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SHARE PURCHASE AGREEMENT

THIS SHARE PURCHASE AGREEMENT is made and effective as of March 1, 2014.

BETWEEN:

GARRY HOFMANN, an individual, residing in the Hamlet of Wardlow,
in the Province of Alberta (hereinafter called the “Vendor”),

     OF THE FIRST PART

AND

ALTA DISPOSAL LTD., a corporation, incorporated pursuant to the laws
of the Province of Alberta (hereinafter called the “Purchaser”),

OF THE SECOND PART

AND

TERO OILFIELD SERVICES LTD., a corporation, incorporated pursuant to the laws
of the Province of Alberta (hereinafter called the “Corporation”),

OF THE THIRD PART

RECITALS

A.

Whereas the Corporation operates a water well drilling and water disposal
business located in central Alberta;

    B.

And Whereas the Vendor owns 1,000,000 Class “A” Voting Common Shares of the
Corporation which represents all of the issued and outstanding shares of the
Corporation;

    C.

And Whereas the Vendor wishes to sell and convey 500,000 of the issued Class “A”
Voting Common Shares of the Corporation to the Purchaser and the Purchaser
wishes to purchase such shares upon the terms and conditions hereinafter set
forth.

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the mutual
covenants contained herein and other good and valuable consideration (the
receipt and sufficiency of which is acknowledged), the Parties agree as follows:

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 SECTION ONE
INTERPRETATION

1.1

Definitions

Whenever used in this Agreement, including the recitals and any schedules
hereto, the following words and phrases shall have the following meanings unless
the context otherwise requires:

  (a)

"Agreement" means this Share Purchase Agreement and includes any agreement
amending this agreement or any agreement or instrument which is supplemental or
ancillary thereof, and the expressions "above", "below", "herein", "hereto",
"hereof" and similar expressions refer to this Agreement;

        (b)

"Assets" means all of the Corporation’s right, title, estate and interest in and
to its property and assets, real and personal, moveable and immoveable, tangible
and intangible of whatsoever nature and kind and wherever situate, including but
without limitation, all Lands and Leases, Inventory, accounts receivable, cash
on hand, trucks, pickers, pumps, production assets and miscellaneous equipment
as more particularly set forth and described in the Financial Statements and in
Schedule A attached to this Agreement;

        (c)

"Books and Records" means all books, records, files and papers of the
Corporation, including computer programs (including source codes and software
programs), computer manuals, computer data, financial and tax working papers,
financial and tax books and records, business reports, business plans and
projections, sales and advertising materials, sales and purchases records and
correspondence, trade association files, research and development records, lists
of present and former customers and suppliers, personnel and employment records,
minute and share certificate books, and all copies and recordings of the
foregoing;

        (d)

"Business" means the business currently carried on by the Corporation as a water
well drilling, water disposal and service company as a going concern and the
intangible goodwill associated therewith and any and all interests of whatsoever
kind and nature related thereto;

        (e)

"Business Permits" means all licenses, permits and similar rights and privileges
that are required and necessary under applicable legislation, regulations, rules
and orders for the Corporation to own its Assets and operate its Business or for
the status and qualification of the Corporation to carry on its Business;

        (f)

"Certificate" means a written certificate of a matter or matters of fact which,
if required by a corporation, shall be made by a duly authorized officer of The
Corporation under corporate seal;

        (g)

"Closing", "Time of Closing" and similar terms means the transfer by Vendor to
the Purchaser of the Purchased Shares and the payment by the Purchaser to the
Vendor of the Purchase Price and the completion of all matters incidental
hereto;

        (h)

"Closing Date" March 3, 2014 or such other date as the Parties agree to in
writing;

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  (i)

"Counsel" means any barrister, solicitor or attorney or a firm thereof retained
by the Vendor or Purchaser as the case may be;

        (j)

"Current Assets" means the assets of the Corporation, which would, in accordance
with Canadian generally accepted accounting principles, be classified as current
assets, but specifically excluding Inventory;

        (k)

"Current Liabilities" means the liabilities of the Corporation, which would, in
accordance with generally accepted accounting principles, be classified as
current liabilities;

        (l)

"Documents" means all contracts, agreements, documents, permits, licenses,
certificates, plans, drawings, specifications, reports, compilations, analysis,
studies, financial statements, budgets, market surveys, minute books, corporate
records, corporate seals and any other documents or information of whatsoever
nature relating to the Corporation or its Business and any all rights in
relation thereto;

        (m)

“Disposal Well” means the Class B Disposal Well owned and operated by the Vendor
which is located on LSD 11-32-24-12-W4M;

        (n)

"Effective Date" means 8:00 a.m. (Calgary, Alberta time), on the March 1, 2014;

        (o)

"Financial Statements" means the review engagement financial statements of the
Corporation for the fiscal year ended September 30, 2012 and the notice to
reader Financial Statements of the Corporation for the fiscal year ended
February 28, 2013, copies of which are attached as Schedule C hereto;

        (p)

"Generally Accepted Accounting Principles" or "GAAP" means the generally
accepted accounting principles from time to time approved by the Canadian
Institute of Chartered Accountants, or any successor institute, applicable as at
the date on which date such calculation is made or required to be made in
accordance with generally accepted accounting principles applied on a basis
consistent with preceding years;

        (q)

“Inventory” means all items the Corporation has previously included in its
inventory calculation, including items for resale and items used on the job
sites that require, by their nature, replacement from time to time including but
not limited to drilling bits;

        (r)

“Lands and Leases” means the lands and leases owned by the Vendor which are set
out and described in Schedule A attached hereto.

        (s)

"Lease Agreement" means the lease agreement for the Lands and Leases of the
Corporation which agreement is more fully described in Schedule A attached;

        (t)

"Lithium" means Lithium Exploration Group Inc., the sole shareholder of the
Purchaser;

        (u)

"Option Agreement” means the Option Agreement between the Vendor and the
Purchaser dated effective as of March 1, 2014;

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  (v)

"Party" or "Parties" means a party or parties to this Agreement;

        (w)

"Purchaser" means Alta Disposal Ltd.;

        (x)

"Purchase Price" shall have the meaning ascribed thereto in Section 2.2 hereof;

        (y)

"Purchased Shares" means 500,000 Class “A” Voting Common Share of the
Corporation;

        (z)

"Permits" means franchises, licences, qualifications, authorizations, consents,
certificates, registrations, exemptions, waivers, filings, grants,
notifications, privileges, rights, orders, judgments, rulings, directives,
permits and other approvals, obtained from or required by a governmental
authority;

        (aa)

“Permitted Encumbrances” means the registered encumbrances on the title to the
Lands and Leases which have been reviewed and accepted by the Purchaser;

        (bb)

"Transaction" means the transaction contemplated by this Agreement;

        (cc)

"Time of Closing" means 11:00 a.m., Calgary time, on the Closing Date when the
Closing of the purchase and sale herein provided for shall be completed;

        (dd)

"Vendor" means Garry Hofmann;

        (ee)

"Working Capital" means the working capital of the Corporation which is
calculated as the net book value of the capital assets of the Corporation
determined pursuant to the Financial Statements of the Corporation for the
fiscal year ended February 28, 2014, less the amount of $500,000 which is due
and owing to Smith Group Holdings Ltd.

1.2

Schedules

Appended hereto are the following schedules, which are incorporated into this
Agreement by reference and are deemed to be a part hereof:

  Schedule A Assets of the Corporation   Schedule B Assets to be Removed by the
Vendor Prior to Closing   Schedule C The Corporation’s Financial Statements  
Schedule D Liabilities   Schedule E The Corporation’s Personnel List   Schedule
F The Corporation’s Bank Accounts

1.3

Schedule References

Wherever any provision of any schedule to this Agreement conflicts with any
provision in the body of this Agreement, the provisions of the body of this
Agreement shall prevail. References herein to a schedule shall mean a reference
to a schedule to this Agreement. References in any schedule to this Agreement
shall mean a reference to this Agreement. References in any schedule to another
schedule shall mean a reference to a schedule to this Agreement.

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1.4

Canadian Dollars

All dollar amounts referred to in this Agreement are in Canadian funds, unless
otherwise indicated herein. All payments contemplated herein shall be by
certified cheque or bank draft issued by a Canadian chartered bank or such other
transfer of immediately available funds as may be acceptable to the Vendor.

1.5

Extended Meanings

In this Agreement, words importing the singular number include the plural and
vice versa; words importing the masculine gender include the feminine and neuter
genders; and references to any statute shall extend to and include
orders-in-council or regulations passed under and pursuant thereto, of any
amendment or re-enactment of such statute, orders-in-council or regulations, or
any statute, order-in-council or regulations substantially in replacement
thereof.

1.6

Entire Agreement

This Agreement constitutes the entire agreement between the parties hereto
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof, including but without limitation the Letters of Intent
between the Corporation, Lithium and Alta dated August 20, 2013, November 22,
2013 and January 30, 2014. No amendment, supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby.

1.7

Headings

Section headings are not to be considered part of this Agreement and are
included solely for convenience of reference and are not intended to be full or
accurate descriptions of the contents thereof.

1.8

Successors and Assigns

All of the terms and provisions in this Agreement shall be binding upon and
shall enure to the benefit of the parties hereto and their respective successors
and assigns.

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SECTION TWO
PURCHASE OF SHARES

2.1

Purchase of Securities

Subject to the terms and conditions of this Agreement, the Vendor hereby sells
to the Purchaser and the Purchaser hereby purchases from the Vendor on the
Closing Date, with effect on the Effective Date, the Purchased Shares for the
Purchase Price as set forth and described in Section 2.2 hereof. The Purchased
Shares shall constitute 50% of the issued and outstanding voting common shares
in the capital of the Corporation, free and clear of all liens and encumbrances,
except for permitted encumbrances.

2.2

Assets to be Removed Prior to Closing

Subject to the terms and conditions of this Agreement, the Parties agree that
the Vendor shall be entitled and shall convey and transfer those assets set
forth and described in Schedule B attached out of the Corporation to the Vendor
or parties designated by him immediately prior to Closing. On February 22, 2014,
the Corporation declared a dividend in the amount of $307,104, payable to the
Vendor by way of a promissory note assigned by the Corporation to the Vendor.

2.3

Adjustments

The following adjustments shall have been made effective as of February 28,
2014, prior to the Closing of the transaction contemplated by Agreement:

(a)  

If the retained earnings of the Corporation as determined pursuant to the
Financial Statements of the Corporation for the fiscal year ended February 28,
2014 are greater than the Working Capital, then a dividend shall be declared to
the Vendor for the difference between those amounts; and

    (b)  

If the retained earnings of the Corporation as described above are less that the
Working Capital, then the Vendor shall owe and be required to pay within 30
days, the amount that is the difference between the amounts to the Corporation.

