Exhibit 2.1


                            SHARE PURCHASE AGREEMENT

                    THIS AGREEMENT made as of July 31, 2000.

                                    BETWEEN:

                          JOHN WHITTAKER ("Whittaker")
                              and RICHARD MACARTHUR
                                  ("MacArthur")
                          (collectively, the "Vendors")

                                     - and -

                           ARS NETWORKS, INCORPORATED
     a corporation incorporated under the laws of the State of New Hampshire

                                (the "Purchaser")

                                     - and -

                           T & T DIESEL POWER LIMITED
      a corporation incorporated under the laws of the Province of Ontario,
                               (the "Corporation")


        THIS  AGREEMENT  WITNESSES  THAT  in  consideration  of  the  respective
covenants,  agreements,  representations,   warranties  and  indemnities  herein
contained  and for  other  good and  valuable  consideration  (the  receipt  and
sufficiency of which are  acknowledged by each party),  the parties covenant and
agree as follows:


                                   ARTICLE I.
                                 INTERPRETATION


1.1.    DEFINED TERMS

        For  the  purpose  of  this  Agreement,  unless  the  context  otherwise
requires,  the following terms shall have the respective  meanings set out below
and grammatical variations of such terms shall have corresponding meanings:

        "Act" means the BUSINESS  CORPORATIONS ACT (Ontario) as in effect on the
date hereof;

        "Affiliate" has the meaning attributed to that term in the Act;

        "Arbitrator" has the meaning set out in section 2.4;

        "ARS  Shares"  means  200,000  common  shares  in  the  capital  of  the
Purchaser;



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        "Associate" has the meaning attributed to that term in the Act;

        "Annual Financial Statements" means the unaudited consolidated financial
statements of the  Corporation as at and for the financial  years ended July 31,
1998 and 1999,  including the notes thereto and the notice to reader thereon,  a
copy of which is annexed hereto as Schedule 1;

        "Business" means the business currently and heretofore carried on by the
Corporation  consisting of manufacturing and assembling of diesel generators and
ancillary equipment  (including,  without  limitation,  trailers and enclosures)
and, as ancillary thereto, product support;

        "Business  Day"  means any day (other  than a  Saturday  or a Sunday) on
which the main branch of CIBC Bank in Guelph, Ontario, is open for business;

        "Claim" has the meaning set out in section 9.3;

        "Closing" means the completion of the Transaction on the Closing Date;

        "Closing Balance Sheet" has the meaning set out in section 2.3;

        "Closing Certificates" has the meaning set out in subsection 5.1(a);

        "Closing Date" means July 31, 2000 or such other date as may be mutually
agreed upon by the Vendors and the Purchaser;

        "Closing Financial Statements" has the meaning set out in section 2.3;

        "Closing Income Statement" has the meaning set out in section 2.3;

        "Contract" means any agreement, indenture, contract, lease, deed of
trust, licence, option, instrument or other commitment, whether written or oral;

        "Direct Claim" has the meaning set out in section 9.3;

        "Employee Plans" has the meaning set out in section 3.34;

        "Encumbrance"  means any encumbrance,  lien, charge,  hypothec,  pledge,
mortgage,  title retention agreement,  security interest of any nature,  adverse
claim, exception, reservation, easement, right of occupation, any matter capable
of registration against title,  option,  right of pre-emption,  privilege or any
Contract to create any of the foregoing;

        "Environmental Laws" has the meaning set out in subsection 3.33(a);

        "Environmental Permits" has the meaning set out in subsection 3.33(b);

        "Escrow Agent" means the law firm of Pallett Valo;

        "ETA" means the Excise Tax Act (Canada), as amended from time to time;


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<PAGE>


        "Financial  Statements"  means the Annual  Financial  Statements and the
Interim Financial Statements;

        "GST" means any and all taxes  payable under Part IX of the ETA or under
any provincial legislation similar to Part IX of the ETA;

        "Hazardous Substances" has the meaning set out in subsection 3.33(a);

        "Indemnified Party" has the meaning set out in section 9.3;

        "Indemnifying Party" has the meaning set out in section 9.3;

        "Intellectual Property" has the meaning set out in section 3.16;

        "Interim   Financial   Statements"  means  the  unaudited   consolidated
financial  statements  of the Corporation as at and for the month periods ended,
April 30,  2000,  copies of which  financial  statements  are annexed  hereto as
Schedule 2;

        "Laws"  means  all laws,  statutes,  ordinances,  regulations,  by-laws,
rules,  judgments,  decrees  or  orders  of  governmental  authorities,  whether
federal, provincial, state or municipal;

        "Leased Property" has the meaning set out in section 3.1 1;

        "Leases" has the meaning set out in section 3.  13;

        "Licences" has the meaning set out in section 3.20;

        "Losses",  in  respect  of  any  matter,  means  all  claims,   demands,
proceedings,  losses,  damages,  liabilities,  deficiencies,  costs and expenses
(including,  without  limitation,  all  legal and  other  professional  fees and
disbursements,  interests,  penalties  and amounts paid in  settlement)  arising
directly or indirectly as a consequence of such matter;

        "Permitted Encumbrances" means:

               (a) liens for taxes, assessments and governmental charges due and
being contested in good faith and diligently by appropriate proceedings (and for
the payment of which adequate provision has been made);

               (b) servitudes, easements, restrictions,  rights-of-way and other
similar rights in real property or any interest  therein,  provided the same are
not of such nature as to  materially  adversely  affect the use of the  property
subject thereto by the Corporation;

               (c) liens for taxes  either  not due and  payable  or due but for
which notice of assessment has not been given;

               (d)  undetermined  or  inchoate  liens,  charges  and  privileges
incidental to current  construction or current  operations and statutory  liens,
charges,  adverse  claims,  security  interests  or  encumbrances  of any nature
whatsoever claimed or held by any governmental authority that have not at the


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<PAGE>

time been filed or registered against the title to the asset or served upon the
Corporation pursuant to law or that relate to obligations not due or delinquent;

               (e)  assignments  of insurance  provided to  landlords  (or their
mortgagees)  pursuant to the terms or any lease and liens or rights  reserved in
any lease for rent or for compliance with the terms of such lease;

               (f) security given in the ordinary  course of the Business to any
public  utility,  municipality  or  government  or to any  statutory  or  public
authority in connection with the operations of the Business, other than security
for borrowed money;

               (g) the reservations in any original grants from the Crown of any
real property or interest therein and statutory  exceptions to title that do not
materially  detract from the value of the real property  concerned or materially
impair its use in the operation of the Business; and

               (h) those encumbrances described in Schedule 4;

        "Purchase Price" has the meaning set out in section 2.2;

        "Purchased Shares" has the meaning set out in section 2.1;

        "Real Property" has the meaning set out in section 3.  11;

        "Shares"  means  all  of  the  issued  shares  in  the  capital  of  the
Corporation;

        "Tax Act"  means the Income Tax Act  (Canada),  as amended  from time to
time;

        "Third Party" has the meaning set out in section 9.5;

        "Third Party Claim" has the meaning set out in section 9.3;

        "Time of Closing" means 10:00 a.m.  Guelph Time on the Closing Date; and

        "Transaction" means the transaction of purchase and sale of the
Purchased Shares contemplated by this Agreement.

1.2.    CURRENCY

        Unless otherwise indicated, all dollar amounts referred to in this
Agreement are expressed in Canadian funds.


1.3.    SECTIONS AND HEADINGS

        The  division of this  Agreement  into  sections  and the  insertion  of
headings  are for  convenience  of  reference  only and  shall  not  affect  the
interpretation of this Agreement.  Unless otherwise indicated,  any reference in
this Agreement to a section or a Schedule refers to the specified  section of or
Schedule to this Agreement.


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<PAGE>

1.4.    NUMBER, GENDER AND PERSONS

        In this  Agreement,  words  importing  the  singular  number  only shall
include the plural and vice versa,  words  importing  gender  shall  include all
genders and words  importing  persons shall include  individuals,  corporations,
partnerships,  associations, trusts, unincorporated organizations,  governmental
bodies and other legal or business entities.


1.5.    ACCOUNTING PRINCIPLES

        Any  reference  in  this  Agreement  to  generally  accepted  accounting
principles refers to generally accepted  accounting  principles as approved from
time to time by the Canadian Institute of Chartered Accountants or any successor
institute.


1.6.    ENTIRE AGREEMENT

        This Agreement constitutes the entire agreement between the parties with
respect to the  subject  matter  hereof  and  supersedes  all prior  agreements,
understandings,   negotiations  and   discussions,   whether  written  or  oral,
including,  without limitation, that certain letter of intent dated May 1, 2000,
between the Purchaser and the Vendors (save and except for the provisions  under
the  heading  "Confidentiality"  in the said  letter  of  intent).  There are no
conditions,   covenants,  agreements,   representations,   warranties  or  other
provisions, express or implied, collateral,  statutory or otherwise, relating to
the subject matter hereof except as herein provided.


1.7.    TIME OF ESSENCE

        Time shall be of the essence of this Agreement.


1.8.    APPLICABLE LAW

        This  Agreement   shall  be  construed,   interpreted  and  enforced  in
accordance with, and the respective  rights and obligations of the parties shall
be governed  by, the laws of the  Province  of Ontario  and the federal  laws of
Canada applicable therein, and each party hereby irrevocably and unconditionally
submits to the non-exclusive jurisdiction of the courts of such province and all
courts competent to hear appeals therefrom.


1.9.    SEVERABILITY

        If any provision of this  Agreement or any part of any provision of this
Agreement,  is  held to be  invalid,  illegal  or  unenforceable  by a court  of
competent  jurisdiction,  such  provision or part shall not affect the validity,
legality or  enforceability  of any other  provision  of this  Agreement  or the
balance of any  provision of this  Agreement  absent such part and such invalid,
illegal or  unenforceable  provision  or part shall be deemed to be severed from
this  Agreement  and this  Agreement  shall be construed and enforced as if such
invalid,  illegal or unenforceable  provision or part had never been inserted in
this Agreement.



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<PAGE>


1.10.   SUCCESSORS AND ASSIGNS

        This Agreement shall enure to the benefit of and shall be binding on and
enforceable by the parties and, where the context so permits,  their  respective
successors and permitted  assigns.  Subject to section 10.7, no party may assign
any of its rights or obligations  hereunder without the prior written consent of
the other parties.


1.11.   AMENDMENT AND WAIVERS

        No  amendment  or waiver of any  provision  of this  Agreement  shall be
binding on any party unless  consented to in writing by such party. No waiver of
any  provision  of  this  Agreement  shall  constitute  a  waiver  of any  other
provision,  nor shall any waiver constitute a continuing waiver unless otherwise
expressly provided.


