Exhibit 10.1

BEAR RIVER RESOURCES, INC.

280 Nelson Street, Suite 253, Vancouver, British Columbia, Canada, V6B 2E2

______________________________________________________________________________

 

October 2, 2008

To:
The Board of Directors of:
OMNICITY, INC.
720 N. Rangeline Road, Carmel, Indiana, U.S.A., 46032

Dear Sirs/Mesdames:

Re:
Offer to purchase all of the shares of Omnicity, Inc. (the "Company") from each
of the shareholders of the Company (each a "Vendor") by Bear River Resources,
Inc. (the "Purchaser"; and the Company, the within Vendor and the Purchaser
being, collectively, the "Parties" herein)

 

AGREEMENT IN PRINCIPLE

This letter will confirm our recent discussions and the intention of each of
Parties hereto to enter into the basic terms of an agreement (herein the
"Agreement") for the proposed acquisition by the above-referenced Purchaser from
the above-referenced Vendors of all of issued and outstanding shares (each a
"Purchased Share") of the above-referenced Company.

We understand and confirm that the Company is a corporation subsisting under and
registered pursuant to the laws of the State of Indiana, U.S.A., that the
Company is presently engaged in the business of the build-out and expansion into
full broadband solutions, including a rollup and consolidation of the United
States rural WISP market, and that the Company now wishes to raise additional
external capital in order to fully develop and realize the potential of its
existing business (collectively, the "Company's Business").

We also understand and confirm that, by entering into this Agreement, the
undersigned authorized signatories for each of the Company and the within Vendor
herein intend to move forward toward entering into a more formal agreement or
takeover bid (the "Formal Agreement") pursuant to which the Vendor, and all
remaining Vendors of the Company, will agree to sell and the Purchaser will
agree to purchase all of the Purchased Shares of the Company from the Vendors
upon terms and conditions similar to those as set forth hereinbelow. At all
times the undersigned hereto acknowledge and agree that the completion of any
such Formal Agreement is subject to the prior ratification and approval of the
terms and conditions of any such Formal Agreement by the Board of Directors and,
if applicable, shareholders of the Purchaser, the Company, the Vendors and such
securities regulatory authorities as may have jurisdiction over the Purchaser,
the Company and the Vendors (collectively, the "Regulatory Authorities").

In connection with the foregoing, therefore, the undersigned hereby acknowledge
and agree that the following will represent the basic terms of a Formal
Agreement for the acquisition by the Purchaser of all of the Purchased Shares
from the Vendors and the initial financing thereof.

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Article 1
PURCHASE AND SALE OF ALL OF THE PURCHASED SHARES

1.1 Purchase and sale. Subject to the terms and conditions hereof and based upon
the representations and warranties contained in Articles "2" and "3"
hereinbelow, together with such other terms and conditions and representations
and warranties as are standard in similar share purchase transactions of this
type and as may be evidenced by the final form of Formal Agreement which
replaces this Agreement, and the prior satisfaction of the conditions precedent
which are set forth in Article "4" hereinbelow, the Vendor, and the remaining
Vendors by virtue of the Formal Agreement thereby, agree to assign, sell and
transfer at the closing date (the "Closing Date") all of their respective right,
entitlement and interest in and to the Purchased Shares to the Purchaser, and
the Purchaser agrees to purchase all of the Purchased Shares from the Vendors,
on the terms and subject to the conditions contained in this Agreement
(collectively, the "Purchase and Sale").

1.2 Purchase Price for the Vendors. The total purchase price (the "Purchase
Price") for all of the Purchased Shares will be paid by the Purchaser's issuance
and delivery to the Vendors, in the manner set forth hereinbelow, of an
aggregate of 23,000,000 restricted common shares in the capital of the Purchaser
(each a "Purchase Price Share"), the Loan Shares (as defined in section "1.4"
hereinbelow) and the Shares for Debt (as defined in section "1.5" hereinbelow)
at the closing (the "Closing") on the Closing Date of the terms and conditions
of the Formal Agreement, at a deemed issuance price of U.S. $0.35 per Purchase
Price Share, per Loan Share and per Share for Debt of the Purchaser.

Unless otherwise directed by the Vendors under the proposed Formal Agreement
prior to Closing, the Purchaser is expected to issue the Purchase Price Shares
to the Vendors pro rata in accordance with the each Vendor's respective
Purchased Share shareholding in and to the Company and outstanding as at the
Closing Date; with all fractions greater than or equal to one-half being rounded
up and all fractions less than one-half being rounded down.

1.3 Resale restrictions and legending of the Purchase Price Share certificates.
The Vendor, and the remaining Vendors by virtue of the Formal Agreement thereby,
hereby acknowledge and agree that the Purchaser makes no representations as to
any resale or other restriction affecting the Purchase Price Shares and that it
is presently contemplated that the Purchase Price Shares will be issued by the
Purchaser to the Vendors in reliance upon the exemptions contained in certain
sections of the United States Securities Act of 1933 (the "Securities Act") or
"Regulation S" promulgated under the Securities Act which will impose a trading
restriction in the United States on the Purchase Price Shares for a period of at
least six months from the Closing Date. In addition, the Vendor, and the
remaining Vendors by virtue of the Formal Agreement thereby, hereby also
acknowledge and agree that the within obligation of the Purchaser to issue the
Purchase Price Shares pursuant to section "1.2" hereinabove will be subject to
the Purchaser being satisfied that an exemption from applicable registration and
prospectus requirements is available under the Securities Act and all applicable
securities laws in respect of each of the Vendors and the Purchased Shares.

The Vendor, and the remaining Vendors by virtue of the Formal Agreement thereby,
hereby also acknowledge and understand that neither the sale of the Purchase
Price Shares which the Vendors are acquiring nor any of the Purchase Price
Shares themselves have been registered under the Securities Act or any state
securities laws, and, furthermore, that the Purchase Price Shares must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. The Vendor, and the remaining
Vendors by virtue of the Formal Agreement thereby, also acknowledge and
understand that the certificates

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representing the Purchase Price Shares will be stamped with the following
legends (or substantially equivalent language) restricting transfer in the
following manner if such restriction is required by the Regulatory Authorities:

"These securities have not been registered under the United States Securities
Act of 1933, as amended, or the laws of any state, and are being issued pursuant
to an exemption from registration pertaining to such securities and pursuant to
a representation by the security holder named hereon that said securities have
been acquired for purposes of investment and not for purposes of distribution.
These securities may not be offered, sold, transferred, pledged or hypothecated
in the absence of registration, or the availability of an exemption from such
registration. The stock transfer agent has been ordered to effectuate transfers
only in accordance with the above instructions."

(or)

"These securities have not been registered under the United States Securities
Act of 1933, as amended (the "Act"), or the laws of any state, and are being
issued in reliance upon Regulation S promulgated under the Act. These securities
may not be offered, sold, transferred, pledged or hypothecated in the absence of
registration, the availability of an exemption from such registration or
compliance with Regulation S. The stock transfer agent has been ordered to
effectuate transfers only in accordance with the above instructions.

(and, if applicable)

"Unless permitted under applicable securities legislation, the holder of the
securities represented hereby shall not trade the securities in Canada before
the earlier of (i) the date that is four months and a day after the date the
company first became a reporting issuer in any of Alberta, British Columbia,
Manitoba, Nova Scotia, Ontario, Quebec and Saskatchewan, if the company is a
sedar filer, and (ii) the date that is four months and a day after the later of
(a) the distribution date, and (b) the date the company became a reporting
issuer in the local jurisdiction of the subscriber of the securities that are
the subject of the trade."

(and)

"Unless other permitted under securities legislation, the holder of this
security must not trade the security in or from British Columbia unless the
conditions in section 12(2) of BC Instrument 51-509 Issuers Quoted in the U.S.
Over-the-Counter Market are met.";

and the Vendor, and the remaining Vendors by virtue of the Formal Agreement
thereby, hereby consent to the Purchaser making a notation on its records or
giving instructions to any transfer agent of the Purchaser (the "Transfer
Agent") in order to implement the restrictions on transfer set forth and
described hereinabove.

The Vendor hereby, and the remaining Vendors by virtue of the Formal Agreement
thereby, also acknowledge and understand that:

(a) the Purchase Price Shares are restricted securities within the meaning of
"Rule 144" promulgated under the Securities Act;

(b) the exemption from registration under Rule 144 will not be available in any
event for at least six months from the date of issuance of the Purchase Price
Shares to the Vendors, and even then will not be available unless (i) a public
trading market then exists for the common stock of the Purchaser, (ii) adequate
information concerning the Purchaser is then available to the public; (iii) all
periodic reports required to be filed by the Purchaser have been filed; and (iv)
other terms and conditions of Rule 144 are complied with; and

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(c) any sale of the Purchase Price Shares may be made by the Vendors only in
limited amounts in accordance with such terms and conditions.

1.4 Interim secured Loan to the Company, the Security therefore and Conversion
into Shares of the Purchaser. In conjunction with and as a condition to the
entering into of this Agreement by the Parties hereto, together with the within
agreement by the Parties hereto to heretofore to use their best efforts to enter
into a Formal Agreement incorporating the terms and conditions hereof as soon as
conveniently possible hereafter, the Purchaser, on behalf of itself or its
various investors and such investors who may subscribe directly for convertible
loans in and to the Company on similar terms (in each such case being a "Lender"
herein), has hereby agreed to advance by way of a loan or loans to the Company
(collectively, the "Loan") the aggregate principal sum of up to U.S. $2,000,000
(collectively, the "Principal Sum") upon the earlier of (a) November 15, 2008
and (b) five business days of the due and complete closing of a minimum of U.S.
$1,500,000 of the proposed Private Placement (as hereinafter determined)
financing as set forth hereinbelow, together with interest accruing on any
Principal Sum Loan amount hereunder at the interest rate published in The Wall
Street Journal as the "Prime Rate" plus two percent (2%) per annum, compounded
semi-annually and not in advance (the "Interest") prior to maturity (the
"Maturity"); and which Maturity shall on the first business day which is the
earlier of (i) 180 calendar days from the date of advancement of each such
Principal Sum by way of Loan hereunder and (ii) the completion of the within
Purchase and Sale.