2.4

Purchase Price

Subject to the terms and conditions of this Agreement, the Purchase Price to be
paid by the Purchaser to the Vendor for the Purchased Shares shall be an
aggregate of $1,000,000 (Cdn.). The Parties acknowledge that Lithium on behalf
of the Purchaser previously paid to the Vendor a non-refundable deposit of
$50,000 which will be credited against the Purchase Price.

2.5

Payment of the Purchase Price

The Purchaser shall pay and satisfy the Purchase Price by payment of cash in the
sum of $950,000 CDN on the Closing Date by certified cheque or bank draft.

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2.6

Option Agreement

At the Closing, the Vendor shall provide and deliver to the Purchaser an Option
Agreement satisfactory to both Parties which shall entitle the Purchaser to
purchase up to an additional 25% of the issued Voting Common Shares of the
Corporation from the Vendor exercisable at a price of $500,000 for a period of
one year from the Closing Date.

2.7

Limited Liability

The Purchaser does not agree to accept or assume, and shall not by this
Agreement be deemed to have accepted or assumed, any obligation or
responsibility for the payment of any debt, obligation, liability, claim or
demand absolute or contingent, of whatsoever nature of or against the Vendor,
except for payment of the Purchase Price and except as otherwise specifically
set forth herein.

2.8

Delivery of Shares

Subject to the fulfilment of all of the terms and conditions hereof (unless
waived as herein provided), at the Time of Closing, the Vendor shall deliver (or
make arrangements to deliver) to the Purchaser all share certificates
representing the Purchased Shares duly endorsed for transfer to the Purchaser,
together with such other documentation as contemplated in Section 5.1 hereof.

2.9

Effective Date of Transfer

For accounting, title and tax purposes, the transfer and assignment of the
Purchased Shares from the Vendor to the Purchaser shall be effective as of the
Effective Date.

SECTION THREE
REPRESENTATIONS AND WARRANTIES OF THE VENDOR AND THE CORPORATION

3.1

Representations and Warranties of the Vendor and the Corporation

To induce the Purchaser to enter into this Agreement and complete the
transactions contemplated hereby the Vendor and the Corporation, jointly and
severally, represent and warrant to and in favour of the Purchaser now as
provided in this Section Three in respect of the Corporation and the Purchased
Shares as follows.

3.2

Purchased Shares

  (a)

The Vendor has or will have on the Closing Date good, marketable, beneficial
and/or recorded title to the Purchased Shares, and such Purchased Shares are
free of all mortgages, charges, liens, pledges, claims, security interests and
agreements and other encumbrances of whatsoever nature and no person, firm or
corporation has any agreement or option or right capable of becoming an
agreement or option for the purchase from the Vendor of any of the Purchased
Shares except as provided herein, and the Vendor has good right, full power and
absolute authority to sell and assign the Purchased Shares to the Purchaser for
the purpose and in the manner as provided in this Agreement. The Shares are not
subject to any shareholder, pooling, escrow or similar agreements.

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  (b)

No consents of, filings with or approval of any governmental or regulatory body
or authority is required by the Vendor for the Vendor's sale and transfer of the
Purchased Shares to the Purchaser, other than those presently held or obtained
by the Vendor which are in full force and effect.

        (c)

The Vendor is not obligated to obtain the written consent of any person to the
Transaction.

3.3

Due Incorporation and Capitalization

  (a)

The Corporation has been duly incorporated and organized under the laws of the
Province of Alberta and is in good standing with respect to filing of annual
returns required in the Province of Alberta.

        (b)

As at the date hereof, the authorized share capital of the Corporation consists
of an unlimited number of Common Shares and an unlimited number of Preferred
Shares, and 1,000,000 Class “A” Common Shares are issued and outstanding as
fully paid and non-assessable shares.

        (c)

On the Closing Date, there are not and will not be, any outstanding
subscriptions, options, stock options, rights, warrants or other agreements or
commitments obligating the Corporation to sell or issue any additional shares or
securities of any class of the Corporation or any securities convertible into
any shares of any class of the Corporation.

3.4

Subsidiaries and Securities

The Corporation has no subsidiary corporations and owns no shares or securities
of any other entity and there are no agreements of any nature to acquire any
subsidiary or business or to acquire howsoever any other business.

3.5

Dividends

The Corporation has not paid, declared or authorized any distribution on or in
respect of any of its shares by way of dividend, redemption, purchase, return of
capital or otherwise other than as disclosed in the Financial Statements
attached hereto as Schedule C or as permitted in this Agreement.

3.6

Business

  (a)

The Business of the Corporation has been and will continue to be until the
Closing Date carried on in the ordinary and normal course subject to the terms
hereof.

        (b)

The Corporation has the corporate power to own its Assets and to carry on the
Business presently carried on by it.

        (c)

The Corporation is duly qualified to do business and is in good standing in each
jurisdiction in which the nature of the Business conducted by it or the property
owned or leased by it makes such qualification necessary, which includes the
Province of Alberta. No such jurisdiction is outside of Canada.

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  (d)

The Corporation is not a party to any current lease or agreement in the nature
of a lease in regard to real or personal property whether as lessor or as
lessee, except for the Lease Agreement, attached as Schedule A.

          (e)

The Corporation holds all Business Permits necessary to operate the Business and
the present status of the Corporation does not violate the terms of such
Business Permits.

          (f)

The Corporation is not in breach of any provision, nor has it received current
notice and is not otherwise aware of, any existing default under any Document,
to which the Corporation is a party.

          (g)

Each contract to which the Corporation is a party to are in full force and
effect in accordance with the terms thereof and, to the best of the
Corporation's and Vendor's knowledge, information and belief, the Corporation is
not in default under any contract related to the Corporation, there is no
outstanding notice of cancellation or termination in connection therewith, nor,
to the best of the Corporation's and Vendor's knowledge, information and belief
does there exist any event or circumstance which through the passage of time or
which as a result of a notice by a third party would become a default by the
Corporation under any contract relating to the Corporation, except as disclosed
in the Financial Statements.

          (h)

To the best of the Corporation’s and the Vendor’s knowledge, information and
belief:

          (i)

the Business of the Corporation as currently conducted does not violate any
applicable law or regulation relating to air, water, or noise pollution, or the
production, storage, labelling or disposition of wastes or hazardous or toxic
substances and the Corporation is in compliance with all applicable regulatory
and environmental legislation governing the Business;

          (ii)

The Corporation has obtained all required approvals and permits under any such
applicable laws or regulations;

          (iii)

neither the Corporation nor any person acting for or on behalf of the
Corporation or with the Corporation's permission has placed, stored, buried,
dumped or disposed of any chemicals produced by, or resulting from, any
business, commercial or industrial activities, operations or processes on,
beneath, or about any of the properties owned or leased for such purpose by the
Corporation, except for inventories of such chemicals to be used, and wastes
generated therefrom, in the Business (which inventories and wastes, if any, were
stored or disposed of in accordance with applicable laws and regulations and in
a manner such that there was no release of any such chemicals into the
environment which could cause the incurrence of material clean-up or other
response costs under applicable laws or regulations);

          (iv)

The Corporation has not received any notice from Alberta Environment or any
governmental agency or private or public entity advising the Corporation that it
is responsible for or potentially responsible for response costs with respect to
a release, a threatened release or clean-up of chemicals produced by, or
resulting from any business, commercial or industrial activities, operations or
processes;

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    (v)

to the best of the Corporation 's and the Vendor’s knowledge, information and
belief, no properties of the Corporation have been used as a site for storage,
treatment or disposal of hazardous waste, except the property that is the
subject of the Lease Agreement;

            (vi)

to the best of the Corporation’s and the Vendor’s knowledge, information and
belief, no pollutants or other toxic or hazardous substances (including any
solid, liquid, gaseous or thermal irritant or contaminant) are present in any
form on, or have been discharged, dispersed, released, stored, treated,
generated, disposed or allowed to escape on any properties of The Corporation
since its incorporation or, insofar as the Corporation and Vendor are aware, in
the adjoining property, which could result in any obligation, order or liability
under any applicable federal, provincial, municipal or other law, regulation or
requirement;

            (vii)

to the best of the Corporation 's and the Vendor's knowledge, information and
belief, no underground storage tanks are located on any properties of the
Corporation, or were located on any properties of the Corporation and
subsequently removed or filled, except the property that is the subject of the
Lease Agreement; and

            (viii)

the Corporation is not subject to any control orders, stop orders or request for
compliance by any governmental authority or any other applicable federal,
provincial, municipal or other law, regulation or requirement.

  (i)

The Assets owned or leased by the Corporation are adequate for the conduct of
its Business as usually conducted in accordance with good industry practices.

        (j)

Schedule A is a true list of the Assets including some of the items of
machinery, equipment, furniture, motor vehicles, rolling stock, heavy duty
equipment, and other personal property owned or leased by the Corporation
(including those in possession of third parties) which had a book value in the
accounting records of the Corporation determined in accordance with generally
accepted accounting principles, at the date of the Corporation's most recently
completed Financial Statements and also includes the Lands and Leases and the
Lease Agreement.

        (k)

The Corporation is not a party to any contract or commitment that would limit
the freedom of the Corporation to compete in any line of business or with any
person or in any geographical area or otherwise to conduct its Business as
currently conducted and as proposed to be conducted. To the best of the
Corporation and the Vendor’s knowledge, information and belief, there exists no
facts or circumstances which could materially and adversely affect the ability
of the Corporation to continue its Business substantially as presently conducted
following the completion of the transaction contemplated by this Agreement.

        (l)

All accounts receivable are bona fide and good and have been incurred in the
ordinary course. The accounts receivable, subject to an allowance for doubtful
accounts, are collectible at their full face value in the ordinary course
without set-off or counterclaim.

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3.7

Severance Payments

There are no amounts to be paid to officers, directors, employees, consultants
or shareholders of the Corporation at or after Closing or pursuant to this
Agreement or any ancillary document thereto for severance or termination of
employment.

3.8

Capital Expenditures

Except as disclosed in the Financial Statements or disclosed to the Purchaser in
writing, no capital expenditures have been made or authorized or are required to
be paid by The Corporation.

3.9

Employees, Officers, Directors, Managers, Consultants

As of the date of this Agreement, the Corporation has approximately 5 employees,
officers, directors, managers or consultants all of which are described in
Schedule E attached hereto.

3.10

Benefit Plans

The Corporation is not a party to any bonus, pension, profit sharing, deferred
compensation, retirement, hospitalization insurance, medical insurance or
similar plan or practice, formal and informal, in effect with respect to any
employees or others and no bonuses of any type, cash or otherwise, are payable
to any director, officer, employee, consultant, or shareholder of the
Corporation on the Effective Date.

3.11

Employment Contracts

      (a)

The Corporation is not a party to any written contracts of employment, service
agreements, management agreements, collective bargaining agreements, labour
agreements or employee association agreements; and the Corporation is not now
conducting any negotiations with any labour union or employee association with
respect to employees of the Corporation and the Corporation does not have any
agreements or understandings relative to any increase in salary, compensation,
or term of service to any employees or contractors.