1.12.   SCHEDULES

        The following Schedules are attached to and form part of this Agreement:

Schedule 1                     Annual Financial Statements
Schedule 2                     Interim Financial Statements
Schedule 3                     Location of Assets
Schedule 4                     Permitted Encumbrances
Schedule 5                     Owned and Leased Real Property
Schedule 6                     Intellectual Property
Schedule 7                     Insurance Policies
Schedule 8                     Material Contracts
Schedule 9                     Licences and Permits
Schedule 10                    Regulatory Consents
Schedule 11                    Third Party Consents
Schedule 12                    Legal and Regulatory Proceedings
Schedule 13                    Accounts and Attorneys
Schedule 14                    Directors and Officers
Schedule 15                    Related Party Transactions
Schedule 16                    Environmental Matters
Schedule 17                    Employee Matters
Schedule 18                    Major Customers
Schedule 19                    Product Warranties
Schedule 20                    Employment Agreement (Whittaker)
Schedule 20A                   Employment Agreement (MacArthur)
Schedule 21                    Form of Opinion of Vendor's Lawyers
Schedule 22                    Form of Release - From Vendors to Corporation
Schedule 23                    Form of Opinion of Purchaser's, US Lawyers
Schedule 24                    Form of Opinion of Purchaser's, Ontario Lawyers
Schedule 25                    Escrow Agreement
Schedule 26                    Promissory Note
Schedule 27                    Litigation Involving the Purchaser
Schedule 28                    Form of Release - From Corporation to Vendors




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<PAGE>

        For greater  certainty  (a) all  information  which is  disclosed on one
Schedule  shall  be  deemed  to be  disclosed  on all  Schedules;  and  (b)  the
disclosure  of  information  on the  Schedules  shall  not  be  deemed  to  have
established a standard of materiality.


                                   ARTICLE II.
                      PURCHASE AND SALE OF PURCHASED SHARES


2.1.    PURCHASE AND SALE OF PURCHASED SHARES

        Subject to the terms and  conditions  hereof,  the Vendors  covenant and
agree to sell, assign and transfer to the Purchaser and the Purchaser  covenants
and agrees to purchase from the Vendors all of the issued and outstanding shares
owned by the Vendors in the Corporation (the "Purchased Shares"), namely:

NAME                                              NUMBER AND CLASS OF SHARES
----                                              --------------------------

Whittaker                                         100 Class A common
MacArthur                                         100 Class B common

        The  Purchased  Shares shall be delivered to the Escrow Agent on Closing
subject to and in accordance with the terms of the Escrow  Agreement in the form
attached as Schedule 25.


2.2.    PURCHASE PRICE

        The  purchase  price  for  the  Purchased  Shares  shall  be the  sum of
$621,796.00 (the "Purchase Price"). The Purchase Price shall be satisfied by the
Purchaser on the Closing Date as follows:

               (a)  by  payment  of the  sum  of  $75,000.00  to  MacArthur  and
$75,000.00 to Whittaker, by way of certified cheque or bankers draft;

               (b) by  issuing  the ARS  Shares to the  Vendors,  100,000  to be
issued  in the name of  MacArthur  and  100,000  in the name of  Whittaker.  The
Vendors  acknowledge  and agree that while a notional value of  $300,000.00  has
been  attributed to the ARS Shares,  the Purchaser  makes no  representation  or
warranty  to the  Vendors  as to the  value  of ARS  Shares  (but,  for  greater
certainty,  this  acknowledgement and agreement shall not diminish or impair the
Vendors' rights under section 7 of the Escrow Agreement); and

               (c)  by  delivery  to  the  Vendors  of a  Promissory  Note  (the
"Promissory Note") substantially in the form set out in Schedule 26 securing the
principal sum of $171,796.00 (the "Principal Amount").


2.3.    CLOSING FINANCIAL STATEMENTS

        As soon as is  practicable,  and in any event not later than 60 calendar
days  following the Closing  Date,  the Vendors shall deliver to the Purchaser a
consolidated  balance sheet for the  Corporation  as of the close of business on
the  Closing  Date (the  "Closing  Balance  Sheet")  and a  consolidated  income


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<PAGE>

statement for the  Corporation for the period from April 30, 2000 to the Closing
Date (the  "Closing  Income  Statement")  each of which  shall be reported on by
Sheila Wierre,  Chartered Accountant.  The Closing Balance Sheet and the Closing
Income Statement  (collectively,  the "Closing  Financial  Statements") shall be
prepared in accordance with generally accepted accounting  principles applied on
a basis  consistent  with the Financial  Statements and shall present fairly the
consolidated  financial  position of the  Corporation as at the Closing Date and
the  consolidated  sales,  earnings  and  results of  operations  for the period
between April 30, 2000 and the Closing Date. If the Purchaser wishes the Closing
Financial  Statements  to be audited,  they shall be  responsible  for all costs
associated with having the Closing Financial Statements audited.


2.4.    DISPUTES CONCERNING CLOSING FINANCIAL STATEMENTS

        The parties, or their respective auditors, may dispute any aspect of the
Closing Financial  Statements by notice in writing given to the other within two
weeks following the delivery of the Closing Financial Statements to the parties.
Unless such dispute is not resolved  promptly by agreement,  the Vendors and the
Purchaser may request each of the  Corporation's  accountant and the Purchaser's
accountant  to  select  jointly  one of  Price  Waterhouse  Coopers  or  KPMG to
arbitrate  the dispute.  If the  Corporation's  accountant  and the  Purchaser's
accountant  are unable to agree as to the firm that will  arbitrate the dispute,
one of the two firms  proposed  above  shall be chosen by lot by counsel for the
Purchaser.  The firm chosen  shall  designate a partner  (the  "Arbitrator")  to
determine the matter in dispute as a single  arbitrator  in accordance  with the
ARBITRATIONS  ACT, 1991 (Ontario).  The cost of the arbitration  shall be in the
discretion of the Arbitrator. The decision of the Arbitrator with respect to any
matter in dispute (including as to all procedural matters and any decision as to
costs) shall be final and binding on the Vendors and the Purchaser and shall not
be subject to appeal by either party. Upon agreement with respect to all matters
in dispute,  or upon a decision of the Arbitrator with respect to all matters in
dispute,  such amendments shall be made to the Closing  Financial  Statements as
may be necessary to reflect such agreement or such decision, as the case may be.
In such event, references in this Agreement to the Closing Financial Statements,
Closing  Balance Sheet and Closing Income  Statement  shall refer to the Closing
Financial Statements, as so amended.


2.5.    PURCHASE PRICE ADJUSTMENT

        Intentionally Deleted.


                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES
                       OF THE VENDORS AND THE CORPORATION

        The Vendors and the  Corporation  jointly and  severally  represent  and
warrant to the  Purchaser  as follows  and  acknowledge  that the  Purchaser  is
relying on such  representations  and warranties in connection with its purchase
of the Purchased Shares:


3.1.    ORGANIZATION

        The  Corporation  is  duly   incorporated   and  organized  and  validly
subsisting under the laws of the Province of Ontario and has the corporate power
to own or lease its property, to carry on the Business as now being conducted by


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it, to enter into this Agreement and to perform its obligations  hereunder.  The
Corporation  is  duly  qualified  as  a  corporation  to  do  business  in  each
jurisdiction  in which the nature of the  Business  or the  property  and assets
owned or leased by it makes such qualification necessary.


3.2.    AUTHORIZATION

        This Agreement has been duly authorized,  executed and delivered by each
of the Vendors and the Corporation and is a legal,  valid and binding obligation
of each of the Vendors and the Corporation,  enforceable  against the Vendors or
the  Corporation,  as the case may be, by the Purchaser in  accordance  with its
terms, except as enforcement may be limited by bankruptcy,  insolvency and other
laws  affecting  the rights of  creditors  generally  and except that  equitable
remedies  may be  granted  only  in  the  discretion  of a  court  of  competent
jurisdiction.


3.3.    NO OTHER AGREEMENTS TO PURCHASE

        No person other than the Purchaser has any written or oral agreement or
option or any right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an agreement or option for the purchase or acquisition from
the Vendors of any of the Purchased Shares.


3.4.    AUTHORIZED AND ISSUED CAPITAL

        The  authorized  capital of the  Corporation  consists  of an  unlimited
number  of Class A Common  Shares,  and an  unlimited  number  of Class B Common
Shares of which  only 100 Class A Shares  and 100 Class B Shares  have been duly
issued and are outstanding as fully paid and nonassessable. The Purchased Shares
represent  all of the  issued  and  outstanding  shares  in the  capital  of the
Corporation.


3.5.    OPTIONS

        No person,  firm or corporation has any agreement or option or any right
or privilege (whether by law, pre-emptive or contractual) capable of becoming an
agreement, including convertible securities, warrants or convertible obligations
of any nature,  for the  purchase,  subscription,  allotment  or issuance of any
unissued shares or other securities of the Corporation.


3.6.    OWNERSHIP OF PURCHASED SHARES

        The Vendors are the beneficial owners of record of the Purchased Shares,
with good and marketable title thereto,  free and clear of all Encumbrances and,
without  limiting the generality of the foregoing,  none of the Purchased Shares
are subject to any voting trust, shareholder agreement or voting agreement.


3.7.    NO SUBSIDIARIES

        The  Corporation  does not own and does not have any  agreements  of any
nature to acquire, directly or indirectly, any shares in the capital of or other
equity or  proprietary  interests in any person,  firm or  corporation,  and the


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Corporation  does not have any agreements to acquire or lease any other business
operations.


3.8.    NO VIOLATION

        The  execution  and  delivery of this  Agreement  by the Vendors and the
Corporation and the  consummation of the  transactions  herein provided for will
not result in either:

               (a) the  breach  or  violation  of any of the  provisions  of, or
constitute a default under,  or conflict with or cause the  acceleration  of any
obligation of the Vendors or the Corporation under:

                      (i) any  Contract to which the Vendors or the  Corporation
is a party or by which any of them is, or either of their properties are, bound;

                      (ii) any provision of the constating documents, by-laws or
resolutions of the board of directors (or any committee thereof) or shareholders
of the Corporation;

                      (iii) any judgment,  decree,  order or award of any court,
governmental  body or  arbitrator  having  jurisdiction  over the Vendors or the
Corporation;

                      (iv)   any   licence,   permit,   approval,   consent   or
authorization  held  by the  Vendors  or the  Corporation  or  necessary  to the
ownership of the Purchased Shares or the operation of the Business; or

                      (v) to the best of the Vendors' knowledge,  any applicable
law, statute, ordinance, regulation or rule; or

               (b) the creation or imposition of any  Encumbrance  on any of the
Purchased Shares or any of the property or assets of the  Corporation,  save and
except as contemplated by this Agreement or any of the documents to be delivered
on Closing.


3.9.    BUSINESS OF THE CORPORATION

        The  Business  is  the  only  business   operation  carried  on  by  the
Corporation.  During the two years preceding the date of this  Agreement,  there
has not been any significant  interruption of operations  (being an interruption
of more than one day) of the Business due to  inadequate  maintenance  of any of
the property and assets owned and used by the Corporation. With the exception of
inventory in transit,  all the tangible assets of the Corporation are situate at
the locations set out in Schedule 3.


3.10.   TITLE TO PERSONAL AND OTHER PROPERTY

        The  property  and  assets  of the  Corporation  (other  than  the  Real
Property) are owned  beneficially  by the  Corporation as the  beneficial  owner
thereof  with a good  and  marketable  title  thereto,  free  and  clear  of all
Encumbrances  other than (a) the  Permitted  Encumbrances;  and (b) the security
interest  registered  in  favour  of  The  Toronto-Dominion   Bank  and  bearing
Registration  No. 19991203 1424 1530 6624, which shall be discharged on or prior
to Closing.


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<PAGE>



3.11.   LOCATION OF REAL PROPERTY

        Schedule 5 sets forth the  municipal  address of the premises  leased by
the Corporation (the "Leased  Property").  The Corporation does not own or lease
and has not agreed to acquire or lease any real  property  or  interest  in real
property and the Leased Property.


