EXHIBIT 10.1
 
 
 __________
 
 
 
 
 
 
SHARE EXCHANGE AGREEMENT
 
 
 
 
 

Among each of:

The SHAREHOLDERS of GLOB MEDIA WORKS INC.

 
And the COMPANY itself; that being:

GLOB MEDIA WORKS INC.
 

And the PURCHASER:

MORGAN CREEK ENERGY CORP.

 

Morgan Creek Energy Corp.
6060 North Central Expressway, Suite 560, Dallas, Texas 75206
__________
 

 
 
1

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

 
 
SHARE EXCHANGE AGREEMENT
 
THIS SHARE EXCHANGE AGREEMENT is made and dated for reference effective as at
May 14, 2012 (the “Effective Date”) as fully executed on this  day of May
2012.
 
AMONG EACH OF:

THE UNDERSIGNED SHAREHOLDER OF GLOB MEDIA WORKS INC., having an address for
notice and delivery located as set forth in Schedule “A” which is attached
hereto;

(and each such shareholder being hereinafter singularly referred to as a
“Vendor” and collectively referred to as the “Vendors” as the context so
requires);

OF THE FIRST PART

AND:

GLOB MEDIA WORKS INC., a company incorporated under the laws of the State of
Washington, and having an address for notice and delivery located at Suite 880,
666 Burrard Street, Vancouver, British Columbia, Canada, V6C 2X8

(the “Company”);
OF THE SECOND PART

AND:

MORGAN CREEK ENERGY CORP., a company incorporated under the laws of the State of
Nevada, U.S.A., and having an address for notice and delivery located at 6060
North Central Expressway, Suite 560, Dallas, Texas 75206

(the “Purchaser”);
OF THE THIRD PART

(and each of the Vendors, the Company and the Purchaser being hereinafter
singularly also referred to as a “Party” and collectively referred to as the
“Parties” as the context so requires).

 
2

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

 

WHEREAS:

A.                           The Company is a body corporate subsisting under
and registered pursuant to the laws of the State of Washington, USA, is
presently engaged in the business of seeking, acquiring, and developing internet
software applications and programs (collectively, the “Company’s Business”), and
the Company is the sole legal, beneficial and registered owner of certain
intellectual property rights and patents for certain software and internet
applications described more fully and detailed in Schedule “C”  (the “IP”);

B.                           The Purchaser is a reporting company incorporated
under the laws of the State of Nevada, U.S.A., is presently engaged in the
business of seeking, acquiring, exploring and developing mineral resource
property interests of merit worldwide and previously in the State of Texas
(collectively, the “Purchaser’s Business”), and has its common shares listed and
posted for trading on FINRA’s Over-the-Counter Bulletin Board;

C.                           The Vendors are the legal and beneficial owners of
all of the presently issued and outstanding common shares in the capital of the
Company; the particulars of the registered and beneficial ownership of such
common shares being set forth in Schedule “A” which is attached hereto and which
forms a material part hereof;

D.                           As a consequence of recent discussions and
negotiations as between the Parties hereto, the Vendors have agreed to sell, and
the Purchaser has agreed to acquire, subject to the prior satisfaction of
certain conditions precedent to the satisfaction of the Purchaser, all of the
issued and outstanding common shares in the capital of the Company
(collectively, the “Purchased Shares” and each a “Purchased Share”); and

E.                            The Parties have agreed to enter into this “Share
Exchange Agreement” (the “Agreement”) which formalizes and replaces, in their
entirety, all such recent discussions and negotiations and which clarifies each
of the Parties’ respective duties and obligations in connection with the
proposed purchase by the Purchaser from the Vendors of all of the Purchased
Shares together with the further development of the Purchaser’s Business as a
consequence thereof.

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
promises, covenants and agreements herein contained, THE PARTIES COVENANT AND
AGREE WITH EACH OTHER as follows:
 
Article 1
DEFINITIONS

1.1                          Definitions.   For the purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
the following words and phrases shall have the following meanings:

 
(a)
“Agreement” means this “Share Exchange Agreement” as entered into among the
Vendors, the Company and the Purchaser herein, together with any Schedules
attached hereto and any amendments made to either of the agreement or Schedules;

 
(b)
“Arbitration Act” means the British Columbia International Commercial
Arbitration Act, as amended from time to time, and the rules and regulations
promulgated therein, as set forth in Article “13” hereinbelow;

 
(c)
“Attorney” has the meaning ascribed to it in section “11.3” hereinbelow;

 
(d)
“Board of Directors” means, as applicable, the respective Board of Directors of
the relevant Party as duly constituted from time to time;

 
 
3

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

 
 
 
(e)
“business day” means any day during which chartered banks are open for business
in the City of Vancouver, British Columbia, Canada;

 
(f)
“Business Documentation” means any and all records and other factual data and
information relating to the Company’s business interests and assets and
including, without limitation, all plans, agreements and records which are in
the possession or control of any of the Vendors or the Company in that respect;

 
(g)
“Closing” has the meaning ascribed to it in section “6.1” hereinbelow;

 
(h)
“Closing Date” has the meaning ascribed to it in section “6.1” hereinbelow;

 
(i)
“Commission” means the United States Securities and Exchange Commission;

 
(j)
“Company” means Glob Media Works Inc., a company duly incorporated under the
laws of the State of Washington, USA or any successor company, however formed,
whether as a result of merger, amalgamation or other action;

 
(k)
“Company’s Business” has the meaning ascribed to it recital “A” hereinabove;

 
(l)
“Company’s Disclosure Schedule” has the meaning ascribed to it in section “2.2”
hereinbelow;

 
(m)
“Company’s Assets” means all assets, contracts, equipment, goodwill, inventory
and Intellectual Property of the Company and including, without limitation, all
of the property interests, assets, contracts, equipment, goodwill and inventory
which are listed and described in Schedules “C” through “G” which are attached
hereto and which form a material part hereof;

 
(n)
“Financial Statements” has the meaning ascribed to it in section “3.2”
hereinbelow; a copy of which Financial Statements of the Company being set forth
in Schedule “B” which is attached hereto and which forms a material part hereof;

 
(o)
“Confidential Information” has the meaning ascribed to it in section “10.1”
hereinbelow;

 
(p)
“Defaulting Party” and “Non-Defaulting Party” have the meanings ascribed to them
in section “14.1” hereinbelow;

 
(q)
“Effective Date” has the meaning ascribed to it on the front page of this
Agreement;

 
(r)
“Escrow Agent” has the meaning ascribed to it in section “7.1” hereinbelow;

 
(s)
“Execution Date” means the actual date of the complete execution of this
Agreement and any amendment thereto by all Parties as set forth on the front
page of this Agreement;

 
(t)
“Indemnified Party” and “Indemnified Parties” have the meanings ascribed to them
in section “15.1” hereinbelow;

 
(u)
“Initial Due Diligence” has the meaning ascribed to it in section “5.1”
hereinbelow;

 
 
4

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

 
 
 
(v)
“Intellectual Property” means, with respect to the Company, all right and
interest to all patents, patents pending, inventions, know-how, any operating or
identifying name or registered or unregistered trademarks and tradenames, all
computer programs, licensed end-user software, source codes, products and
applications (and related documentation and materials) and other works of
authorship (including notes, reports, other documents and materials, magnetic,
electronic, sound or video recordings and any other work in which copyright or
similar right may subsist) and all copyrights (registered or unregistered)
therein, industrial designs (registered or unregistered), franchises, licenses,
authorities, restrictive covenants or other industrial or intellectual property
used in or pertaining to the Company and including, without limitation, the
items described in Schedule “C” which is attached hereto and which forms a
material part hereof, and all lists of customers, documents, records,
correspondence and other information pertaining to the Company;

 
(w)
“NI 45-106” means National Instrument 45-106 – Prospectus and Registration
Exemptions of the Canadian Securities Administrators;

 
(x)
“Parties” or “Party” means, respectively, collectively and individually, as the
context so requires, each of the Vendors, the Company, and/or the Purchaser, as
the case may be, together with their respective successors and permitted assigns
as the context so requires;

 
(y)
“person” or “persons” means an individual, corporation, partnership, party,
trust, fund, association and any other organized group of persons and the
personal or other legal representative of a person to whom the context can apply
according to law;

 
(z)
“Power of Attorney” has the meaning ascribed to it in section “11.3”
hereinbelow;

 
(aa)
“Purchased Shares” has the meaning ascribed to it in recital “D” hereinabove;
the particulars of the registered and beneficial ownership of such Purchased
Shares being set forth in Schedule “A” which is attached hereto;

 
(ab)
“Purchase Price” has the meaning ascribed to it in section “2.2” hereinbelow;

 
(ac)
“Purchaser” means Morgan Creek Energy Corp., a company incorporated pursuant to
the laws of the State of Nevada, U.S.A., or any successor company, however
formed, whether as a result of merger, amalgamation or other action;

 
(ad)
“Purchaser’s Business” has the meaning ascribed to it in recital “B.”
hereinabove;

 
(ae)
“Purchaser’s Disclosure Schedule” has the meaning ascribed to it in section
“4.1” hereinbelow;

 
(af)
“Ratification” has the meaning ascribed to it in section “5.1(a)” hereinbelow;

 
(ag)
“Regulation D”, “Regulation S”, “Rule 144”, “Rule 501”, “Rule 506” and “U.S.
Person” have the meanings ascribed to them in the Securities Act;

 
 
5

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

 
 
 
(ah)
“Regulation S Certificate”, “U.S. Accredited Investor Certificate” and “Canadian
Accredited Investor Certificate” have the meanings ascribed to them in section
“3.2” hereinbelow; the proposed forms of which being attached hereto as Schedule
“I” and forming a material part hereof;