In this regard the Parties hereby acknowledge and agree that any such Principal
Sum and Interest will be secured, contemporaneously with the advancement of any
funds under any such Loan, by way of a senior, subordinated (subordinated only
to the Company's existing banking indebtedness), fixed and floating charge on
all of the assets of the Company. In this regard it is hereby also acknowledged
and agreed that, upon the completion of the within Purchase and Sale, it is
intended, subject to the Purchaser's prior receipt of appropriate accounting and
legal advice, that any Loan from the Purchaser will simply be forgiven, or
become an inter-company account as the situation may require and that the Loan
Shares (as defined below) will constitute the full consideration from the
Company to each Lender for the forgiveness of such Loan.

The Parties hereby also acknowledge and agree that, except as set forth below,
each Lender (excluding the Purchaser if applicable) will have the right and
option, exercisable until 5:00 p.m. (Vancouver time) on the date of Maturity of
each such Loan hereunder, to convert any Principal Sum, Interest or any other
sum outstanding under any Loan from such Lender to the Company as contemplated
herein (collectively, the "Outstanding Indebtedness") into common shares of the
Purchaser (each a "Loan Share"), at a deemed settlement and issuance price of
U.S. $0.35 per Loan Share for that portion of Outstanding Indebtedness which is
then being so converted by such Lender (the "Conversion" in each such instance).
In this regard it is hereby acknowledged and agreed that the right of Conversion
after the date of Maturity will be in the sole and absolute discretion of the
Purchaser to extend. Notwithstanding the foregoing, upon the Closing of the
Purchase and Sale, any Principal Sum, Interest or any Outstanding Indebtedness
will automatically be converted into Loan Shares, at a deemed settlement and
issuance price of U.S. $0.35 per Loan Share, for that portion of the Outstanding
Indebtedness which is then being so converted by such Lender.

1.5 Shares For Debt in the Purchaser for Company Creditors. Subject to the
remaining terms and conditions hereof and based upon the representations and
warranties contained in Articles "2" and "3" hereinbelow, together with such
other terms and conditions and representations and warranties as are standard in
similar share purchase transactions of this type

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and as may be evidenced by the final form of Formal Agreement which replaces
this Agreement, at Closing the Company will cause, and the Purchaser will agree
that, certain substantive, material and bona fide creditors of the Company to be
listed in the Formal Agreement (collectively, the "Company's Creditors"); and
currently representing certain principal and interest which is due and owing by
the Company to the Company's Creditors (collectively, the "Debt Amount"), will
use commercially reasonable efforts to cause such Company's Creditors to settle
all such Debt Amount within the Company for common shares of the Purchaser (each
a "Share For Debt"), at a deemed settlement and issuance price of U.S. $0.35 per
Share For Debt.

1.6 Costs. It is hereby further acknowledged and agreed by the Parties hereto
that while any portion of any Outstanding Indebtedness is outstanding hereunder,
and should this Agreement or any Formal Agreement have terminated due solely to
either the breach, default or failure to perform thereunder by the Company, each
of the Company and the Purchaser will remain responsible for all of their own
respective fees and expenses and including, without limitation, all legal,
accounting, sponsorship, regulatory and filing fees and expenses, and otherwise,
in connection with the preparation and execution of this Agreement, any Formal
Agreement, all corporate and statutory materials in conjunction with any Formal
Agreement, all filings with any regulatory authority as may have jurisdiction
over either the Company or the Purchaser in conjunction with the completion of
any Formal Agreement and all documentation necessarily incidental thereto.

1.7 Standstill provisions. In consideration of the Parties' within agreement to
purchase and sell the Purchased Shares and to enter into the terms and
conditions of this Agreement, each of the Parties hereby undertake for
themselves, and for each of their respective agents and advisors, that they will
not until the earlier of the Closing Date or the termination of this Agreement
approach or consider any other potential Purchasers, or make, invite, entertain
or accept any offer or proposal for the proposed sale of any interest in and to
any of the Purchased Shares or the assets or the respective business interests
of the Company or the Purchaser, as the case may be, or, for that matter,
disclose any of the terms of this Agreement, without the Parties' prior written
consent. In this regard each of the Parties hereby acknowledges that the
foregoing restrictions are important to the respective businesses of the Parties
and that a breach by any of the Parties of any of the covenants herein contained
would result in irreparable harm and significant damage to each affected Party
that would not be adequately compensated for by monetary award. Accordingly, the
Parties hereby agree that, in the event of any such breach, in addition to being
entitled as a matter of right to apply to a Court of competent equitable
jurisdiction for relief by way of restraining order, injunction, decree or
otherwise as may be appropriate to ensure compliance with the provisions hereof,
any such Party will also be liable to the other Parties, as liquidated damages,
for an amount equal to the amount received and earned by such Party as a result
of and with respect to any such breach. The Parties hereby also acknowledge and
agree that if any of the aforesaid restrictions, activities, obligations or
periods are considered by a Court of competent jurisdiction as being
unreasonable, they agree that said Court shall have authority to limit such
restrictions, activities or periods as the Court deems proper in the
circumstances.

Article 2
WARRANTIES, REPRESENTATIONS AND COVENANTS

BY THE COMPANY AND BY THE VENDORS

2.1 Warranties, representations and covenants by the Company and by the Vendors.
In order to induce the Purchaser to enter into this Agreement and to enter into
and consummate any Formal Agreement, each of the Company and the Vendor hereby,
and each of the Company and the Vendors by virtue of any Formal Agreement will,
respectively, thereby, warrant to, represent to and covenant with the Purchaser
in this Agreement, and in any Formal Agreement as at the Closing Date, that, to
the best of the knowledge, information and belief of

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each of the Company and the Vendor herein, and to the best of the knowledge,
information and belief of each of the Company and the Vendors, respectively, in
any Formal Agreement, after making due inquiry and where appropriate and
applicable (and for the purposes of the following warranties, representations
and covenants "Company" shall mean the Company and any and all subsidiaries of
the Company, if any, as the context so requires):

(a) each of the Company and, where applicable, the Vendors, are duly
incorporated under the laws of their respective jurisdictions of incorporation,
are validly existing and are in good standing with respect to all statutory
filings required by the applicable corporate laws, and each of the Company and,
where applicable, the Vendors, has the requisite power, authority and capacity
to own and use all of its respective business assets and to carry on the
Company's Business as presently conducted by them;

(b) save and except as set forth in the "Company's Disclosure Schedule"; a copy
of such Company's Disclosure Schedule accompanying the Company's delivery of
this Agreement; and as will be set forth in any Formal Agreement as contemplated
herein, the Company owns and possesses and has good and marketable title to and
possession of all of its business assets free and clear of all actual or
threatened liens, charges, options, encumbrances, voting agreements, voting
trusts, demands, limitations and restrictions of any nature whatsoever;

(c) save and except as set forth in the Company's Disclosure Schedule and as
will be set forth in any Formal Agreement as contemplated herein, the Company
holds all licenses and permits required for the conduct in the ordinary course
of its operations of the Company's Business and for the uses to which its
business assets have been put and are in good standing, and such conduct and
uses are in compliance with all laws, zoning and other by-laws, building and
other restrictions, rules, regulations and ordinances applicable to the Company
and its business assets, and neither the execution and delivery of this
Agreement nor the completion of the transactions contemplated hereby will give
any person the right to terminate or cancel any said license or permit or affect
such compliance;

(d) as set forth in the Company's Disclosure Schedule, the issued and authorized
capital of the Company is accurately disclosed therein of which, according to
the records of the Company, and as at the Closing Date, all of the Purchased
Shares of the Company will be issued and outstanding as fully paid and
non-assessable as at Closing;

(e) there will be no shares in the capital of the Company issued or allotted or
agreed to be issued or allotted to any persons or entities other than the
Vendors herein;

(f) save and except as set forth in the Company's Disclosure Schedule, the
Vendors have good and marketable title to and are the legal, registered and
beneficial owners of all of the Purchased Shares;

(g) the Purchased Shares are validly issued and outstanding and fully paid and
non-assessable in the capital of the Company and are free and clear of all
actual or threatened liens, charges, options, encumbrances, voting agreements,
voting trusts, demands, limitations and restrictions of any nature whatsoever;

(h) save and except as set forth in the Company's Disclosure Schedule, there are
no claims of any nature whatsoever affecting the rights of the Vendors to
transfer the Purchased Shares to the Purchaser and, without limiting the
generality of the

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foregoing, there are no claims or potential claims under any relevant family
relations legislation or other equivalent legislation affecting the Purchased
Shares;

(i) the Vendors have the power and capacity to own and dispose of the Purchased
Shares;

(j) this Agreement and any Formal Agreement as contemplated herein will
constitute a legal, valid and binding obligation of each of the Company and the
Vendors, enforceable against each of the Company and the Vendors in accordance
with its respective terms, except as enforcement may be limited by laws of
general application affecting the rights of creditors and rights of
shareholders;

(k) as at the execution date of any Formal Agreement as contemplated herein the
Company will not have committed itself to provide any person, firm or
corporation with any agreement, option or right, consensual or arising by law,
present or future, contingent or absolute, or capable of becoming an agreement,
option or right:

(i) to require it to issue any further or other shares in its share capital, or
any other security convertible or exchangeable into shares in its share capital,
or to convert or exchange any securities into or for shares in its share
capital;

