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Purchaser Agreement

This Purchaser Agreement dated this 1st day, November, 2006 by and between
HydroFlo Water Treatment, Incorporated, a North Carolina corporation located at
2501 Reliance Ave. Apex, NC 27539 (the “Company”) andShine Holdings, Inc. a
North Carolina corporation located at 2500 Regency Parkway, Suite 224, Cary, NC
27511 (the “Purchaser”).

RECITALS
A. The Company is engaged in the manufacture and sale of water treatment
products, certain of which products are more particularly described in the
attached Schedule A, as the same may be hereafter amended by the mutual consent
of the parties (collectively and including any other products listed in the
Company’s catalogues from time to time, the “Products”); and

B. The Purchaser engages to sell such Products to the end-users listed on the
attached Schedule B in connection with those end-users’ operations located in
the geographic areas also listed on the attached Schedule B, as the same
schedule may be hereafter amended by the mutual consent of the parties (the
“Customers”); and

C. The Company is willing to manufacture and supply Products to the Purchaser
and to appoint the Purchaser as a distributor of the Products on the terms and
conditions set forth herein;

NOW THEREFORE, in consideration of the premises and the mutual promises and
covenants set forth herein, the parties hereby agree as follows:

1.    DISTRIBUTION RIGHTS. Subject to the terms and conditions set forth herein,
the Company hereby appoints the Purchaser as a distributor of the Products to
the Customers for the term of this Agreement as provided in Section 2 below. The
Purchaser agrees that it shall not, directly or indirectly, offer, market, sell
or otherwise deal in any products substantially similar in design or usage to
the Products for sale to the Customers. No right or license to manufacture the
Products are granted to the Purchaser by this Agreement.
 
2.    TERM. This agreement shall commence on October 01, 2006 and, unless sooner
terminated as provided in Section 7, shall continue in full force and effect for
a period of one (1) year (the “Term”). This agreement shall be self renewing
unless otherwise terminated.

3.
DUTIES OF THE PURCHASER.

 
(a)
The Purchaser shall use his best efforts to place the Products in operational
use.

 
(b)
Guaranteed Units to be purchased according to the following schedules and
minimums and exact pricing and equipment to be determined by site conditions to
be described in a site characterization form (attached):
(.1) Year one beginning 10/01/06: Purchaser warrants a guaranteed minimum
purchase for use in Shine operation program of 10 systems, 100 GPM or larger
Prior to 9/30/07.

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    (.2) Year two beginning 10/01/07: Purchaser warrants a guaranteed minimum
purchase for use in Shine operation program of 12 (twelve) systems 100 GPM or
larger prior to 9/30/08.

     

    (.3) Year three beginning 10/01/08: Purchaser warrants a guaranteed minimum
purchase for use in Shine operation program of 15 systems 100 GPM or larger
prior to 9/30/09.

     

    (.4) Year four beginning 10/01/09: Purchaser warrants a guaranteed minimum
purchase for use in Shine operation program of 20 systems 100 GPM or larger
prior to 9/30/10.

     

    (.5) Year five beginning 10/01/10: Purchaser warrants a guaranteed minimum
purchase for use in Shine operation program of 25 systems, 100 GPM or larger
prior to 9/30/11.

     

 
(c)
The Purchaser shall comply with all appropriate federal, state, county and local
laws, rules and regulations pertaining to this Agreement and/or the acquisition,
receipt, holding, selling, distribution or advertising of the Products.

 
(d)
Minimum quantities ordered begin with October 31, 2006 and continue monthly for
the next twelve months ending September 2007. Failure to adhere per the terms
specified herein or failure to order during any three consecutive months shall
be considered breach of contract with remedies described in paragraph 7.

 
(e)
The Purchaser shall, at its own expense, make, execute or file such reports and
obtain such licenses as are required by law or any public authority with respect
to this Agreement and/or the acquisition, receipt, holding, selling,
distributing or advertising of the Products.

 
(f)
The Purchaser shall be solely responsible for the declaration and payment of all
local, state and federal taxes as may accrue because of the Purchaser's
activities in connection with this Agreement.

 
(g)
The Purchaser shall maintain as confidential and proprietary all non-public
information and details concerning (i) this Agreement per the attached
confidentiality and non-disclosure agreement; (ii) the Products and (iii) the
Company’s Marketing and Compensation Program. Notwithstanding the foregoing,
either party to this Agreement the Purchaser may disclose any otherwise
confidential information if the disclosure is required by a court or
governmental authority.