 
(ai)
“Regulatory Approval” means the acceptance for filing, if required, of the
transactions contemplated by this Agreement by the Regulatory Authorities;

 
(aj)
“Regulatory Authority” and “Regulatory Authorities” means, either singularly or
collectively as the context so requires, any regulatory agencies who have or who
may have jurisdiction over the affairs of the Company, the Vendors and the
Purchaser herein and including, without limitation, and where applicable, all
applicable securities commissions and again including, without limitation, the
Commission, and all other regulatory authorities from whom any such
authorization, approval or other action is required to be obtained or to be made
in connection with the transactions contemplated by this Agreement;

 
(ak)
“Securities Act” means the United States Securities Act of 1933, as amended, and
all the Rules and Regulations promulgated under the Securities Act; “1934 Act”
means the United States Securities Exchange Act of 1934, as amended, and all the
Rules and Regulations promulgated under the 1934 Act; and “B.C. Securities Act”
means the British Columbia Securities Act, as amended, and all the Rules and
Regulations promulgated under the B.C. Securities Act;

 
(al)
“Share” has the meaning ascribed to it in section “2.2” hereinbelow, and
“Shares” means all Shares issued as part of the Purchase Price hereunder;

 
(am)
“Subject Removal Date” has the meaning ascribed to it in section “5.1”
hereinbelow;

 
(an)
“subsidiary” means any company or companies of which more than 50% of the
outstanding shares carrying votes at all times (provided that the ownership of
such shares confers the right at all times to elect at least a majority of the
board of directors of such company or companies) are for the time being owned by
or held for a company and/or any other companies in like relation to the
company, and includes any company in like relation to the subsidiary;

 
(ao)
“Transfer Agent” means the Purchaser’s existing registrar and transfer agent for
its common shares, or any successor Transfer Agent, however formed, whether as a
result of merger, amalgamation or other action;

 
(ap)
“Transfer Documents” has the meaning ascribed to it in section “7.2”
hereinbelow;

 
(aq)
“U.S. Person” has the meaning ascribed thereto in Regulation S; and

 
(ar)
“Vendor” or “Vendors” means the shareholders of Glob Media Works Inc. who have
executed this Agreement as a Party.

1.2                          Schedules. For the purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
the following shall represent the Schedules which are attached to this Agreement
and which form a material part hereof; provided that each of the Parties hereto
acknowledge that all such Schedules shall be prepared following the execution
hereof and the initial payment of $50,000 pursuant to Section 2.2, and shall be
attached hereof and made a part hereof only upon mutual acceptance of each such
Schedule by the Parties, and all representations and warranties referring to any
such Schedule shall be qualified in their entirety until such Schedule is so
approved:
 
 
6

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

 
 

Schedule   Description of Schedule       Company Disclosure Schedule;  
Purchaser’s Disclosure Schedule; Schedule “A”: Purchased Shares and Vendors;
Schedule “B”: Financial Statements; Schedule “C”: Companies’ Intellectual
Property; Schedule “D”: Companies’ Leases and Licenses; Schedule “E”: Companies’
Contracts of Employment; Schedule “F”: Companies’ Material Contracts; Schedule
“G”: Companies’ List of Bank Accounts etc.; Schedule “H”:    Purchaser’s
Material Contracts; and Schedule “I”: Vendors’ Certificates.

 
1.3                           Interpretation. For the purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires,:

 
(a)
the words “herein”, “hereof”, “hereunder”, “hereinabove” and “hereinbelow” and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, section or other subdivision of this Agreement;

 
(b)
any reference to an entity shall include and shall be deemed to be a reference
to any entity that is a permitted successor to such entity; and

 
(c)
words in the singular include the plural and words in the masculine gender
include the feminine and neuter genders, and vice versa.

 
Article 2
PURCHASE AND SALE AND CONDITIONS THEREON

2.1                          Purchase and sale.   Subject to the terms and
conditions hereof and based upon the representations, warranties and covenants
contained in Articles “3” and “4” hereinbelow and the prior satisfaction of the
conditions precedent which are set forth in Article “6” hereinbelow, the Vendors
hereby agree to assign, sell and transfer at the “Closing Date” (as hereinafter
determined) all of their respective right, entitlement and interest in and to
all of the Purchased Shares to the Purchaser and the Purchaser hereby agrees to
purchase all of the Purchased Shares from the Vendors on the terms and subject
to the conditions contained in this Agreement.

2.2                          Purchase Price.   The total purchase price
(collectively, the “Purchase Price”) for all of the Purchased Shares will be
satisfied by way of the issuance and delivery by the Purchaser to the order and
direction of the Vendors, in accordance with section “2.3” hereinbelow, an
aggregate of 9,075,734 restricted common shares in the capital of the Purchaser
(each a “Share”), at a deemed issuance price of U.S. $0.03 per Share, at the
“Closing” (as hereinafter determined) on the Closing Date of this Agreement.  A
condition precedent of the purchase and sale contemplated by the parties will be
all non-common equity related securities of the Company shall be converted to
common shares of the Company, and no options or warrants or other securities of
any equity interest in the Company will be issued by the Company at the Closing
other than the 5,317,033 common shares of the Company that will be exchanged for
9,075,734 common shares of the Purchaser. A further condition of the purchase
and sale contemplated by the parties is funding of the Company by the Purchaser
in the aggregate initial amount of $250,000 with such funds provided to the
Company as follows: a) $50,000 within 5 business days of the full execution by
the Vendors of this Agreement, and b) the remaining $200,000 within deposit of 5
business days of the Closing.
 
 
7

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

 

2.3                          Disbursement of Shares.   The Purchaser will issue
the Shares to the Vendors in accordance with the Vendors’ direction and
registration instructions delivered to the Purchaser prior to the Closing.

2.4                          Resale restrictions and legending of Share
certificates.   The Vendors hereby acknowledge and agree that the Purchaser
makes no representations as to any resale or other restriction affecting the
Shares and that it is presently contemplated that the Shares will be issued by
the Purchaser to the Vendors in reliance upon the registration and prospectus
exemptions contained in certain sections of the United States Securities Act of
1933, as amended (the “Securities Act”), or “Regulation S” promulgated under the
Securities Act and, if applicable, the British Columbia Securities Act (the
“B.C. Securities Act”), which will impose a trading restriction in the United
States on the Shares for a period of at least 6 months from the Closing
Date.  In addition, the Vendors hereby also acknowledge and agree that the
within obligation of the Purchaser to issue the Shares pursuant to section “2.2”
hereinabove will be subject to the Purchaser being satisfied that an exemption
from applicable registration and prospectus requirements is available under the
Securities Act and, if applicable, the B.C. Securities Act, and all applicable
securities laws, in respect of each of the Vendors, the Purchased Shares and the
Shares, and the Purchaser shall be relieved of any obligation whatsoever to
purchase any Purchased Shares of the Vendors and to issue any Shares in respect
of Vendors where the Purchaser reasonably determines that a suitable exemption
is not available to it.

The Vendors hereby also acknowledge and understand that neither the sale of the
Shares which the Vendors are acquiring nor any of the Shares themselves have
been registered under the Securities Act and, if applicable, the B.C. Securities
Act, or any state securities laws, and, furthermore, that the Shares must be
held indefinitely unless subsequently registered under the Securities Act and,
if applicable, the B.C. Securities Act, or an exemption from such registration
is available.  The Vendors also acknowledge and understand that the certificates
representing the Shares will be stamped with the following legends (or
substantially equivalent language) restricting transfer in the following manner
if such restriction is required by the “Regulatory Authorities”:

“The securities represented by this certificate have not been registered under
the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)
or applicable state securities laws.  They may not be sold, offered for sale,
pledged or otherwise transferred except pursuant to an effective registration
statement under the U.S. Securities Act and in accordance with any applicable
state securities laws, or pursuant to an exemption or exclusion from
registration under the U.S. Securities Act and any applicable state securities
laws.  The securities represented by the certificate cannot be the subject of
hedging transactions unless such transactions are conducted in compliance with
the U.S. Securities Act.”;

“Unless permitted under securities legislation, the holder of this security must
not trade the security before [the date which is four months plus a day from the
date of issuance].”; and

“Unless otherwise permitted under securities legislation, the holder of this
security must not trade the security in or from British Columbia unless (a) the
security holder trades the security through an investment dealer registered in
British Columbia from an account at that dealer in the name of the security
holder, and (b) the dealer executes the trade through the OTC Bulleting Board or
Pink Sheets.”;
 
 
8

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

 

and the Vendors hereby consent to the Purchaser making a notation on its records
or giving instructions to any transfer agent of the Purchaser (the “Transfer
Agent”) in order to implement the restrictions on transfer set forth and
described hereinabove.

The Vendors also acknowledge and understand that:

 
(a)
the Shares are restricted securities within the meaning of “Rule 144”
promulgated under the Securities Act;

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

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

2.5                           Costs.   The Parties shall bear their own costs in
relation to the negotiation and formalization of this Agreement and the matters
contemplated thereby, including any legal fees, accounting, regulatory and
filing fees and expenses.

2.6                           Other securities.   If and to the extent that the
Vendors, or any other party related, associated or affiliated with the Vendors,
any absolute, contingent, optional, pre-emptive or other right to acquire any
securities in the capital of the Company, it is hereby acknowledged and agreed
by the Vendors that such party shall be conclusively deemed, as and from the
Closing, to have transferred the same to the Purchaser to the fullest extent
permitted by law, and to otherwise hold the same in trust for and at the
discretion of the Purchaser.