(ii) for the issue and allotment of any of the authorized but unissued shares in
its share capital;

(iii) to require it to purchase, redeem or otherwise acquire any of the issued
and outstanding shares in its share capital, save and except as to settle,
cancel or re-acquire any disputed outstanding shares as set forth in the
Company's Disclosure Schedule; or

(iv) to purchase or otherwise acquire any shares in its share capital, save and
except as to settle, cancel or re-acquire any disputed outstanding shares as set
forth in the Company's Disclosure Schedule;

(l) no other person, firm or corporation has any agreement, option or right
capable of becoming an agreement for the purchase of any of the Purchased
Shares;

(m) save and except as set forth in the Company's Disclosure Schedule, and save
and except as will be provided for in the Company's consolidated and comparative
audited financial statements for its most recently completed financial period to
be provided prior to Closing (presently expected as at July 31, 2008 and July
31, 2007; and, collectively, the "Company's Financial Statements") and as will
be set forth in any Formal Agreement as contemplated herein, there are no
material liabilities, contingent or otherwise, existing on the date hereof in
respect of which the Company may be liable on or after the completion of the
transactions contemplated by this Agreement other than:

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

(ii) liabilities incurred in the ordinary course of the Company's Business, none
of which are materially adverse to the business, operations, affairs or
financial conditions of the Company;

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(n) no dividend or other distribution by the Company will be declared, paid or
authorized up to and including the Closing Date, and the Company has not and has
not committed itself to confer upon, or pay to or to the benefit of, any entity,
any benefit having monetary value, any bonus or any salary increases except in
the normal course of its business;

(o) save and except as set forth in the Company's Disclosure Schedule and as
will be set forth in any Formal Agreement as contemplated herein, there is no
basis for and there are no actions, suits, judgments, investigations or
proceedings outstanding or pending or, to the best of the knowledge, information
and belief of the Company and the Vendors, after making due inquiry, threatened
against or affecting the Company at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau or agency;

(p) save and except as set forth in the Company's Disclosure Schedule and as
will be set forth in any Formal Agreement as contemplated herein, the Company is
not in breach of any laws, ordinances, statutes, regulations, by-laws, orders or
decrees to which it is subject or which apply to it;

(q) save and except as set forth in the Company's Disclosure Schedule and as
will be set forth in any Formal Agreement as contemplated herein, the Company
has not experienced, nor are the Company and the Vendors aware of, any
occurrence or event which has had, or might reasonably be expected to have, a
materially adverse affect on the Company's Business or on the results of its
operations;

(r) save and except as set forth in the Company's Disclosure Schedule and as
will be set forth in any Formal Agreement as contemplated herein, the Company is
not, nor until or at the Closing Date will it be, in breach of any provision or
condition of, nor has it done or omitted anything that, with or without the
giving of notice or lapse or both, would constitute a breach of any provision or
condition of, or give rise to any right to terminate or cancel or accelerate the
maturity of any payment under, any deed of trust, contract, certificate,
consent, permit, license or other instrument to which it is a party, by which it
is bound or from which it derives benefit, any judgment, decree, order, rule or
regulation of any Court or governmental authority to which it is subject, or any
statute or regulation applicable to it, to an extent that, in the aggregate, has
a material adverse affect on it;

(s) the Company has not committed to making and until the Closing Date will not
make or commit itself to:

(i) guarantee, or agree to guarantee, any indebtedness or other obligation of
any person or corporation; or

(ii) waive or surrender any right of material value;

(t) until the Closing Date the Company will:

(i) maintain its assets in a manner consistent with and in compliance with
applicable law; and

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(ii) not, save and except as set forth in the Company's Disclosure Schedule,
enter into any material transaction or assume or incur any material liability
outside the normal course of its business without the prior written consent of
the Purchaser;

(u) the Company and the Vendors acknowledges that the Purchase Price Shares will
be issued under certain exemptions from the registration and prospectus filing
requirements otherwise applicable under the Securities Act and that, as a
result, the Vendors may be restricted from using most of the remedies that would
otherwise be available to them and will not receive information that would
otherwise be required to be provided to them, and the Purchaser is relieved from
certain obligations that would otherwise apply to it, in either case, under
applicable securities legislation;

(v) the Company and the Vendors acknowledge and agree that the Purchase Price
Shares have not been and will not be qualified or registered under the any
federal or state securities laws of the United States and, as such, the Vendors
may be restricted from selling or transferring such Purchase Price Shares under
applicable law;

(w) the Vendors realize that the sale of the Purchased Shares in exchange for
the Purchase Price Shares will be a highly speculative investment and that the
Vendors are able, without impairing that Vendors' financial condition, to hold
the Purchase Price Shares for an indefinite period of time and to suffer a
complete loss on the Vendors' investment. In addition, the Vendors have such
knowledge and experience in financial and business matters that the Vendors are
capable of evaluating the merits and risks of the prospective investment, and
the Vendors have not received, nor have the Vendors requested or do the Vendors
require to receive, any offering memorandum or a similar document describing the
business and affairs of the Purchaser in order to assist the Vendors in entering
into this Agreement and any Formal Agreement and in consummating the
transactions contemplated herein;

(x) the Company has, and shall have until repayment in full of any Principal Sum
and any Interest accrued thereon under the within interim Loan, all requisite
power and authority to enter into the Loan arrangement and to grant the security
and supporting documents which may be required by the Purchaser as a condition
of the Loan, and the Loan and the security and supporting documents will be duly
and validly authorized, executed and delivered by the Company to the Purchaser
immediately upon the execution of this Agreement and will be valid obligations
of and legally binding on the Company enforceable in accordance with each of
their respective terms;

(y) at Closing each of the Company and the Vendors will have executed and
provided each other with an acceptable form of final release and indemnification
respecting any and all claims which either of such Parties had, or may have had,
against any such other Party prior to Closing (the "Release");

(z) to the actual knowledge, information and belief of each of the Company and
the Vendors only in each of the following instances, the making of this
Agreement, the completion of the transactions contemplated hereby pursuant to
any Formal

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Agreement and the performance of and compliance with the terms hereof does not
and will not:

(i) conflict with or result in a breach of or violate any of the terms,
conditions or provisions of the constating documents of either of the Company or
the Vendors;

(ii) conflict with or result in a breach of or violate any of the terms,
conditions or provisions of any law, judgment, order, injunction, decree,
regulation or ruling of any court or governmental authority, domestic or
foreign, to which either of the Company or any of the Vendors is subject, or
constitute or result in a default under any agreement, contract or commitment to
which either of the Company or any of the Vendors is a party;

(iii) give to any party the right of termination, cancellation or acceleration
in or with respect to any material agreement, contract or commitment to which
either of the Company or any of the Vendors is a party;

(iv) give to any government or governmental authority, or any municipality or
any subdivision thereof, including any governmental department, commission,
bureau, board or administration agency, any right of termination, cancellation
or suspension of, or constitute a breach of or result in a default under, any
permit, license, control or authority issued to either of the Company or to any
of the Vendors which is necessary or desirable in connection with the conduct
and operations of the Company's Business and the ownership or leasing of its
business assets; or

(v) constitute a default by either of the Company or any of the Vendors, or any
event which, with the giving of notice or lapse of time or both, might
constitute an event of default, under any agreement, contract, indenture or
other instrument relating to any indebtedness of the Company or any of the
Vendors which would give any party to that agreement, contract, indenture or
other instrument the right to accelerate the maturity for the payment of any
amount payable under that agreement, contract, indenture or other instrument;
and

(aa) it is not aware of any fact or circumstance which has not been disclosed to
the Purchaser which should be disclosed in order to prevent the representations,
warranties and covenants contained in this section from being misleading or
which would likely affect the decision of the Purchaser to enter into this
Agreement or any Formal Agreement.

Article 3
WARRANTIES, REPRESENTATIONS AND COVENANTS BY THE PURCHASER

3.1 Warranties, representations and covenants by the Purchaser. In order to
induce each of the Company and each of the Vendors to enter into this Agreement
and to enter into and consummate any Formal Agreement, the Purchaser hereby, and
by virtue of any Formal Agreement will thereby, warrant to, represent to and
covenant with each of the Company and the Vendors that, to the best of the
knowledge, information and belief of the Purchaser herein, and to the best of
the knowledge, information and belief of the Purchaser in any Formal Agreement
as at the Closing Date, after making due inquiry and where appropriate and
applicable (and for the

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purposes of the following warranties, representations and covenants "Purchaser"
shall mean the Purchaser and any subsidiary of the Purchaser, if any, as the
context so requires):

(a) the Purchaser is duly incorporated under the laws of its jurisdiction of
incorporation, is validly existing and is in good standing with respect to all
statutory filings required by the applicable corporate laws;

(b) the Purchaser has the requisite power, authority and capacity to own and use
all of its business assets and to carry on its business as presently conducted
by it;

(c) save and except as will be set forth in the "Purchaser's Disclosure
Schedule"; a copy of such Purchaser's Disclosure Schedule to accompany the
Purchaser's delivery of this Agreement; and as will be set forth in any Formal
Agreement as contemplated herein, the Purchaser owns and possesses and has good
and marketable title to and possession of all of its business assets free and
clear of all actual or threatened liens, charges, options, encumbrances, voting
agreements, voting trusts, demands, limitations, contingent liabilities and
restrictions of any nature whatsoever;

(d) save and except as will be set forth in the Purchaser's Disclosure Schedule
and as will be set forth in any Formal Agreement as contemplated herein, the
Purchaser holds all licenses and permits required for the conduct in the
ordinary course of the operations of its business and for the uses to which its
business assets have been put and are in good standing, and such conduct and
uses are in compliance with all laws, zoning and other by-laws, building and
other restrictions, rules, regulations and ordinances applicable to the
Purchaser, and neither the execution and delivery of this Agreement nor the
completion of the transactions contemplated hereby will give any person the
right to terminate or cancel any said license or permit or affect such
compliance;