      (b)

The Corporation is not a party to any written management contract or employment
agreement, including, but without limitation, any written contract which
provides for the payment of severance in lieu of notice upon termination
thereof.

      (c)

To the knowledge of the Vendor, no claims exist or are threatened against The
Corporation in respect of worker's compensation legislation, any applicable
labour or employment legislation, health and safety or human right's legislation
or pursuant to either the Unemployment Insurance Act, Canada, or the Canada
Pension Plan Act, Canada.

      (d)

The Corporation has no employees on short or long term disability or who have
been absent from work for more than three consecutive months.

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  (e)

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

3.12

Litigation

      (a)

There are no judgments unsatisfied against the Corporation or any consent
decrees or injunctions to which the Corporation or the Vendor are subject or
bound and there are no actions, suits or proceedings (whether or not purportedly
on behalf of the Corporation) pending or, to the best of the Corporation’s or
the Vendor's, information and belief, threatened against or affecting the
Corporation at law or in equity or before or by any federal, provincial,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which action, suit or proceeding involves
the possibility of any judgment against or liability of the Corporation. the
Corporation or the Vendor are not aware of any existing ground on which any such
action, suit or proceeding might be commenced with any reasonable likelihood of
success.

      (b)

The Corporation or the Vendor are not subject to any judgement, order, writ,
injunction or decree of any court or government body which would prevent the
carrying out of this Agreement or consummation of the transactions herein
contemplated.

3.13

Financial Statements

      (a)

The Corporation’s Financial Statements for the fiscal years ended September 30,
2012 and February 28, 2013 have been prepared in accordance with GAAP and truly
and fairly present the assets and liabilities of the Corporation and its
financial position as at the dates thereof and the results of its operations for
the fiscal periods reported on, and, in particular, without limiting the
generality of the foregoing, include all liabilities or obligations of any
nature, whether accrued, contingent or otherwise, and whether due or to become
due as at the dates of those statements. Since the dates thereof, other than
what has been disclosed to the Purchaser, there has not been any material
adverse change in the financial position of the Corporation, computed on a basis
consistent with that used in the preparation of the balance sheet included in
such Financial Statements.

      (b)

All accounts receivable, book debts and other debts disclosed by the Vendor to
the Purchaser as due or accruing due, are good and collectable.

      (c)

To the best of the Vendor's knowledge, information and belief, there are no
liabilities for income taxes under the Income Tax Act, Canada or under similar
legislation of any other jurisdiction or for other taxes due or to become due
for any period prior to the date of the Financial Statements.

3.14

No Change in and Title to Assets

      (a)

There has been no change in the legal and beneficial ownership of the Assets of
the Corporation except in the ordinary course of business.

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  (b)

To the best of the Corporation's or the Vendor's knowledge, information and
belief, on the Closing Date, the Corporation has or will have good, marketable
and beneficial title and ownership to all of its Assets, free of all liens,
mortgages, charges, pledges or encumbrances of whatsoever nature and as may be
registered by the Vendor pursuant to this Agreement and by the Purchaser’s
lenders.

3.15

Records and Data

      (a)

The Vendor shall cause the Corporation to make available, and by the Time of
Closing will have made available, to the Purchaser or Purchaser’s representative
for inspection, all Documents which the Purchaser shall reasonably require and
which to the knowledge of the Vendor are in the possession and control of the
Corporation and the Vendor or the Corporation pertaining to or affecting the
Corporation or the Assets of the Corporation and the title of the Corporation
thereto, and the Vendor nor the Corporation will knowingly not make available
any Documents or information reasonably required to make not misleading the
Documents and information so made available to the Purchaser.

      (b)

All information, records and data furnished to the Purchaser, their
representatives and counsel pursuant to Sections 5.1 (c), 5.1 (d) and 8.1
hereof, is, to the best of the Corporation's and the Vendor's knowledge,
information and belief, accurate in all material respects.

      (c)

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

3.16

Indebtedness and Guarantees

      (a)

The Corporation is not a party to any agreement of guarantee, indemnification or
assumption of the obligations of a third party, or other like commitment,
contingent or otherwise, including endorsements or other contingent liabilities,
except as reflected in the Financial Statements.

      (b)

The Corporation does not have outstanding any bonds, debentures, mortgages,
promissory notes or other evidence of indebtedness and the Corporation is not
bound under any agreement to create or issue any bonds, debentures, mortgages,
promissory notes or other indebtedness, except as reflected in the Financial
Statements.

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3.17

Bank Accounts and Powers of Attorney

At the Time of Closing the Corporation shall have no bank accounts, term
deposits or safety deposit boxes, nor shall any person, firm or corporation hold
any general or specific power of attorney from the Corporation regarding same,
with the exception of those described in Schedule F. Schedule F is a true,
accurate and complete list of the bank accounts and safety deposit boxes of the
Corporation and of persons holding general or special powers of attorney from
the Corporation and sets out the name of each bank, trust company or similar
institution in which the Corporation has accounts or safety deposit boxes, the
number or designation of each such account and safety deposit box and the names
of all Persons authorized to draw thereon or to have access thereto.

3.18

Taxes

      (a)

The Corporation has paid all taxes eligible from it or for the collection of
which it is responsible under the laws of Canada or any other jurisdiction, in
the case of taxes on income, in respect of all fiscal years ended on or prior to
September 30, 2012 and February 28, 2013, and, in the case of all other taxes,
in respect of all periods ended prior to the Effective Date, for which such
taxes were due and payable prior to the Effective Date.

      (b)

To the best of the Corporation's and the Vendor’s knowledge, information and
belief, there are no taxes, assessments, re-assessments, or levies of whatsoever
nature which the Corporation is required or will or could be required by law to
withhold, collect or pay and for which the Purchaser could become liable,
including but without limitation, unemployment insurance, pension plan payments,
non-resident withholding tax or similar assessments.

      (c)

As at the Closing Date, all taxes, assessments, levies and source deductions
which the Corporation is required by law to withhold or to collect, including
unemployment insurance and pension plan payments and non-resident withholding
tax have been duly withheld or collected, and have been paid over to the proper
governmental authorities, or held by the Corporation or on behalf of the
Corporation and such withholdings and collections and all other payments due in
connection therewith are duly reflected in the Financial Statements to the date
as of which they were prepared and since that date will be duly entered in the
accounts of the Corporation.

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3.19

Tax Returns

      (a)

As of the Effective Date, the Corporation has or will have duly and timely filed
all tax returns required to be filed by it, has paid all taxes shown to be due
and payable on such returns, and has paid all assessments and re-assessments,
and all other taxes, governmental charges, penalties, interest and fines due and
payable by it on or before the date hereof and which are claimed by any
governmental authority to be due and owing and adequate provision has been made
on the books of the Corporation for taxes payable for the current period for
which tax returns are not yet required to be filed; there are no agreements,
waivers or other arrangements providing for any extension of time with respect
to the filing of any tax returns by, or payment of any tax, governmental charge
or deficiency against the Corporation, and, to the best of the Corporation's and
Vendor's knowledge, information and belief, there are no actions, suits,
proceedings, investigations or claims now threatened or pending against the
Corporation with respect to taxes, governmental charges or assessments, or any
other matters under discussion with any governmental authority, relating to
taxes, governmental charges or assessments asserted by any such authority and
the Corporation has withheld from payments made to any of its respective
officers, directors, former directors and employees, creditors and shareholders,
the amount of all taxes, including but not limited to income tax, and other
deductions required to be withheld therefrom and have paid the same to the
proper tax or other receiving offices within the time required under any
applicable tax legislation.

      (b)

On or before the Effective Date, all returns of the Corporation for capital,
excise, manufacturing, sales or use tax required to be filed by the Corporation
before the Effective Date shall be fully prepared and filed before the Effective
Date and all such taxes of every kind and description due or payable against or
payable by the Corporation prior to the Effective Date in respect of the
Corporation shall have been paid in full on or before the Effective Date.

      (c)

Since February 28, 2013, the Corporation has not made any tax elections, entered
into any tax agreements, filed any tax consents, or entered into any agreements
with any federal, provincial, local or other tax authorities with respect to the
Corporation or the securities, Assets or revenues of the Corporation.

3.20

Regulatory Matters

      (a)

The Corporation has not received notice of any defaults under any of the
provisions of the Securities Act (Alberta) or any other applicable securities
legislation in Canada or the United States of America.

      (b)

The Corporation is not a "reporting issuer" as defined by the Securities Act
(Alberta) in any province in Canada.

3.21

Execution and Delivery of Agreement

      (a)

The execution and delivery of this Agreement by the Vendor and the consummation
of the transactions contemplated thereby do not constitute a breach or a default
under the terms of the articles, bylaws or other constating documents of the
Corporation, nor under any agreement to which the Vendor or the Corporation are
a party or by which any of them is bound.

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  (b)

This Agreement has been duly executed and delivered by the Vendor or its duly
appointed power of attorney and representative and the Corporation and all
documents required hereunder to be executed and delivered by the Vendor and the
Corporation shall have been duly executed and delivered by the Vendor and this
Agreement does and such documents and instruments shall, constitute legal, valid
and binding obligations of the Vendor and the Corporation enforceable in
accordance with their respective terms.

3.22

Residency of Vendor

The Vendor is a resident of Canada within the meaning of the Income Tax Act,
Canada.

3.23

Broker's Fees

The Vendor has not incurred any obligation or liability, contingent or otherwise
for broker's or finder's fees in respect of the transaction herein provided for
which the Purchaser shall have any obligation and liability to pay.

3.24

Insurance

The Corporation has in place all appropriate insurance policies necessary to
operate the Business.

3.25

Bankruptcy and Insolvency Matters

      (a)

No action or proceeding has been commenced or filed by or against the
Corporation or which seeks or may lead to receivership or the Corporation the
adjustment, compromise or composition of claims against them or the appointment
of a trustee, receiver, liquidator, custodian, or other similar officer for the
Corporation or any portion of their assets. No such action or proceeding has
been authorized or is being considered by or on the Corporation and no creditor
or equity security holder the Corporation has threatened to commence or advise
that it may commence, any such action or proceeding.

      (b)

To the best of the Corporation's and the Vendor’s knowledge, information and
belief, the Corporation has not made nor is it presently considering making an
assignment for the benefit of its creditors, and has not requested nor is it
currently considering requesting a meeting of its creditors to seek a reduction,
compromise, composition, or other accommodation with respect to its
indebtedness.

      (c)

The Vendor has not entered into this Agreement with actual intent to hinder,
delay or defraud present or future creditors of the Vendor.