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

 
9

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

 

Article 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
BY EACH OF THE VENDORS AND THE COMPANY

3.1                          General representations, warranties and covenants
by each of the Vendors and the Company.   In order to induce the Purchaser to
enter into and consummate this Agreement, each of the Vendors and the Company
hereby, jointly and severally, represents to, warrants to and covenants with the
Purchaser, with the intent that the Purchaser will rely thereon in entering into
this Agreement and in concluding the transactions contemplated herein, that, to
the best of the knowledge, information and belief of each of the Vendors and the
Company, after having made due inquiry (and for the purposes of the following
warranties, representations and covenants, (i) “Vendors” and “Company” shall
mean the Vendors, the Company and any subsidiary of the Vendors and the Company,
if any, as the context so requires, (ii) a Vendor’s obligation of “due inquiry”
shall extend only to warranties, representations and covenants relating to such
Vendor and not to any warranties, representations and covenants relating to the
Company, and (iii) no Vendor is making any representation, warranty or covenant
with respect to any other Vendor, and that the representations, warranties and
covenants of a Vendor are being made solely with respect to such Vendor):

 
(a)
the Company and the corporate Vendors are duly incorporated under the laws of
their respective jurisdictions of incorporation, are validly existing and are in
good standing with respect to all statutory filings required by the applicable
corporate laws;

 
(b)
the Company and the Vendors have the requisite power, authority and capacity to
own and use all of their respective business assets and to carry on the Business
as presently conducted by them;

 
(c)
the execution and delivery of this Agreement and the agreements contemplated
hereby have been duly authorized by all necessary action, corporate or
otherwise, on their respective parts;

 
(d)
there are no other consents, approvals or conditions precedent to the
performance of this Agreement which have not been obtained;

 
(e)
this Agreement constitutes a legal, valid and binding obligation of each of the
Vendors and the Company, enforceable against each of the Vendors and the Company
in accordance with its terms, except as enforcement may be limited by laws of
general application affecting the rights of creditors;

 
(f)
no proceedings are pending for, and it is unaware of, any basis for the
institution of any proceedings leading to its respective dissolution or winding
up, or the placing of it in bankruptcy or subject to any other laws governing
the affairs of insolvent companies or persons;

 
(g)
to the actual knowledge, information and belief of each of the Vendors and the
Company, the making of this Agreement and the completion of the transactions
contemplated hereby and the performance of and compliance with the terms hereof
does not and will not:

 
 
10

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

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

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

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

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

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

 
(h)
neither this Agreement nor any other document, certificate or statement
furnished to the Purchaser by or on behalf of any of the Vendors or the Company
in connection with the transactions contemplated hereby knowingly or negligently
contains any untrue or incomplete statement of material fact or omits to state a
material fact necessary in order to make the statements therein not misleading
which would likely affect the decision of the Purchaser to enter into this
Agreement; and

 
(i)
each of the Vendors and the Company are not aware of any fact or circumstance
which has not been disclosed to the Purchaser which should be disclosed in order
to prevent the representations and warranties contained in this section from
being misleading or which would likely affect the decision of the Purchaser to
enter into this Agreement.

3.2                           Representations, warranties and covenants by each
of the Vendors and the Company respecting the Purchased Shares and Shares.   In
order to induce the Purchaser to enter into and consummate this Agreement, each
of the Vendors and the Company hereby, jointly and severally, also represents
to, warrants to and covenants with the Purchaser, with the intent that the
Purchaser will also rely thereon in entering into this Agreement and in
concluding the transactions contemplated herein, that, to the best of the
knowledge, information and belief of each of the Vendors and the Company, after
having made due inquiry (and for the purposes of the following warranties,
representations and covenants, (i) “Vendors” and “Company” shall mean the
Vendors, the Company and any subsidiary of the Vendors and the Company, if any,
as the context so requires, (ii) a Vendor’s obligation of “due inquiry” shall
extend only to warranties, representations and covenants relating to such Vendor
and not to any warranties, representations and covenants relating to the
Company, and (iii) no Vendor is making any representation, warranty or covenant
with respect to any other Vendor, and that the representations, warranties and
covenants of a Vendor are being made solely with respect to such Vendor):
 
 
11

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

 

 
(a)
save and except as set forth in Schedule “A” which is attached hereto and as set
forth in the “Company’s Disclosure Schedule”, the Vendors have good and
marketable title to and are the legal and beneficial owner of all of the
Purchased Shares, and the Purchased Shares are fully paid and non-assessable and
are free and clear of liens, charges, encumbrances, pledges, mortgages,
hypothecations and adverse claims of any and all nature whatsoever and
including, without limitation, options, pre-emptive rights and other rights of
acquisition in favour of any person, whether conditional or absolute;

 
(b)
the Vendors have the power and capacity to own and dispose of the Purchased
Shares, and the Purchased Shares are not subject to any voting or similar
arrangement;

 
(c)
there are no actions, suits, proceedings or investigations (whether or not
purportedly against or on behalf of any of the Vendors or the Company), pending
or threatened, which may affect, without limitation, the rights of the Vendors
to transfer any of the Purchased Shares to the Purchaser at law or in equity, or
before or by any federal, state, provincial, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, and, without limiting the generality of the foregoing, there are no
claims or potential claims under any relevant family relations legislation or
other equivalent legislation affecting the Purchased Shares.  In addition, the
Vendors and the Company are not now aware of any existing ground on which any
such action, suit or proceeding might be commenced with any reasonable
likelihood of success;

 
(d)
save and except as set forth in Schedule “A” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, no other person, firm or corporation
has any agreement, option or right capable of becoming an agreement for the
purchase of any of the Purchased Shares;

 
(e)
the Vendors acknowledge that the Shares will be issued under certain exemptions
from the registration and prospectus filing requirements otherwise applicable
under the Securities Act and, if applicable, the B.C. Securities Act, and all
applicable securities laws, and that, as a result, the Vendors may be restricted
from using most of the remedies that would otherwise be available to the
Vendors, the Vendors will not receive information that would otherwise be
required to be provided to the Vendors and the Purchaser is relieved from
certain obligations that would otherwise apply to the Purchaser, in either case,
under applicable securities legislation;

 
(f)
the Vendors realize that the sale of the Purchased Shares in exchange for the
Shares will be a highly speculative investment and that the each of the Vendors
should be able, without impairing that Vendor’s financial condition, to hold the
Shares for an indefinite period of time and to suffer a complete loss on such
investment.  In addition, each of the Vendors has such knowledge and experience
in financial and business matters that they are capable of evaluating the merits
and risks of the prospective investment;

 
 
12

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

 
 
 
(g)
the Vendors have not received, nor have any of the Vendors requested, or do any
of the Vendors require to, receive any offering memorandum or a similar document
describing the business and affairs of the Purchaser in order to assist the
Vendors in entering into this Agreement and in consummating the transactions
contemplated herein;

 
(h)
if the Vendor is a “U.S. Person”, as that term is defined in Regulation S, then
such Vendor hereby certifies that:

 
(i)
it qualifies as an “accredited investor” as that term is defined under “Rule
501” of “Regulation D” promulgated under the Securities Act, as amended;

 
(ii)
it is receiving the Shares solely for its own account for investment and not
with a view to or for sale or distribution of the Shares or any portion thereof
and not with any present intention of selling, offering to sell or otherwise
disposing of or distributing the Shares or any portion thereof in any
transaction other than a transaction exempt from registration under the
Securities Act;

 
(iii)
the entire legal and beneficial interest in the Shares it is receiving is being
acquired for, and will be held for the account of, itself only and neither in
whole nor in part for any other person;

 
(iv)
it understands that: (A) neither the sale of the Shares which it is receiving
nor the Shares themselves have been registered under the Securities Act or any
state securities laws, and the Shares must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available; and (B) the share certificate representing the Shares
will be stamped with the following legend (or substantially equivalent language)
restricting transfer:

“The securities represented by this certificate have not been registered under
the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)
or applicable state securities laws.  They may not be sold, offered for sale,
pledged or otherwise transferred except pursuant to an effective registration
statement under the U.S. Securities Act and in accordance with any applicable
state securities laws, or pursuant to an exemption or exclusion from
registration under the U.S. Securities Act and any applicable state securities
laws.  The securities represented by the certificate cannot be the subject of
hedging transactions unless such transactions are conducted in compliance with
the U.S. Securities Act.”;

“Unless permitted under securities legislation, the holder of this security must
not trade the security before [the date which is four months plus a day from the
date of issuance].”; and

“Unless otherwise permitted under securities legislation, the holder of this
security must not trade the security in or from British Columbia unless (a) the
security holder trades the security through an investment dealer registered in
British Columbia from an account at that dealer in the name of the security
holder, and (b) the dealer executes the trade through the OTC Bulleting Board or
Pink Sheets.”; and
 
 
13

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

 

each such U.S. Person Vendor will complete and provide the Purchaser and the
Company with an executed copy of the attached form of “U.S. Accredited Investor
Certificate”; which is attached hereto with Schedule “I” and which forms a
material hereof; contemporaneously with the Vendor’s execution of this Agreement
at or before Closing;

 
(i)
if the Vendor is not a U.S. Person, as defined in Regulation S, then such Vendor
hereby certifies that:

 
(i)
it is not a U.S. Person (as defined in “Rule 902” of Regulation S under the
Securities Act, which definition includes, but is not limited to, any natural
person resident in the United States, any corporation or partnership
incorporated or organized under the laws of the United States or any estate or
trust of which any executor, administrator or trustee is a U.S. Person);

 
(ii)
it is not acquiring any of the Shares for the account or benefit of any U.S.
Person or for offering, resale or delivery for the account or benefit of any
U.S. Person or for the account of any person in any jurisdiction other than the
jurisdiction as set out for its name and address as stated in Schedule “A” which
is attached hereto;

 
(iii)
it was not offered any Shares in the United States and was outside the United
States at the time of execution and delivery of this Agreement;

 
(iv)
it understands that the Shares have not been registered under the Securities Act
and, if applicable, the B.C. Securities Act, and any applicable securities laws;