 
(h)
The Purchaser shall exercise due diligence to keep the Company informed, through
regular written reports, with respect to any observations or complaints received
from any of the Customers with regard to any of the Products.

 
(i)
The Purchaser shall bear its own costs and expenses incurred in performing its
obligations hereunder.

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(j)
All press related to HydroFlo Inc or its portfolio companies shall be reviewed
and approved by HydroFlo Inc prior to being released.

 
(k)
Special orders of smaller units less than 100 GPM are available upon request but
will not effect miminum order size.

 
(l)
A 10% discount will be granted for volume purchases and the adjustment will be
made at the end of the agreement term on a yearly basis.

DUTIES OF THE COMPANY.

 
(a)
The Company shall design systems appropriately to meet the needs for station
based on conditions provided by the purchaser.

 
(b)
The Company shall be involved in the start-up of the system and training of the
operations personnel.

 
(c)
The Company will make available names and telephone numbers of all PLUS system
owners.

 
(d)
The Company will make available any and all “white” papers customarily written
about the PLUS system.

 
4.
ORDERS AND DELIVERY. The Purchaser shall qualify submitted purchase orders for
Products signed by a duly authorized officer and containing complete information
regarding Product price, item number, quantity, requested delivery dates,
shipping instructions and shipping address (each, a “Purchase Order”). Promptly,
following receipt of Purchase Order, the Company shall acknowledge and confirm
the order. Confirmed Purchase Orders shall be governed by the terms set forth
herein to the exclusion of any additional or contrary terms set forth in the
parties’ standard sales transaction forms.

5.
TERMS OF SALE AND PAYMENT.

 
(a)
During the Term of the contract, the Purchaser shall receive net pricing for
each Product, less shipping costs. The Company shall furnish any revised price
list to the Purchaser with a 90 day advanced notice of price increases. The list
price shall be adjusted from time to time at the discretion of the Company.

 
(b)
All equipment produced by the company is sold f.o.b. the company’s office in
Apex, NC.

 
(c)
The Customer shall pay for the Products in U.S. Currency by wire transfer or
other payment according to the following payment plan:

     

    (i) Thirty three percent (33%) due upon order.

     

    (ii) Thirty three percent (33%) due upon design completion and component
order.

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(iii) Remaining Balance will be due prior to shipment.

 
 
(.2) Freight charges shall be billed COD to the purchaser.

 
6.    LIMITED TRADEMARK LICENSE. During the Term, the Company grants to the
Purchaser a limited, non-exclusive, royalty-free right and license to use, but
not to register the name and trademark “HydroFlo Water Treatment.” Except as
provided in this Section 6, the Purchaser agrees not to utilize the HydroFlo
logo, or HydroFlo Water Treatment trade name or trademarks in any way or to name
executives, employees, members or affiliates in any advertising format or medium
without the prior express written consent of HydroFlo Water Treatment, Inc.

7.    TERMINATION. In the event the Purchaser breaches any provision of this
Agreement, the Company may terminate this Agreement immediately and shall have
the right to seek all other available remedies. Upon the termination of this
Agreement, the Company will complete the manufacture of all in-process Products
subject to a Confirmed Purchase Order and the Purchaser completing the terms
stated in 5. C. of this agreement, as provided in Section 4 and the Purchaser
will purchase the same at the prices then in effect.

8.    STATUS OF THE Purchaser. The Purchasers duly organized and is qualified
and has all consents, permits and authorizations required to perform its
obligations under this Agreement.

9.    RELATIONSHIP OF THE PARTIES. The Purchaser acknowledges that it is an
independent contractor. Nothing in this Agreement, its provisions or the
transactions, obligations and relationships contemplated hereby shall constitute
either party to this Agreement as the agent, employee or legal purchaser for the
other party hereto for any purpose whatsoever, nor shall any party to this
Agreement hold itself out as such. This Agreement does not create and shall not
be deemed to create a relationship of partners, joint ventures, associates or
principal and agent between the parties hereto, and the parties acknowledge that
each is acting as a principal hereunder. This Agreement does not constitute
either the sale of a franchise or a dealership to the Purchaser.

10.          AMENDMENT. This Agreement may only be amended by mutual written
agreement of the parties.

11.          ENTIRE AGREEMENT. It is expressly agreed by the Parties that there
are no verbal or written representations, understandings, stipulations,
agreements, or promises relating to the subject matter of the Agreement not
incorporated in writing in the Agreement. This Agreement constitutes the entire
Agreement between the Parties hereto, and it cannot be amended except as
provided in Section 10 above.