3.26

Environmental Matters

      (a)

The Corporation has been and is in compliance with all applicable laws,
including orders, directives and decisions rendered by any ministry, department
or administrative or regulatory agency (the "Environmental Laws") relating to
the protection of the environment, occupational health and safety or the
manufacture, processing, distribution, use, treatment, storage, disposal,
discharge, transport or handling of any deleterious substances or good,
hazardous, corrosive or toxic substances or materials, special wastes, wastes or
any other substances, the storage, disposal, discharge, treatment, remediation
or release into the environment of which is prohibited, controlled or regulated
("Hazardous Substances").

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  (b)

The Corporation has obtained all Permits under Environmental Laws (the
"Environmental Permits") required for the operation of the Business. Each
Environmental Permit is valid, subsisting and in good standing and the
Corporation is not in default or breach of any Environmental Permit and no
proceeding is, to the knowledge of the Corporation and the Vendor's, pending or
threatened, to revoke or limit any Environmental Permit.

        (c)

The Corporation has not used or permitted to be used, except in compliance with
all Environmental Laws, any of the Assets or facilities or any property or
facility that it has at any time owned, occupied, managed, or controlled or in
which it has at any time had a legal or beneficial interest to generate,
manufacture, process, distribute, use, treat, store, dispose of, transport or
handle any Hazardous Substance.

        (d)

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

        (e)

To the knowledge of the Corporation and the Vendor, there are no pending or
proposed changes to Environmental Laws that would render illegal or restrict or
make more costly the drilling services provided by the Corporation.

        (f)

The Corporation has not caused or permitted, and the Vendor does not have any
knowledge of, the release, in any manner whatsoever, of any Hazardous Substance
on or from any of the Assets or any property or facility that the Corporation
previously owned or leased, except in accordance with Environmental Laws, or any
such release on or from a facility owned or operated by third parties but with
respect to which the Corporation is or may reasonably be alleged to have
liability. All Hazardous Substances and all other wastes and other materials and
substances used in whole or in part by the Corporation or resulting from the
Business have been disposed of, treated and stored in compliance with all
Environmental Laws.

        (g)

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

        (h)

True, accurate and complete copies of all documents, including any certificates
or reports, issued, filed or registered, pursuant to applicable contaminated
sites legislation with respect to the Business or the Assets have been provided
to the Purchaser.

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  (i)

The Corporation has not conducted any environmental audits, evaluations,
assessments, studies or tests relating to the Corporation or to any facility or
property which the Corporation has at any time owned, occupied, leased, managed
or controlled or in which it has at any time had a legal or beneficial interest.

3.27

Representations and Warranties Surviving Closing Date

      (a)

The covenants, representations and warranties of the Corporation and the Vendor
contained in Section Three hereof and elsewhere in this Agreement, and in any
certificate or other material delivered under this Agreement are accurate and
complete, do not contain any untrue statement of a material fact or, considered
in the context in which presented, omit to state a material fact necessary in
order to make the statements and information contained herein or therein not
misleading.

      (b)

The covenants, representations and warranties of the Corporation and the Vendor
contained in Section Three hereof and elsewhere in this Agreement, shall either
be set forth in or, if not, shall be deemed to apply to all assignments,
transfers, conveyances or other documents conveying the Purchased Shares
hereunder, and there shall not be any merger of any covenant, representation or
warranty in such assignments, transfers, conveyances or documents, any rule or
law, in equity or in statute to the contrary notwithstanding.

      (c)

Any claims against the Corporation or the Vendor by the Purchaser pursuant to
the terms hereof shall not be enforceable against the Vendor unless notice
thereof shall have been given in writing to the Corporation and the Vendor
within two (2) years from the Closing Date.

      (d)

The representations and warranties set out in Section 3 relating to tax matters
(and the corresponding tax representations and warranties set out in the closing
certificates executed by the Vendor) shall survive Closing and continue in full
force and effect until, but not beyond, the 180th day following the expiration
of the period, if any, during which an assessment, reassessment or other form of
recognized document assessing liability for taxes under applicable tax
legislation in respect of any taxation year to which those representations and
warranties extend could be issued under that tax legislation to the Corporation,
provided the Corporation did not file any waiver or other document extending
that period.

SECTION FOUR
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

4.1

Representations and Warranties

To induce the Vendor to enter into this Agreement and complete the transactions
contemplated thereby, the Purchaser represents and warrants to and in favour of
the Vendor now as provided in this Section Four.

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4.2

Execution and Delivery of Agreement

      (a)

The execution and delivery of this Agreement by the Purchaser and the
consummation of the transactions contemplated hereby do not constitute a breach
of a default under the terms of the articles, by-laws or other constating
documents of the Purchaser, nor under any agreement to which the Purchaser is a
party or by which it is bound.

      (b)

This Agreement has been duly executed and delivered by the Purchaser or its duly
appointed power of attorney and representative, and all documents required
hereunder to be executed and delivered by the Purchaser shall have been duly
executed and delivered by the Purchaser, and this Agreement does, and such
documents and instruments shall, constitute legal, valid and binding obligations
of the Purchaser and is enforceable in accordance with their respective terms.

4.3

Organization and Authority

The Purchaser has been duly incorporated and organized under the laws of the
Province of Alberta and is in good standing with respect to filing of annual
returns required in the Province of Alberta. The Purchaser has good right, full
power and absolute authority to purchase the Purchased Share on the terms
described herein and in the manner contemplated by this Agreement. Further, the
Purchaser has good right, full power, and absolute authority to execute the
Debenture and all security associated therewith.

4.4

Income Tax

The Purchaser is a resident of Canada within the meaning of the Income Tax Act.

4.5

Investment Canada Act

The Purchaser is not a "non-Canadian" within the meaning of the Investment
Canada Act.

4.6

Consents

      (a)

No consents of, filings with or approval of any governmental or regulatory body
or authority is required by the Purchaser to purchase the Purchased Shares from
the Vendor.

      (b)

The Purchaser is not obligated to obtain the written consent of any person to
the transaction contemplated by this Agreement, other than those persons from
whom consent has, or prior to the Time of Closing, will be obtained.

4.7

Broker's Fees

The Purchaser has not incurred any obligation or liability, contingent or
otherwise for broker's or finder's fees in respect to the transaction herein
provided for which the Vendor shall be obligated to pay.

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4.8

Regulatory Matters

      (a)

The Purchaser has not received notice of any defaults under any of the
provisions of the Securities Act (Alberta) or any other applicable securities
legislation in Canada or the United States of America.

      (b)

The Purchaser is not a "reporting issuer" as defined by the Securities Act
(Alberta) in any Canadian jurisdiction or foreign jurisdiction and its common
shares are not listed or posted for trading on any stock exchange or trading
platform.

4.9

Representations and Warranties Surviving Closing Date

      (a)

The covenants, representations and warranties of the Purchaser contained in
Section Four hereof and elsewhere in this Agreement, and in certificate or other
material delivered under this Agreement are accurate and complete, do not
contain any untrue statement of any material facts or, considered in the context
in which presented, omit to state a material fact necessary in order to make the
statements and information contained herein and therein misleading.

      (b)

Any claims against the Purchaser by the Vendor pursuant to the terms hereof
shall not be enforceable against the Purchaser unless notice thereof shall have
been given in writing to the Purchaser within two (2) years from the Closing
Date.

      (c)

Each and every right, remedy and power granted to the Vendor hereunder pursuant
to Section Four or under any documents or instruments delivered pursuant to the
terms and conditions hereof, shall be cumulative and shall be in addition to any
other right, remedy or power herein or therein specifically granted or
hereinafter existing in equity at law, by virtue or statue or otherwise and
every such right, remedy and power may be exercised by the Vendor from time to
time concurrently or independently and as often and in such order as the
Purchaser may deem expedient.

      (d)

Notwithstanding Section 4.9 (c), a claim for any breach of any of the
representations and warranties contained in this Agreement or in any contract,
agreement, instrument, certificate or other document executed or delivered
pursuant hereto involving fraud or fraudulent misrepresentations may be made at
any time following the Closing Date, subject only to applicable limitation
periods imposed by applicable law.

SECTION FIVE
COMPLETION OF PURCHASE

5.1

Purchaser’s Conditions

The obligation of the Purchaser to complete the purchase of the Purchased Shares
contemplated herein, is subject to the fulfilment of each of the following
conditions precedent, unless waived in writing by the Purchaser.

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  (a)

The Corporation's and Vendor's Representations, Warranties and Covenants. At the
Time of Closing, the Corporation and the Vendor shall have executed, delivered
and performed all agreements and documents on their part to be performed
hereunder; all representations and warranties contained in Section Three shall
be true at the Time of Closing, except where a different date is otherwise
specified therein, and in such case, at the date specified, with the same effect
as if made on and as of such date and The Corporation and the Vendor shall
deliver a Certificate executed as of the Time of Closing certifying that all
representations and warranties of the Corporation and the Vendor as contained
herein are true and correct as of such date, except where a different date is
otherwise specified therein, and in such case, at the date specified.

        (b)

No Material Change. Except for the removal of certain assets from the
Corporation prior to Closing and the payment of the dividend to the Vendor at
Closing pursuant to Sections 2.2 and 2.3, at the Time of Closing, there shall
not have been any material adverse change in the condition (financial or
otherwise) of the Assets, liabilities, capitalization or Business of the
Corporation from that as set forth in the Financial Statements.

        (c)

Inspection of Financial Books and Records. Until and including the Time of
Closing, the Vendor shall cause the Corporation to make available to the
representatives of the Purchaser all material books, accounts, records and other
financial and accounting data of the Corporation (including all available
audited and unaudited financial statements) in order to enable such
representatives to make an examination of the same and shall cause the
accountants of the Corporation to give all such material information concerning
the affairs of same to such representatives as such representatives may
reasonably request.

        (d)

Inspection of Non-Financial Books and Records. The Vendor shall have caused the
Corporation to make available to Counsel for the Purchaser all Documents, minute
books and other corporate records and all documents of title and related records
and other material data of the Corporation in order to enable such Counsel to
make an examination of the same.

        (e)

Approvals. At the Time of Closing, there shall have been obtained the written
consents or approvals, in form and substance satisfactory to the Purchaser,
acting reasonably, of any governmental or regulatory agency or person whose
consent to the transactions contemplated hereby is required, including, but
without limitation the approval by the board of directors of the Corporation.

        (f)

No Litigation. At the Time of Closing, no litigation or proceeding shall be
pending or threatened to restrain, set aside or invalidate the transactions
contemplated by, or to obtain substantial damages in respect of, this Agreement
or the Vendor's ownership of the Purchased Shares or operation of the Business
of the Corporation.

        (g)

Corporate Proceedings. At the Time of Closing, all necessary steps and corporate
proceedings, as approved by Counsel for the Purchaser, shall have been taken to
permit the Purchased Shares to be duly and regularly transferred to the
Purchaser.