(e) this Agreement and any Formal Agreement as contemplated herein will
constitute a legal, valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its respective terms, except as
enforcement may be limited by laws of general application affecting the rights
of creditors;

(f) the authorized capital of the Purchaser consists solely of 200,000,000
common shares, with a par value of U.S. $0.001 per common share, of which an
aggregate of 5,710,001 common shares of the Purchaser are presently issued and
outstanding as fully paid and non-assessable in the share capital of the
Purchaser;

(g) all of the issued and outstanding shares of the Purchaser are listed for
trading on the FINRA Over-the-Counter Bulletin Board (the "OTCBB"), and the
Purchaser is not in material default of any of its listing requirements of the
OTCBB or any rules or policies of the United States Securities and Exchange
Commission (the "Commission");

(h) all registration statements, reports and proxy statements filed by the
Purchaser with the Commission, and all registration statements, reports and
proxy statements required to be filed by the Purchaser with the Commission, have
been filed by the Purchaser under the United States Securities Act of 1934 (the
"1934 Act"), have been filed in all material respects in accordance with the
requirements of the 1934 Act and the rules and regulations thereunder and no
such registration statements, reports or proxy statements contain any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary

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          12

in order to make the statements therein, in light of the circumstances under
which they were made, not misleading;

(i) the Purchaser will allot and issue the Purchase Price Shares on the Closing
Date in accordance with section "1.2" hereinabove, the Loan Shares on the
Closing Date (or any earlier date of Conversion) in accordance with section
"1.4" hereinabove, and the Shares for Debt on the Closing Date in accordance
with section "1.5" hereinabove, as fully paid and non-assessable in the capital
of the Purchaser free and clear of all actual or threatened liens, charges,
options, encumbrances, voting agreements, voting trusts, demands, limitations
and restrictions of any nature whatsoever, other than hold periods or other
restrictions imposed under applicable securities legislation;

(j) up to and including the Closing Date the Purchaser will not, except as
provided in this Agreement and the Formal Agreement, commit itself to:

(i) redeem or acquire any shares in its share capital;

(ii) declare or pay any dividend;

(iii) make any reduction in or otherwise make any payment on account of its
paid-up capital;

(iv) issue any further or other shares of capital (whether or not previously
authorized but unissued), or any other security convertible or exchangeable into
shares in its capital, or to convert or exchange any securities into or for
shares in Purchaser's capital; or

(v) effect any subdivision, consolidation (except as required by the terms of
this Agreement) or reclassification of any of its share capital;

(k) up to and including the Closing Date the Purchaser will not commit itself
to:

(i) acquire or have the use of any property from a person, corporation or entity
with whom it was not dealing with at arm's length; or

(ii) dispose of anything to a person, corporation or entity with whom it was not
dealing with at arm's length for proceeds less than the fair market value
thereof;

(l) save and except for any fees which may be payable or issuable by the
Purchaser in conjunction with the completion of its proposed Private Placement
(as hereinafter determined) as set forth hereinbelow, the Purchaser has not
retained, employed or introduced any other consultant, broker, finder or other
person who would be entitled to a fee, brokerage commission or finder's fee
arising out of the transactions contemplated hereby;

(m) save and except as will be set forth in this Agreement and any Formal
Agreement as contemplated herein, up to and including the Closing Date the
Purchaser will not commit itself to provide any person, firm or corporation with
any agreement, option or right, consensual or arising by law, present or future,
contingent or absolute, or capable of becoming an agreement, option or right:

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          13

 

(i) to require it to issue any further or other shares in its share capital, or
any other security convertible or exchangeable into shares in its share capital,
or to convert or exchange any securities into or for shares in its share
capital;

(ii) for the issue and allotment of any of the authorized but unissued shares in
its share capital;

(iii) to require it to purchase, redeem or otherwise acquire any of the issued
and outstanding shares in its share capital; or

(iv) to purchase or otherwise acquire any shares in its share capital;

(n) save and except as will be set forth in the Purchaser's Disclosure Schedule
and as will be set forth in any Formal Agreement as contemplated herein, there
will be no material liabilities, contingent or otherwise, existing on the
Closing Date in respect of which the Purchaser may be liable on or after the
completion of the transactions contemplated by the Formal Agreement other than:

(i) liabilities disclosed or referred to in the Formal Agreement; and

(ii) liabilities incurred in the ordinary course of business, none of which are
materially adverse to the business, operations, affairs or financial conditions
of the Purchaser;

(o) no dividend or other distribution by the Purchaser will have been made,
declared or authorized since its incorporation, nor will any be declared, paid
or authorized up to and including the Closing Date, and the Purchaser will not
commit itself to confer upon, or pay to or to the benefit of, any entity, any
benefit having monetary value, any bonus or any salary increases except in the
normal course of its business;

(p) save and except as will be set forth in the Purchaser's Disclosure Schedule
and as will be set forth in any Formal Agreement as contemplated herein, there
will be no basis for and there will be no actions, suits, judgments,
investigations or proceedings outstanding or pending or, to the best of the
knowledge, information and belief of the Purchaser under the Formal Agreement,
after making due inquiry, threatened against or affecting the Purchaser at law
or in equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau or agency;

(q) save and except as will be set forth in the Purchaser's Disclosure Schedule
and as will be set forth in any Formal Agreement as contemplated herein, the
Purchaser will not be in breach of any laws, ordinances, statutes, regulations,
by-laws, orders or decrees to which it is subject or which apply to it;

(r) save and except as will be set forth in the Purchaser's Disclosure Schedule
and as will be set forth in any Formal Agreement as contemplated herein, the
Purchaser will have not experienced, nor will the Purchaser be aware of, any
occurrence or event which has had, or might reasonably be expected to have, a
materially adverse affect on the Purchaser's business or on the results of its
operations;

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          14

 

(s) up to and including the Closing Date there has been and will be prepared and
filed on a timely basis all federal and state income tax returns, elections and
designations, and all other governmental returns, notices and reports of which
the Purchaser had or ought reasonably to have had knowledge, required to be or
reasonably capable of being filed up to the Closing Date, with respect to the
operations of the Purchaser, and no such returns, elections, designations,
notices or reports contain any material misstatement or omit any material
statement that should have been included, and each such return, election,
designation, notice or report, including accompanying schedules and statements,
is true, correct and complete in all material respects;

(t) save and except as will be set forth in the Purchaser's Disclosure Schedule
and as will be set forth in any Formal Agreement as contemplated herein, the
Purchaser is not, nor until or at the Closing Date will it be, in breach of any
provision or condition of, nor has it done or omitted anything that, with or
without the giving of notice or lapse or both, would constitute a breach of any
provision or condition of, or give rise to any right to terminate or cancel or
accelerate the maturity of any payment under, any deed of trust, contract,
certificate, consent, permit, license or other instrument to which it is a
party, by which it is bound or from which it derives benefit, any judgment,
decree, order, rule or regulation of any court or governmental authority to
which it is subject, or any statute or regulation applicable to it, to an extent
that, in the aggregate, has a material adverse affect on it;

(u) save and except as will be set forth in the Purchaser's Disclosure Schedule
and as will be set forth in any Formal Agreement as contemplated herein, no
payments of any kind will have been made or authorized by or on behalf of the
Purchaser to or on behalf of directors, officers, shareholders or employees of
the Purchaser or under any management agreements with the Purchaser;

(v) save and except as will be set forth in the Purchaser's Disclosure Schedule
and as will be set forth in any Formal Agreement as contemplated herein, the
Purchaser will not have any contracts, agreements, undertakings or arrangements,
whether oral, written or implied, with employees, lessees, licensees, managers,
accountants, suppliers, agents, distributors, directors, officers, lawyers or
others which cannot be terminated, without penalty, on no more than one month's
notice;

(w) save and except as will be set forth in the Purchaser's Disclosure Schedule
and as will be set forth in any Formal Agreement as contemplated herein, none of
directors, officers or employees of the Purchaser prior to Closing will be
indebted or under obligation to the Purchaser on any account whatsoever;

(x) the Purchaser has not committed to making and until the Closing Date will
not make or commit itself to:

(i) guarantee, or agree to guarantee, any indebtedness or other obligation of
any person or corporation; or

(ii) waive or surrender any right of material value;

(y) until the Closing Date the Purchaser will:

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          15

(i) maintain its assets in a manner consistent with and in compliance with
applicable law; and

(ii) not enter into any loan, any material transaction or assume or incur any
material liability outside the normal course of its business (except as required
by the terms of the Formal Agreement);

(z) the shares in the capital of the Purchaser will not be subject to or
affected by any actual or, to the best of the knowledge, information and belief
of the Purchaser, after making due inquiry, pending or threatened cease trade,
compliance or denial of use of exemptions orders of, or action, investigation or
proceeding by or before, any securities regulatory authority, court,
administrative agency or other tribunal;

(aa) the making of the Formal Agreement, the completion of the transactions
contemplated thereby and the performance of and compliance with the terms
thereof will not:

(i) conflict with or result in a breach of or violate any of the terms,
conditions or provisions of the constating documents of the Purchaser;

(ii) conflict with or result in a breach of or violate any of the terms,
conditions or provisions of any law, judgment, order, injunction, decree,
regulation or ruling of any court or governmental authority, domestic or
foreign, to which the Purchaser is subject, or constitute or result in a default
under any agreement, contract or commitment to which the Purchaser is a party;

(iii) give to any party the right of termination, cancellation or acceleration
in or with respect to any agreement, contract or commitment to which the
Purchaser is a party;