3.12.   TITLE TO REAL PROPERTY

        The Corporation is not the beneficial or registered owner of and has not
agreed to acquire any real property or any interest in any real property.


3.13.   REAL PROPERTY LEASES

               (a) The  Corporation  is not a party to any lease or agreement in
the  nature of a lease in  respect  of any real  property,  whether as lessor or
lessee, other than the leases (the "Leases") described in Schedule 5 relating to
the Leased Property.

               (b) Schedule 5 describes each of the Leases.

               (c) Except as described in Schedule 5, the  Corporation  occupies
the Leased  Property  and has the  exclusive  right to occupy and use the Leased
Property in accordance with the terms of the Leases.

               (d) Each of the Leases is in good  standing and in full force and
effect without amendment  thereto,  and, to the best of the Vendor's  knowledge,
neither  the  Corporation  nor any  other  party  thereto  is in  breach  of any
covenants, conditions or obligations contained therein.

               (e) The  Vendors  have  provided a true copy of each Lease to the
Purchaser.


3.14.   INVENTORIES

        The  inventories  of the  Corporation  do not include any material items
that are slow  moving,  below  standard  quality or of a quality or quantity not
useable or saleable in the normal course of business, the value of which has not
been written down on its books of account to net  realizable  market value.  The
inventory  levels of the Corporation have been maintained at such amounts as are
required  for the  operation  of the  Business as  previously  conducted  and as
proposed to be conducted, and such inventory levels are adequate therefor.


3.15.   ACCOUNTS RECEIVABLE

        To the best of the Vendors'  knowledge,  all accounts  receivable,  book
debts and other debts due or accruing to the  Corporation are bona fide and good
and,  subject to an allowance for doubtful  accounts that has been  reflected on
the books of the  Corporation in accordance with generally  accepted  accounting
principles, are collectible without act-off or counterclaim.



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<PAGE>

3.16.   INTELLECTUAL PROPERTY

               (a) The Corporation does not have any trade names (other than its
corporate name and any derivative or short form thereof), registered trade-mark
rights, industrial designs, copyrights (other than unregistered copyright in
mechanical drawings prepared by the Corporation in the ordinary course of its
business) or patents.

               (b) Neither the Vendors nor the Corporation:

                      (i) is aware of a claim of any  infringement  or breach of
any  industrial  or  intellectual  property  rights of any  other  person by the
Corporation; or

                      (ii) have  received  any  notice  that the  conduct of the
Business  infringes  upon or breaches any  industrial or  intellectual  property
rights of any other person.

               (c) To the best of the  Vendors'  knowledge,  but without  having
made any  enquiries  (but the  failure to make  enquiries  shall not relieve the
Vendors  from  responsibility  if they  have  actual  knowledge  or  notice of a
matter),  the conduct of the Business does not infringe upon the patents,  trade
marks,  licences,  trade names, business names, copyright or other industrial or
intellectual property rights, domestic or foreign, of any other person.


3.17.   INSURANCE

               (a)  The  Corporation  has in  effect  the  insurance  set out on
Schedule 7.

               (b) Schedule 7 sets out all insurance  policies  (specifying  the
insurer,  the type of  insurance,  the  policy  number  and any  pending  claims
thereunder)  maintained  by  the  Corporation  on its  property  and  assets  or
personnel as of the date hereof and true and complete  copies of the most recent
inspection reports, if any, received from insurance underwriters or others as to
the condition of the property and assets of the Corporation.

               (c) The  Corporation is not in default with respect to any of the
provisions contained in any such insurance policy and has not failed to give any
notice or present any claim under any such insurance  policy in a due and timely
fashion.

               (d) The Vendors have provided to the Purchaser, or made available
for the Purchaser's inspection, a true copy of each insurance policy referred to
in Schedule 7.


3.18.   NO EXPROPRIATION

        No property or asset of the  Corporation  has been taken or expropriated
by any federal,  provincial,  state,  municipal or other  authority  nor has any
notice or  proceeding  in respect  thereof  been given or  commenced  nor is the
Vendors  or the  Corporation  aware of any intent or  proposal  to give any such
notice or commence any such proceeding.



                                       12
<PAGE>


3.19.   AGREEMENTS AND COMMITMENTS

        Except as described on Schedule 5, 6, 8, 17 and 19, the  Corporation  is
not a party  to or bound  by any  Contract  relating  to the  property,  assets,
Business or  operations  of the  Corporation,  including,  without  limiting the
generality of the foregoing:

               (a) any distributor,  sales, advertising, agency or manufacture's
representative Contract;

               (b) any  collective  bargaining  agreement or other contract with
any labour union;

               (c) any  continuing  Contract  for  the  purchase  of  materials,
supplies, equipment or services;

               (d) any  employment or  consulting  Contract or any other written
Contract with any officer,  employee or consultant  other than oral Contracts of
indefinite hire terminable by the employer without cause on reasonable notice;

               (e) any profit sharing, bonus, stock option, pension, retirement,
disability,  stock  purchase,  medical,  dental,  hospitalization,  insurance or
similar plan or agreement  providing benefits to any current or former director,
officer, employee or consultant;

               (f) any  trust  indenture,   mortgage,   promissory  note,  loan
agreement,  guarantee or other  Contract for the borrowing of money or a leasing
transaction of the type required to be capitalized in accordance  with generally
accepted accounting principles;

               (g) any commitment for charitable contributions;

               (h) any Contract for capital expenditures in excess of $10,000.00
in the aggregate;

               (i) any Contract for the sale of any assets,  other than sales of
inventory to customers in the ordinary course of the Business;

               (j) any Contract pursuant to which the Corporation is a lessor of
any machinery,  equipment,  motor vehicles, office furniture,  fixtures or other
personal property;

               (k) any  confidentiality,  secrecy  or  non-disclosure  Contract
(whether the Corporation is a beneficiary or obliger thereunder) relating to any
proprietary  or  confidential  information  or any  non-competition  or  similar
Contract;

               (l) any  licence,  franchise or other  agreement  that relates in
whole or in part to any Intellectual Property;

               (m) any  agreement  of  guarantee,   support,   indemnification,
assumption or endorsement  of, or any other similar  commitment with respect to,
the obligations, liabilities (whether accrued, absolute, contingent or


                                       13
<PAGE>

otherwise) or indebtedness of any other person (except for cheques  endorsed for
collection);

               (n) any Contract that  expires,  or may expire if the same is not
renewed or extended at the option of any person other than the Corporation;

               (o) any Contract  entered into by the  Corporation  other than in
the ordinary course of the Business.

        The Corporation has performed, or is performing,  all of the obligations
required to be performed by it and is entitled to all  benefits  under,  and, to
the best of the  Vendors'  knowledge,  is not in  default  or  alleged  to be in
default in respect of, any  Contract  relating to the  Business to which it is a
party or by which it is bound,  all such  Contracts  are in good standing and in
full force and effect,  and, to the best of the  Vendors'  knowledge,  no event,
condition  or  occurrence  exists  that,  after notice or lapse of time or both,
would constitute a material default under any of the foregoing.  The Vendors has
provided to the Purchaser, or made available for the Purchaser's  inspection,  a
true and complete copy of each  Contract  listed or described on Schedules 5, 6,
8, 17 and 19 and all amendments thereto.


3.20.   COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATION

               (a) To the best of the  Vendors'  knowledge,  but without  making
enquiries (but the failure to make enquiries  shall not relieve the Vendors from
responsibility  if they  have  actual  knowledge  or notice  of a  matter),  the
Corporation  has  complied  with  all Laws  applicable  to the  Business  or the
Corporation.

               (b) Schedule  9 sets out a  complete  and  accurate  list of all
licences,  permits,  approvals,   consents,   certificates,   registrations  and
authorizations (whether governmental,  regulatory or otherwise) (the "Licences")
held by or granted to the Corporation, and there are no other licences, permits,
approvals, consents, certificates,  registrations or authorizations necessary to
carry on the Business or to own or lease any of the property or assets  utilized
by the Corporation.

               (c) Each Licence is valid,  subsisting  and in good  standing and
the Corporation is not in default or breach of any Licence and, to the knowledge
of the Vendors,  no  proceeding  is pending or threatened to revoke or limit any
Licence.

               (d) The Vendors have  provided a true and  complete  copy of each
Licence and all amendments thereto to the Purchaser,  or made same available for
the Purchaser's inspection.


3.21.   CONSENTS AND APPROVALS

               (a) There is no  requirement  on the part of the  Vendors  or the
Corporation  to make any  filing  with,  give any  notice  to or to  obtain  any
licence, permit, certificate,  registration,  authorization, consent or approval
of, any  governmental  or  regulatory  authority  as a  condition  to the lawful
consummation of the transactions contemplated by this Agreement,  except for the
filings, notifications, licences, permits, certificates, registrations, consents


                                       14
<PAGE>

and approvals  described in Schedule 10 or that relate solely to the identity of
the Purchaser or the nature of any business carried on by the Purchaser.

               (b) There is no  requirement  under any Contract  relating to the
Business or the  Corporation to which the Vendors or the  Corporation is a party
or by which it is bound to give any  notice  to, or to  obtain  the  consent  or
approval of, any party to such agreement,  instrument or commitment  relating to
the consummation of the  transactions  contemplated by this Agreement except for
the notifications, consents and approvals described in Schedule 11.

3.22.   FINANCIAL STATEMENTS

        The Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior periods,
are correct and complete  and present  fairly the assets,  liabilities  (whether
accrued,  absolute,  contingent  or otherwise)  and  financial  condition of the
Corporation  as at the  respective  dates of the  Financial  Statements  and the
sales,  earnings and results of operations of the Corporation for the respective
periods  covered  by  the  Financial  Statements.  When  prepared,  the  Closing
Financial  Statements  will be prepared in accordance  with  generally  accepted
accounting  principles  applied  on a basis  consistent  with  those used in the
preparation  of the Audited  Financial  Statements  and will present  fairly the
financial  position and results of operations of the Corporation as at the close
of business on the Closing Date.


3.23.   BOOKS AND RECORDS

        The books and records of the Corporation fairly and correctively set out
and disclose in accordance  with generally  accepted  accounting  principles the
financial  position of the  Corporation  as at the date hereof and all financial
transactions of the Corporation have been accurately  recorded in such books and
records.

