vendor pursuant to this section
                8
                will be:

            


    

    


    (i) subject
      to the limitations refereed to in section 4.1 hereof with respect to the
      survival of the representations and warranties by the Vendor;

    


    (ii) subject
      to the limitations referred to in section 4.3 hereof, and

    


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

    


    
      	8.2	
              Provisions
                Relating to Indemnity Claims. 

            


    

    


    The
      following provisions will apply to any claim by the Purchaser for
      indemnification by the Vendor pursuant to section 8.1 hereof (hereinafter,
      in
      this section, called an “Indemnity Claim”). 

    


    (a) Promptly
      after becoming aware of any matter that may give rise to an Indemnity Claim,
      the
      Purchaser will provide to the Vendor written notice of the Indemnity Claim
      specifying (to the extent that information is available) the factual basis
      for
      the Indemnity Claim and the amount of the Indemnity Claim or, if an amount
      is
      not then determinable, an estimate of the amount of the Indemnity Claim, if
      any
      estimate is feasible in the circumstances. 

    


    (b) If
      an
      Indemnity Claim relates to an alleged liability to any other person
      (hereinafter, in this section, called a “Third Party Liability”), including
      without limitation any governmental or regulatory body or any taxing authority,
      which is of a nature such that the Purchaser is required by applicable law
      to
      make a payment to a third party before the relevant procedure for challenging
      the existence or quantum of the alleged liability can be implemented or
      completed, then the Purchaser may, notwithstanding the provisions of paragraph
      (3) and (4) of this section, make such payment and forthwith demand
      reimbursement for such payment from the Vendor in accordance with this
      Agreement; provided that, if the alleged liability to the third party as finally
      determined upon completion of settlement negotiations or related legal
      proceedings is less that the amount which is paid by the Vendor in respect
      of
      the related Indemnity Claim, then the Purchaser shall forthwith following the
      final determination pay to the Vendor the amount by which the amount of the
      liability as finally determined is less than the amount which is so paid by
      the
      Vendor. 

    


    (c) The
      Purchaser shall not negotiate, settle, compromise or pay (except in the case
      of
      payment of a judgment) any Third Party Liability as to which it proposes to
      assert an Indemnity Claim, except with the prior consent of the Vendor (which
      consent shall not be unreasonably withheld or delayed), unless there is a
      reasonable possibility that such Third Party Liability may materially and
      adversely affect the condition of the business of the Purchaser, in which case
      the Purchaser shall have the right, after notifying the Vendor, to negotiate,
      settle, compromise or pay such Third Party Liability without prejudice to its
      rights of indemnification hereunder. 

    


    (d) 
      With
      respect to any Third Party Liability, provided the Vendor first admits the
      Purchaser’s right to indemnification for the amount of such Third Party
      Liability which may be determined or settled, then in any legal, administrative
      or other proceedings in connection with the matters forming the basis of the
      Third Party Liability, the following procedures will apply:


    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    


    (i) except
      as
      contemplated by subparagraph (c) below, the Vendor will have the right to assume
      carriage of the compromise or settlement of the Third Party Liability and the
      conduct of any related legal, administrative or other proceedings, but the
      Purchaser shall have the right and shall be given the opportunity to participate
      in the defense of the Third Party Liability, to consult with the Vendor in
      the
      settlement of the Third Party Liability and the conduct of related legal,
      administrative and other proceedings (including consultation with counsel)
      and
      to disagree on reasonable grounds with the selection and retention of counsel,
      in which case counsel satisfactory to the Vendor and the Purchaser shall be
      retained by the Vendor;

    


    (ii) the
      Vendor will co-operate with the Purchaser in relation to the Third Party
      Liability, will keep it fully advised with respect thereto, will provide it
      with
      copies of all relevant documentation as it becomes available, will provide
      it
      with access to all records and files relating to the defense of the Third Party
      Liability and will meet with representatives of the Purchaser at all reasonable
      times to discuss the Third Party Liability; and

    


    (iii) notwithstanding
      subparagraphs (a) and (b), the Vendor will not settle the Third Party Liability
      or conduct any legal, administrative or other proceedings in any manner which
      would, in the reasonable opinion of the Purchaser, have a material adverse
      affect on the condition of the business or the Purchaser, except with the prior
      written consent of the Purchaser.

    


    (e) If,
      with
      respect to any Third Party Liability, the Vendor does not admit the Purchaser’s
      right to indemnification or declines to assume carriage of the settlement or
      of
      any legal, administrative or other proceedings relating to the Third Party
      Liability, the following provisions with apply:

    


    (i) the
      Purchaser, at its discretion, may assume carriage of the settlement or of any
      legal, administrative or other proceedings relating to the Third Party Liability
      and may defend or settle the Third Party Liability on such terms as the
      Purchaser, acting in good faith, considers advisable; and 

    


    (ii) any
      cost,
      lost, damage or expense incurred or suffered by the Purchaser in the settlement
      of such Third Party Liability or the conduct of any legal, administrative or
      other proceedings shall be added to the amount of the Indemnity Claim.