(iv) give to any government or governmental authority, or any municipality or
any subdivision thereof, including any governmental department, commission,
bureau, board or administration agency, any right of termination, cancellation
or suspension of, or constitute a breach of or result in a default under, any
permit, license, control or authority issued to the Purchaser which is necessary
or desirable in connection with the conduct and operations of its business and
the ownership or leasing of its business assets; or

(v) constitute a default by the Purchaser or any event which, with the giving of
notice or lapse of time or both, might constitute an event of default, under any
agreement, contract, indenture or other instrument relating to any indebtedness
of the Purchaser which would give any party to that agreement, contract,
indenture or other instrument the right to accelerate the maturity for the
payment of any amount payable under that agreement, contract, indenture or other
instrument;

(ab) at or subsequent to Closing the following changes will be effected to the
Board of Directors and officers of the resulting Purchaser company
(collectively, the "Change in Board and officers"):

(i) at Closing all but one director and all officers of the Purchaser will
resign and the previous Board of Directors of the Purchaser will appoint an

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          16

aggregate of an additional six directors to be comprised of two nominees
appointed by the previous Board of Directors of the Purchaser and four nominees
to be put forward by the Vendors; and

(ii) at Closing the resulting Board of Directors of the Purchaser will appoint
such executive officers of the resulting Purchaser as may be determined by the
Vendors prior to Closing;

(ac) the Purchaser, on behalf of itself or its various investors and such
investors who may subscribe directly for convertible loans in and to the Company
on similar terms, will raise prior to and/or commensurate with or prior to
Closing a common share private placement or convertible loan funding, under
"Rule 506" or Regulation S under the Securities Act, of a minimum of U.S.
$1,500,000 and a maximum of up to U.S. $2,000,000, and at a subscription or
conversion price of not less than U.S. $0.35 per restricted common share (each a
"Share") (collectively, the "Private Placement"); with an understanding that not
less than U.S. $1,500,000 from the Private Placement shall be advanced by the
Purchaser to the Company, or shall have been raised directly by the Company
through convertible loans, upon the earlier of (i) November 30, 2008 and (ii)
five business days of the due and complete closing of the Private Placement,
with the balance, if any, being available for unallocated working capital for
the resulting Purchaser company. In this regard it is hereby contemplated that
up to U.S. $2,000,000, but not less than U.S. $1,500,000, of any such Private
Placement will take the form of the proposed Loan from the Purchaser and/or the
Lenders as contemplated in section "1.4" hereinabove;

(ad) commensurate with or as soon as reasonably practicable subsequent to
Closing the resulting Purchaser company will seek the approval of its
shareholders, if required, to change the name of the resulting Purchaser company
to such name as the Purchaser's resulting Board of Directors may determine at
Closing (the "Change in Name"); and subsequent to Closing the resulting
Purchaser company shall be in the process of preparing or filing the necessary
documentation with all Regulatory Authorities to effect the Change in Name and
which shall include, without limitation, obtaining a new trading symbol and
CUSIP number for the resulting Purchaser company; and

(ae) it is not aware of any fact or circumstance which has not been disclosed to
the Company and the Vendors which should be disclosed in order to prevent the
representations, warranties and covenants contained in this section from being
misleading or which would likely affect the decision of the Company and the
Vendors to enter into this Agreement or any Formal Agreement.

Article 4
CONDITIONS PRECEDENT TO CLOSING

4.1 Purchaser's conditions precedent. All of the obligations of the Purchaser
under this Agreement are, and under any Formal Agreement will be, further
subject to at least the following conditions for the exclusive benefit of the
Purchaser fulfilled in all material aspects in the reasonable opinion of the
Purchaser or to be waived by the Purchaser as soon as possible but, unless
specifically indicated as otherwise, not later than five calendar days prior to
the Closing Date:

(a) each of the Company and the Vendors shall have complied with all warranties,
representations, covenants and agreements herein and under any Formal

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          17

Agreement agreed to be performed or caused to be performed by each of the
Company and the Vendors on or before the Closing Date;

(b) each of the Company and the Vendors shall have obtained all authorizations,
approvals and other actions by, and have made all filings with, any securities
regulatory authority from whom any such authorization, approval or other action
is required to be obtained or to be made in connection with the transactions
contemplated herein, and all such authorizations, approvals and other actions
are in full force and effect and all such filings have been accepted and each of
the Company and the Vendors are in compliance with, and have not committed any
breach of, any securities laws, regulations or policies of any securities
regulatory authority to which either of the Company or the Vendors may be
subject;

(c) all matters which, in the opinion of counsel for the Purchaser, are material
in connection with the transactions contemplated by this Agreement and by any
Formal Agreement shall be subject to the favourable opinion of such counsel, and
all relevant records and information shall be supplied to such counsel for that
purpose;

(d) no material loss or destruction of or damage to either of the Company, any
of its assets, any of the Company's Business or the Purchased Shares shall have
occurred;

(e) no action or proceeding at law or in equity shall be pending or threatened
by any person, company, firm, governmental authority, regulatory body or agency
to enjoin or prohibit:

(i) the purchase or transfer of any of the Purchased Shares contemplated by this
Agreement and by any Formal Agreement or the right of any of the Company or the
Vendors to dispose of any of the Purchased Shares; or

(ii) the right of the Company to conduct its operations and carry on, in the
normal course, its Company's Business and operations as it has carried on in the
past;

(f) the delivery to the Purchaser by the Company and the Vendors, on a
confidential basis, of all remaining material documentation and information and
including, without limitation, an updated Company's Disclosure Schedule and:

(i) a copy of all material contracts, agreements, reports and information of any
nature respecting the Company, its assets and the Company's Business; and

(ii) details of any lawsuits, claims or potential claims relating to either of
the Company, its assets, the Company's Business or the Purchased Shares of which
either of the Company or the Vendors is aware and the Purchaser is unaware;

(g) the delivery to the Purchaser by the Company of such security and supporting
documentation and instruments respecting the granting by the Purchaser to the
Company of the within interim Loan as the Purchaser's solicitors may reasonably
require;

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          18

(h) the delivery to the Purchaser by the Company and the Vendors of an
acceptable form of final Release respecting any and all claims which either of
such Parties had, or may have had, against any such other Party prior to
Closing;

(i) the Company and the Vendors will cause the Company, for a period of at least
five calendar days prior to the Closing Date, during normal business hours, to:

(i) make available for inspection by the counsel, auditors and representatives
of the Purchaser, at such location as is appropriate, the Company's books,
records, contracts, documents, correspondence and other written materials, and
afford such persons every reasonable opportunity to make copies thereof and take
extracts therefrom at the sole cost of the Purchaser, provided such persons do
not unduly interfere in the operations of the Company;

(ii) authorize and permit such persons at the risk and the sole cost of the
Purchaser, and only if such persons do not unduly interfere in the operations of
the Company, to attend at all of its places of business and operations to
observe the conduct of the Company's Business and operations, inspect its assets
and, if applicable, make physical counts of its inventories, shipments and
deliveries; and

(iii) require each of the Company's management personnel to respond to all
reasonable inquiries concerning the Company's Business, its assets or the
conduct of its business relating to its liabilities and obligations; and

(j) the completion by the Purchaser and by the Purchaser's professional advisors
of a thorough due diligence and operations review of both the Company's Business
and the operations of the Company together with the transferability of the
Purchased Shares as contemplated by this Agreement and by any Formal Agreement.

4.2 Company's and Vendors' conditions precedent. All of the obligations of the
Company and the Vendors under this Agreement are, and under any Formal Agreement
will be, further subject to at least the following conditions for the exclusive
benefit of the Company and the Vendors fulfilled in all material aspects in the
reasonable opinion of the Company and the Vendors or to be waived by the Company
and the Vendors as soon as possible but, unless specifically indicated as
otherwise, not later than five calendar days prior to the Closing Date:

(a) the Purchaser shall have complied with all warranties, representations,
covenants and agreements herein and under any Formal Agreement agreed to be
performed or caused to be performed by the Purchaser on or before the Closing
Date;

(b) all matters which, in the opinion of counsel for the Company and the
Vendors, are material in connection with the transactions contemplated by this
Agreement and by any Formal Agreement shall be subject to the favourable opinion
of such counsel, and all relevant records and information shall be supplied to
such counsel for that purpose;

(c) no material loss or destruction of or damage to the Purchaser shall have
occurred;

(d) written confirmation that the Purchaser has raised into trust or otherwise,
on behalf of itself or its various investors and such investors who may
subscribe directly for convertible loans in and to the Company on similar terms,
sufficient funding in order to close the minimum required Private Placement at
Closing on the terms as set forth in paragraph "3.1(ac)" hereinabove and
delivery of the Loan proceeds to Company having occurred upon the earlier of (i)
November 15, 2008 and (ii) five business days of the due and complete closing of
the Private Placement;

(e) the delivery to the Company and the Vendors by the Purchaser, on a
confidential basis, of all remaining material documentation and information and
including, without limitation, an updated Purchaser's Disclosure Schedule and:

(i) a copy of all material contracts, agreements, reports and title information
of any nature respecting the Purchaser; and

(ii) details of any lawsuits, claims or potential claims relating to the
Purchaser of which the Purchaser is aware and the Company and the Vendors are
unaware;

(f) the Purchaser will, for a period of at least five calendar days prior to the
Closing Date, during normal business hours:

(i) make available for inspection by the solicitors, auditors and
representatives of the Company and the Vendors, at such location as is
appropriate, all of the Purchaser's books, records, contracts, documents,
correspondence and other written materials, and afford such persons every
reasonable opportunity to make copies thereof and take extracts therefrom at the
sole cost of the Company and the Vendors, provided such persons do not unduly
interfere in the operations of the Purchaser;

(ii) authorize and permit such persons at the risk and the sole cost of the
Company and the Vendors, and only if such persons do not unduly interfere in the
operations of the Purchaser, to attend at all of its places of business and
operations to observe the conduct of its business and operations, inspect its
properties and assets and, if applicable, make physical counts of its
inventories, shipments and deliveries; and

(iii) require the Purchaser's management personnel to respond to all reasonable
inquiries concerning the Purchaser's business assets or the conduct of its
business relating to its liabilities and obligations; and

(g) the completion by the Company and the Vendors, and by the Company's and the
Vendors' professional advisors, of a thorough due diligence and operations
review of both the business and operations of the Purchaser; and

(h) the Purchaser shall have obtained all authorizations, approvals and other
actions by, and have made all filings with, any securities regulatory authority
from whom any such authorization, approval or other action is required to be
obtained or to be made in connection with the transactions contemplated herein,
and all such authorizations, approvals and other actions are in full force and
effect and all such filings have been accepted and the Purchaser is in
compliance with, and has not committed any breach of, any securities laws,
regulations or policies of any securities regulatory authority to which the
Purchasermay be subject.