 
(v)
it agrees to resell the Shares only in accordance with the provisions of
Regulation S, pursuant to a registration under the Securities Act, or pursuant
to an available exemption from such registration, and that hedging transactions
involving the Shares may not be conducted unless in compliance with the
Securities Act and, if applicable, the B.C. Securities Act; and

 
(vi)
it understands that any certificate representing the Shares will bear a legend
setting forth the foregoing restrictions; and

each such non-U.S. Person Vendor will complete and provide the Purchaser with an
executed copy of the attached form of “Regulation S Certificate”; which is
attached hereto with Schedule “I” and which forms a material part hereof;
contemporaneously with the Vendor’s execution of this Agreement at or before
Closing;

 
(j)
If the Vendor is a Canadian resident, then in addition to the representations,
warranties and covenants provided in Section 3.2(i) above, the Vendor hereby
certifies that:

 
(i)
it is an “accredited investor” within the meaning of NI 45-106;

 
(ii)
if the Vendor is a person, other than an individual or investment fund, that has
net assets of at least CDN$5,000,000, it was not created or used solely to
acquire the Shares as an accredited investor;

 
 
14

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

 
 
 
(iii)
if the Vendor is a resident of the Province of Ontario, then it authorizes the
indirect collection of personal information (as defined in the securities laws
of the Province of Ontario) by the Ontario Securities Commission and confirms
that it has been notified by the Purchaser:

 
(A)
that the Purchaser will be delivering such personal information to the Ontario
Securities Commission;

 
(B)
that such personal information is being collected indirectly by the Ontario
Securities Commission under the authority granted to it in the securities laws
of the Province of Ontario;

 
(C)
that such personal information is being collected for the purpose of the
administration and enforcement of the securities laws of the Province of
Ontario; and

 
(D)
that the title, business address and business telephone number of the public
official in the Province of Ontario who can answer questions about the Ontario
Securities Commission’s indirect collection of personal information is as
follows:

Administrative Assistant to the Director of Corporate Finance Ontario Securities
Commission
Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario, Canada, M5H 3S8
Telephone:  (416) 593-8086;

 
(iv)
it acknowledges and consents to the fact that the Purchaser is collecting the
Vendor’s personal information (as that term is defined under applicable privacy
legislation, including, without limitation, the Personal Information Protection
and Electronic Documents Act (Canada) and any other applicable similar,
replacement or supplemental provincial or federal legislation or laws in effect
from time to time) and acknowledges and consents to the Purchaser retaining such
personal information as required and that the Purchaser may use or disclose such
personal information to its directors, officers, employees or agents as
necessary, or to any Regulatory Authorities as required; and

each such Canadian resident Vendor will complete and provide the Purchaser with
an executed copy of the attached form of “Canadian Accredited Investor
Certificate”; which is attached hereto with Schedule “I” and which forms a
material part hereof; contemporaneously with the Vendor’s execution of this
Agreement at or before Closing; and

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

 
 
15

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

 
 
3.3                          Representations, warranties and covenants by each
of the Vendors and the Company respecting the Company.   In order to induce the
Purchaser to enter into and consummate this Agreement, each of the Vendors and
the Company hereby, jointly and severally, also represent to, warrant to and
covenant with the Purchaser, with the intent that the Purchaser will also rely
thereon in entering into this Agreement and in concluding the transactions
contemplated herein, that, to the best of the knowledge, information and belief
of each of the Vendors and the Company, after having made due inquiry (and for
the purposes of the following warranties, representations and covenants,
“Vendors” and “Company” shall mean the Vendors, the Company and any subsidiary
of the Vendors and the Company, if any, as the context so requires):

 
(a)
the Company own and possesses and have good and marketable title to and
possession of all of the business interests and the Company’s Assets free and
clear of all actual or threatened liens, charges, options, encumbrances, voting
agreements, voting trusts, demands, limitations and restrictions of any nature
whatsoever; save and except for those actual or threatened liens, charges,
encumbrances, demands, limitations and restrictions which are listed in Schedule
“B” which is attached hereto and which forms a material part hereof and as set
forth in the Company’s Disclosure Schedule;

 
(b)
save and except as set forth in Schedule “B” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, the Company, holds all licenses and
permits required for the conduct in the ordinary course of the operations of the
business and for the uses to which the Company’s Assets have been put and are in
good standing, and such conduct and uses are in compliance with all laws, zoning
and other by-laws, building and other restrictions, rules, regulations and
ordinances applicable to the Company and to the business and the Company’s
Assets;

 
(c)
the presently authorized and issued share capital of the Company is as described
in Schedule “A” which is attached hereto and which forms a material part hereof,
and there are no other shares in the capital of the Company, issued or allotted
or agreed to be issued or allotted, to any person.  In addition, at Closing the
issued share capital of the Company, together with the names and the number,
class and kind of shares of the Company held by the Vendors, will be as set out
in Schedule “A”;

 
(d)
the Purchased Shares are validly issued and outstanding and fully paid and
non-assessable in the capital of the Company and, save and except as set forth
in Schedule “A” which is attached hereto and as set forth in the Company’s
Disclosure Schedule, the Purchased Shares are free and clear of all actual or
threatened liens, charges, options, encumbrances, voting agreements, voting
trusts, demands, limitations and restrictions of any nature whatsoever;

 
(e)
save and except as set forth in Schedule “A” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, no other person, firm or corporation
has any agreement, option or right capable of becoming an agreement for the
purchase of any of the Purchased Shares or any unissued shares in the capital of
the Company;

 
(f)
save and except as set forth in Schedule “A” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, there are no actions, suits,
proceedings or investigations (whether or not purportedly against or on behalf
of any of the Vendors or the Company), pending or threatened, which may affect,
without limitation, the right of the Vendors to transfer the Purchased Shares to
the Purchaser at law or in equity, or before or by any federal, state,
provincial, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, and, without limiting
the generality of the foregoing, there are no claims or potential claims under
any relevant family relations legislation or other equivalent legislation
affecting any of the Purchased Shares.  In addition, the Vendors and the Company
are not now aware of any existing ground on which any such action, suit or
proceeding might be commenced with any reasonable likelihood of success;

 
 
16

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

 
 
 
(g)
from the Execution Date up to and including the Closing Date the Company has not
committed to making, and until the Closing Date will not make or commit itself,
without the written consent of the Purchaser, to:

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

 
 
(ii)
declare or pay any dividend;

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

 
(iv)
effect any subdivision, consolidation or reclassification of its share capital
other than as necessary to comply with section 2.2 hereinabove;

 
(h)
other than as set forth in the Company’s Disclosure Schedule, from the Execution
Date up to and including the Closing Date the Company has not committed to
making, and until the Closing Date will not make or commit itself, without the
written consent of the Purchaser, to:

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

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

 
(i)
other than as set forth in Schedule “A” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, from the Execution Date up to and
including the Closing Date the Company has not committed to making, and until
the Closing Date will not make or commit itself, without the written consent of
the Purchaser, to provide any person, firm or corporation with any agreement,
option or right, consensual or arising by law, present or future, contingent or
absolute, or capable of becoming an agreement, option or right:

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

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

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

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

 
 
17

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

 
 
 
(j)
save and except for those matters which are listed in Schedule “B” which is
attached hereto and in particular, however, without limitation, except for
liabilities which are disclosed, reflected or adequately provided for in the
Company’s financial statement (collectively, the “Financial Statements”); a copy
of which Financial Statements being attached hereto as Schedule “B” and forming
a material part hereof; there are no other material liabilities, contingent or
otherwise, existing on the Execution Date hereof in respect of which the Company
may be liable on or after the completion of the transactions contemplated by
this Agreement other than:

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

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

 
(k)
no dividend or other distribution by the Company has been made, declared or
authorized since its incorporation, and from the Execution Date up to and
including the Closing Date the Company has not committed to making and until the
Closing Date will not make or commit itself, without the written consent of the
Purchaser, to confer upon, or pay to or to the benefit of, any entity, any
benefit having monetary value, any bonus or any salary increases except in the
normal course of its business;

 
(l)
save and except as set forth in Schedule “B” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, there is no basis for and there are
no actions, suits, judgments, investigations or proceedings outstanding or
pending or, to the best of the knowledge, information and belief of each of the
Vendors and the Company, after having made due inquiry, threatened against or
affecting the Company at law or in equity or before or by any federal, state,
municipal or other governmental department, commission, board, bureau or agency;

 
(m)
save and except as set forth in Schedule “B” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, the Company is not in breach of any
laws, ordinances, statutes, regulations, by-laws, orders or decrees to which it
is subject or which apply to it;

 
(n)
the Company is not a party to any collective agreement with any labour union or
other association of employees, and there are no pending applications for
certification of the Company’s employees as a collective bargaining unit.  In
addition, and to the best of the knowledge, information and belief of the
Company, after having made due inquiry, the Company is not presently a party to
any complaint, grievance, arbitration or other labour matter referred to any
board or labour authority;

 
(o)
there are no pension, profit sharing, group insurance or similar plans or other
deferred compensation plans affecting the Company or any of its respective
directors, officers or employees;

 
(p)
the Company has not experienced, nor are any of the Vendors or the Company aware
of, any occurrence or event which has had, or might reasonably be expected to
have, a materially adverse affect on the Company’s Business, the Company’s
Assets or on the results of the Company’s respective operations;

 
 
18

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

 
 
 
(q)
save and except as set forth in the Company’s Disclosure Schedule, the Company
holds or have applied for all permits, licenses, consents and authorities
issuable by any federal, state, regional or municipal government or agency
thereof which are necessary or desirable in connection with its operations;