3.24.   ABSENCE OF CHANGES

        Since  July  31,  1999 the  Corporation  has  carried  on  Business  and
conducted  its  operations  and affairs only in the  ordinary and normal  course
consistent with past practice and there has not been:

               (a) any material  adverse  change in the condition  (financial or
otherwise), assets, liabilities,  operations, earnings, business or prospects of
the Corporation;

               (b) any damage,  destruction  or loss  (whether or not covered by
insurance) affecting the property or assets of the Corporation;

               (c) any  obligation  or  liability  (whether  absolute,  accrued,
contingent  or  otherwise,  and whether  due or to become  due)  incurred by the
Corporation,  other than those  incurred in the ordinary  and normal  course and
consistent with past practice;

               (d) any payment,  discharge or satisfaction  of any  Encumbrance,
liability  or  obligation  of  the  Corporation   (whether  absolute,   accrued,
contingent or otherwise, and whether due or to become due) other than payment of


                                       15
<PAGE>

accounts payable and tax liabilities incurred in the ordinary course of business
consistent with past practice;

               (e) any declaration,  setting aside or payment of any dividend or
other  distribution with respect to any shares in the capital of the Corporation
or any direct or indirect redemption,  purchase or other acquisition of any such
shares, other than as shown on the Financial Statements;

               (f) any  issuance  or sale by the  Corporation,  or any  Contract
entered into by the Corporation, for the issuance or sale by the Corporation, of
any shares in the capital of or securities  convertible  into or exercisable for
shares in the capital of the Corporation;

               (g) any labour trouble adversely affecting the Corporation;

               (h) any licence, sale, assignment, transfer, disposition, pledge,
mortgage or granting of a security interest or other Encumbrances on or over any
property  or  assets  of the  Corporation,  other  than  sales of  inventory  to
customers in the ordinary and normal course of the Business;

               (i) any extraordinary write-down of the value of any inventory or
any  write-off  as  uncollectible  of any  accounts or notes  receivable  or any
portion thereof of the Corporation;

               (j) extraordinary  cancellation  of any  debts or  claims or any
amendment, termination or waiver of any rights of value to the Corporation;

               (k) other than  increases  in the  ordinary  course,  any general
increase in the compensation of employees of the Corporation, or any increase in
any such compensation or bonus payable to any officer,  employee,  consultant or
agent thereof  (having an annual salary or remuneration in excess of $20,000.00)
or the execution of any employment contract with any officer or employee (having
an annual salary or remuneration in excess of $20,000.00),  or the making of any
loan to, or  engagement  in any  transaction  with,  any  employee,  officer  or
director of the Corporation;

               (l) any capital expenditures or commitments of the Corporation in
excess of $10,000.00 in the aggregate;

               (m) any   forward   purchase   commitments   in  excess  of  the
requirements of the Corporation  for normal  operating  inventories or at prices
higher than the current market prices;

               (n) any forward sales  commitments other than in the ordinary and
normal  course of the Business or any failure to satisfy any accepted  order for
goods or services;

               (o) any change in the accounting or tax practices followed by the
Corporation;

               (p) any change adopted by the Corporation in its  depreciation or
amortization policies or rates; or




                                       16
<PAGE>


               (q) any change in the credit terms offered to customers of, or by
suppliers to, the Corporation.


3.25.   TAXES

               (a) The  Corporation  has duly  filed on a timely  basis  all tax
returns  required  to be filed by it and has  paid  all  taxes  that are due and
payable, and all assessments,  reassessments,  governmental charges,  penalties,
interest and fines due and payable by it.

               (b) The Corporation has made adequate provision for taxes payable
by it for the current  period and any previous  period for which tax returns are
not yet required to be filed.

               (c) There are no actions, suits,  proceedings,  investigations or
claims  pending  or,  to the  knowledge  of the  Corporation  and  the  Vendors,
threatened against, the Corporation in respect of taxes, governmental charges or
assessments, nor are any material matters under discussion with any governmental
authority relating to taxes, governmental charges or assessments asserted by any
such authority.

               (d) The Corporation has withheld from each payment made to any of
its past or present employees, officers or directors, and to any non-resident of
Canada,  the amount of all taxes and other  deductions  required  to be withheld
therefrom  and has paid the same to the proper tax or other  receiving  officers
within the time required under any applicable legislation.

               (e) The Corporation has remitted to the appropriate tax authority
when required by law to do so all amounts collected by it on account of GST.

               (f) The Canadian  federal income tax liability of the Corporation
has been assessed by Revenue Canada for all fiscal years up to and including the
fiscal  year ended July 31, 1999 and there are no  agreements,  waivers or other
arrangements  providing  for an  extension of time with respect to the filing of
any tax  return by, or payment  of any tax,  governmental  charge or  deficiency
against, the Corporation.

               (g) The Vendors has provided to the Purchaser,  or mace available
for the  Purchaser's  inspection,  a true copy of all tax  returns  filed by the
Corporation  in  respect  of  the  five  last  completed  fiscal  years  of  the
Corporation.


3.26.   LITIGATION

        Except as  described  in Schedule  12,  there are no  actions,  suits or
proceedings  (whether or not purportedly on behalf of the  Corporation)  pending
or, to the knowledge of the Vendors or the  Corporation,  threatened  against or
affecting,  the  Corporation  at law or in equity,  or before or by any federal,
provincial,  municipal  or other  governmental  department,  court,  commission,
board, bureau,  agency or instrumentality,  domestic or foreign, or by or before
an arbitrator or arbitration  board.  Neither the Vendors nor the Corporation is
aware of any  ground  on which  any such  action,  suit or  proceeding  might be
commenced with any reasonable likelihood of success.



                                       17
<PAGE>


3.27.   RESIDENCY

        The Vendors are residents of Canada for the purposes of the Tax Act.


3.28.   GST REGISTRATION

        The   Corporation  is  a  registrant  for  purposes  of  the  ETA  whose
registration number is #135989499.


3.29.   ACCOUNTS AND ATTORNEYS

        Schedule 13 sets forth a true and complete list showing:

               (a) the name of each bank,  trust company or similar  institution
in which the  Corporation  has  accounts or safe  deposit  boxes,  the number or
designation  of each  such  account  and safe  deposit  box and the names of all
persons authorized to draw thereon or to have access thereto; and

               (b) the  name of  each  person,  firm,  corporation  or  business
organization holding a general or special power of attorney from the Corporation
and a summary of the terms thereof.


3.30.   DIRECTORS AND OFFICERS

        Schedule  14 sets  forth the names and  titles of all the  officers  and
directors of the Corporation.


3.31.   DIVIDENDS

        Except as shown on the  Financial  Statements,  since July 31,  1999 the
Corporation has not,  directly or indirectly,  declared or paid any dividends or
declared  or made any other  distribution  on any of its shares of any class and
has not, directly or indirectly,  redeemed,  purchased or otherwise acquired any
of its outstanding shares of any class or agreed to do so.


3.32.   NON-ARM'S LENGTH TRANSACTIONS

               (a) The  Corporation has not since July 31, 1999 made any payment
or loan to, or  borrowed  any  moneys  from or is  otherwise  indebted  to,  any
officer,  director,  employee,  shareholder  or any other  person not dealing at
arm's length with the Corporation (within the meaning of the Tax Act), except as
disclosed  in the Audited  Financial  Statements  and except for usual  employee
reimbursements  and  compensation  paid in the ordinary and normal course of the
Business.

               (b) Except for Contracts of employment,  the Corporation is not a
party to any Contract with any officer, director,  employee,  shareholder or any
other  person not  dealing at arm's  length  with the  Corporation  (within  the
meaning of the Tax Act).

               (c) No officer, director or shareholder of the Corporation and no
entity that is an Affiliate or Associate of one or more such individuals:



                                       18
<PAGE>

                      (i) owns, directly or indirectly,  any interest in (except
for shares  representing less than one per cent of the outstanding shares of any
class or series of any publicly  traded  company),  or is an officer,  director,
employee or consultant  of, any person which is, or is engaged in business as, a
competitor of the Business or the  Corporation  or a lessor,  lessee,  supplier,
distributor, sales agent or customer of the Business or the Corporation;

                      (ii) owns,  directly or  indirectly,  in whole or in part,
any property that the Corporation uses in the operation of the Business; or

                      (iii) has any cause of  action or other  claim  whatsoever
against, or owes any amount to, the Corporation in connection with the Business,
except for any  liabilities  reflected in the Audited  Financial  Statements and
claims in the  ordinary  and  normal  course of  business,  such as for  accrued
vacation pay and accrued benefits under the Employee Plans.


3.33.   ENVIRONMENTAL

               (a) Except as  described  in  Schedule  16 and to the best of the
Vendors'  knowledge,  the  Corporation  has been and is in  compliance  with all
applicable Laws and orders,  directives and decisions  rendered by any ministry,
department  or  administrative  or  regulatory  agency   ("Environmental  Laws")
relating to the protection of the environment, occupational health and safety or
the manufacture,  processing,  distribution,  use, treatment, storage, disposal,
discharge, transport or handling of any pollutants,  contaminants,  chemicals or
industrial, toxic or hazardous wastes or substances ("Hazardous Substances").

               (b) The   Corporation   has  obtained  all  licences,   permits,
approvals, consents, certificates,  registrations and other authorizations under
Environmental Laws (the  "Environmental  Permits") required for the operation of
the  Business,  all of which are  described  in Schedule  9. Each  Environmental
Permit is valid,  subsisting and in good standing and the  Corporation is not in
default or breach of any Environmental  Permit and no proceeding is pending,  or
threatened, to revoke or limit any Environmental Permit.

               (c) The Corporation has not used or permitted to be used,  except
in compliance with all  Environmental  Laws, any of its property  (including the
Leased  Property) or  facilities  or any property or facility that it previously
owned or leased,  to generate,  manufacture,  process,  distribute,  use, treat,
store, dispose of, transport or handle any Hazardous Substance.

               (d) The  Corporation  has never  received any notice of, nor been
prosecuted for an offence alleging,  non-compliance with any Environmental Laws,
and  neither  the Vendors nor the  Corporation  has  settled any  allegation  on
noncompliance  short of prosecution.  There are no orders or directions relating
to environmental  matters requiring any work,  repairs,  construction or capital
expenditures  with respect to the  Business or any property of the  Corporation,
nor has the Corporation received notice of any of the same.

               (e) Except  as  disclosed  in  Schedule  16,  to the best of the
Vendors'  knowledge,  but without  making any enquiries (but the failure to make
enquiries shall not relieve the Vendors from  responsibility if they have actual
knowledge  or notice of a matter),  there are no pending or proposed  changes to
Environmental Laws that would render illegal or restrict the manufacture or sale
of any product manufactured or sold or service provided by the Corporation.


                                       19
<PAGE>


               (f) The Corporation has not caused or permitted, nor does it have
any  knowledge  of, the  release,  in any manner  whatsoever,  of any  Hazardous
Substance  on or  from  any  of its  properties  (including  any  of the  Leased
Property)  or assets or any  property or facility  that it  previously  owned or
leased,  or any such  release on or from a facility  owned or  operated by third
parties  but with  respect  to which the  Corporation  is or may  reasonably  be
alleged to have  liability.  All Hazardous  Substances  and all other wastes and
other  materials and substances  used in whole or in part by the  Corporation or
resulting  from the  Business  have been  disposed  of,  treated  and  stored in
compliance  with all  Environmental  Laws.  Schedule  16  identifies  all of the
locations where Hazardous Substances used in whole or in part by the Corporation
have been or are being stored.  The  Corporation  retains the services of Safety
Klean to dispose of Hazardous Substances.

               (g) The  Corporation  has not  received  any  notice  that it is
potentially responsible for a federal,  provincial,  municipal or local clean-up
site or corrective action under any Environmental  Laws. The Corporation has not
received any request for information in connection with any federal, provincial,
municipal or local inquiries as to disposal sites.

               (h) The Vendors have delivered to the Purchaser true and complete
copies of all environmental audits, evaluations,  assessments,  studies or tests
relating to the Corporation of which it is aware, or made same available for the
Purchaser's inspection.


3.34.   EMPLOYEE PLANS

               (a) Schedule 17 identifies each retirement, pension, bonus, stock
purchase,  profit sharing,  stock option,  deferred  compensation,  severance or
termination pay, insurance,  medical,  hospital, dental, vision care, drug, sick
leave, disability, salary continuation,  legal benefits,  unemployment benefits,
vacation,  incentive or other compensation plan or arrangement or other employee
benefit  that is  maintained  or  otherwise  contributed  to, or  required to be
contributed  to, by the  Corporation  for the  benefit  of  employees  or former
employees of the Corporation (the "Employee Plans") and a true and complete copy
of each Employee Plan has been furnished to the Purchaser, or made available for
the Purchaser's inspection.