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          19

 

4.3 Parties' conditions precedent. The Closing of any Formal Agreement and the
rights, obligations and duties of the Parties arising upon and prior to the
Closing Date shall also be conditional upon and subject to:

(a) the specific ratification of the terms and conditions of this Agreement by
each of the Board of Directors of the Company and the Purchaser, together with
each of the Vendors if applicable, within five business day of the due and
completion execution of this Agreement by each of the Parties hereto
(collectively, the "Ratification");

(b) the completion by each of the Purchaser and the Company of an initial due
diligence and operations review of the other Party's respective businesses and
operations within ten business days of the prior satisfaction of the
Ratification (the "Initial Due Diligence");

(c) the execution of a Formal Agreement as between the Company, the Vendors and
the Purchaser, or the corresponding delivery of a takeover bid circular by the
Purchaser to the Vendors, incorporating terms and conditions similar to those
contained in this Agreement, on or before October 31, 2008;

(d) if required under applicable corporate and securities laws, the receipt of
all necessary approvals from any Regulatory Authority having jurisdiction over
the transactions contemplated by this Agreement and by any Formal Agreement on
or before November 15, 2008;

(e) if required under applicable corporate and securities laws, shareholders of
the Purchaser and/or the Company passing an ordinary resolution or, where
required, a special resolution, approving the terms and conditions of this
Agreement and any Formal Agreement, and all of the transactions contemplated
hereby and thereby, and the Purchaser and/or the Company sending all required
notice to the Purchaser's and/or the Company's shareholders in connection
therewith, or, in the alternative and if allowable in accordance with applicable
corporate and securities laws, shareholders of the Purchaser and/or the Company
holding over 50% of the issued shares of the Purchaser and the Company providing
written consent resolutions evidencing their approval to the terms and
conditions of this Agreement, and any Formal Agreement, and all of the
transactions contemplated hereby and thereby, together with certification of any
required notice to all shareholders of the Purchaser and/or Company of such
written consent resolutions; and

(f) the Board of Directors of each of the Purchaser and/or of each of the
shareholders of the Purchaser, if required, approving of the within issuance by
the Purchaser to the order and direction of the Vendors of all of the referenced
Purchase Price Shares in accordance with section "1.2" hereinabove, the Loan
Shares in accordance with section "1.4" hereinabove and the Shares for Debt in
accordance with section "1.5" below hereinabove, and, in addition, the Board of
Directors and/or shareholders of the Purchaser, if required, having also
approved and received any required notice of:

(i) the proposed Loan by the Purchaser to the Lender prior to Closing of not
less than the Principal Sum of $1,500,000 which shall be convertible by

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          20

the Lenders thereof into Loan Shares of the Purchaser in accordance with section
"1.4" hereinabove;

(ii) the proposed issuance by the Purchaser to the Company's Creditors of the
Shares For Debt in accordance with section "1.5" hereinabove;

(iii) the proposed Change in Board and officers of the Purchaser in accordance
with paragraph "3.1(ab)" hereinabove;

(iv) in accordance with paragraph "3.1(ac)" hereinabove, a common share or
convertible loan Private Placement funding of a minimum of U.S. $1,500,000 and a
maximum of up to U.S. $2,000,000, and at a subscription price of not less than
U.S. $0.35 per restricted common share; with an understanding that not less than
U.S. $1,500,000 from the Private Placement shall be advanced by the Purchaser to
the Company, or shall have been raised directly by the Company through
convertible loans, upon the earlier of (i) November 15, 2008 and (ii) five
business days of the due and complete closing of the Private Placement with the
balance, if any, being available for unallocated working capital for the
resulting Purchaser. In this regard it is hereby contemplated that at least U.S.
$1,500,000 of such Private Placement will take the form of the proposed Loan
from the Purchaser as contemplated herein;

(v) in accordance with paragraph "3.1(ad)" hereinabove, if required and
possible, the proposed Change in Name of the Purchaser; and

(vi) such other matters as may be agreed to as between the Parties hereto prior
the completion of the transactions contemplated by this Agreement.

4.4 Company's and Vendors' additional document covenants. The Company and the
Vendors will also deliver, or cause to be delivered to the Purchaser prior to
the Closing Date, an independent assessment report and business plan respecting
the Company's Business and assets together with such corporate and asset status
reports and/or opinions respecting the Company's Business and assets, as may be
required by either the Purchaser or any Regulatory Authority, prepared, at a
minimum, in accordance with the applicable rules and reporting guidelines of the
appropriate Regulatory Authorities.

Article 5
CLOSING AND EVENTS OF CLOSING

5.1 Closing and Closing Date. The Closing of the within purchase and delivery of
the Purchased Shares, in conjunction with any Formal Agreement, together with
all of the transactions contemplated by this Agreement and by any Formal
Agreement, shall occur on the day which is 30 calendar days following the
satisfaction of all of the conditions precedent which are set out in Article "4"
hereinabove, or on such earlier or later Closing Date as may be agreed to in
advance and in writing by each of the Parties hereto, and will be closed at the
offices of counsel for the Purchaser, Lang Michener LLP, Lawyers - Patent &
Trade Mark Agents, located at 1500 Royal Centre, 1055 West Georgia Street,
Vancouver, British Columbia, Canada, V6E 4N7, at 2:00 p.m. (Vancouver time) on
the Closing Date.

5.2 Latest Closing Date. If the Closing Date has not occurred by November 30,
2008, this Agreement will be terminated and unenforceable unless the Parties
hereto agree in writing to grant an extension of the Closing Date.

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5.3 Documents to be delivered by the Company and the Vendors prior to the
Closing Date. Not later than two calendar days prior to the Closing Date, and in
addition to the documentation which is required by the agreements and conditions
precedent which are set forth hereinabove, the Company and the Vendors shall
also execute and deliver or cause to be delivered all such other documents,
resolutions and instruments as may be necessary, in the opinion of counsel for
the Purchaser, acting reasonably, to transfer all of the Purchased Shares to the
Purchaser free and clear of all liens, charges and encumbrances, and in
particular including, but not being limited to:

(a) a certified copy of an ordinary resolution of the shareholders of the
Company and, if applicable, the Vendors, approving the terms and conditions of
this Agreement, any Formal Agreement and the transactions contemplated hereby
and thereby or, in the alternative, shareholders of the Company and, if
applicable, the Vendors, holding over 50% of the issued shares of the Company
and/or the Vendors providing written consent resolutions evidencing their
approval to the terms and conditions of this Agreement, any Formal Agreement and
all of the transactions contemplated thereunder together with certification of
any required notice to all shareholders of the Company and, if applicable, the
Vendors, of such written consent resolutions;

(b) all documentation as may be necessary and as may be required by counsel for
the Purchaser, acting reasonably, to ensure that all of the Purchased Shares
have been transferred, assigned and are registerable in the name of and for the
benefit of the Purchaser, and to ensure that all outstanding options in and to
the Company, if any, have been cancelled, under all applicable corporate and
securities laws;

(c) certificate(s) representing the Purchased Shares registered in the name of
the Vendors, duly endorsed for transfer to the Purchaser or irrevocable stock
powers transferring the Purchased Shares to the Purchaser;

(d) a certificate representing the Purchased Shares of the Company registered in
the name of the Purchaser;

(e) written evidence of the Release having been obtained;

(f) a certified copy of the resolutions of the Board of Directors of each of the
Company and, if applicable, the Vendors, authorizing the transfer by the Vendors
to the Purchaser of the Purchased Shares;

(g) consents to act and similar documentation required in order to effect the
proposed Change in Board and officers of the Purchaser;

(h) a copy of all corporate records and books of account for the Company and its
respective subsidiaries and including, without limiting the generality of the
foregoing, a copy of all minute books, share register books, share certificate
books and annual reports of the Company and its respective subsidiaries;

(i) all necessary consents and approvals in writing to the completion of the
transactions contemplated herein;

(j) a certificate of an officer for each of the Company, dated as of the Closing
Date, acceptable in form to counsel for the Purchaser, acting reasonably,
certifying that the warranties, representations, covenants and agreements of
each of the Company

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          22

and the Vendors contained in, respectively, this Agreement and in any Formal
Agreement are true and correct in all respects and will be true and correct as
of the Closing Date as if made by the Company and the Vendors on the Closing
Date;

(k) an opinion of counsel to the Company and the Vendors, dated as at the
Closing Date, and addressed to the Purchaser and its counsel, in form and
substance satisfactory to each of the Parties and their counsel, acting
reasonably, respecting each of the matters material to the Purchase and Sale
contemplated herein at Closing;

(l) all such other documents and instruments as the Purchaser's counsel may
reasonably require.