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

 
(s)
save and except as set forth in the Company’s Disclosure Schedule, the Company
have been assessed for all federal, state and municipal income tax for all years
up to and including their most recent taxation years, and from the Execution
Date up to and including the Closing Date, the Company will have paid in full or
accrued in accounts all amounts (including, but not limited to, sales, use and
consumption taxes and taxes measured on income and all installments of taxes)
due and payable to all federal, state and municipal taxation authorities up to
and including the Closing Date;

 
(t)
save and except as set forth in Schedule “B” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, there is not now, any proceeding,
claim or, to the best of the knowledge, information and belief of each of the
Vendors and the Company, after having made due inquiry, any investigation by any
federal, state or municipal taxation authority, or any matters under discussion
or dispute with such taxation authorities, in respect of taxes, governmental
charges, assessments or reassessments in connection with the Company, and the
Vendors and the Company are not aware of any contingent tax liabilities or any
grounds that could result in an assessment, reassessment, charge or potentially
adverse determination by any federal, state or municipal taxation authority as
against the Company;

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

 
(v)
adequate provision has been made and will be made for taxes payable by the
Company for the current period for which a tax return is not yet required to be
filed and, to the best of the knowledge, information and belief of the Vendors
and the Company, after having made due inquiry, there are no contingent tax
liabilities of the Company or any grounds which would prompt a re-assessment of
the Company and including without limitation, the aggressive treatment of income
and expenses in the filing of earlier tax returns by the Company;

 
 
19

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

 
 
 
(w)
all amounts required to be withheld for taxes by the Company from payments made
to any present or former shareholders, officers, directors, non-resident
creditors, employees, associates or consultants have been withheld and paid on a
timely basis to the proper governmental body pursuant to applicable legislation;

 
(x)
Schedule “C” which is attached hereto and which forms a material part hereof
contains an accurate and complete description of all of the Company’s
Intellectual Property, and the Intellectual Property does not infringe the
rights of any other person;

 
(y)
the Company does not have and does not use any service mark, tradename or
trademark except as disclosed as part of the Company’s Intellectual Property;

 
(z)
save and except as set forth in Schedule “B” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, the Company has good and marketable
title to all of the Company’s Intellectual Property, Company’s Assets,
properties and interests in properties, real and personal, including those
reflected in the Financial Statements or which have been acquired since the date
of the latest of the Financial Statements (except for those which have been
transferred, sold or otherwise disposed of in the ordinary or normal course of
business), free and clear of all encumbrances, and none of the Company’s
properties or the Company’s Assets is in the possession of or under the control
of any other person;

 
(aa)
save and except as set forth in Schedule “B” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, the Company has no equipment, other
than the personal property or fixtures in the possession or custody of the
Company which, as of the date hereof, are leased or are held under license or
similar arrangement;

 
(ab)
except for the real property leases and licenses and the contracts of employment
which are set forth in Schedules “D” and “E”, respectively, which are attached
hereto and which form a material part hereof, the Company is not party to or
bound by any other material contract, whether oral or written, other than the
contracts and agreements as set forth in Schedule “F” which are attached hereto
and which form a material part hereof;

 
(ac)
as to the contracts listed in Schedule “F” which are attached hereto:

 
(i)
each such contract is in full force and effect and unamended;

 
(ii)
no material default exists in respect thereof on the part of either the Company
or any other party thereto;

 
(iii)
each such contract does not involve the Vendors or any non-arm’s length party
except where described; and

 
(iv)
neither the Vendors nor the Company are aware of any intention on the part of
any other party thereto to terminate or materially alter any such contract;

 
 
20

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

 
 
 
(ad)
the Company has no consulting or employment agreements, whether written or
otherwise, except for those which are set forth in Schedule “E” which is
attached hereto;

 
(ae)
Schedule “G” which is attached hereto and which forms a material part hereof is
a true and complete list showing the name of each bank, trust company or similar
institution in which the Company has accounts or safety deposit boxes, the
identification numbers of each such account or safe deposit box, the names of
all persons authorized to draw therefrom or to have access thereto and the
number of signatories required on each account.  In addition, Schedule “G” also
includes a list of all non-bank account numbers, codes and business numbers used
by the Company for the purposes of remitting tax, dues, assessments and other
fees;

 
(af)
[Reserved]

 
(ag)
the most recently completed and consolidated management prepared Financial
Statements for the Company are true and correct in every respect and present
fairly the financial position of the Company as at their most recently completed
financial periods and the results of their respective operations for the period
then ended; a copy of said Financial Statements being attached hereto as
Schedule “B”;

 
(ah)
the Financial Statements and the books and records of the Company are true and
correct in every material respect, fairly reflect the business, property, the
Company’s Assets and the financial position of the Company as at the date of the
Financial Statements and any such books and records and the results of the
operations for the period then ended, and there have been no adverse changes in
the business or affairs of the Company since the date of the Financial
Statements and any such books and records;

 
(ai)
since the date of the Company’s most recent Financial Statements:

 
(i)
there has not been any material adverse change in the financial position or
condition of the Company or any damage, loss or other change in circumstances
materially affecting the business or properties or the Company’s right or
capacity to carry on business;

 
(ii)
the Company has not waived or surrendered any right of material value;

 
(iii)
the Company has not discharged or satisfied or paid any lien or encumbrance or
obligation or liability other than current liabilities in the ordinary course of
business; and

 
(iv)
the business has been carried on in the ordinary course;

 
(aj)
save and except for those matters which are listed in Schedule “B” which is
attached hereto and as set forth in the Company’s Disclosure Schedule, there are
no liabilities, contingent or otherwise, of the Company not disclosed or
reflected in the Financial Statements, except those incurred in the ordinary
course of business of the Company since the date of the Financial Statements;

 
 
21

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

 
 
 
(ak)
save and except as set forth in Schedule “B” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, no payments of any kind have been
made or authorized by or on behalf of the Company to or on behalf of the Vendors
or to or on behalf of any directors, officers, shareholders or employees of the
Company or under any management agreements with the Company other than in the
ordinary course of business;

 
(al)
except as otherwise provided for herein, the Vendors and the Company have not
retained, employed or introduced any broker, finder or other person who would be
entitled to a brokerage commission or finder’s fee arising out of the
transactions contemplated hereby;

 
(am)
save and except for those matters which are listed in Schedule “F” which is
attached hereto, the Company does not have any contracts, agreements,
undertakings or arrangements, whether oral, written or implied, with employees,
lessees, licensees, managers, accountants, suppliers, agents, distributors,
directors, officers, lawyers or others which cannot be terminated, without
penalty, on no more than one month’s notice;

 
(an)
save and except as set forth in Schedule “B” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, neither the Vendors, nor any
directors, officers or employees of the Company, are now indebted or under
obligation to the Company on any account whatsoever other than in the ordinary
course of business;

 
(ao)
all material transactions of the Company and including, without limitation, all
directors’ and shareholders’ resolutions, have been promptly and properly
recorded or filed in or with their respective books and records;

 
(ap)
the Vendors and the Company have the full authority and capacity required to
enter into this Agreement and to perform their respective obligations hereunder;

 
(aq)
the present directors and officers of the Company are as follows:

 
Name of director/officer
 
Company
 
Position with Company
 
Marc Strauch
 
Glob Media Works Inc.
 
President CEO, Secretary, Treasurer, and Director

 
(ar)
prior to the “Subject Removal Date” the Company will have obtained all
authorizations and approvals or waivers that may be necessary or desirable in
connection with the transactions contemplated in this Agreement, and other
actions by, and has made all filings with, any and all Regulatory Authorities,
if applicable, from whom any such authorization, approval or other action is
required to be obtained or to be made in connection with the transactions
contemplated herein, and all such authorizations, approvals and other actions
will be in full force and effect, and all such filings will have been accepted
by the Company which will be in compliance with, and will have not committed any
breach of any securities laws, regulations or policies of any Regulatory
Authority to which the Company may be subject;

 
 
22

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

 
 
 
(as)
save and except as set forth in Schedule “B” which is attached hereto and as set
forth in the Company’s Disclosure Schedule, the Company has not committed to
making and until the Closing Date will not make or commit itself, without the
written consent of the Purchaser, to:

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

 
(ii)
other than the payment of ordinary course obligations, make any single operating
or capital expenditures in excess of U.S. $50,000.00; or

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

 
(at)
until the Closing Date the Company will:

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

 
(ii)
not enter into any material transaction or assume or incur any material
liability outside the normal course of its business;

 
(au)
the Company has not committed to making and until the Closing Date will not make
or commit themselves, without the written consent of the Purchaser, to:

 
(i)
declare or pay any dividend, or make any distribution of its properties or
assets to its shareholders, or purchase or retire any of its shares;

 
(ii)
sell all or any part of its business or assets or agree to do or perform any act
or enter into any transaction or negotiation which could reasonably be expected
to interfere with this Agreement or which would render inaccurate any of the
representations, warranties and covenants set forth in this Agreement; or

 
(iii)
merge, amalgamate or consolidate into or with any entity, or enter into any
other corporate reorganization;

provided, however, that the provisions hereof shall not preclude the Company,
pending the Closing or the termination of this Agreement, whichever shall first
occur, from carrying on its business in the normal course thereof;

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

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

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

 
 
23

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

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

 
(aw)
the Vendors and the Company will give to the Purchaser, within at least five
business days prior to the Closing Date, by written notice, particulars of:

 
(i)
each occurrence within the Vendors’ and the Company’s knowledge after the
Execution Date of this Agreement that, if it had occurred before the Execution
Date, would have been contrary to any of the Vendors’ or the Company’s
representations or warranties contained herein; and

 
(ii)
each occurrence or omission within the Vendors’ and the Company’s knowledge
after the Execution Date that constitutes a breach of any of the Vendors’ or the
Company’s covenants contained in this Agreement;

 
(ax)
each of the attached Schedules contains all material information for each
particular Schedule listed therein and there are no omissions of material
information by the Company; and