               (b) Each Employee Plan has been maintained in compliance with its
terms and with the  requirements  prescribed  by any and all  statutes,  orders,
rules and regulations that are applicable to such Employee Plan.


3.35.   COLLECTIVE AGREEMENTS

        Except as  described in Schedule  17, the  Corporation  has not made any
Contracts with any labour union or employee  association nor made commitments to
or conducted  negotiations  with any labour union or employee  association  with
respect to any future  agreements and, except as set out in Schedule 17, neither
the Vendors nor the Corporation is aware of any current  attempts to organize or
establish any labour union or employee association with respect to any employees
of the Corporation, nor is there any certification of any such union with regard
to a bargaining unit.



                                       20
<PAGE>


3.36.   EMPLOYEES

               (a)  Schedule 17  contains a complete  and  accurate  list of the
names  of all  individuals  who are  employees  or  sales  or  other  agents  or
representatives of the Corporation specifying:

                      (i) intentionally deleted;

                      (ii) with respect to salaried employees and sales or other
agents or representatives, the length of service, age, title, rate of salary and
commission structure for each such employee, agent or representative.

               (b) No notice has been received by the Corporation of:

                      (i) any complaint  filed by any of the  employees  against
the  Corporation  claiming  that the  Corporation  has violated  the  EMPLOYMENT
STANDARDS  ACT (Ontario) or the HUMAN RIGHTS CODE  (Ontario) (or any  applicable
employee or human rights or similar  legislation in the other  jurisdictions  in
which the Business is conducted or the Corporation operates); or

                      (ii) any  complaints or  proceedings of any kind involving
the Corporation  or, to the Vendors' and the  Corporation's  knowledge,  without
making any enquiries  (but the failure to make  enquiries  shall not relieve the
Vendors  from  responsibility  if they  have  actual  knowledge  or  notice of a
matter),  any of the employees of the  Corporation  before any labour  relations
board, except as disclosed in Schedule 17.

               (c) There  are no  outstanding  orders or  charges  against  the
Corporation  under  the  OCCUPATIONAL   HEALTH  AND  SAFETY  ACT  (Ontario)  (or
applicable health and safety legislation in the other jurisdictions in which the
Business is conducted.)

               (d) All  levies,  assessments  and  penalties  made  against  the
Corporation  pursuant  to the  WORKERS'  COMPENSATION  ACT  (Ontario)  (and  any
applicable workers' compensation legislation in the other jurisdictions in which
the Business is conducted) have been paid by the Corporation and the Corporation
has not been reassessed under any such legislation during the past 5 years.


3.37.   EMPLOYEE ACCRUALS

        All  accruals  for  unpaid  vacation  pay,   premiums  for  unemployment
insurance,  health  premiums,  Canada  Pension  Plan  premiums,  accrued  wages,
salaries and commissions and employee  benefit plan payments have been reflected
in the books and records of the Corporation.


3.38.   CUSTOMERS AND SUPPLIERS

        Schedule 18 sets out a customer list showing the Corporation's customers
for the period August 1, 1999 to June 6, 2000.  There has been no termination or
cancellation  of, and no modification or change in, the  Corporation's  business
relationship with any of the customers shown on Schedule 18. The Corporation has


                                       21
<PAGE>

no reason to  believe  that the  benefits  of any  relationship  with any of the
customers  listed on Schedule  18 will not  continue  after the Closing  Date in
substantially  the same  manner as prior to the date of the  Agreement,  but the
Vendors and the Corporation  make no  representation  or warranty  regarding the
likelihood of such customers making future purchases from the Corporation.


3.39.   PRODUCT WARRANTIES

        Schedule 19 is a complete list of all express,  written warranties given
to purchasers of products supplied by the Corporation.


3.40.   FULL DISCLOSURE

        Neither this Agreement nor any document to be delivered pursuant to this
Agreement  by the  Vendors  or the  Corporation  nor  any  certificate,  report,
statement or other document  furnished by the by the Vendors or the  Corporation
in connection with the closing of the Transaction contains, or will contain, any
untrue  statement  of a material  fact or omits or will omit to state a material
fact  necessary  to  make  the  statements   contained  herein  or  therein  not
misleading.


                                   ARTICLE 4.
                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

        The  Purchaser  represents  and  warrants  to the Vendors as follows and
acknowledges  and confirms  that the Vendors is relying on such  representations
and  warranties  in  connection  with the sale by the  Vendors of the  Purchased
Shares:


4.1.    ORGANIZATION

        The Purchaser is a corporation  validly subsisting under the laws of the
State of New Hampshire and it has the corporate  power to enter into and perform
its obligations pursuant to this Agreement.


4.2.    ARS SHARES

               (a) The  securities  of the  Purchaser are listed or approved for
listing on the National  Association of Securities  Dealers Automated  Quotation
Market System.

               (b) The ARS Shares shall,  when issued:  (a) be validly issued by
the  Corporation in accordance  with all  applicable  Laws  (including,  without
limitation,  securities  Laws) and the  requirements of the NASD OTCBB Exchange;
(b) are  outstanding as fully paid and  non-assessable  shares in the capital of
the  Corporation;  (c) be free and clear of all  Encumbrances  (except as may be
created by the  Vendors);  (d) not be subject to any voting  trust,  shareholder
agreement or voting agreement, except as contemplated by this Agreement; and (e)
be  "Restricted  Securities"  as that term is defined in Rule  144(a)(3)  of the
United States  Securities  and Exchange  Commission and may not be resold by the
Vendors in the absence of registration or exemption from registration.



                                       22
<PAGE>

4.3.    NO VIOLATION

        The  execution  and delivery of this  Agreement by the Purchaser and the
consummation of the transactions herein provided for will not result in either:

               (a) the  breach  or  violation  of any of the  provisions  of, or
constitute a default under,  or conflict with or cause the  acceleration  of any
obligation of the Purchaser under:

                      (i) any  Contract to which the  Purchaser is a party or by
which it is bound;

                      (ii) any provision of the constating  documents or by-laws
or  resolutions  of the  board  of  directors  (or  any  committee  thereof)  or
shareholders of the Purchaser;

                      (iii) any judgment,  decree,  order or award of any court,
governmental body or arbitrator having jurisdiction over the Purchaser;

                      (iv) any applicable, law, statute,  ordinance,  regulation
or rule,  including,  without  limitation,  the  rules  and  regulations  of any
securities exchange on which the shares of the Purchaser are listed for trading;

               (b) the creation or imposition of any  Encumbrance  on any of the
ARS Shares, when issued, or of any of the property or assets of the Purchaser.


4.4.    AUTHORIZATION

        This Agreement has been duly  authorized,  executed and delivered by the
Purchaser  and is a  legal,  valid  and  binding  obligation  of the  Purchaser,
enforceable  against the Purchaser by the Vendors in accordance  with its terms,
except as enforcement  may be limited by  bankruptcy,  insolvency and other laws
affecting  the  enforcement  of rights of  creditors  generally  and except that
equitable remedies may only be granted in the discretion of a court of competent
jurisdiction.


4.5.    CONSENTS AND APPROVALS

        There is no requirement  for the Purchaser to make any filing with, give
any  notice  to  or  obtain  any  licence,  permit,  certificate,  registration,
authorization, consent or approval of, any government or regulatory authority as
a condition to the lawful consummation of the transactions  contemplated by this
Agreement.


4.6.    INVESTMENT CANADA ACT

        The  Purchaser  is a  "non-Canadian"  for the purposes of and within the
meaning of the Investment Canada Act.



                                       23
<PAGE>


4.7.    LITIGATION

        Except as  described  in Schedule  27,  there are no  actions,  suits or
proceedings  (whether or not purportedly on behalf of the Purchaser) pending or,
to  the  knowledge  of the  Purchaser,  threatened  against  or  affecting,  the
Purchaser  at  law or in  equity,  or  before  or by  any  federal,  provincial,
municipal or other governmental department,  court,  commission,  board, bureau,
agency or instrumentality, domestic or foreign, or by or before an arbitrator or
arbitration  board.  The  Purchaser is not aware of any ground on which any such
action, suit or proceeding might be commenced with any reasonable  likelihood of
success.


4.8.    BUSINESS PROSPECTS

        The Purchaser knows of no reason why the  Purchaser's  business would be
likely to decline after the Closing Date, subject to the Purchaser's  management
ability and normal business risks.


4.9.    FULL DISCLOSURE

        Neither this Agreement nor any document to be delivered pursuant to this
Agreement  by the  Purchaser  nor any  certificate,  report,  statement or other
document  furnished  by the  Purchaser  in  connection  with the  closing of the
Transaction  contains,  or will contain, any untrue statement of a material fact
or omits or will omit to state a material fact  necessary to make the statements
contained herein or therein not misleading.


                                   ARTICLE V.
                   SURVIVAL OF REPRESENTATIONS AND WARRANTIES


5.1.    SURVIVAL  OF  REPRESENTATIONS  AND  WARRANTIES  OF THE  VENDORS  AND THE
CORPORATION

        To the extent that they have not been fully performed at or prior to the
Time of Closing,  the covenants,  representations  and warranties of the Vendors
and the Corporation  contained in this Agreement and any agreement,  instrument,
certificate  or other  document  executed or  delivered  pursuant  hereto  shall
survive  the  closing  of  the  transactions   contemplated   hereby  until  the
anniversary  of the Closing  Date and,  notwithstanding  such  closing,  nor any
investigation  made by or on behalf of the  Purchaser,  shall  continue  in full
force and effect for the benefit of the  Purchaser  during such  period,  except
that:

               (a) the  representations  and warranties set out in sections 3.1,
3.2, 3.3, 3.4, 3.5 and 3.6 (and the corresponding representations and warranties
set out in the certificates to be delivered  pursuant to subsection 7.1 (a) (the
"Closing  Certificates"))  shall  survive and  continue in full force and effect
without limitation of time;

               (b) the  representations  and  warranties set out in section 3.25
(and the  corresponding  representations  and  warranties set out in the Closing
Certificates) shall survive the closing of the transactions  contemplated hereby
and continue in full force and effect until,  but not beyond,  the expiration of
the period,  if any,  during which an assessment,  reassessment or other form of
recognized  document  assessing  liability for tax,  interest or penalties under
applicable  tax  legislation  in  respect  of any  taxation  year to which  such
representations and warranties extend could be issued under such tax legislation


                                       24
<PAGE>

to the  Corporation,  provided the  Corporation did not file any waiver or other
document extending such period; and

               (c) a claim  for any  breach  of any of the  representations  and
warranties  contained  in  this  Agreement  or  in  any  agreement,  instrument,
certificate or other document  executed or delivered  pursuant hereto  involving
fraud or  fraudulent  misrepresentation  may be made at any time  following  the
Closing Date, subject only to applicable limitation periods imposed by law.


5.2.    EXPIRY OF THE REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

        The  representations  and warranties of the Purchaser  contained in this
Agreement or in any document,  certificate or undertaking  given pursuant hereto
shall  terminate  at the end of ONE (1) year after  Closing or when the  Vendors
have elected to retain the ARS shares whichever first occurs.