5.4 Documents to be delivered by the Purchaser prior to the Closing Date. Not
later than two calendar days prior to the Closing Date, and in addition to the
documentation which is required by the agreements and conditions precedent which
are set forth hereinabove, the Purchaser shall also execute and deliver or cause
to be delivered all such documents, resolutions and instruments as are
necessary, in the opinion of counsel for the Company and the Vendors, acting
reasonably, to issue to the Vendors the entire Purchase Price Shares free and
clear of all liens, charges and encumbrances, however, subject to the normal
U.S. resale provisions applicable thereto, and in particular including, but not
being limited to:

(a) a certified copy of an ordinary resolution of the shareholders of the
Purchaser approving the terms and conditions of the Formal Agreement and the
transactions contemplated hereby and thereby or, in the alternative,
shareholders of the Purchaser holding over 50% of the issued shares of the
Purchaser providing written consent resolutions evidencing their approval to the
terms and conditions of the Formal Agreement and all of the transactions
contemplated thereunder together with certification of any required notice to
all shareholders of the Purchaser of such written consent resolutions;

(b) a certified copy of the resolutions of the directors of the Purchaser
providing for the approval of all of the transactions contemplated hereby and
including, without limitation, each of the matters provided for in paragraph
"4.3(f)" hereinabove;

(c) share certificates, subject to the normal U.S. resale provisions applicable
thereto, representing all of the Purchase Price Shares issued and registered in
the names of the Vendors as notified by the Vendors to the Purchaser prior to
Closing in accordance with section "1.2" hereinabove;

(d) Shares For Debt common share certificates, subject to the normal U.S. resale
provisions applicable thereto, representing all of the Shares For Debt issued to
the Company's Creditors in accordance with section "1.5" hereinabove;

(e) Private Placement and Loan Share common share certificates, subject to the
normal U.S. resale provisions applicable thereto, representing all of the
Private Placement and Loan Shares issued to the Lenders and Private Placement
subscribers in accordance with section "1.4" hereinabove;

(f) all necessary consents and approvals in writing to the completion of the
transactions contemplated herein;

(g) a certificate of an officer of the Purchaser, dated as of the Closing Date,
acceptable in form to counsel for the Company and the Vendors, acting

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          23

reasonably, certifying that the warranties, representations, covenants and
agreements of the Purchaser contained in, respectively, this Agreement and in
any Formal Agreement are true and correct and will be true and correct as of the
Closing Date as if made by the Purchaser on the Closing Date;

(h) resignations and similar documentation required in order to effect the
proposed Change in Board and officers of the Purchaser in accordance with
paragraph "3.1(ab)" hereinabove;

(i) a certified copy of the resolutions of the Board of Directors of the
Purchaser accepting the proposed Change in Board and officers of the Purchaser;

(j) confirmation that the Purchaser has raised into trust or otherwise, on
behalf of itself or its various investors and such investors who may subscribe
directly for convertible loans in and to the Company on similar terms,
sufficient funding in order to close the minimum required Private Placement at
Closing on the terms as set forth in paragraph "3.1(ac)" hereinabove; such that
the sum of not less than U.S. $1,500,000 in liquid funds was delivered or
provided to the Company from the Private Placement proceeds upon the earlier of
(i) November 15, 2008 and (ii) five business days of the due and complete
closing of the Private Placement;

(k) an opinion of counsel to the Purchaser, dated as at the Closing Date, and
addressed to the Company, the Vendors and their counsel, in form and substance
satisfactory to each of the Parties and their counsel, acting reasonably,
respecting each of the matters material to the Purchase and Sale contemplated
herein at Closing;

(l) all such other documents and instruments as the Company's and the Vendors'
counsel may reasonably require.

Article 6
DUE DILIGENCE AND NON-DISCLOSURE

6.1 Due Diligence. Each of the Parties shall forthwith conduct such further due
diligence examination of the other Parties as it deems appropriate.

6.2 Confidentiality. Each Party may in a reasonable manner carry out such
investigations and due diligence as to the other Parties, at all times subject
to the confidentiality provisions hereinbelow, as each Party deems necessary. In
that regard the Parties agree that each shall have full and complete access to
the Purchaser's and the Company's respective books, records, financial
statements and other documents, articles of incorporation, by-laws, minutes of
Board of Directors' meetings and their committees, investment agreements,
material contracts and as well such other documents and materials as the Vendors
or the Purchaser, or their respective counsel, may deem reasonable and necessary
to conduct an adequate due diligence investigation of each such Party, its
respective operations and financial condition prior to the Closing Date.

6.3 Non-disclosure. Subject to the provisions hereinbelow, the Parties, for
themselves, their officers, directors, shareholders, consultants, employees and
agents agree that they each will not disseminate or disclose, or knowingly
allow, permit or cause others to disseminate or disclose to third parties who
are not subject to express or implied covenants of confidentiality, without the
other Parties' express written consent, either: (i) the fact or existence of
this Agreement or discussions and/or negotiations between them involving, inter
alia, possible business transactions; (ii) the possible substance or content of
those discussions; (iii) the possible

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          24

terms and conditions of any proposed transaction; (iv) any statements or
representations (whether verbal or written) made by either Party in the course
of or in connection with those discussions; or (v) any written material
generated by or on behalf of any Party and such contacts, other than such
disclosure as may be required under applicable securities legislation or
regulations, pursuant to any order of a court or on a "need to know" basis to
each of the Parties respective professional advisors.

6.4 Public Announcements. Notwithstanding the provisions of this Article, the
Parties agree to make such public announcements of this Agreement promptly upon
its execution in accordance with the requirements of applicable securities
legislation and regulations.

Article 7
ASSIGNMENT AND VARIATIONS

7.1 Assignment. Save and except as provided herein, no Party may sell, assign,
pledge or mortgage or otherwise encumber all or any part of its interest herein
without the prior written consent of all of the other Parties hereto.

7.2 Amendment. This Agreement and any provision thereof may only be amended in
writing and only by duly authorized signatories of each of the respective
Parties hereto.

7.3 Variation in the terms of this Agreement upon review. It is hereby
acknowledged and agreed by each of the Parties hereto that where any variation
in the terms and/or conditions of this Agreement or any Formal Agreement is
reasonably required by any of the Regulatory Authorities as a condition of their
respective Regulatory Approval to any of the terms and conditions of this
Agreement, any such reasonable variation, having first been notified to all
Parties, will be deemed to be accepted by each of the Parties hereto and form
part of the terms and conditions of this Agreement. If any such Party, acting
reasonably, deems any such notified variation unreasonable, that Party may, in
its sole and absolute discretion, and within a period of not greater than ten
calendar days from its original notification and at its cost, make such further
applications or submissions to the relevant Regulatory Authority as it considers
necessary in order to seek an amendment to any such variation; provided,
however, that the final determination by any such Regulatory Authority to any
such application or submission by such objecting Party will be deemed binding
upon such Party who must then provide notification to all other Parties as
provided for hereinabove.

Article 8
FORCE MAJEURE

8.1 Events. If any Party hereto is at any time prevented or delayed in complying
with any provisions of this Agreement by reason of strikes, walk-outs, labour
shortages, power shortages, fires, wars, acts of God, earthquakes, storms,
floods, explosions, accidents, protests or demonstrations by environmental
lobbyists or native rights groups, delays in transportation, breakdown of
machinery, inability to obtain necessary materials in the open market,
unavailability of equipment, governmental regulations restricting normal
operations, shipping delays or any other reason or reasons beyond the control of
that Party, then the time limited for the performance by that Party of its
respective obligations hereunder shall be extended by a period of time equal in
length to the period of each such prevention or delay.

8.2 Notice. A Party shall, within seven calendar days, give notice to the other
Parties of each event of force majeure under section "8.1" hereinabove, and upon
cessation of such event shall furnish the other Parties with notice of that
event together with particulars of the number of days by which the obligations
of that Party hereunder have been extended by virtue of such event of force
majeure and all preceding events of force majeure.

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Article 9
ARBITRATION

9.1 Matters for arbitration. The Parties agree that all questions or matters in
dispute with respect to this Agreement shall be submitted to arbitration
pursuant to the terms hereof.

9.2 Notice. It shall be a condition precedent to the right of any Party to
submit any matter to arbitration pursuant to the provisions hereof that any
Party intending to refer any matter to arbitration shall have given not less
than two calendar days' prior written notice of its intention to do so to the
other Parties together with particulars of the matter in dispute. On the
expiration of such two calendar days the Party who gave such notice may proceed
to refer the dispute to arbitration as provided in section "9.3" hereinbelow.

9.3 Appointments. The Party desiring arbitration shall appoint one arbitrator,
and shall notify the other Parties of such appointment, and the other Parties
shall, within ten calendar days after receiving such notice, appoint an
arbitrator, and the two arbitrators so named, before proceeding to act, shall,
within five calendar days of the appointment of the last appointed arbitrator,
unanimously agree on the appointment of a third arbitrator, to act with them and
be chairperson of the arbitration herein provided for. If the other Parties
shall fail to appoint an arbitrator within ten calendar days after receiving
notice of the appointment of the first arbitrator, and if the two arbitrators
appointed by the Parties shall be unable to agree on the appointment of the
chairperson, the chairperson shall be appointed under the provisions of the
American Arbitration Rules (the "Arbitration Rules"). Except as specifically
otherwise provided in this section, the arbitration herein provided for shall be
conducted in accordance with the rules and procedures promulgated under the
Arbitration Rules. The chairperson, or in the case where only one arbitrator is
appointed, the single arbitrator, shall fix a time and place in the City of
Indianapolis, State of Indiana, U.S.A., for the purpose of hearing the evidence
and representations of the Parties, and he shall preside over the arbitration
and determine all questions of procedure not provided for under such Arbitration
Rules or this section. After hearing any evidence and representations that the
Parties may submit, the single arbitrator, or the arbitrators, as the case may
be, shall make an award and reduce the same to writing, and deliver one copy
thereof to each of the Parties. The expense of the arbitration shall be paid as
specified in the award.