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

3.4                           Continuity of the representations, warranties and
covenants by each of the Vendors and the Company.   The representations,
warranties and covenants by each of the Vendors and the Company contained in
this Article, or in any certificates or documents delivered pursuant to the
provisions of this Agreement or in connection with the transactions contemplated
hereby, will be true in all material respects at and as of the Closing Date as
though such representations, warranties and covenants were made at and as of
such time, except for representations and warranties which address matters only
as to a specified date, which representations and warranties shall be true and
correct with respect to such specified date.  Notwithstanding any investigations
or inquiries made by the Purchaser or by the Purchaser’s professional advisors
prior to the Closing Date, or the waiver of any condition by the Purchaser, the
representations, warranties and covenants of each of the Vendors and the Company
contained in this Article shall survive the Closing Date and shall continue in
full force and effect for a period of one calendar year from the Closing Date;
provided, however, that the Vendors and the Company shall not be responsible for
the breach of any representation, warranty or covenant of either of the Vendors
or the Company contained herein caused by any act or omission of the
Purchaser.  The Parties acknowledge that the time periods set forth in this
section 3.4 and elsewhere in this Agreement for the assertion of claims and
notices under this Agreement are the result of arms-length negotiations among
the Parties and that the Parties intend for the time periods to be enforced as
agreed by the Parties. In the event that any of the said representations,
warranties or covenants are found by a Court of competent jurisdiction to be
incorrect and such incorrectness results in any loss or damage sustained
directly or indirectly by the Purchaser, then the Vendors and/or the Company, as
the case may be, will, in accordance with the provisions of Article “15”
hereinbelow, pay the amount of such loss or damage to the Purchaser within 30
calendar days of receiving notice of judgment therefore; provided that the
Purchaser will not be entitled to make any claim unless the loss or damage
suffered exceed the amount of U.S. $25,000.00, in aggregate.
 
 
24

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

 

3.5                          NO OTHER WARRANTIES OR REPRESENTATIONS. EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE III, NEITHER THE
COMPANY, THE VENDORS NOR ANY OF THEIR REPRESENTATIVES MAKES ANY OTHER EXPRESS OR
IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO THE COMPANY, THE VENDORS OR
THE CONTEMPLATED TRANSACTIONS, AND THE COMPANY AND EACH OF THE VENDORS DISCLAIMS
ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY THE COMPANY, A VENDOR
OR ANY OF THEIR REPRESENTATIVES.
 
Article 4
WARRANTIES, REPRESENTATIONS AND COVENANTS BY THE PURCHASER

4.1                          Warranties, representations and covenants by the
Purchaser.   In order to induce each of the Vendors and the Company to enter
into and consummate this Agreement, the Purchaser hereby warrants to, represents
to and covenants with each of the Vendors and the Company, with the intent that
each of the Vendors and the Company will rely thereon in entering into this
Agreement and in concluding the transactions contemplated herein, that, to the
best of the knowledge, information and belief of the Purchaser, after having
made due inquiry (and for the purposes of the following warranties,
representations and covenants, “Purchaser” shall mean the Purchaser and any
subsidiary of the Purchaser, if any, as the context so requires):

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

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

 
(c)
save and except as set forth in the “Purchaser’s Disclosure Schedule” which will
accompany the Purchaser’s execution and delivery of this Agreement, the
Purchaser is qualified to do business in those jurisdictions where it is
necessary to fulfill its obligations under this Agreement, and it has the full
power and authority to enter into this Agreement and any agreement or instrument
referred to or contemplated by this Agreement;

 
(d)
the execution and delivery of this Agreement and the agreements contemplated
hereby has been duly authorized by all necessary corporate action on its part;

 
(e)
there are no other consents, approvals or conditions precedent to the
performance of this Agreement which have not been obtained;

 
(f)
this Agreement constitutes a legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms, except
as enforcement may be limited by laws of general application affecting the
rights of creditors;

 
(g)
no proceedings are pending for, and the Purchaser is unaware of, any basis for
the institution of any proceedings leading to the dissolution or winding up of
the Purchaser or the placing of the Purchaser in bankruptcy or subject to any
other laws governing the affairs of insolvent companies;

 
 
25

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

 
 
 
(h)
the Purchaser owns and possesses and has good and marketable title to and
possession of all of its business assets free and clear of all actual or
threatened liens, charges, options, encumbrances, voting agreements, voting
trusts, demands, limitations and restrictions of any nature whatsoever, save and
except for those actual or threatened liens, charges, encumbrances, demands,
limitations and restrictions which are listed in Schedule “H” which is attached
hereto and which forms a material part hereof and as set forth in the
Purchaser’s Disclosure Schedule;

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

 
(j)
the authorized capital of the Purchaser consists of 66,666,666 common shares of
common stock, with a par value of U.S. $0.001 per common share, which, according
to the records of the Purchaser, there are 52,612,392 common shares issued and
outstanding as fully paid and non-assessable as at the Execution Date hereof;

 
(k)
all of the issued and outstanding shares of the Purchaser are listed and posted
for trading on FINRA’s Over-the-Counter Bulletin Board and the Purchaser is not
in material default of any applicable FINRA rules or any rules or policies of
the United States Securities and Exchange Commission (the “Commission”);

 
(l)
all registration statements, reports and proxy statements filed by the Purchaser
with the Commission, have been filed by the Purchaser under the United States
Securities Act of 1934 (the “1934 Act”), were filed in all material respects in
accordance with the requirements of the 1934 Act and the rules and regulations
thereunder and no such registration statements, reports or proxy statements
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading;

 
(m)
the Purchaser will allot and issue the Shares on the Closing Date in accordance
with section “2.2” hereinabove as fully paid and non-assessable in the capital
of the Purchaser, free and clear of all actual or threatened liens, charges,
options, encumbrances, voting agreements, voting trusts, demands, limitations
and restrictions of any nature whatsoever, other than hold periods or other
restrictions imposed under applicable securities legislation;

 
(n)
the Purchaser is not aware of any court order which restricts or prevents the
issuance by the Purchaser of any shares from treasury;

 
(o)
there is no basis for and there are no actions, suits, judgments, investigations
or proceedings outstanding or pending or, to the best of the knowledge,
information and belief of the Purchaser, after making due inquiry, threatened
against or affecting the Purchaser at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau or agency;

 
 
26

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

 
 
 
(p)
save and except as set forth in the Purchaser’s Disclosure Schedule, the
Purchaser is not in breach of any laws, ordinances, statutes, regulations,
by-laws, orders or decrees to which it is subject or which apply to it;

 
(q)
the Purchaser is not a party to any collective agreement with any labour union
or other association of employees, and there is no pending application for
certification of any of the Purchaser’s employees as a collective bargaining
unit.  In addition, and to the best of the knowledge, information and belief of
the Purchaser, after having made due inquiry, the Purchaser is not presently a
party to any complaint, grievance, arbitration or other labour matter referred
to any board or labour authority;

 
(r)
there are no pension, profit sharing, group insurance or similar plans or other
deferred compensation plans affecting the Purchaser or any of its directors,
officers or employees;

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

 
(t)
save and except as set forth in the Purchaser’s Disclosure Schedule, the
Purchaser holds or has applied for all permits, licenses, consents and
authorities issuable by any federal, state, regional or municipal government or
agency thereof which are necessary or desirable in connection with its
operations;

 
(u)
there is not now, and there will not be by the Closing Date, any proceeding,
claim or, to the best of the knowledge, information and belief of the Purchaser,
after making due inquiry, any investigation by any federal, state or municipal
taxation authority, or any matters under discussion or dispute with such
taxation authorities, in respect of taxes, governmental charges, assessments or
reassessments in connection with the Purchaser, and the Purchaser is not aware
of any contingent tax liabilities or any grounds that could result in an
assessment, reassessment, charge or potentially adverse determination by any
federal, state or municipal taxation authority as against the Purchaser;

 
(v)
the Purchaser is not in breach of any provision or condition of, nor have they
done or omitted anything that, with or without the giving of notice or lapse or
both, would constitute a breach of any provision or condition of, or give rise
to any right to terminate or cancel or accelerate the maturity of any payment
under, any deed of trust, contract, certificate, consent, permit, license or
other instrument to which it is a party, by which it is bound or from which it
derives benefit, any judgment, decree, order, rule or regulation of any court or
governmental authority to which it is subject, or any statute or regulation
applicable to it, to an extent that, in the aggregate, has a material adverse
affect on it;

 
(w)
the Purchaser has good and marketable title to all of its assets, properties and
interests in properties, real and personal, free and clear of all encumbrances,
and none of the Purchaser’s assets or properties is in the possession of or
under the control of any other person;

 
 
27

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

 
 
 
(x)
the Purchaser has no equipment, other than the personal property or fixtures in
the possession or custody of the Purchaser which, as of the date hereof, are
leased or are held under license or similar arrangement;

 
(y)
except for the material contracts which are set forth in Schedule “H” which is
attached hereto and which forms a material part hereof, the Purchaser is not
party to or bound by any other material contract, whether oral or written, other
than the contracts as set forth in Schedule “H”;

 
(z)
save and except as set forth in the Purchaser’s Disclosure Schedule, as to the
contracts listed in Schedule “H” which is attached hereto:

 
(i)
each such contract is in full force and effect and unamended;

 
(ii)
no material default exists in respect thereof on the part of either the
Purchaser or any other party thereto;

 
(iii)
each such contract does not involve any non-arm’s length party except where
described; and

 
(iv)
the Purchaser is not aware of any intention on the part of any other party
thereto to terminate or materially alter any such contract;

 
(aa)
there are no liabilities, contingent or otherwise of the Purchaser not
disclosed;