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  (h)

Tax Matters. Until and including the Effective Date, the Vendor shall cause the
Corporation to file duly and timely all tax returns required to be filed by it
and to promptly pay all taxes and assessments due and owing; not to permit the
Corporation to enter into an agreement, waiver or other arrangement providing
for an extension of time with respect to the filing of any tax return, or the
payment or assessment of any tax, governmental charge or deficiency.

          (i)

Closing Documents. The Corporation shall have executed and delivered to the
Purchaser all documents as the Purchaser or the Purchaser’s Counsel may
reasonably request for the purposes of effecting the transfer and delivery of
the Purchased Shares in accordance with the terms of this Agreement, including
the following:

          (i)

Certificate representing the Purchased Shares, accompanied by stock transfer
powers duly executed in blank or duly executed instruments of transfer, and all
such other assurances, consents and other documents as the Purchaser may
reasonably request to effectively transfer to the Purchaser title to the
Purchased Shares free and clear of all encumbrances;

          (ii)

Original share registers, share transfer ledgers, minute books and corporate
seals (if any) of the Corporation;

          (iii)

All other Books and Records;

          (iv)

A certified copy of a resolution of the board of directors of the Corporation
consenting to the transfer of the Purchased Shares from the Vendor to the
Purchaser as contemplated by this Agreement and authorizing the execution,
delivery and performance of all contracts, agreements, instruments, certificates
and other documents required by this Agreement to be delivered by the
Corporation;

          (v)

Consent of two directors appointed by the Purchaser to the board of directors of
the Corporation;

          (vi)

A certificate of status or its equivalent of the Corporation under the laws of
the jurisdiction of its incorporation; and

          (vii)

A certificate of incumbency of the Corporation .

          (j)

Delivery of Documents. The Corporation shall deliver to the Purchaser, or make
arrangements satisfactory to the Purchaser, to deliver, in organized form all
Documents relating to the Corporation as are in the possession of the
Corporation at the Closing Date.

          (l)

Due Diligence. Completion by the Purchaser of satisfactory due diligence on the
Corporation and its Assets.

          (m)

Financing. The Purchaser shall have secured the necessary financing to satisfy
the cash requirements of the Purchase Price referred to in Section 2.4 herein,
on terms and conditions satisfactory to the Purchaser.

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  (n)

Financial Statements. The review to the sole satisfaction of the Purchaser of
the Financial Statements of the Corporation.

If any such conditions shall not be fulfilled or waived in writing by the
Purchaser at or prior to the Time of Closing, the Purchaser may rescind this
Agreement by written notice to the Vendor and, in such event, the Purchaser and
the Vendor shall be released from all obligations hereunder. Notwithstanding the
foregoing, the Purchaser acknowledges that the $50,000 deposit is non-refundable
to the Purchaser.

5.2

Vendor's Conditions

The obligation of the Vendor to complete the sale of the Purchased Shares
contemplated herein, is subject to the fulfilment of the following conditions
precedent, unless waived in writing by the Vendor.

  (a)

Purchaser’s Representations, Warranties and Covenants. At the Time of Closing,
the Purchaser shall have executed, delivered and performed all agreements and
documents on its part to be performed hereunder; all representations and
warranties contained in Section Four shall be true at the Time of Closing, with
the same effect as if made on and as of such date and the Purchaser shall
deliver a Certificate executed as of the Time of Closing certifying that all
representations and warranties of the Purchaser as contained herein are true and
correct as of such date.

        (b)

Approvals. At the Time of Closing, there shall have been obtained the written
consents or approvals, in form and substance satisfactory to the Vendor, acting
reasonably, of any governmental or regulatory agency or person whose consent to
the transactions contemplated hereby is required, including, but without
limitation, approval by the board of directors of the Purchaser.

        (c)

Purchase Price. The Purchaser shall tender the Purchase Price payable by the
Purchaser to the Vendor pursuant to Section 2.4 hereof.

        (d)

Due Diligence. Completion by the Corporation of a satisfactory due diligence on
the Purchaser.

        (e)

No Litigation. At the Time of Closing, no litigation or proceeding shall be
pending or threatened to restrain, set aside or invalidate the transactions
contemplated by, or to obtain substantial damages in respect of, this Agreement
or operation of the Business of the Purchaser.

        (f)

Closing Documents. The Purchaser shall have executed and delivered to the
Corporation and the Vendor all documents as the Corporation and the Vendor may
reasonably request for the purposes of effecting the payment of the Purchase
Price.

If any such conditions shall not be fulfilled or waived in writing by the Vendor
at or prior to the Time of Closing, the Vendor may rescind this Agreement by
written notice to the Purchaser and, in such event, the Purchaser, the Vendor
and the Corporation shall be released from all obligations hereunder.

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5.3

Rescission and Termination

      (a)

Satisfaction of Conditions. All of the Parties covenant and agree with the other
Parties to use all reasonable efforts until the Closing Date to take or refrain
from taking any actions with the intent that the conditions precedent, as set
forth in Section Five hereof, shall be satisfied and all covenants and
agreements herein made by them shall have been performed. The Purchaser shall
have the sole and exclusive right to terminate the transaction if the Closing
has not occurred by March 31, 2014.

      (b)

Consequences of Rescission. In the event this Agreement is rescinded and
terminated pursuant to the provisions of Section 5.1 or Section 5.2 hereof, each
Party shall be released from all obligations hereunder and each Party shall take
all reasonable actions to return the other Parties to the position relative to
the Purchase Shares which such Party occupied prior to the execution hereof.

SECTION SIX
INDEMNIFICATION

6.1

Mutual Indemnifications for Breaches of Warranties, Etc.

The Corporation and the Vendor hereby covenant and agree with the Purchaser and
the Purchaser hereby covenants and agrees with the Corporation and the Vendor
(the party or parties so covenanting and agreeing to indemnify another party or
parties hereinafter in this Section referred to as the "Indemnifying Party" and
the party or parties so to be indemnified being hereinafter called the
"Indemnified Party") to indemnify and save harmless the Indemnified Party,
effective as and from the Time of Closing, from and against any claims, demands,
actions, causes of action, damages, loss, costs, liability or expense
(hereinafter in this Section called "Claims") which may be made or brought
against the indemnified Party and/or which it may suffer or incur as a result
of, in respect of, or arising out of any nonfulfillment of any covenant or
agreement on the part of the Indemnifying Party under this Agreement or any
incorrectness in or breach of any representation or warranty or covenant of the
Indemnifying Party contained herein or in any certificate or other document
furnished by the Indemnifying Party pursuant hereto.

6.2

Liability Cap and Threshold

The Corporation and the Vendor will have no liability under Section 6.1 until
the aggregate amount of all losses incurred by the Purchaser as a result of any
breaches of the covenants, representations and warranties in this Agreement by
the Corporation and the Vendor equals or exceeds Fifty Thousand ($50,000)
Dollars (the “Indemnity Threshold”). Once the total of all

Claims with respect to any of such matters exceeds the Indemnity Threshold, the
Purchaser shall be entitled to make an indemnity claim for all Claims that
exceed the Indemnity Threshold but may not claim the amount of the Indemnity
Threshold. The aggregate maximum amount that may be claimed by the Purchaser
against the Corporation and the Vendor, is the amount of funds actually paid to
the Vendor by the Purchaser pursuant to this Agreement.

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SECTION SEVEN
CLOSING

7.1

Closing and Closing Date

The Closing of the sale and purchase herein contemplated shall take place at the
offices of Sander van der Wissel in Calgary, Alberta, on the Closing Date or
upon such earlier or later time and date as may be agreed upon between the
Parties.

SECTION EIGHT
RECORDS

8.1

Access to Premises and Records

Up to and including the Closing Date, the Purchaser’s, the Vendor’s and the
Corporation’s respective counsel, accountants, appraisers and other advisors
shall have full and complete access, during normal business hours, to the
premises, books, Documents and other records of the Corporation or the
Purchaser, as the case may be, for the purpose of investigating the Business and
affairs of the Corporation or the Purchaser.

SECTION NINE
GENERAL

9.1

Expenses

All Parties shall be responsible for their own legal and audit fees and other
charges and expenses incurred in connection with the purchase and sale of the
Purchased Shares, the preparation of this Agreement and all negotiations between
the Parties.

9.2

Commissions, Etc.

The Corporation agrees to indemnify and save harmless the Purchaser from and
against any claims whatsoever for any commission or other remuneration payable
or alleged to be payable to any broker, agent or other intermediary who has
acted for the Corporation or the Vendor in connection with the sale of the
Purchased Shares.

9.3

Documents and Information Confidential

Until immediately after the Time of Closing, all Documents and information
received by the Purchaser from the Vendor and the Corporation or vice versa, and
their respective accountants and Counsel, shall be treated by the Purchaser or
the Vendor, as the case may be, as confidential information and will not be
disclosed to others by the Purchaser, except to its Counsel, accountants and
bankers.

9.4

Time of the Essence

Time shall be of the essence of this Agreement.

9.5

Governing Law

This Agreement shall be construed in accordance with the laws of the Province of
Alberta, and the parties hereto attorn to the courts of such jurisdiction.

- 25 -

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9.6

Counterparts

This Agreement may be executed in several counterparts, each of which so
executed shall be deemed to be an original, and such counterparts together shall
constitute one and the same instrument and, notwithstanding their date of
execution, shall be deemed to bear the date as of the date above written.

10.7

Notices

Any notice required or permitted to be given by a Party to the other shall be
given in writing and addressed:

  (a)

if to the Corporation or the Vendor at:

Tero Oilfield Services Ltd.
c/o Van Der Wissel Law Firm
200, 638 – 11th Ave. S.W.
Calgary, Alberta T2S 0J7
Telephone: (403) 537-9935
Email: svanderwissel@vdwlaw.ca

  (b)

if to Alta or Lithium at:

Alta Disposal Ltd.
Suite 300, 840 – 6 Avenue SW
Calgary, Alberta T2P 3E5
Attention: Alex Walsh, President
Telephone: (403) 930-1925
Email: aw@lithiumexplorationgroup.com

Any such notice shall be delivered, or mailed by prepaid registered post. Any
notice delivered as aforesaid shall be deemed to have been received by the Party
to which it is so delivered at the time on the date of its being so delivered.
Any notice mailed as aforesaid shall be deemed to have been received by the
Party to which it is so mailed on the third business day next following the time
on the date of it being so mailed. Any Party may change its address for notice
by giving notice to that effect.

10.8

Enurement

This Agreement shall enure to the benefit of the Parties, their respective
heirs, successors and permitted assigns.

10.9

Further Assurances

The Vendor and the Corporation will from time to time, on and after the Closing
Date, at the request and expense of the Purchaser, execute and deliver all such
other additional instruments, notices, releases, acquittances and other
documents and shall do all such other acts and things as may be reasonably
necessary to more fully convey the Purchased Shares to the Purchaser.