9.4 Award. The Parties agree that the award of a majority of the arbitrators, or
in the case of a single arbitrator, of such arbitrator, shall be final and
binding upon each of them.

Article 10
TERMINATION

10.1 Default. The Parties hereto agree that if any Party hereto is in default
with respect to any of the provisions of this Agreement (herein called the
"Defaulting Party"), the non-defaulting Party (herein called the "Non-Defaulting
Party") shall give notice to the Defaulting Party designating such default, and
within 14 calendar days after its receipt of such notice, the Defaulting Party
shall either:

(a) cure such default, or commence proceedings to cure such default and
prosecute the same to completion without undue delay; or

(b) give the Non-Defaulting Party notice that it denies that such default has
occurred and that it is submitting the question to arbitration as herein
provided.

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10.2 Arbitration. If arbitration is sought, a Party shall not be deemed in
default until the matter shall have been determined finally by appropriate
arbitration under the provisions of Article "9" hereinabove.

10.3 Curing the default. If:

(a) the default is not so cured or the Defaulting Party does not commence or
diligently proceed to cure the default; or

(b) arbitration is not so sought; or

(c) the Defaulting Party is found in arbitration proceedings to be in default,
and fails to cure it within five calendar days after the rendering of the
arbitration award,

the Non-Defaulting Parties may, by written notice given to the Defaulting Party
at any time while the default continues, terminate the interest of the
Defaulting Party in and to this Agreement.

10.4 Termination. In addition to the foregoing it is hereby acknowledged and
agreed by the Parties hereto that this Agreement will be terminated in the event
that:

(a) the entire Ratification is not received within five business days of the due
and completion execution of this Agreement by each of the Parties hereto;

(b) a Formal Agreement as between the Company, the Vendors and the Purchaser, or
the corresponding delivery of a takeover bid circular by the Purchaser to the
Vendors, incorporating terms and conditions similar to those contained in this
Agreement is not entered into or provided on or before October 31, 2008;

(c) either of the Parties hereto has not either satisfied or waived each of
their respective conditions precedent prior to Closing in accordance with the
provisions of Article "4" hereinabove;

(d) each of the conditions specified in section "4.3" hereinabove have not been
satisfied in the manner and within the time periods as specified therein;

(e) either of the Parties hereto has failed to deliver or caused to be delivered
any of their respective documents required to be delivered by Articles "5" and
"6" hereinabove prior to the Closing Date in accordance with the provisions of
Articles "5" and "6";

(f) the final Closing has not occurred on or before November 30, 2008 in
accordance with section "5.2" hereinabove; or

(g) by agreement, in writing, of each of the Parties hereto;

and in such event, unless waived by each Party hereto in advance and in writing,
this Agreement will be terminated and be of no further force and effect other
than the obligations under Article "6" hereinabove, with each Party to bear its
own expenses up to and including the time of such termination.

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Article 11
NOTICE

11.1 Notice. Each notice, demand or other communication required or permitted to
be given under this Agreement shall be in writing and shall be sent by prepaid
registered mail deposited in a post office addressed to the Party entitled to
receive the same, or delivered to such Party, at the address for such Party
specified above. The date of receipt of such notice, demand or other
communication shall be the date of delivery thereof if delivered, or, if given
by registered mail as aforesaid, shall be deemed conclusively to be the third
calendar day after the same shall have been so mailed, or 15 calendar days in
the case of an addressee with an address for service in a country other than a
country in which the Party giving the notice, demand or other communication
resides, except in the case of interruption of postal services for any reason
whatsoever, in which case the date of receipt shall be the date on which the
notice, demand or other communication is actually received by the addressee.

11.2 Change of address. Either Party may at any time or from time to time notify
the other Parties in writing of a change of address and the new address to which
notice shall be given to it thereafter until further change.

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Article 12
GENERAL PROVISIONS

12.1 Entire Agreement. This Agreement constitutes the entire agreement to date
between the Parties hereto and supersedes every previous agreement,
communication, expectation, negotiation, representation or understanding,
whether oral or written, express or implied, statutory or otherwise, between the
Parties with respect to the subject matter of this Agreement.

12.2 Enurement. This Agreement will enure to the benefit of and will be binding
upon the Parties, their respective heirs, executors, administrators and assigns.

12.3 Time of the essence. Time will be of the essence of this Agreement.

12.4 Representation and costs. It is hereby acknowledged by each of the Parties
hereto that Lang Michener LLP, Lawyers - Patent & Trade Mark Agents, acts solely
for the Purchaser and, correspondingly, that the Company and the Vendors have
been required by each of Lang Michener LLP and the Purchaser to obtain
independent legal advice with respect to their respective reviews and execution
of this Agreement. Each Party to this Agreement will also bear and pay its own
costs, legal and otherwise, in connection with its respective preparation,
review and execution of this Agreement and, in particular, that the costs
involved in the preparation of this Agreement, and all documentation necessarily
incidental thereto, by Lang Michener LLP shall be at the cost of the Purchaser.

12.5 Applicable law. The situs of this Agreement is the City of Carmel, State of
Indiana, U.S.A., and for all purposes this Agreement will be governed
exclusively by and construed and enforced in accordance with the laws and Courts
prevailing in the State of Indiana and the federal laws of the United States
applicable therein.

12.6 Further assurances. The Parties hereto hereby, jointly and severally,
covenant and agree to forthwith, upon request, execute and deliver, or cause to
be executed and delivered, such further and other deeds, documents, assurances
and instructions as may be required by the Parties hereto or their respective
counsel in order to carry out the true nature and intent of this Agreement.

12.7 Severability and construction. Each Article, section, paragraph, term and
provision of this Agreement, and any portion thereof, shall be considered
severable, and if, for any reason, any portion of this Agreement is determined
to be invalid, contrary to or in conflict with any applicable present or future
law, rule or regulation in a final unappealable ruling issued by any court,
agency or tribunal with valid jurisdiction in a proceeding to any of the Parties
hereto is a party, that ruling shall not impair the operation of, or have any
other effect upon, such other portions of this Agreement as may remain otherwise
intelligible (all of which shall remain binding on the Parties and continue to
be given full force and agreement as of the date upon which the ruling becomes
final).

12.8 Captions. The captions, section numbers and Article numbers appearing in
this Agreement are inserted for convenience of reference only and shall in no
way define, limit, construe or describe the scope or intent of this Agreement
nor in any way affect this Agreement.

12.9 Currency. Unless otherwise stipulated, all references to money amounts
hereunder shall be in lawful money of the United States.

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12.10 Counterparts. This Agreement may be signed by the Parties hereto in as
many counterparts as may be necessary, and via facsimile if necessary, each of
which so signed being deemed to be an original and such counterparts together
constituting one and the same instrument and, notwithstanding the date of
execution, being deemed to bear the effective execution date as set forth on the
front page of this Agreement.

12.11 No partnership or agency. The Parties have not created a partnership and
nothing contained in this Agreement shall in any manner whatsoever constitute
any Party the partner, agent or legal representative of any other Party, nor
create any fiduciary relationship between them for any purpose whatsoever. No
Party shall have any authority to act for, or to assume any obligations or
responsibility on behalf of, any other party except as may be, from time to
time, agreed upon in writing between the Parties or as otherwise expressly
provided.

12.12 Consents and waivers. No consent or waiver expressed or implied by either
Party in respect of any breach or default by the other in the performance by
such other of its obligations hereunder shall:

(a) be valid unless it is in writing and stated to be a consent or waiver
pursuant to this section;

(b) be relied upon as a consent to or waiver of any other breach or default of
the same or any other obligation;

(c) constitute a general waiver under this Agreement; or

(d) eliminate or modify the need for a specific consent or waiver pursuant to
this section in any other or subsequent instance.

ACCEPTANCE AND EXECUTION

It is expressly understood and agreed that as soon as practicable after the
execution of this Agreement the undersigned will use their best efforts to enter
into a Formal Agreement or takeover bid incorporating the terms and conditions
hereof, in addition to normal share purchase terms and conditions, and the
undersigned hereto hereby, jointly and severally, covenant and agree to
forthwith, upon request, execute and deliver, or cause to be executed and
delivered, such further and other deeds, documents, assurances and instructions
as may be required by the undersigned hereto or their respective counsel in
order to carry out the true nature and intent of this Agreement and any such any
Formal Agreement. At all times the undersigned hereto acknowledge and agree that
the completion of any such Formal Agreement is subject to the prior ratification
and approval of the terms and conditions of any such Formal Agreement by the
Board of Directors and, if applicable, shareholders of the Purchaser, the
Vendors, the Company and such Regulatory Authorities as may have jurisdiction
over the Purchaser, the Company and the Vendors.

Please acknowledge your acceptance of the general terms of this Agreement by
kindly executing the same in the space provided hereinbelow. This offer is only
open for acceptance until 5:00 p.m. (Vancouver time) on October 7, 2008.

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Yours very truly,

BEAR RIVER RESOURCES, INC.

Per:

/s/ "Donald M. Prest"
Don Prest, Authorized Signatory for the Purchaser

The within offer and terms of Agreement are hereby accepted by each of the
Company and the within Vendor effective on this 7th day of October, 2008:

OMNICITY, INC.

Per:

/s/ "Richard Beltzhoover"
Richard Beltzhoover, Authorized Signatory for the Company and a Vendor

__________