 
(ab)
no payments of any kind have been made or authorized by or on behalf of the
Purchaser to or on behalf of directors, officers, shareholders or employees of
the Purchaser or under any management agreements with the Purchaser other than
in the ordinary course of business;

 
(ac)
the Purchaser has not retained, employed or introduced any other broker, finder
or other person who would be entitled to a brokerage commission or finder’s fee
arising out of the transactions contemplated hereby;

 
(ad)
none of the directors, officers or employees of the Purchaser are now indebted
or under obligation to the Purchaser on any account whatsoever, other than in
the ordinary course of business;

 
(ae)
save and except as set forth in the Purchaser’s Disclosure Schedule, all
material transactions of the Purchaser and including, without limitation, all
directors’ and shareholders’ resolutions, have been promptly and properly
recorded or filed in or with its books and records;

 
(af)
prior to the Subject Removal Date the Purchaser will have obtained all
authorizations, approvals, or waivers that may be necessary or desirable in
connection with the transactions contemplated in this Agreement, and other
actions by, and have made all filings with, any and all Regulatory Authorities
required to be made in connection with the transactions contemplated herein, and
all such authorizations, approvals and other actions will be in full force and
effect, and all such filings will have been accepted by the Purchaser, which
will be in compliance with, and have not committed any breach of, any securities
laws, regulations or policies of any Regulatory Authority to which the Purchaser
may be subject;

 
 
28

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

 
 
 
(ag)
the Purchaser has not committed to making and until the Closing Date will not
make or commit itself, without the written consent of each of the Vendors and
the Companies, to:

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

 
(ii)
other than the payment of ordinary course obligations, make any operating or
capital expenditures in excess of U.S. $50,000.00; or

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

 
(ah)
until the Closing Date the Purchaser will:

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

 
(ii)
not enter into any material transaction or assume or incur any material
liability outside the normal course of its business;

 
(ai)
the Purchaser has not committed to making and until the Closing Date will not
make or commit itself, without the written consent of each of the Vendors and
the Company, to:

 
(i)
declare or pay any dividend, or make any distribution of its properties or
assets to its shareholders, or purchase or retire any of its shares;

 
(ii)
sell all or any part of its assets or agree to do or perform any act or enter
into any transaction or negotiation which could reasonably be expected to
interfere with this Agreement or which would render inaccurate any of the
representations, warranties and covenants set forth in this Agreement; or

 
(iii)
merge, amalgamate or consolidate into or with any entity, or enter into any
other corporate reorganization;

provided, however, that the provisions hereof shall not preclude the Purchaser
pending the Closing or the termination of this Agreement, whichever shall first
occur, from carrying on its business in the normal course thereof;

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

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

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

 
 
29

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

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

 
(ak)
the Purchaser will give to each of the Vendors and the Company, within at least
five business days prior to the Closing Date, by written notice, particulars of:

 
(i)
each occurrence within the Purchaser’s knowledge after the Execution Date of
this Agreement that, if it had occurred before the Execution Date, would have
been contrary to any of the Purchaser’s representations or warranties contained
herein; and

 
(ii)
each occurrence or omission within the Purchaser’s knowledge after the Execution
Date that constitutes a breach of any of the Purchaser’s covenants contained in
this Agreement;

 
(al)
save and except for those matters which are listed in Schedule “H” which is
attached hereto and as set forth in the Purchaser’s Disclosure Schedule, the
shares in the capital of the Purchaser are not subject to or affected by any
actual or, to the knowledge of the Purchaser, pending or threatened cease
trading, compliance or denial of use of exemptions orders of, or action,
investigation or proceeding by or before, any securities regulatory authority,
Court, administrative agency or other tribunal;

 
(am)
the making of this Agreement and the completion of the transactions contemplated
hereby and the performance of and compliance with the terms hereof does not and
will not:

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

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

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

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

 
 
30

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

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

 
(an)
neither this Agreement nor any other document, certificate or statement
furnished to any of the Vendors or the Company by or on behalf of the Purchaser
in connection with the transactions contemplated hereby knowingly or negligently
contains any untrue or incomplete statement of material fact or omits to state a
material fact necessary in order to make the statements therein not misleading;
and

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

4.3                          Reports Under the 1934 Act.  With a view to making
available to the Vendors the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Purchaser to the public without
registration or pursuant to a registration on Form S-3, the Purchaser agrees to:
(a) make and keep public information available, as those terms are understood
and defined in SEC Rule 144, at all times during which the Shares remain
restricted securities; and (b) file with the SEC in a timely manner all reports
and other documents required of the Purchaser under the Securities Act and the
1934 Act.

4.4                          Continuity of the representations, warranties and
covenants by the Purchaser.   The representations, warranties and covenants of
the Purchaser contained in this Article, or in any certificates or documents
delivered pursuant to the provisions of this Agreement or in connection with the
transactions contemplated hereby, will be true at and as of the Closing Date as
though such representations, warranties and covenants were made at and as of
such time.  Notwithstanding any investigations or inquiries made by either of
the Vendors or the Company, or by the Vendors’ or the Company’s respective
professional advisors prior to the Closing Date, or the waiver of any condition
by either of the Vendors or the Company, the representations, warranties and
covenants of the Purchaser contained in this Article shall survive the Closing
Date and shall continue in full force and effect for a period of one calendar
year from the Closing Date; provided, however, that the Purchaser shall not be
responsible for the breach of any representation, warranty or covenant of the
Purchaser contained herein caused by any act or omission of either of the
Vendors or the Company.  The Parties acknowledge that the time periods set forth
in this section 4.4 and elsewhere in this Agreement for the assertion of claims
and notices under this Agreement are the result of arms-length negotiations
among the Parties and that the Parties intend for the time periods to be
enforced as agreed by the Parties.  In the event that any of the said
representations, warranties or covenants are found by a Court of competent
jurisdiction to be incorrect and such incorrectness results in any loss or
damage sustained directly or indirectly by either of the Vendors and/or the
Company, then the Purchaser will, in accordance with the provisions of Article
“15” hereinbelow, pay the amount of such loss or damage to either of the Vendors
and/or the Company, as the case may be, within 30 calendar days of receiving
notice of judgment therefore; provided that the Vendors and the Company will not
be entitled to make any claim unless the loss or damage suffered exceed the
amount of U.S. $25,000.00, in aggregate.
 
 
31

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

 

4.5                         NO OTHER WARRANTIES OR REPRESENTATIONS.  EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE IV, NEITHER THE
PURCHASER NOR ANY OF ITS REPRESENTATIVES MAKES ANY OTHER EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY WITH RESPECT TO THE PURCHASER OR THE CONTEMPLATED
TRANSACTIONS, AND THE PURCHASER DISCLAIMS ANY OTHER REPRESENTATIONS OR
WARRANTIES, WHETHER MADE BY THE PURCHASER OR ANY OF ITS REPRESENTATIVES.
 
Article 5
CONDITIONS PRECEDENT TO CLOSING

5.1                          Parties’ conditions precedent.   All of the rights,
duties and obligations of each of the Parties under this Agreement are subject
to the following conditions precedent for the exclusive benefit of each of the
Parties to be fulfilled in all material aspects in the reasonable opinion of
each of the Parties or to be waived by each or any of the Parties, as the case
may be, as soon as possible after the Execution Date; however, unless
specifically indicated as otherwise, not later than two calendar days prior to
the Closing Date (such date being the “Subject Removal Date”):

 
(a)
the specific ratification of the terms and conditions of this Agreement by the
Board of Directors of each of the Purchaser and the Company within two calendar
days of the due and completion execution of this Agreement by each of the
Parties (collectively, the “Ratification”);

 
(b)
the completion by each of the Purchaser and the Company of an initial due
diligence and operations review of the other Party’s respective businesses and
operations within 14 calendar days of the prior satisfaction of the Ratification
(collectively, the “Initial Due Diligence”);

 
(c)
if required under applicable corporate and securities laws, the receipt of all
necessary approvals from any Regulatory Authority having jurisdiction over the
transactions contemplated by this Agreement;

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

 
(f)
the Board of Directors of the Purchaser approving of the within issuance by the
Purchaser to the order and direction of the Vendors of all of the referenced
Shares in accordance with section “2.2” hereinabove and, in addition, the Board
of Directors of the Purchaser, if required, having also approved and received
any required notice of such other matters as may be agreed to as between the
Parties prior the completion of the transactions contemplated by this Agreement.

 
 
32

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

 
 
5.2                           Parties’ waiver of conditions precedent.   The
conditions precedent set forth in section “5.1” hereinabove are for the
exclusive benefit of each of the Parties and may be waived by each or any of the
Parties in writing and in whole or in part at any time; however, not later than
the Subject Removal Date.

5.3                           Vendors’ and the Company’s conditions
precedent.   The rights, duties and obligations of each of the Vendors and the
Company under this Agreement are also subject to the following conditions
precedent for the exclusive benefit of each of the Vendors and the Company to be
fulfilled in all material aspects in the reasonable opinion of the Vendors and
the Company or to be waived by each or any of the Vendors and the Company as
soon as possible after the Execution Date, however; unless specifically
indicated as otherwise, not later than the Subject Removal Date:

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

 
(b)
the Purchaser shall have complied with all applicable securities laws in
connection with the issuance of the Shares to the Vendors on or before the
Closing Date;

 
(c)
the Purchaser will have obtained all authorizations, approvals, or waivers that
may be necessary or desirable in connection with the transactions contemplated
in this Agreement, and other actions by, and have made all filings with, any and
all Regulatory Authorities required to be made in connection with the
transactions contemplated herein, and all such authorizations, approvals and
other actions will be in full force and effect, and all such filings will have
been accepted by the Purchaser who will be in compliance with, and have not
committed any breach of, any securities laws, regulations or policies of any
Regulatory Authority to which the Purchaser may be subject;

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

 
(e)
no material loss or destruction of or damage to the Purchaser shall have
occurred since the Execution Date;

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

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

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

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

 
 
33

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

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

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

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

5.4                          Vendors’ and the Company’s waiver of conditions
precedent.   The conditions precedent set forth in section “5.3” hereinabove are
for the exclusive benefit of each of the Vendors and the Company and may be
waived by each or any of the Vendors and the Company in writing and in whole or
in part at any time after the Execution Date; however, unless specifically
indicated as otherwise, not later than the Subject Removal Date.