                                   ARTICLE 6.
                                    COVENANTS


6.1.    ACCESS TO THE CORPORATION

               (a) The Vendors shall  forthwith  make available to the Purchaser
and its authorized representatives and, if requested by the Purchaser, provide a
copy to the Purchaser of, or make available for the Purchaser's inspection,  all
title  documents,   Contracts,   financial   statements,   minute  books,  share
certificate books, share registers,  plans, reports,  licences, orders, permits,
books  of  account,  accounting  records,  constating  documents  and all  other
documents, information or data relating to the Corporation and the Business.

               (b) The Vendors and the  Corporation  shall afford the  Purchaser
and its authorized representatives every reasonable opportunity to have free and
unrestricted  access to the  Business  and the  property,  assets,  undertaking,
records and documents of the  Corporation  at such times as agreed upon with the
Vendors.

               (c) At the request of the Purchaser, the Vendors shall execute or
cause to be executed  such  consents,  authorizations  and  directions as may be
necessary  to permit any  inspection  of the  Business  and any  property of the
Corporation  or to enable the  Purchaser or its  authorized  representatives  to
obtain full access to all files and records relating to any of the assets of the
Corporation maintained by governmental or other public authorities.

               (d) At the Purchaser's request, the Vendors shall co-operate with
the Purchaser in arranging any such meetings as the Purchaser should reasonably
request with:

                      (i)   employees of the Corporation;

                      (ii)  customers,  suppliers,  distributors  or others  who
have or have had a business relationship with the Corporation; and


                                       25
<PAGE>


                      (iii) auditors, solicitors or any other persons engaged or
previously  engaged to provide services to the Corporation who have knowledge of
matters relating to the Corporation and the Business.

               (e) Without  limiting the generality of the preceding  provisions
of this section,  the Vendors shall permit the  Purchaser's  representatives  or
consultants  to  conduct  all  such  testing  and   inspections  in  respect  of
environmental  matters at the premises  (the  "Premises")  which are the subject
matter of the lease described in Schedule 5 (the "Lease"),  subject to obtaining
all necessary  consents from the landlord under the Lease,  as the Purchaser may
determine,  in its sole discretion,  as may be required to satisfy the Purchaser
in respect of such matters.  The  Purchaser  shall be  responsible,  at its sole
cost, for making all necessary repairs to the Premises  necessitated as a result
of such testing.

               (f) The exercise of any rights of  inspection  by or on behalf of
the Purchaser under this section 6.1 shall not mitigate or otherwise  affect the
representations  and  warranties of the Vendors and the  Corporation  hereunder,
which shall continue in full force and effect as provided in section 5.1, except
to the extent that the Purchaser fails to advise the Vendors and the Corporation
of its findings.


6.2.    DELIVERY OF BOOKS AND RECORDS

        At the Time of Closing there shall be delivered to the Purchaser, by the
Vendors, all of the books and records of and relating to the Corporation and the
Business. The Purchaser agrees that it will preserve the books and records so
delivered to it for a period of six years from the Closing Date, or for such
longer period as is required by any applicable law, and will permit the Vendors
or its authorized representatives reasonable access thereto in connection with
the affairs of the Vendors relating to its matters, but the Purchaser shall not
be responsible or liable to the Vendors for or as a result of any accidental
loss or destruction of or damage to any such books or records.


6.3.    CHANGE AND USE OF NAME

        Intentionally Deleted


6.4.    CONDUCT PRIOR TO CLOSING

        Without in any way limiting any other obligations of the Vendors and the
Corporation  hereunder,  during the period  from the date  hereof to the Time of
Closing:

               (a) Conduct  Business in the Ordinary  Course.  The Vendors shall
cause the  Corporation  to  conduct,  and the  Corporation  shall  conduct,  the
Business and the operations and affairs of the Corporation  only in the ordinary
and normal course of business consistent with past practice, and the Corporation
shall not,  without the prior written  consent of the Purchaser,  enter into any
transaction  or refrain from doing any action that, if effected  before the date
of this Agreement,  would constitute a breach of any  representation,  warranty,
covenant or other obligation of the Vendors or the Corporation contained herein,
and provided  further that the Vendors shall not enter into any material  supply
arrangements relating to the Corporation or make any material decisions or enter


                                       26
<PAGE>

into any material Contracts with respect to the Corporation  without the consent
of the Purchaser, which consent shall not be unreasonably withheld;

               (b) Continue  Insurance.  The Vendors shall cause the Corporation
to continue,  and the Corporation shall continue,  to maintain in full force and
effect all policies of insurance or renewals  thereof now in effect,  shall take
out,  at the  expense of the  Purchaser,  such  additional  insurance  as may be
reasonably requested by the Purchaser and shall give all notices and present all
claims under all policies of insurance in a due and timely fashion;

               (c) Regulatory  Consents.  The Vendors shall use its best efforts
to obtain or cause the Corporation to obtain,  and the Corporation shall use its
best efforts to obtain, at or prior to the Time of Closing, from all appropriate
federal,  provincial,  state,  municipal  or other  governmental  or  regulatory
bodies, the licences, permits, consents, approvals, certificates,  registrations
and authorizations described in Schedule 10;

               (d) Contractual Consents.  The Vendors shall use its best efforts
to  give or  obtain  or  cause  the  Corporation  to  give  or  obtain,  and the
Corporation  shall use its best  efforts to obtain,  the  notices,  consents and
approvals described in Schedule 11;

               (e) Preserve Goodwill.  The Vendors shall use its best efforts to
preserve,  and cause the  Corporation to preserve  intact,  and the  Corporation
shall use its best efforts to preserve  intact,  the Business and the  property,
assets,  operations and affairs of the  Corporation and to carry on the Business
and the affairs of the  Corporation as currently  conducted,  and to promote and
preserve for the  Purchaser  the  goodwill of  suppliers,  customers  and others
having business relations with the Corporation;

               (f)   Discharge   Liabilities.   The  Vendors   shall  cause  the
Corporation to pay and discharge,  and the Corporation  shall pay and discharge,
the  liabilities  of the  Corporation  in the ordinary  course in accordance and
consistent with the previous practice of the Corporation, except those contested
in good faith by the Corporation;

               (g) Corporate  Action.  The Vendors shall use its best efforts to
take and cause the Corporation to take, and the  Corporation  shall use its best
efforts to take,  all  necessary  corporate  action,  steps and  proceedings  to
approve or authorized,  validly and  effectively,  the execution and delivery of
this Agreement and the other agreements and documents contemplated hereby and to
complete the transfer of the Purchased  Shares to the Purchaser and to cause all
necessary  meetings  of  directors  and  shareholders  of the  Vendors  and  the
Corporation to be held for such purpose; and

               (h) Best  Efforts.  The  Vendors  shall use its best  efforts  to
satisfy the conditions contained in section 7.1.


6.5.    FILINGS

        Within 30 days following the Closing Date, the Purchaser shall file with
the state of New Hampshire the information and certificates as required pursuant
to the New Hampshire  Business  Corporation Act,  Sections  293-A:11.02  through


                                       27
<PAGE>

293-A:11.07 regarding the share exchange arising out of the Purchaser's purchase
of the Purchased Shares and the issuance of the ARS Shares to the Vendors.


                                  ARTICLE VII.
                              CONDITIONS OF CLOSING


7.1.    CONDITIONS OF CLOSING IN FAVOUR OF THE PURCHASER

        The  sale  and  purchase  of the  Purchased  Shares  is  subject  to the
following terms and conditions for the exclusive benefit of the Purchaser, to be
fulfilled or performed at or prior to the Time of Closing:

               (a)  Representations  and  Warranties.  The  representations  and
warranties of the Vendors and the Corporation  contained in this Agreement shall
be true and  accurate  on the date  hereof and shall be true and  correct in all
material  respects at the Time of Closing,  with the same force and effect as if
such  representations  and  warranties  were  made at and as of such  time,  and
certificates  of the Vendors and of the President of the  Corporation  dated the
Closing Date to that effect shall have been  delivered  to the  Purchaser,  such
certificates to be in form and substance  satisfactory to the Purchaser,  acting
reasonably;

               (b) Covenants. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Vendors and the Corporation at
or before the Time of Closing  shall have been complied with or performed in all
material  respects  and  certificates  of the Vendors and the  President  of the
Corporation  dated the Closing Date to that effect shall have been  delivered to
the Purchaser, such certificates to be in form and substance satisfactory to the
Purchaser, acting reasonably;

               (c) Regulatory Consents. There shall have been obtained, from all
appropriate   federal,   provincial,   municipal   or  other   governmental   or
administrative   bodies,   such   licences,   permits,   consents,    approvals,
certificates, registrations and authorizations as are required to be obtained by
the  Vendors  to  permit  the  change  of  ownership  of  the  Purchased  Shares
contemplated hereby including,  without limitation,  those described in Schedule
10;

               (d) Contractual  Consents.  The  Vendors  shall  have  given  or
obtained the notices,  consents and approvals  described in Schedule 11, in each
case in form and substance satisfactory to the Purchaser, acting reasonable;

               (e) Material  Adverse  Change.  There shall have been no material
adverse changes in the condition (financial or otherwise),  assets, liabilities,
operations, earnings, business or prospects of the Corporation since the date of
the Financial Statements;

               (f) No Action of  Proceeding.  No legal or  regulatory  action or
proceeding  shall be pending or threatened by any person to enjoin,  restrict or
prohibit the purchase and sale of the purchased Shares contemplated hereby;

               (g) No  Material  Damage.  No  material  damage  by fire or other
hazard  to the  whole or any  material  part of the  property  or  assets of the
Corporation shall have occurred from the date hereof the to Time of Closing;



                                       28
<PAGE>

               (h) Legal  Matters.  All actions,  proceedings,  instruments  and
documents required to implement this Agreement, or instrumental thereto, and all
legal matters relating to the purchase of the Purchased Shares,  including title
of the Vendors to the Purchased Shares,  shall have been approved as to form and
legality by Kearns, McKinnon, lawyers for the Purchaser, acting reasonably;

               (i) Intentionally Deleted;

               (j) Intentionally Deleted;

               (k) Resignation  of Directors and Officers.  Such  directors and
officers of the  Corporation as the Purchaser may specify shall have resigned in
favour of nominees of the Purchaser  effective as of the Time of Closing.  In no
event,  however,  shall  Whittaker be required to resign prior to the  Purchased
Shares being released from escrow pursuant to the terms of the Escrow Agreement;
and

               (l) Intentionally Deleted.

If any of the conditions contained in this section 7.1 shall not be performed or
fulfilled  at or  prior  to the  Time  of  Closing  to the  satisfaction  of the
Purchaser,  acting  reasonably,  the  Purchaser  may, by notice to the  Vendors,
terminate  this  Agreement and the  obligations of the Vendors and the Purchaser
under this  Agreement,  other then the  obligations  contained in sections 10.3,
10.4 and 10.5,  provided that the Purchaser may also bring an action pursuant to
Article IX against the Vendors for damages  suffered by the Purchaser  where the
non-performance or non-fulfillment of the relevant condition is as a result of a
breach  of  covenant,  representation  or  warranty  by the  Vendors.  Any  such
condition may be waived in whole or in part by the Purchaser  without  prejudice
to any claims it may have for breach of covenant, representation or warranty.