12.         BINDING AGREEMENT; GOVERNING LAW AND VENUE. The Purchaser
acknowledges that it has read and understands this Agreement and that this
Agreement shall become binding upon the Purchaser upon execution by both
parties. This Agreement shall be governed by the laws of the State of North
Carolina. It is expressly agreed by the Parties that any action or other
proceeding initiated by one party to this Agreement against the other party
relating to or for the enforcement of this Agreement shall be brought under
arbitration to be conducted in compliance with the rules of the American
Arbitration Association in Raleigh, North Carolina.

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13.          NOTICE. Any notice or invoice required or permitted herein shall,
unless otherwise specified in this Agreement, be given by facsimile, telex,
cable, registered mail-return receipt requested, or receipted overnight delivery
properly addressed to the party to be notified at its address as stated below,
and shall be deemed delivered when so transmitted.

If to the Company:
If to the
 
Purchaser:
   
HydroFlo Water Treatment, Inc.
Shine Holdings, Inc.
2501 Reliance Ave.
2500 Regency Parkway,
Apex, NC 27539
Suite 224
 
Cary, NC 27511
Attn Mr. Tom Barbee
Attn: Mr. Brett Swailes
Telephone: 919-355-1200
Telephone: 919-654-3014
Facsimile: 919-355-1220
Facsimile: 919-882-8244

14.         FORCE MAJURE. Except as to payment obligations, neither party shall
be liable or considered in default under this Agreement when the delay of
performance is caused by circumstances beyond its reasonable control and
occurring without its fault or negligence, including failure of suppliers,
subcontractors, and carriers, acts of civil or military authorities, national
emergencies, fire, flood, hurricane, acts of God, insurrection, and war,
provided the affected party immediately provides notice thereof to the other and
does those things reasonably possible to resume the timely performance of its
obligations under this Agreement.

15.         VALIDITY. In the event that any provision of this Agreement (a) is
found to be invalid or unenforceable by final decision of a court of competent
jurisdiction, or (b) is rendered invalid by reason of subsequently enacted
legislation then that provision shall be of no force or effect, but the
remainder of the Agreement shall continue in full force and effect. If a
provision of this Agreement fails for either of the reasons listed above, the
parties shall enter into immediate negotiations for the purpose of arriving at a
mutually satisfactory replacement for such provision.
 
16.         DISCLAIMER OF WARRANTIES; LIMITATION OF LIABILITIES.

(a)    THE COMPANY PROVIDES ITS EQUIPMENT FOR THE PURPOSE OF AERATION TO WATER
AND WASTEWATER, HOWEVER,SINCE THE CHARACTERISTICS OF WATER AND WASTEWATER ARE
HIGHLY VARIABLE AND THOSE CHARACTERISTICS AFFECT THE ABILITY OF OXYGEN TO ENTER
AND REMAIN IN THE WATER AND WASTEWATER, THE COMPANY SHALL ONLY WARRANT THE
MATERIALS AND WORKMANSHIP OF THE EQUIPMENT AND THE VOLUME OF AIR INTRODUCED INTO
THE WATER AS PROVIDED IN CURRENT AND FUTURE PRODUCT DOCUMENTS. NO OTHER WARRANTY
IS EXPRESSED OR IMPLIED FOR THE MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE, OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED, FOR ANY OF THE PRODUCTS.

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(b)    THE COMPANY SHALL IN NO EVENT BE LIABLE, WHETHER IN CONTRACT, TORT, OR ON
ANY OTHER BASIS, FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES, OR
LOSS OF PROFITS OF ANY KIND SUSTAINED BY THE PURCHASER, OR BY ANY PERSON DEALING
WITH THE PURCHASER, IN CONNECTION WITH THE PRODUCTS. THE COMPANY 'S LIABILITY
FOR ANY CLAIM OF ANY KIND (INCLUDING, WITHOUT LIMITATION, CLAIMS BASED UPON ANY
EXPRESS WARRANTY CONTAINED HEREIN AND CLAIMS BASED UPON ANY WARRANTY IMPLIED BY
LAW), SHALL BE LIMITED, AT THE COMPANY 'S OPTION, TO REPLACEMENT OF THE PRODUCTS
OR THE DIFFERENCE BETWEEN THE INVOICED AMOUNT AND THE MARKET PRICE OF THE
PRODUCTS AT THE TIME AND PLACE SPECIFIED IN THE PURCHASE ORDER OR THE RETURN TO
THE PURCHASER OF THE AMOUNT PAID BY THE PURCHASER, AND THE PURCHASER EXPRESSLY
WAIVES ANY RIGHT IT MIGHT HAVE TO ANY OTHER MEASURE OF DAMAGES, STATUTORY OR
OTHERWISE.
 