     

    ARTICLE
      9
      - GENERAL PROVISIONS

    


    
      	9.1	
              Further
                Assurances.

            


    

    


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

    


    
      	9.2	
              Remedies
                Cumulative.

            


    

    


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


    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    


    
      	9.3	
              Notices.

            


    

    


    (a) Any
      notice, designation, communication, request, demand or other document, required
      or permitted to be given or sent or delivered hereunder to any party hereto
      shall be in writing and shall be sufficiently given or sent or delivered if
      it
      is:

     

    (i) delivered
      personally to an officer or director of such party;

     

    (ii) sent
      to
      the party entitled to receive it by prepaid courier service; or

     

    (iii) sent
      by
      facsimile machine. 

    


    (b) Notice
      shall be sent to the following addresses or facsimile number:

     

    
      	
            	(i)	
              in
                the case of the Vendor to:

            


    

    


    
      	
              Thomas
                Equipment, Inc.

            
	 
	 
	
              Attention:

            	 
	
              Facsimile:
                

            	 


    

    


    
      	 	
              (ii)

            	
              in
                the case of Purchaser to:

            


    

    


    
      	
              Carleton
                International, Ltd.

            
	 
	 
	
              Attention:

            	 
	
              Facsimile:
                

            	 


    

    


    or
      to
      such other address or facsimile number as the party entitled to or receiving
      such notice, designation, communication, request, demand or other document
      shall, by a notice given in accordance with this section, have communicated
      to
      the party giving or sending or delivering such notice, designation,
      communication, request, demand or other document.

    


    (c) Any
      notice, designation, communication, request, demand or other document given
      or
      sent or delivered as aforesaid shall:

    


    (i) if
      delivered personally or by courier as aforesaid, be deemed to have been given
      sent, delivered and received on the date of delivery; and

    


    (ii) if
      sent
      by facsimile machine, be deemed to have been given, sent, delivered and received
      on the date the sender receives the telecopy answer back confirming receipt
      by
      the recipient.

    


    
      	9.4	
              Counterparts.

            


    

    


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


    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    


    
      	9.5	
              Expenses
                of Parties.

            


    

    


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

    


    
      	9.6	
              Announcements.

            


    

    


    No
      announcement with respect to this Agreement will be made by any party hereto
      without the prior approval of the other party. The foregoing will not apply
      to
      any announcement by any party required in order to comply with laws pertaining
      to timely disclosure, provided that such party consults with the other parties
      before making any such announcement.

    


    
      	9.7	
              Assignment.

            


    

    


    The
      rights of the Vendor hereunder shall not be assignable without the written
      consent of the Purchaser. The rights of the Purchaser hereunder shall not be
      assignable without the written consent of the Vendor.

    


    
      	9.8	
              Successors
                and Assigns.

            


    

    


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

    


    
      	9.9	
              Entire
                Agreement.

            


    

    


    This
      Agreement and the schedules referred to herein constitute the entire agreement
      between the parties hereto and supersede all prior agreements, representations,
      warranties, statements, promises, information, arrangements and understandings,
      whether oral or written, express or implied, with respect to the subject matter
      hereof. None of the parties hereto shall be bound by or charged with any oral
      or
      written agreements, representations, warranties, statements, promises,
      information, arrangements or understandings not specifically set fort in this
      Agreement or in the schedules, documents and instruments to be delivered on
      or
      before the Closing Date pursuant to this Agreement. The parties hereto further
      acknowledge and agree that, in entering into this Agreement and in delivering
      the schedules, documents and instruments to be delivered on or before the
      Closing Date, they have not in any way relied, and will not in any way rely,
      upon any oral or written agreements, representations, warranties, statement,
      promises, information, arrangements or understandings, express or implied,
      not
      specifically set forth in this Agreement or in such schedules documents or
      instruments.

    


    
      	9.10	
              Waiver

            


    

    


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

    


    
      	9.11	
              Amendments.

            


    

    


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


    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    


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

    


    
      	
              Carleton
                International, Ltd.

            
	 
	
              /s/
                Michael Luther

            
	 
	
              Its
                Executive Vice President

            
	 
	
              816552418RT0001

            
	
              GST
                Registration Number

            
	 
	 
	
              Thomas
                Equipment, Inc.

            
	 
	
              /s/Petter
                Etholm

            
	 
	
              Its
                Chief Executive Officer

            
	 
	
              848171948RT0001

            
	
              GST
                Registration Number

            


    

     

    
      
        
        

      

      
        26