7.2.    CONDITIONS OF CLOSING IN FAVOUR OF THE VENDORS

        The  purchase  and  sale  of the  Purchased  Shares  is  subject  to the
following terms and conditions for the exclusive  benefit of the Vendors,  to be
fulfilled or performed at or prior to the Time of Closing:

               (a) Representations  and  Warranties.  The  representations  and
warranties  of the  Purchaser  contained  in this  Agreement  shall  be true and
correct in all material respects at the Time of Closing, with the same force and
effect as if such  representations  and  warranties  were made at and as of such
time, and a certificate of an authorized  signing officer of the Purchaser dated
the Closing Date to that effect shall have been  delivered to the Vendors,  such
certificate  to be in form and  substance  satisfactory  to the Vendors,  acting
reasonably;

               (b) Covenants. All of the terms, covenants and conditions of this
Agreement to be complied  with or  performed  by the  Purchaser at or before the
Time of Closing  shall have been  complied  with or  performed  in all  material
respects and a  certificate  of an authorized  signing  officer of the Purchaser
dated the Closing Date to that effect shall have been  delivered to the Vendors,
such certificate to be in form and substance satisfactory to the Vendors, acting
reasonably;



                                       29
<PAGE>

               (c) Regulatory Consents. There shall have been obtained, from all
appropriate   federal,   provincial,   municipal   or  other   governmental   or
administrative   bodies,   such   licences,   permits,   consents,    approvals,
certificates,  registrations  and  authorizations  as are  required by law to be
obtained by the  Purchaser to permit the change of  ownership  of the  Purchased
Shares  contemplated  hereby  including  those described in Schedule 10, in each
case in form and substance satisfactory to the Vendors, acting reasonably;

               (d) No Action or  Proceeding.  No legal or  regulatory  action or
proceeding  shall be pending or threatened by any person to enjoin,  restrict or
prohibit the purchase and sale of the Purchased Shares contemplated hereby;

               (e) Legal  Matters.  All actions,  proceedings,  instruments  and
documents required to implement this Agreement,  or instrumental thereto,  shall
have been  approved as to form and  legality  by the  Vendors'  lawyers,  acting
reasonably; and

               (f) Intentionally Deleted.

If any of the conditions contained in this section 7.2 shall not be performed or
fulfilled at or prior to the Time of Closing to the satisfaction of the Vendors,
acting reasonably,  the Vendors may, by notice to the Purchaser,  terminate this
Agreement  and the  obligations  of the  Vendors  and the  Purchaser  under this
Agreement, other then the obligations contained in sections 10.3, 10.4 and 10.5,
provided  that the  Vendors  may also  bring an action  pursuant  to  Article IX
against  the   Purchaser   for  damages   suffered  by  the  Vendors  where  the
non-performance or non-fulfillment of the relevant condition is as a result of a
breach of  covenant,  representation  or  warranty  by the  Purchaser.  Any such
condition may be waived in whole or in part by the Vendors without  prejudice to
any claims it may have for breach of covenant, representation or warranty.


                                  ARTICLE VIII.
                              CLOSING ARRANGEMENTS


8.1.    PLACE OF CLOSING

        The  closing  shall take place at the Time of Closing at the  offices of
Pallett Valo, lawyers for the Vendors, Mississauga, Ontario.


8.2.    CLOSING PROCEDURES

        On the Closing  Date,  the Vendors  shall  deliver  the  instruments  of
conveyance and other  documents  described in section 8.3 and upon such delivery
the Purchaser shall deliver the monies and documents described in section 8.4.


8.3.    VENDORS' DELIVERIES ON CLOSING

        On Closing,  the Vendors  shall  deliver to the  Purchaser the following
items, in form and substance  satisfactory to the  Purchaser's  lawyers,  acting
reasonably, and, where appropriate, dated the Closing Date:


                                       30
<PAGE>


               (a) share  certificates  representing  the Purchased  Shares duly
endorsed in favour of the Purchaser in fully transferable form;

               (b) the resignations contemplated in section 7.1(k);

               (c) a release  from the Vendors in the form  attached as Schedule
22;

               (d) in the case of Whittaker,  the employment  agreement attached
as Schedule 20;

               (e) in the case of MacArthur,  the employment  agreement attached
as Schedule 20A;

               (f) a certificate of the Vendors that:

                      (i) the  representations  and  warranties  of the  Vendors
contained in this Agreement are true and correct as of the Closing Date; and

                      (ii) the Vendors have  observed and complied  with all the
covenants,  agreements and obligations on their  respective parts to be observed
and complied with by them prior to the Closing Date;

               (g) to  the  extent  available,  the  consents  contemplated  by
Schedule 10;

               (h) a certified copy of a resolution of the board of directors of
the  Corporation  authorizing  it to enter into this  Agreement and complete the
Transaction in accordance with the terms of this Agreement;

               (i) resolution of the Corporation's  board of directors approving
the transfer of the Purchased Shares from the Vendors to the Purchaser;

               (j) a statutory  declaration  sworn by Whittaker that he is not a
non-resident of Canada within the meaning of section 1 16 of the Tax Act;

               (k) a statutory  declaration  sworn by MacArthur that he is not a
non-resident of Canada within the meaning of section 116 of the Tax Act;

               (l) a certificate of status of the Corporation, with an effective
date of not earlier than 7 days prior to Closing;

               (m) the minute books of the Corporation;

               (n) the Escrow Agreement;

               (o) the opinion of the Vendors'  lawyers in the form  attached as
Schedule 21;

               (p) all of the  documents  contemplated  by section  6.2. For the
purposes of this provision,  it is  acknowledged  that there will be no physical
delivery  of such items on Closing and the said items will remain in the control


                                       31
<PAGE>

of the Corporation at the Premises,  save and except for the minute books of the
Corporation which will be delivered to the Purchaser on the Closing Date; and

               (q) all such other  documents and  agreements as the  Purchaser's
solicitors  reasonably  consider  necessary  or  desirable to give effect to the
Transaction or to update the minute books of the Corporation.


8.4.    PURCHASER'S DELIVERIES ON CLOSING

        On Closing,  the  Purchaser  shall  deliver to the Vendors the following
items,  in form and substance  satisfactory to the Vendors,  acting  reasonably,
and, where appropriate, dated the Closing Date:

               (a) the monies referred to in section 2.2(a);

               (b) share  certificates  in the name of  Whittaker  representing
100,000 of the ARS shares referred to in section 2.2(b);

               (c) share  certificates  in the name of  MacArthur  representing
100,000 of the ARS shares referred to in section 2.2(b);

               (d) the Promissory Note;

               (e) a certified copy of a resolution of the board of directors of
the  Purchaser  authorizing  it to enter into this  Agreement  and  complete the
Transaction in accordance with the terms of this Agreement;

               (f) the employment agreement attached as Schedule 20;

               (g) the employment agreement attached as Schedule 20A;

               (h) a certificate of the Purchaser that:

                      (i)  the representations  and  warranties of the Purchaser
contained in this Agreement are true and correct as of the Closing Date; and

                      (ii) the  Purchaser has observed and complied with all the
covenants,  agreements  and  obligations on its part to be observed and complied
with by it prior to the Closing Date;

               (i) a certificate of status of the  Purchaser,  with an effective
date of not earlier than 7 days prior to Closing;

               (j) a release in the form attached as Schedule 28;

               (k) the Escrow Agreement;

               (l) the  opinion  of the  Purchaser's  U.S.  lawyers  in the form
attached as Schedule 23;



                                       32
<PAGE>


               (m) the opinion of the  Purchaser's  Ontario  lawyers in the form
attached as Schedule 24; and

               (n) all such other documents and agreements as the Vendors'
solicitors reasonably consider necessary or desirable to give effect to the
Transaction.


8.5.    FURTHER ASSURANCES

        Each party to this  Agreement  covenants  and agrees that,  from time to
time  subsequent to the Closing Date, it will, at the request and expense of the
requesting  party,  execute and deliver all such documents,  including,  without
limitation,  all such  additional  conveyances,  transfers,  consents  and other
assurances  and do all such  other acts and  things as any other  party  hereto,
acting reasonably, may from time to time request be executed or done in order to
better  evidence or perfect or effectuate  any provision of this Agreement or of
any agreement or other  document  executed  pursuant to this Agreement or any of
the respective obligations intended to be created hereby or thereby.


                                   ARTICLE IX.
                                 INDEMNIFICATION


9.1.    INDEMNIFICATION BY THE VENDORS

        The Vendors agrees to indemnify and save harmless the Purchaser from all
Losses suffered or incurred by the Purchaser as a result of or arising out of or
in connection with:

               (a)  any  breach  by the  Vendors  or the  Corporation  of or any
inaccuracy of any  representation  or warranty of the Vendors  contained in this
Agreement or in any agreement,  certificate or other document delivered pursuant
hereto  (provided  that the Vendors  shall not be required to  indemnify or save
harmless  the   Purchaser  in  respect  of  any  breach  or  inaccuracy  of  any
representation  or warranty  unless the Purchaser  shall have provided notice to
the Vendors in accordance  with section 9.3 on or prior to the expiration of the
applicable  time period related to such  representation  and warranty set out in
section 5.1);

               (b)  any  breach  or   non-performance  by  the  Vendors  or  the
Corporation  of any  covenant to be  performed  by it that is  contained in this
Agreement or in any agreement,  certificate or other document delivered pursuant
hereto;

               (c) all  debts,  liabilities  or  contracts  whatsoever  (whether
accrued,  absolute,  contingent or otherwise) of the Corporation existing at the
Time of Closing,  including  any  liabilities  for federal,  provincial,  sales,
excise,  income,  corporate or any other taxes of the Corporation for any period
up to and including the Time of Closing,  and not disclosed on,  provided for or
included in the balance sheets forming part of the Financial Statements,  except
those liabilities:

                      (i) disclosed in this Agreement or any Schedule hereto; or

                      (ii) accruing or incurred  subsequent to April 30, 2000 in
the ordinary course of the Business;


                                       33
<PAGE>


                      (iii)  approved or consented to by the Purchaser  prior to
the Closing Date; and

               (d) any breach of the representations and warranties contained in
section 3.33.


9.2.    INDEMNIFICATION BY THE PURCHASER

        The Purchaser agrees to indemnify and save harmless the Vendors from all
Losses suffered or incurred by the Vendors as a result of or arising directly or
indirectly out of or in connection with:

               (a) any  breach  by the  Purchaser  of or any  inaccuracy  of any
representation  or warranty  contained in this  Agreement  or in any  agreement,
instrument, certificate or other document delivered pursuant hereto; and

               (b)  any  breach  or  non-performance  by  the  Purchaser  of any
covenant to be performed  by it that is  contained  in this  Agreement or in any
agreement, certificate or other document delivered pursuant hereto.


9.3.    NOTICE OF CLAIM

               (a) In the event that a party  (the  "Indemnified  Party")  shall
become aware of any claim,  proceeding or other matter (a "Claim") in respect of
which  another  party  (the  "Indemnifying   Party")  agreed  to  indemnify  the
Indemnified  Party  pursuant  to this  Agreement,  the  Indemnified  Party shall
promptly give written  notice  thereof to the  Indemnifying  Party.  Such notice
shall  specify  whether  the  Claim  arises  as a result  of a claim by a person
against the Indemnified  Party (a "Third Party Claim") or whether the Claim does
not so  arise (a  "Direct  Claim"),  and  shall  also  specify  with  reasonable
particularity  (to the extent that the  information  is  available)  the factual
basis for the Claim and the amount of the Claim, if known.