(c)    All warranty disclaimers contained herein are intended to comply with
applicable law and shall be enforced to the fullest extent possible under
applicable law. To the extent that any warranty disclaimer is deemed invalid
under any law, which may be applied, any related non-disclaimable warranties,
whether express or implied, shall be limited in duration to a period of six (6)
months.
 
(d)    System component warranties for pumps, valves, fittings, compressors,
oxygen generation systems, and macerators shall be pass thru warranties provided
by the OEM to the Purchaser.
 
(e)    Neither the Purchaser, nor any agent, purchaser nor designee of the
Purchaser shall make any warranties, representations or guarantees to any
person, either orally or in writing, in the name of or on behalf of the Company
without the Company's prior written consent.

(f)    Any action for breach of this Agreement or for breach of any warranty,
express or implied, of the Company shall be commenced within one (1) year from
the date of the delivery of the Products.

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IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers,
have executed this Agreement as of the date first written above.

HydroFlo Water Treatment, Inc.
Company Shine Holdings, Inc.
By:
   
 
By:
   
Name: T F Barbee
   
Name: Brett S. Swailes
 
Title: COO
   
Title: CEO
 

 
 
HydroFlo Inc
 
By:
     
Name: George A. Moore III
 
CEO
 

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Schedule A

Products Represented

HydroFlo Plus System

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Schedule B
Shine Agreement

Geographic Territories included for sales to Municipalities and Industrial
accounts.

Unlimited

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Confidentiality, Non-disclosure and Non-compete Agreement

This Agreement is entered into this _____ day of ____________2006, between
HYDROFLO Water Treatment, Inc. (herein referred to as "HWTI”) located at 2501
Reliance Avenue; Apex, North Carolina 27539, and ___________________, located at
_________________________________(herein referred to as “Interested Party”).

Now, therefore, all Parties to this Agreement agree as follows:

The Parties are in the process of exchanging information and investigating a
possible business undertaking for the purpose of either financial participation
in HWTI, or assisting in the development, installation, use, and/or marketing of
the HWTI system or system components. To permit the development of this process,
the Parties have agreed to supply each other with confidential and proprietary
information and materials to assist in the understanding of these processes and
market potential and the development of a framework for structuring the business
undertaking. In addition, it is possible that during and after the preparation
of an anticipated working agreement, a Party may be exposed to information held
confidential or proprietary by one or both of the other Parties to this
Agreement.

1.     Acknowledgment of Confidentiality. Each Party hereby acknowledges that it
may be exposed to confidential and proprietary information of the other Party
including, without limitation, project specific information; development
opportunities; custom work product; business information (sales and marketing
research, materials, plans, accounting, financial information, personnel records
and the like); and other information designated as confidential expressly or by
the circumstances in which it is provided, all collectively herein referred to
as "Confidential Information". “The term "Information" as used herein also
includes (i) the fact that the Information has been made available to or is
being inspected or evaluated by Interested Party, (ii) the fact that such
discussions or negotiations are taking place concerning the possible transaction
between the parties, and (iii) any of the terms, conditions or other facts with
respect to the transaction, including the status thereof. Any Information
supplied by HWTI to Interested Party hereto prior to the execution of this
Agreement shall be considered in the same manner and be subject to the same
treatment as the Information made available after the execution of this
Agreement. The term "Information" as used herein does not include any data or
information:

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a.
Which is now in or hereafter enters the public domain beyond the control of
Interested Party and without his or her violation of this Agreement;

b.
Which is known (as evidenced by documentation in Interested Party’s possession
as of the date of this Agreement) by Interested Party prior to the time of
disclosure by HWTI or independently developed by Interested Party without access
to information disclosed by HWTI.

c.
Which is disclosed in good faith to Interested Party by a third party legally
entitled to disclose the same; or

d.
Which is specifically released in writing by HWTI. Provided, however, that the
burden shall be on Interested Party to prove the applicability of one or more of
the foregoing exceptions by documented evidence, should HWTI question the
applicability of such exceptions. This section shall not, however, be construed
to

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e.
provide any presumption of responsibility for confidential information which may
enter the public domain from other sources by unknown means, nor to require any
burden of proof that Interested Party did not cause such an event.”