- 26 -

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10.10

Public Announcements

      (a)

The Corporation and the Vendor acknowledge that, as the Purchaser is a wholly
owned subsidiary of a reporting issuer, that the Purchaser and its parent
company are required to give public disclosure with respect to the transaction
contemplated by the Agreement and any ongoing matters with respect to the
Corporation and the Corporation and the Vendor hereby consent to any such
disclosure required to satisfy the Purchaser’s reporting requirements.

      (b)

Notwithstanding the foregoing, the Parties may disclose any information required
to be disclosed to any federal, provincial, state or local government or
governmental agency or regulatory body, branch, board, agency or necessary to
comply with relevant timely disclosure laws or the requirements of regulatory
authorities, including stock exchange, having jurisdiction in respect of the
securities of the Parties.

10.11

Severability

If, in any jurisdiction, any provision of this Agreement or its application to
any Party or circumstance is restricted, prohibited or unenforceable, that
provision shall, as to that jurisdiction, be ineffective only to the extent of
that restriction, prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, without affecting the validity or
enforceability of that provision in any other jurisdiction and, if applicable,
without affecting its application to the other parties or circumstances. The
Parties shall engage in good faith negotiations to replace any provision which
is so restricted, prohibited or unenforceable with an unrestricted and
enforceable provision, the economic effect of which comes as close as possible
to that of the restricted, prohibited or unenforceable provision which it
replaces.

- 27 -

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[exhibit10-33x28x1.jpg]

[exhibit10-33x28x2.jpg]

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SCHEDULE A

ASSETS, LANDS AND LEASES AND LEASE AGREEMENT

PART I – ASSETS OF THE CORPORATION

PART II – LANDS AND LEASES

PART III – LEASE AGREEMENT

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

[exhibit10-33x30x1.jpg]

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[exhibit10-33x31x1.jpg]

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[exhibit10-33x32x1.jpg]

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

[exhibit10-33x33x1.jpg]

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[exhibit10-33x34x1.jpg]

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[exhibit10-33x35x1.jpg]

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[exhibit10-33x36x1.jpg]

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SCHEDULE B

ASSETS TO BE REMOVED BY VENDOR PRIOR TO CLOSING

  Description Market Value       1. 2007 Hurricane Vac Unit – serial no.
1D9BV15267W048052 $35,000.00       2. 2000 Alta Fab 56 Ft. Skid Double Ended
$48,000.00         Wellsite – serial no. 001256-S-3336-WSM-B         3. 2012 GMC
Sierra – serial no. 3GTP2VE73CG229171 $14,000.00       4. 2000 Dex Stock Trailer
– serial no. 2D9TL6275Y1053462 $1,500.00       5. 2007 H&H Speedloader Trailer –
serial no. 4J6MX18237B088971 $750.00       6. 2008 S185 Skid Steer Loader
(Bobcat) – serial no. 530321438 $21,000.00       7. Plan 8610093 Block 3 Lot 1
$58,260.00       8. Plan 8610093 Block 3 Lot 2 $103,360.00       9. Plan 8610093
Block 3 Lot 3 $3,260.00       10. Plan 8610093 Block 4 Lot 1 $3,660.00       11.
Plan 8610093 Block 4 Lot 2 $3,690.00

 

  Total $292,480.00         Plus GST $14,624.00         Total with GST
$307,104.00

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SCHEDULE C

THE CORPORATION’S FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED SEPTEMBER 30,
2012 AND FEBRUARY 28, 2013.

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

 

 

TERO OILFIELD SERVICES LTD.

 Financial Statements

Year Ended September 30,2012

(Unaudited)

[exhibit10-33x39x1.jpg]

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

TERO OILFIELD SERVICES LTD. Index to Financial Statements Year Ended September
30,2012 (Unaudited)  

  Page REVIEW ENGAGEMENT REPORT 1     FINANCIAL STATEMENTS        Balance Sheet
2-3          Statement of Loss 4          Statement of Retained Eamings 5    
     Statement of Cash Flows 6          Notes to Financial Statements 7 - 15

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

 

[exhibit10-33x41x1.jpg]
6620 Crowchild Trail SW Calgary, Alberta T3E 5R8 Telephone: (403) 217-5925
Facsimile: (403) 217-5934 Email: info@dlaUp.com www.dlaUp.com

  REVIEW ENGAGEMENT REPORT

To the Shareholders of Tero Oilfield Services Ltd.

We have reviewed the balance sheet of Tero Oilfield Services Ltd. (the
"Company") as at September 30, 2012 and the statements of loss, retained
earnings and cash flows for the year then ended. Our review was made in
accordance with Canadian generally accepted standards for review engagements
and, accordingly, consisted primarily of inquiry, analytical procedures and
discussion related to information supplied to us by the Company.

A review does not constitute an audit and, consequently, we do not express an
audit opinion on these financial statements.

Based on our review, nothing has come to our attention that causes us to believe
that these financial statements are not, in all material respects, in accordance
with Canadian accounting standards for private enterprises.

We draw attention to Note 2 to the financial statements which describes that
Tero Oilfield Services Ltd. adopted Canadian accounting standards for private
enterprises on October 1, 2011 with a transition date of October 1, 2010. These
standards were applied retrospectively by management to the comparative
information in these financial statements, including the balance sheets as at
September 30, 2011 and October 1, 2010 and the statements of loss, retained
earnings and cash flows for the year ended September 30, 2011 and related
disclosures. We were not engaged to report on the restated comparative
information, and as such, it is neither audited nor reviewed.

 

Calgary, AB
April3,2013

[exhibit10-33x41x2.jpg]

CHARTERED ACCOUNTANTS                     

 

1

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

TERO OILFIELD SERVICES LTD. Balance Sheet September 30,2012 (Unaudited)  

    September 30     September 30     October 1       2012     2011     2010    
                                      ASSETS                   CURRENT          
               Cash and equivalents (Note 4) $  225,018   $  191,163   $  80,666
         Accounts receivable   209,459     328,463     208,503          Accounts
receivable from employees   18,380     15,321     6,023          Income taxes
recoverable   -     -     9,246          Interest receivable   1,289     827    
-          Goods and services tax recoverable   42           -          Prepaid
expenses   9,060     10,264     10,805                           463,248    
546,038     315,243                       PROPERTY AND EQUIPMENT (Note 5)  
715,695     652,174     773,699                         $  1,178,943   $
 1,198,212   $  1,088,942  

See notes to financial statements   DAUNHEIMER LYNCH ANDERSON LLP 2

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

TERO OILFIELD SERVICES LTD. Balance Sheet September 30, 2012 (Unaudited)  

    September 30     September 30     October 1       2012     2011     2010    
                  LIABILITIES AND SHAREHOLDERS' EQUITY                   CURRENT
                         Accounts payable and accrued liabilities $  36,829   $
 51,153   $  48,235          Income taxes payable   1,173     28,709     -      
   Current portion of long term debt   -     -     39,202          Goods and
services tax payable   -     14,472     7,399          Employee deductions
payable   -     2,132     2,146          Current portion of capital lease (Note
7)   19,436           24,409       57,438     96,466     121,391                
      OBLIGATIONS UNDER CAPITAL LEASE (Note 7)   49,975     -     -   FUTURE
INCOME TAXES   1,708     1,354     2,075   ASSET RETIREMENT OBLIGATION (Note 8)
  220,074     205,237     191,401       271,757     206,591     193,476      
329,195     303,057     314,867   SHAREHOLDERS' EQUITY                        
 Share capital (Note 10)   10     10     10          Retained earnings   849,738
    895,145     774,065       849,748     895,155     774,075     $  1,178,943  
$  1,198,212   $  1,088,942  

CONTINGENT LIABILITY (Note 12)

 

ON BEHALF OF THE BOARD

____________________________Director

____________________________Director

See notes to financial statements   DAUNHEIMER LYNCH ANDERSON LLP 3

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TERO OILFIELD SERVICES LTD. Statement of Loss Year Ended September 30,2012
(Unaudited)  

    2012     2011                 DISPOSAL WELL REVENUES $  844,124   $  983,620
                              EXPENSES                    Salaries and benefits
  255,913     214,963          Repairs and maintenance   120,903     74,828    
     Solids disposals   112,435     171,059          Fuel and oil   72,807    
55,513          Insurance   45,744     32,825          Utilities   37,469    
45,782          Sub-contracts   23,832     26,838          Property taxes  
11,324     11,700          Advertising and promotion   10,357     12,383        
 Office   9,869     6,888          Professional fees   9,550     9,634        
 Telephone   9,526     10,444          Interest and bank charges   6,159    
8,943          Bad debts (recovery)   5,759     (3,176 )        Travel   5,250  
  5,086          Interest on capital lease obligations   4,490     -        
 Business taxes and licences   2,946     4,293          Rental   2,700     2,700
         Interest on long term debt   1,620     1,670          Accretion  
14,837     13,836          Amortization   126 411     129,315                  
  889,901     835,524                 INCOME (LOSS) FROM OPERATIONS   (45,777)  
  148,096                 OTHER INCOME                    Interest income  
1,897     1,061          Loss on disposal of eqUipment   -     (89}            
        1,897     972                 INCOME (LOSS) BEFORE INCOME TAXES  
(43,880}     149,068                 INCOME TAXES                    Current  
1,173     28,709          Future (Recovery)   354     (721)                    
1,527     27,988                 NET INCOME (LOSS) $ (45,4071)   $  121,080  

See notes to financial statements   DAUNHEIMER LYNCH ANDERSON LLP 4

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

TERO OILFIELD SERVICES LTD. Statement of Retained Earnings Year Ended September
30,2012 (Unaudited)  

    2012     2011                 RETAINED EARNINGS - BEGINNING OF YEAR $
 895,145   $  774,065   NET INCOME (LOSS) FOR THE YEAR   (45,407 )   121,080  
RETAINED EARNINGS - END OF YEAR $  849,738   $  895,145  

 

See notes to financial statements   DAUNHEIMER LYNCH ANDERSON LLP 5

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TERO OILFIELD SERVICES LTD. Statement of Cash Flows Year Ended September 30,
2012 (Unaudited)  

    2012     2011                 OPERATING ACTIVITIES                    Net
income (loss) $  (45,407 ) $  121,080          Items not affecting cash:        
                   Amortization of property and equipment   126,411     129,315
                 Loss on disposal of equipment   -     89                
 Future income taxes   354     (721 )                Accretion   14,837    
13,836                     96,195     263,599                        Changes in
non-cash working capital:                            Accounts receivable  
119,004     (119,960 )                Accounts receivable from employees  
(3,059 )   (9,298 )                Interest receivable   (462 )   (827 )        
       Accounts payable and accrued liabilities   (14,320 )   2,915            
     Income taxes payable   (27,536 )   37,955                  Prepaid expenses
  1,204     541                  GST payable (receivable)   (14,514 )   7,073  
               Employee deductions payable   (2,132)     (14 )                  
58,185     (81 ,615 )                      Cash flow from operating activities  
154,380     181,984                 INVESTING ACTIVITY                          
 Purchase of property and eqUipment   (105,579)     (7,876)                
FINANCING ACTIVITIES                            Repayment of long term debt   -
    (39,202 )                Repayment of obligations under capital lease  
(14,946)     (24,409 )                      Cash flow used by financing
activities   (14,946)     (63,611 )               INCREASE IN CASH FLOW   33,855
    110,497                 Cash - beginning of year   191,163     80,666      
          CASH - END OF YEAR $  225,018   $  191,163                 CASH
CONSISTS OF:             Cash $ -   $  27,779   Term deposits   234,900    
163,384   Bank indebtedness   (9,882 )   -                   $  225,018   $
 191,163  

See notes to financial statements   DAUNHEIMER LYNCH ANDERSON LLP 6

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TERO OILFIELD SERVICES LTD. Notes to Financial Statements Year Ended September
30,2012 (Unaudited)  

1.