               (b)  If,  through  the  fault  of  the  Indemnified   Party,  the
Indemnifying  Party  does not  receive  notice of any  Claim in time to  contest
effectively the  determination of any liability  susceptible of being contested,
the  Indemnifying  Party shall be entitled to set off against the amount claimed
by the Indemnified  Party the amount of any Losses incurred by the  Indemnifying
Party  resulting from the  Indemnified  Party's failure to give such notice on a
timely basis.


9.4.    DIRECT CLAIMS

        With respect to any Direct Claim,  following  receipt of notice from the
Indemnified Party of the Claim, the Indemnifying  Party shall have sixty days to
make such  investigation  of the Claim as is considered  necessary or desirable.
For  the  purpose  of such  investigation,  the  Indemnified  Party  shall  make
available  to  the  Indemnifying  Party  the  information  relied  upon  by  the
Indemnified  Party to  substantiate  the  Claim,  together  with all such  other
information as the Indemnifying  Party may reasonably  request.  If both parties
agree at or prior to the  expiration  of such sixty day period (or any  mutually
agreed upon  extension  thereof) to the validity  and amount of such Claim,  the
Indemnifying  Party  shall  immediately  pay to the  Indemnified  Party the full


                                       34
<PAGE>

agreed  amount of the Claim,  failing  which the  matter  shall be  referred  to
binding  arbitration  in such  manner  as the  parties  may  agree  or  shall be
determined by a court of competent jurisdiction.


9.5.    THIRD PARTY CLAIMS

        With respect to any Third Party Claim, the Indemnifying Party shall have
the  right,  at  its  expense,  to  participate  in or  assume  control  of  the
negotiation,  settlement  or  defence  of the  Claim  and,  in such  event,  the
Indemnifying Party shall reimburse the Indemnified Party for all the Indemnified
Party's out-of-pocket  expenses as a result of such participation or assumption.
If the Indemnifying  Party elects to assume such control,  the Indemnified Party
shall have the right to participate in the negotiation, settlement or defence of
such Third Party Claim and to retain counsel to act on its behalf, provided that
the fees and  disbursements  of such  counsel  shall be paid by the  Indemnified
Party unless:

               (a) the  Indemnifying  Party  consents to the  retention  of such
counsel; or

               (b) unless the named parties to any action or proceeding  include
both the Indemnifying  Party and the Indemnified  Party and a representation  of
both the Indemnifying  Party and the Indemnified Party by the same counsel would
be inappropriate due to the actual or potential differing interests between them
(such as the availability of different defences).

If the  Indemnifying  Party,  having elected to assume such control,  thereafter
fails to defend the Third Party Claim within a reasonable  time, the Indemnified
Party shall be entitled to assume such control, and the Indemnifying Party shall
be bound by the results  obtained by the Indemnified  Party with respect to such
Third  Party  Claim.  If any  Third  Party  Claim is of a nature  such  that the
Indemnified  Party is required by applicable law to make a payment to any person
(a "Third Party") with respect to the Third Party Claim before the completion of
settlement negotiations or related legal proceedings,  the Indemnified Party may
make such payment and the Indemnifying Party shall,  within 30 days after demand
by the Indemnified Party,  reimburse the Indemnified Party for such payment.  If
the amount of any liability of the Indemnified Party under the Third Party Claim
in respect of which such payment was made, as finally  determined,  is less than
the amount that was said by the Indemnifying Party to the Indemnified Party, the
Indemnified Party shall, within 10 days after receipt of the difference from the
Third Party, pay the amount of such difference to the Indemnifying Party.


9.6.    SETTLEMENT OF THIRD PARTY CLAIMS

        If the Indemnifying  Party fails to assume control of the defence of any
Third Party  Claim,  the  Indemnified  Party shall have the  exclusive  right to
contest, settle or pay the amount claimed. Whether or not the Indemnifying Party
assumes  control of the  negotiation,  settlement  or defence of any Third Party
Claim, the Indemnifying Party shall not settle any Third Party Claim without the
written  consent  of  the  Indemnified   Party,   which  consent  shall  not  be
unreasonably  withheld or delayed. If the Indemnified Party does not provide its
written consent to the settlement of the Third Party,  then the liability of the
Indemnifying Party shall be limited to the proposed settlement amount.



                                       35
<PAGE>


9.7.    CO-OPERATION

        The Indemnified Party and the Indemnifying  Party shall co-operate fully
with each other with  respect to Third Party  Claims,  and shall keep each other
fully advised with respect thereto  (including  supplying copies of all relevant
documentation promptly as it becomes available).


9.8.    LIMIT TO CLAIMS MADE BY PURCHASER AND CORPORATION

        Regardless of any other provision of this Agreement, the Purchaser shall
not have the right to make any Claim for  indemnification  under this  Agreement
unless the Claim or the Claims, in the aggregate,  equal or exceed $7,500.00, in
which case the Vendors shall be liable in full for all of then  existing  Claims
and all  subsequent  Claims of  indemnification  without regard to the $7,500.00
limitation contained in this section.


9.9.    EXCLUSIVITY

        The provisions of this Article IX shall apply to any Claim for breach of
any covenant,  representation,  warranty or other provision of this Agreement or
any agreement,  certificate or other document  delivered  pursuant hereto (other
than a claim for specific performance or injunctive relief) with the intent that
all such  Claims  shall be  subject  to the  limitations  and  other  provisions
contained  in this  Article  IX.  No party  shall  have the  right to bring  any
proceeding against any other party for a breach of any representation, warranty,
covenant or agreement  contained in this Agreement whether in contract,  tort or
otherwise except in accordance with the provisions of this Article 9.00.


                                   ARTICLE X.
                                  MISCELLANEOUS


10.1.   CONFIDENTIALITY OF INFORMATION

        In  the  event  that  the  transactions   contemplated  herein  are  not
consummated for any reason:

               (a) the Purchaser  covenants and agrees that, except as otherwise
authorized by the Vendors, neither the Purchaser nor its representatives, agents
or  employees  will  disclose  to third  parties,  directly or  indirectly,  any
confidential information or confidential data relating to the Corporation or the
Business  discovered by the Purchaser or its  representatives as a result of the
Vendors  and  the  Corporation   making  available  to  the  Purchaser  and  its
representatives  the  information  requested  by them  in  connection  with  the
transactions contemplated herein; and

               (b) the  provisions  under the heading  "Confidentiality"  in the
letter of intent dated May 1, 2000, between the Purchaser and the Vendors (which
are currently in full force and effect) will continue in full force and effect.


10.2.   NOTICES

               (a) Any notice or other communication required or permitted to be
given  hereunder  shall  be  in  writing  and  shall  be  delivered  in  person,


                                       36
<PAGE>

transmitted by telecopy or similar means of recorded electronic communication or
sent by registered mail, charges prepaid, addressed as follows:

(i)   if to the Vendors or the Corporation:   23 Armstrong Avenue
                                              Georgetown, Ontario L7G 4S1
                                              Attention:     John Whittaker or
                                                             Richard MacArthur
                                              Telecopier Number:    905-877-3995

      together with a copy to:                Murray Box
                                              Pallett Valo 90 Burnhamthorpe
                                              Road West Suite 1600
                                              Mississauga, Ontario L5B 3C3
                                              Telecopier Number:
                                              905-273-6920

(ii)  if to the Purchaser:                    1450 Bayshire Drive
                                              Attention: Mark Miziolek
                                              Oakville, Ontario
                                              L6H 6E7
                                              Telecopier Number:    905-339-1981

               (b) Any such  notice  or other  communication  shall be deemed to
have been given and received on the day on which it was delivered or transmitted
(or, if such day is not a Business Day, on the next following  Business Day) or,
if mailed,  on the third  Business Day following the date of mailing;  provided,
however, that if at the time of mailing or within three Business Days thereafter
there is or occurs a labour  dispute or other  event that  might  reasonably  be
expected  to disrupt  the  delivery of  documents  by mail,  any notice or other
communication  hereunder  shall be delivered or transmitted by means of recorded
electronic communication as aforesaid.

               (c) Any party may at any time change its address for service from
time to time by giving  notice  to the other  parties  in  accordance  with this
section 10.2.


10.3.   COMMISSIONS, ETC.

        The Vendors agrees to indemnify and save harmless the Purchaser from and
against  all Losses  suffered or  incurred  by the  Purchaser  in respect of any
commission or other remuneration payable or alleged to be payable to any broker,
agent or other  intermediary  retained  by the Vendors in  connection  with this
matter.


10.4.   CONSULTATION

        The  parties  shall  consult  with each other  before  issuing any press
release or making any other public  announcement  with respect to this Agreement
or  the  transactions  contemplated  hereby  and,  except  as  required  by  any
applicable law or regulatory requirement,  neither the Vendors nor the Purchaser
shall issue any such press release or make any such public announcement  without


                                       37
<PAGE>

the prior written consent of the other,  which consent shall not be unreasonably
withheld or delayed.


10.5.   DISCLOSURE

        Prior to any public announcement of the transaction  contemplated hereby
pursuant to section  10.4,  neither party shall  disclose this  Agreement or any
aspect  of such  transaction  except  to its  board  of  directors,  its  senior
management, its legal, accounting, financial or other professional advisors, any
financial  institution contacted by it with respect to any financing required in
connection with such transaction and counsel to such  institution,  or as may be
required by any  applicable  law or any  regulatory  authority or stock exchange
having jurisdiction.


10.6.   PUBLIC ANNOUNCEMENTS

        No  public  announcement  or press  release  not  required  by law or by
applicable stock exchange rule concerning the purchase and sale of the Purchased
Shares shall be made by the Vendors,  the  Corporation or the Purchaser  without
the consent and joint approval of the Vendors and the Purchaser.


10.7.   ASSIGNMENT BY PURCHASER

        The Purchaser may assign its rights under this  Agreement in whole or in
part to any other person; provided,  however, that any such assignment shall not
relieve the Purchaser from any of its obligations hereunder.


10.8.   BEST EFFORTS

        The  parties  acknowledge  and  agree  that,  for all  purposes  of this
Agreement,  an  obligation  on the part of any party to use its best  efforts to
obtain any waiver,  consent,  approval,  permit, licence or other document means
the use of reasonable  commercial  efforts which shall not require such party to
make any payment to any person for the purpose of procuring the same, other than
payments  for amounts due and payable to such person,  payments  for  incidental
expenses  incurred by such person and payments required by any applicable law or
regulation.


10.9.   COUNTERPARTS AND EXECUTION BY FAX

        This  Agreement may be executed by the parties in separate  counterparts
each of which when so executed  and  delivered  to all of the  parties  shall be
deemed  to be and shall be read as a single  agreement  among  the  parties.  In
addition,  execution of this Agreement by any of the parties may be evidenced by
way of a faxed transmission of such party's signature (which signature may be by
separate counterpart), or a photocopy of such faxed transmission, and such faxed
signature,  or photocopy of such faxed signature,  shall be deemed to constitute
the original signature of such party to this Agreement.



                                       38
<PAGE>

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


                                              --------------------------------
                                              JOHN WHITTAKER



                                              --------------------------------
                                              RICHARD MACARTHUR


                                              ARS NETWORKS, INCORPORATED

                                              Per:
                                                     ---------------------------
                                              Name:
                                                     ---------------------------
                                              Title:
                                                     ---------------------------
                                              Authorized Signing Officer


                                              T & T DIESEL POWER LIMITED

                                              Per:
                                                     ---------------------------
                                              Name:
                                                     ---------------------------
                                              Title:
                                                     ---------------------------
                                              Authorized Signing Officer