2.     Covenant Not to Disclose. With respect to the other Party's information
which is identified in writing or orally to be confidential, the recipient
hereby agrees that during the Term of this agreement and at all times thereafter
it shall not use, commercialize, or disclose such Confidential Information to
any such person or entity, except to its own employees having a "need to know"
(and who are themselves bound by similar nondisclosure restrictions), that all
such recipients shall have first executed a confidentiality agreement in a form
acceptable to both Parties. Each Party shall use at least the same degree of
care in safeguarding the other Party's Confidential Information as it uses in
safeguarding its own confidential information.

3.     Non-Compete. Recognizing that the Confidential Information of the Parties
are special and unique assets of each Party and until the Parties finalize their
anticipated working relationship, each Party agrees that during the term of this
Agreement and continuing for a period of two (2) years following termination of
this Agreement neither Party will directly or indirectly use marketing
materials, contacts, or information provided by the other party to solicit or
engage in any competitive business with each Party’s current or prospective
clientele. The intent of this clause is to prohibit each Party from using any
shared information or experience in any way that competes with the interest of
the other Party. The intent is not to prevent or restrict business relationships
that either Party has already established or may be established in the future
through mechanisms completely unrelated to and independent of the joint business
undertaking of the Parties.

4.     Violation of Terms or Conditions. If it appears that either Party has
violated (or threatened to violate) any provision of this agreement, the
affected Party shall be entitled to an injunction to restrain the other Party
from disclosing, in whole or part, such Confidential Information, or from
providing any services to any third party to whom such Confidential Information
has been disclosed or may be disclosed. The affected Party shall not be
prohibited by this provision from pursuing other remedies, including claims for
losses and damages.

5.     Party's Inability to Contract for the other Party. No Party shall have
the right to make any contracts or commitments for or on behalf of the other
Party without first obtaining express written consent of the other Party.

6.     Inventions. All right, title, and interest, of every kind whatsoever, in
the United States and throughout the world, in any copyrights, trademarks, and
any ideas, designs, discoveries, inventions, and improvements with economic
value, whether or not patentable or capable of copyright or trademark
registration, created, developed, or conceived by the Interested Party while
employed or engaged by HWTI relating in any manner to the HWTI system or system
components shall be the sole property of HWTI. The Interested Party shall
execute all documents reasonably necessary as requested by HWTI to create,
enforce, or evidence HWTI࿖s right in the foregoing property. This provision 6
does not apply to copyrights, trademarks, and ideas, designs, discoveries,
inventions, and improvements with economic value that are created, developed or
conceived by the Interested Party which are unrelated to HWTI’s current or
planned products, services or operations.

7.     Term of Agreement. The provisions of this Agreement shall remain in full
force and effect for a period of two (2) years after written termination of this
Agreement. Written termination may be implemented by either Party at anytime by
thirty (30) days prior written notice upon which each party must return
information supplied by the other party during the effective period of this
Agreement. All materials must be returned to the rightful party within sixty
(60) days of the termination date of the Agreement.

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8.     Ownership; Return of Information. “No license to the Interested Party,
under any trademark, patent, copyright, mask work protection right or any other
intellectual property right, is either granted or implied by the conveying of
Information to Interested Party. All Information (including tangible copies and
computerized or electronic versions thereof) shall remain the property of HWTI.
Within ten (10) days following the receipt of a written request referencing this
Agreement and this paragraph from HWTI, Interested Party shall deliver to HWTI
all tangible materials containing or embodying the Information received from
HWTI. That portion of the Information which has been incorporated into analyses,
compilations, comparisons, studies or other documents prepared by Interested
Party or his or her associates and employees shall be destroyed.”

This agreement, is the entire agreement between the Parties and may be amended
or altered only in writing by both Parties and shall be deemed to have been made
and entered into in the State of North Carolina, and the construction, validity,
and enforceability of this agreement shall be governed by the laws in Wake
County, in the State of North Carolina.

Facsimile Transmission: A fax transmission of this agreement, including without
limitations, the faxed signature of the signer of a Party to this Agreement, and
other documents relating to the operations of or transactions and procedures set
forth in this Agreement or confidential information disclosed in accordance with
this agreement, shall be acted upon and be deemed and treated to be an original
document for all purposes.

Entered into this _________________________, 2006.
 

HYDROFLO Water Treatment, INC.   INTERESTED PARTY                          

 
 

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