DESCRIPTION OF OPERATIONS

Tero Oilfield Services Ltd. is a privately owned company incorporated under the
Alberta Business Corporations Act and operates a disposal well.

2. FIRST TIME ADOPTION OF ACCOUNTING STANDARDS FOR PRIVATE ENTERPRISES

Effective October 1, 2011 the Company adopted the requirements of the Canadian
Institute of Chartered Accountants (CICA) Handbook - Accounting, electing to
adopt the new accounting framework: Canadian Accounting Standards for Private
Enterprises (ASPE). These are the Company's first financial statements prepared
in accordance with ASPE and the transitional provisions of Section 1500,
First-time Adoption have been applied. Section 1500 requires retrospective
application of the accounting standards with certain elective exemptions and
limited retrospective exceptions. The accounting policies set out in the
significant accounting policy note have been applied in preparing the financial
statements for the year ended September 30,2012, the comparative information for
the year ended September 30, 2011 and the opening ASPE balance sheet at October
1, 2010 (the Company's date of transition).

The Company has made elective exemptions permissible under Section 1500, First
Time Adoption as noted below with respect to the balance sheet at the date of
transition and the comparative statements of income, retained earnings and cash
flows. The Company has elected to:

  • 
Not retrospectively apply Section 3840, Related Party Transactions for related
party transactions that occurred prior to the date of transition. Accordingly,
there is no adjustment to the assets or liabilities recognized in a previous
related party transaction. Applying this elective exemption has resulted in no
change to assets, liabilities and equity accounts at the date of transition.
        • 
Not retrospectively apply Section 3856, Financial Instruments for non-derivative
financial instruments if the financial asset or financial liability has been
derecognized prior to the date of transition. Accordingly, there is no
adjustment to the assets or liabilities recognized in previous transactions
involving a non-derivative financial instrument that does not exist at the date
of transition. Applying this elective exemption has resulted in no change to
assets, liabilities and equity accounts at the date of transition.

        • 
Not retrospectively apply Section 3110, Asset Retirement Obligation Transactions
for asset retirement obligation transactions that occurred prior to the date of
transition. Accordingly, there is no adjustment to the assets or liabilities
recognized in a previous asset retirement obligation transaction. Applying this
elective exemption has resulted in no change to assets, liabilities and equity
accounts at the date of transition.

The Company issued financial statements for the year ended September, 2011 using
generally accepted accounting prinCiples prescribed by CICA Handbook -
Accounting XFI. The adoption of ASPE had no impact on the previously reported
assets, liabilities and equity of the Company, and accordingly, no adjustments
have been recorded in the comparative balance sheet, income statement, statement
of retained earnings and cash flow statement Certain of the Company's
disclosures included in these financial statements reflect the new disclosure
requirements of ASPE.

DAUNHEIMER LYNCH ANDERSON LLP 7

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TERO OILFIELD SERVICES LTD. Notes to Financial Statements Year Ended September
30,2012 (Unaudited)  

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The financial statements were prepared in accordance with Canadian accounting
standards for private enterprises.

Financial instruments policy

Measurement of financial instruments

The Company initially measures its financial assets and liabilities at fair
value, except for certain non-arm's length transactions.

The Company subsequently measures all its financial assets and financial
liabilities at amortized cost, except for investments in equity instruments that
are quoted in an active market, which are measured at fair value. Changes in
fair value are recognized in net income.

Financial assets measured at amortized cost include accounts receivable, payroll
advances and interest receivable.

Financial liabilities measured at amortized cost include bank indebtedness,
accounts payable and accrued liabilities and capital leases.

Impairment

Financial assets measured at amortized cost are tested for impairment when there
are indicators of impairment. The amount of the write-down is recognized in net
income. Previously recognized impairment losses may be reversed to the extent of
the improvement, directly or by adjusting the allowance account, provided it is
no greater than the amount that would have been reported at the date of the
reversal had the impairment not been recognized previously. The amount of the
reversal is recognized in net income.

Cash equivalents

Cash equivalents includes short term investments in cashable Guaranteed
Investment Certificates with a major chartered bank and are valued at cost plus
accrued interest.

The Company also considers their bank indebtedness to be a cash equivalent as it
is an integral part of the cash management of the Company.

Accounts receivable and allowance for doubtful accounts

Management reviews its accounts receivable annually to determine if any of the
accounts outstanding at the year end are uncollectable. Those accounts
specifically identified as un collectable are recorded as bad debts and included
in the allowance for doubtful accounts. In the event that any of the accounts
are subsequently collected they are recorded. as bad debts recovered in the year
they are received.

(continues)

DAUNHEIMER LYNCH ANDERSON LLP 8

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TERO OILFIELD SERVICES LTO. Notes to Financial Statements Year Ended September
30, 2012 (Unaudited)  

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Equipment

Equipment is stated at cost less accumulated amortization. Amortization is
provided at various rates designed to amortize the assets over their estimated
useful lives. The amortization rates are as follows:

  Buildings 4%   declining balance method   Equipment 20 - 25%   declining
balance method   Contractors moveable 30%   declining balance method   Computer
equipment 30%   declining balance method   Disposal well 10%   declining balance
method

Only one half of these rates is used in the year of acquisition. No amortization
is taken in the year of disposal. The Company regularly reviews its property and
equipment to eliminate obsolete items.

Leases

A lease that transfers substantially all of the benefits and risks of ownership
is classified as a capital lease. At the inception of a capital lease, an asset
and a payment obligation are recorded at an amount equal to the lesser of the
present value of the minimum lease payments and the property's fair market
value. Assets under capital leases are amortized on a declining balance over
their estimated useful lives. All other leases are accounted for as operating
leases and rental payments are expensed as incurred.

Measurement uncertainty

When preparing financial statements according to Canadian accounting standards
for private enterprises, management makes estimates and assumptions relating to:

  • 
reported amounts of revenues and expenses
        • 
reported amounts of assets and liabilities

        • 
disclosure of contingent assets and liabilities.

Estimates are based on a number of factors including historical experience,
current events and actions that the Company may undertake in the future, and
other assumptions that management believes are reasonable under the
circumstances. By their nature, these estimates are subject to measurement
uncertainty and actual results could differ. In particular, estimates are used
in accounting for certain items such as revenues, allowance for doubtful
accounts, useful lives of capital assets, asset impairments, asset retirement
obligation, legal and tax contingencies and income taxes.

(continues)

 

DAUNHEIMER LYNCH ANDERSON LLP 9

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TERO OILFIELD SERVICES LTD. Notes to Financial Statements Year Ended September
30, 2012 (Unaudited)

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Future income taxes

Income taxes are reported using the tax liability method, as follows: current
income tax expense is the estimated income taxes payable for the current year
after any refunds or the use of losses incurred in previous years, and future
income taxes reflect:

  • 
the temporary differences between the carrying amounts of assets and liabilities
for accounting purposes and the amounts used for tax purposes;
        • 
the benefit of unutilized tax losses that will more likely than not be realized
and carried forward to future years to reduce income taxes .

Future income taxes are estimated using the rates enacted by tax law and those
substantively enacted for the years in which future income taxes assets are
likely to be realized, or future income tax liabilities settled. The effect of a
change in tax rates on future income tax assets and liabilities is included in
earnings in the period when the change is substantively enacted.

Asset retirement obligation

The liability for the fair value of environmental and site restoration
obligations is recorded when the obligations are incurred and the fair value can
be reasonably estimated. The obligations are normally incurred at the time the
related assets are brought into production. The fair value of the obligation is
based on the estimated cash flows required to settle the obligations discounted
using an estimate of the Company's finanCing rate. The fair value of the
obligations is recorded as a liability with the same amount recorded as an
increase in capitalized costs. The amounts included in capitalized costs are
amortized using an amortization rate of 10%. The liability is adjusted for
accretion expense representing the increase in the fair value of the obligations
due to the passage of time.

Revenue recognition

The Company recognizes revenues when they are earned, specifically when all the
following conditions are met:

  • 
services are provided or products are delivered to customers
        • 
there is clear evidence that an arrangement exists

        • 
amounts are fixed or can be determined
        •  the ability to collect is reasonably assured.

    4. CASH AND EQUIVALENTS

      2012     2011                     Bank Indebtedness $  (9,882 ) $ -    
Cash   -     27,779     Short term investments   234,900     163,384            
          $  225,018   $  191,163  

        DAUNHEIMER LYNCH ANDERSON LLP 10

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TERO OILFIELD SERVICES LTD. Notes to Financial Statements Year Ended September
30,2012 (Unaudited)  

5.

PROPERTY AND EQUIPMENT

                  2012     2011         Cost     Accumulated     Net book    
Net book               amortization     value     value                        
        Land $  36,120   $ -   $  36,120   $  36,120     Buildings   159,385    
55,538     103,847     108,174     Equipment   1,060,748     839,004     221,744
    210,461     Contractors moveable   443,628     280,128     163,500    
85,286     Computer equipment   5,409     3,884     1,525     2,178     Disposal
well   554,512     365,553     188,959     209,955                              
    $  2,259,802   $  1,544,107   $  715,695   $  652,174  

  Included in contractors moveable equipment are assets under capital lease with
a cost of $84,356 and a net a book value $71 ,703. Amortization expense includes
an amount for the amortization of assets under capital lease in the amount of
$12,653.         6 . BANK INDEBTEDNESS

The Company has available a revolving demand bank loan to a maximum of $400,000
(2011 -$400,000), which is due on demand, subject to an annual review and bears
interest at a chartered bank's prime rate plus 0.5% (2011 - 0.5%) per annum.
Security for the operating loan is as follows:

- general security agreement;
- limited liability guarantee from the corporate shareholder limited to
$1,000,000;
- assignment and postponement of claim from the corporate shareholder.

Under its Demand Operating Facility Agreement the Company must meet the
following ratio: Maintain a debt service ratio of not less than 1.25:1 at the
end of each fiscal year. As of September 30, 2012 the ratio was in compliance.

        DAUNHEIMER LYNCH ANDERSON LLP 11

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TERO OILFIELD SERVICES LTD. Notes to Financial Statements Year Ended September
30, 2012 (Unaudited)  

7.

OBLIGATIONS UNDER CAPITAL LEASE

        2012     2011                       Capital lease obligation bears
interest at 5.76% per annum and is repayable in monthly blended payments of
$1,620. The loan matures on August 25, 2016 and is secured by equipment having a
net book value of $71 ,703.   $ 69,411 $ -   Amounts payable within one year    
(19,436 )   -                           $  49,975   $ -  

Future minimum capital lease payments are approximately:

                                 2013 $  19,436                                
   2014   19,436                                    2015   19,436              
                     2016   19,636   Total minimum lease payments   77,944  
Less: amount representing interest at 5.79%   8,533   Present value of minimum
lease payments   69,411   Less: current portion   19,436     $  49,975  

    8. ASSET RETIREMENT OBLIGATION

      2012     2011     Asset retirement obligation, beginning of year $
 205,237   $  191,401     Accretion expense   14,837     13,836     Asset
retirement obligation, end of year $  220,074   $  205,237  

As at September 30, 2012, the estimated total undiscounted amount required to
settle the asset retirement obligation was $220,074 (2011 - $205,237) and these
costs are expected to be settled over the useful life of the underlying asset,
which is currently determined to be 7 - 10 years. The estimated cash flow has
been discounted at a credit-adjusted risk free rate of7.0% per annum.

In accordance with provincial regulations, $220,074 (2011 - $205,237) in letters
of credit have been issued by the Company's bank in favour of a provincial
authority.

        DAUNHEIMER LYNCH ANDERSON LLP 12

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TERO OILFIELD SERVICES LTD. Notes to Financial Statements Year Ended September
30,2012 (Unaudited)  

9.

RELATED PARTY TRANSACTIONS

During the year the Company entered into the following transactions:

The Company incurred expenses from companies, related by way of common
shareholders and/or common management, in the amount of $28,432 (2011 -
$19,501).

The Company has provided a loan guarantee to the Corporate shareholder's bank
and no fee has been charged for this guarantee.

The Corporate shareholder has provided a loan guarantee to the Company's bank
and has not charged a fee for this guarantee.

The related party transactions are recorded at the exchange amount which is the
amount of consideration established and agreed to by the parties.

    10. SHARE CAPITAL

          2012     2011                         Authorized:                  
Unlimited   Class "A" Common Voting shares               Unlimited   Class "8"
Common Voting shares               Unlimited   Class "C" Common Voting shares  
            Unlimited   Class "0" Common Voting shares               Unlimited  
Class "E" Common Non-voting shares               Unlimited   Class "F" Preferred
Non-voting shares                                   Issued:                   50
  Class A Common shares $  5   $  5     50   Class 8 Common shares   5     5    
                          $  10   $  10  

        DAUNHEIMER LYNCH ANDERSON LLP 13

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TERO OILFIELD SERViCES LTD. Notes to Financial Statements Year Ended September
30,2012 (Unaudited)  

11

FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash, short term investments,
accounts receivable, accounts payable and accrued liabilities, long-term debt
and obligations under capital lease. Unless otherwise noted, it is management's
opinion that the Company is not exposed to significant interest, currency or
credit risks arising from these financial instruments. The fair value of these
financial instruments approximate their carrying values, unless otherwise noted.

Credit Risk

Credit risk arises from the potential that a counter party will fail to perform
its obligations. The Company is exposed to credit risk from customers. In order
to reduce its credit risk, the Company has adopted credit pOlicies which include
the analysis of the financial position of its customers and the regular review
of their credit limits. An allowance for doubtful accounts is established based
upon factors surrounding the credit risk of speCific acounts, historical trends
and other information.

Interest Rate

Interest rate risk is the risk that the value of a financial instrument might be
adversely affected by a change in the interest rates. In seeking to minimize the
risks from interest rate fluctuations, the Company manages exposure through its
normal financing activities. The Company is exposed to interest rate risk
primarily through its floating interest rate bank indebtedness and credit
facilities.

    12. CONTINGENT LIABILITY

The Company is contingently liable for a guarantee provided to the bank of the
Corporate Shareholder. The guarantee is in the amount of $350,000 and is
supported by a general security agreement covering aI/ property and a floating
charge on land. It is not possible to determine the amount of the liability, if
any that may result from the obligation of the Company to make repayments. The
Company does not have any recourse from these guarantees if this loan guarantee
is exercised. Any losses resulting from these guarantees will be charged against
earnings in the year incurred. No liability has been accrued as no payments are
expected to be made at this time.

    13. NON-CASH TRANSACTIONS

During the year, equipment costing $84,356 (2011 - $Nil) was acquired through a
capital lease.

    14. SUBSEQUENT EVENTS

The following events occurred subsequent to the fiscal year end:

Redemption of shares

On March 1,2013, the Company redeemed 50 Class A common shares for a total
consideration of $800,000. The consideration given was $300,000 cash and a
$500,000 promissory note for a 5 year term bearing interest at 2% per annum.

Sale of Property

On March 2, 2013, the Company sold some of its land and buildings for $170,000
to the shareholder and a relative of the shareholder.

        DAUNHEIMER LYNCH ANDERSON LLP 14

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TERO OILFIELD SERVICES LTD. Notes to Financial Statements Year Ended September
30, 2012 (Unaudited)    

15.

COMPARATIVE FIGURES

Some of the comparative figures have been reclassified to conform to the current
year's presentation.

    DAUNHEIMER LYNCH ANDERSON LLP 15

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 TERO OILFIELD SERVICES LTO.
Financial Statements
Five Month Period Ended February 28, 2013
(Unaudited - See Notice To Reader)

[exhibit10-33x39x1.jpg]

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[exhibit10-33x41x1.jpg] 6620 Crowchild Trail SW Calgary, Alberta T3E 5R8
Telephone: (403) 217-5925 Facsimile: (403) 217-5934 Email: info@dlallp.com
www.dlallp.com

  NOTICE TO READER

On the basis of information provided by management, we have compiled the balance
sheet of Tero Oilfield Services Ltd. as at February 28, 2013 and the statement
of income and retained earnings for the five month period then ended.

We have not performed an audit or a review engagement in respect of these
financial statements and, accordingly, we express no assurance thereon.

Readers are cautioned that these statements may not be appropriate for their
purposes.

 

Calgary, AS
June 25, 2013

[exhibit10-33x41x2.jpg]

CHARTERED ACCOUNTANTS                     

1

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TERO OILFIELD SERVICES LTO. Balance Sheet February 28, 2013 (Unaudited - See
Notice To Reader)    

    February 28     September 30       2013     2012                            
  ASSETS             CURRENT                    Cash $ 44,700   $ -        
 Term deposits   69,285     234,900          Accounts receivable   221,670    
209,459          Accounts receivable from employees   17,523     18,380        
 Interest receivable   497     1,289          Goods and services tax recoverable
  -     42          Prepaid expenses   -     9,060          Deposit on share
repurchase   300,000     -                                   653,675     473,130
                PROPERTY AND EQUIPMENT (Net of accumulated amortization)  
664,591     715,695                                 $  1,318,286   $  1,188,825
                              LIABILITIES AND SHAREHOLDERS' EQUITY            
CURRENT                    Bank indebtedness $ -   $ 9,882          Accounts
payable and accrued liabilities   30,149     36,829          Income taxes
payable   10,733     1,173          Goods and services tax payable   2,065     -
         Due to shareholder   100,000     -          Current portion of capital
lease   16,220     19,436                     159,167     67,320                
              OBLIGATIONS UNDER CAPITAL LEASE   46,704     49,975              
  FUTURE INCOME TAXES   -     1,708                 ASSET RETIREMENT OBLIGATION
  -     220,074                     46,704     271,757                    
205,871     339,077                 SHAREHOLDERS' EQUITY                  
 Share capital   10     10          Retained earnings   1,112,385     849,738  
                  1,112,395     849,748                   $  1,318,266   $
 1,188,825                

DAUNHEIMER LYNCH ANDERSON LLP 2

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TERO OILFIELD SERVICES LTO. Statement of Income and Retained Earnings Five Month
Period Ended February 28, 2013 (Unaudited - See Notice To Reader)  

    February2B     September 30       2013     2012       (5 months)            
                        DISPOSAL WELL REVENUES $ 415,394   $  844,124          
      EXPENSES                    Salaries and benefits   121,747     255,913  
       Sub-contracts   42,341     23,832          Repairs and maintenance  
35,451     120,903          Solids disposals   31,289     112,435        
 Utilities   22,143     37,469          Insurance   17,000     45,744        
 Fuel and oil   12,511     72,807          Advertising and promotion   7,091    
10,357          Telephone   5,949     9,526          Professional fees   5,000  
  9,550          Office   3,043     9,869          Rental   2,700     2,700    
     Business taxes and licences   1,796     2,946          Travel   1,660    
5,250          Interest on capital lease obligations   1,612     4,490        
 Interest on long term debt   1,345     1,620          Property taxes   1,341  
  11,324          Interest and bank charges   813     6,159          Bad debts  
-     5,759          Amortization   51,104     126,411          Accretion   -  
  14,837                     365,936     889,901                 INCOME (LOSS)
FROM OPERATIONS   49,458     (45,l77 )               OTHER INCOME              
     Asset retirement obligation recovery   220,074     -          Interest
income   967     1,897       221,041     1,897                 INCOME (LOSS)
BEFORE INCOME TAXES   270,499     (43,880}                 INCOME TAXES        
           Current   9,560     1,173          Future   (1,708 )   354          
          7,852     1,527                 NET INCOME (LOSS)   262,647    
(45,407 )               RETAINED EARNINGS - BEGINNING OF PERIOD   849,738    
895,145                               RETAINED EARNINGS - END OF PERIOD $
 1,112,385   $  849,738  

DAUNHEIMER LYNCH ANDERSON LLP 3

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SCHEDULE D

LIABILITIES OF THE CORPORATION

As at the Closing Date, Tero has the following material liabilities:

1.

Promissory Note to Smith Holdings Group Ltd. in the amount of $500,000.

2.

LLR liability to Energy Department of Alberta in the amount of $270,000 which is
secured by an LC.

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SCHEDULE E

THE CORPORATION’S PERSONNEL LIST

1.

Garry Hofmann

    2.

Natel Hofmann

    3.

Timothy Lewandoski

    4.

Mickey Barca

    5.

John Beute

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SCHEDULE F

THE CORPORATION’S BANK ACCOUNTS

Royal Bank of Canada chequing account: Transit # 01439, Account #1012970

Royal Bank of Canada business loan (line of credit): Account #
03009-82525387-001

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