5.5                          Purchaser’s conditions precedent.   The rights,
duties and obligations of the Purchaser under this Agreement are also subject to
the following conditions precedent for the exclusive benefit of the Purchaser to
be fulfilled in all material aspects in the reasonable opinion of the Purchaser
or to be waived by the Purchaser as soon as possible after the Execution Date;
however, unless specifically indicated as otherwise, not later than the Subject
Removal Date (and for the purposes of the following conditions precedent,
“Vendors” and “Company” shall mean the Vendors, the Company and any subsidiary
of the Vendors and the Company, if any, as the context so requires):

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

 
(b)
the Vendors and the Company will have obtained all authorizations, approvals or
waivers that may be necessary or desirable in connection with the transactions
contemplated in this Agreement, and other actions by, and have made all filings
with, any and all Regulatory Authorities from whom any such authorization,
approval or other action is required to be obtained or to be made in connection
with the transactions contemplated herein, and all such authorizations,
approvals and other actions will be in full force and effect, and all such
filings will have been accepted by the Vendors and the Company who will be in
compliance with, and have not committed any breach of, any securities laws,
regulations or policies of any Regulatory Authority to which the Vendors or the
Company may be subject;

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

 
 
34

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

 
 
 
(d)
no material loss or destruction of or damage to the Company, any of the
Company’s Assets, any of the Company’s Business or the Purchased Shares shall
have occurred;

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

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

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

 
(f)
the delivery to the Purchaser by the Vendors and the Company, on a confidential
basis, of all Business Documentation and including, without limitation, the
following documentation and information:

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

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

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

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

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

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

 
 
35

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

 
 
 
(h)
the completion by the Purchaser and by the Purchaser’s professional advisors of
a thorough due diligence and operations review of both the business and the
operations of the Company together with the transferability of the Purchased
Shares as contemplated by this Agreement, to the sole and absolute satisfaction
of the Purchaser.

5.6                          Purchaser’s waiver of conditions precedent.   The
conditions precedent set forth in section “5.5” hereinabove are for the
exclusive benefit of the Purchaser and may be waived by the Purchaser in writing
and in whole or in part at any after the Execution Date; however, unless
specifically indicated as otherwise, not later than the Subject Removal Date.
 
Article 6
CLOSING AND EVENTS OF CLOSING

6.1                          Closing and Closing Date.   The closing (the
“Closing”) of the within purchase and delivery of the Purchased Shares, as
contemplated in the manner as set forth in Article “2” hereinabove, together
with all of the transactions contemplated by this Agreement, shall occur on such
day which is five calendar days following the due and complete satisfaction of
all of the conditions precedent which are set out in Article “5” hereinabove and
including, without limitation, the Mineral Assets Condition Precedent (the
“Closing Date”), or on such earlier or later Closing Date as may be agreed to in
advance and in writing by each of the Parties, and will be closed, in each such
instance, at the offices of McMillan LLP, Lawyers – Patent & Trade Mark Agents,
located at 1500 Royal Centre, 1055 West Georgia Street, Vancouver, British
Columbia, V6E 4N7, at 2:00 p.m. (Vancouver time) on the Closing Date.

6.2                          Latest Closing Date.   If the Closing Date has not
occurred by June 15, 2012 this Agreement will be terminated and unenforceable
unless the Parties agree in writing to grant an extension of the Closing Date.

6.3                          Documents to be delivered by the Vendors and the
Company prior to the Closing Date.   Not later than five calendar days prior to
the Closing Date, and in addition to the documentation which is required by the
agreements and conditions precedent which are set forth hereinabove, the Vendors
and the Company shall also execute and deliver, or cause to be delivered, to the
Purchaser and/or the Escrow Agent, as applicable, all such other documents,
resolutions and instruments as may be necessary, in the opinion of counsel for
the Purchaser, acting reasonably, to complete all of the transactions
contemplated by this Agreement and including, without limitation, the necessary
transfer all of the Purchased Shares to the Purchaser free and clear of all
liens, charges and encumbrances, and in particular including, but not being
limited to, the following materials:

 
(a)
a certified copy of an ordinary resolution of the shareholders of the Vendors
and/or the Company approving the terms and conditions of this Agreement and the
transactions contemplated hereby and thereby together with certification of any
required notice to all shareholders of the Vendors and/or the Company of such
written consent resolutions;

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

 
 
36

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

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

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

 
(e)
a certified copy of the resolutions of the Board of Directors of the Company
(and of the corporate Vendors if necessary) authorizing the transfer by the
Vendors to the Purchaser of the Purchased Shares;

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

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

 
(h)
a certificate of an officer from the Company dated as of the Closing Date,
acceptable in form to counsel for the Purchaser, acting reasonably, certifying
that the warranties, representations, covenants and agreements of the Vendors
and the Company contained in this Agreement are true and correct in all respects
and will be true and correct as of the Closing Date as if made by the Vendors
and the Company on the Closing Date;

 
(i)
all remaining Business Documentation; and

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

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

 
(a)
a Closing agenda;

 
(b)
a certified copy of an ordinary resolution of the shareholders of the Purchaser
approving the terms and conditions of this Agreement and the transactions
contemplated hereby and thereby together with certification of any required
notice to all shareholders of the Purchaser of such written consent resolutions;

 
(c)
a certified copy of the resolutions of the directors of the Purchaser providing
for the approval of all of the transactions contemplated hereby and including,
without limitation, each of the matters provided for in paragraph “5.1(f)”
hereinabove;

 
 
37

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

 
 
 
(d)
share certificates, subject to the normal resale provisions applicable thereto,
representing all of the Purchase Price Shares issued and registered in the names
of the Vendors as notified by the Vendors to the Purchaser prior to Closing in
accordance with sections “2.2” and “2.3” hereinabove;

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

 
(f)
a certificate of an officer of the Purchaser, dated as of the Closing Date,
acceptable in form to counsel for the Vendors and the Company, acting
reasonably, certifying that the warranties, representations, covenants and
agreements of the Purchaser contained in this Agreement are true and correct and
will be true and correct as of the Closing Date as if made by the Purchaser on
the Closing Date; and

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

 
Article 7
APPOINTMENT OF ESCROW AGENT AND TRANSFER DOCUMENTS

7.1                          Appointment of Escrow Agent.   The Parties hereby
acknowledge and initially appoint Diane Dalmy, Lawyer located at 8965 West
Cornell Place, Lakewood, CO  80227, counsel for the Purchaser herein, as escrow
agent (the “Escrow Agent”) herein, or such other Escrow Agent as may be mutually
determined by the Parties prior to the Subject Removal Date.

7.2                          Escrow of Transfer Documents.   Subject to and in
accordance with the terms and conditions hereof and the requirements of Articles
“2”, “5” and “6” hereinabove, and without in any manner limiting the obligations
of each of the Parties as contained therein and hereinabove, it is hereby
acknowledged and confirmed by the Parties that each of the Parties will execute,
deliver, or cause to be delivered, all such documentation as may be required by
the requirements of Articles “2”, “5” and “6” hereinabove (herein, collectively,
the “Transfer Documents”) and deposit the same with the Escrow Agent, or with
such other mutually agreeable escrow agent, together with a copy of this
Agreement, there to be held in escrow for release by the Escrow Agent to the
Parties in accordance with the strict terms and provisions of Articles “2”, “5”
and “6” hereinabove.

7.3                          Resignation of Escrow Agent.   The Escrow Agent may
resign from its duties and responsibilities if it gives each of the Parties
three calendar days’ written notice in advance.   Upon receipt of notice of the
Escrow Agent’s intention to resign, the Parties shall, within three calendar
days, select a replacement escrow agent and jointly advise the Escrow Agent in
writing to deliver the Transfer Documents to the replacement escrow agent.  If
the Parties fail to agree on a replacement escrow agent within three calendar
days of such notice, the replacement escrow agent shall be selected by a Judge
of the Supreme Court of the Province of British Columbia upon application by any
Party.   The Escrow Agent shall continue to be bound by this Agreement until the
replacement escrow agent has been selected and the Escrow Agent receives and
complies with the joint instructions of the Parties to deliver the Transfer
Documents to the replacement escrow agent.   The Parties agree to enter into an
escrow agreement substantially in the same form of this Agreement with the
replacement escrow agent.

7.4                          Instructions to Escrow Agent.   Instructions given
to the Escrow Agent pursuant to this Agreement shall be given by duly authorized
signatories of the respective Parties.

7.5                          No other duties or obligations.   The Escrow Agent
shall have no duties or obligations other than those specifically set forth in
this Article.
 
 
38

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

 

7.6                          No obligation to take legal action.   The Escrow
Agent shall not be obligated to take any legal action hereunder which might, in
its judgment, involve any expense or liability unless it shall have been
furnished with a reasonable indemnity by all of the Parties together with such
other third parties as the Escrow Agent may require in its sole and absolute
discretion.

7.7                          Not bound to any other agreements.   The Escrow
Agent is not bound in any way by any other contract or agreement between the
Parties whether or not it has knowledge thereof or of its terms and conditions
and its only duty, liability and responsibility shall be to hold and deal with
the Transfer Documents as herein directed.

7.8                          Notice.   The Escrow Agent shall be entitled to
assume that any notice and evidence received by it pursuant to these
instructions from anyone has been duly executed by the Party by whom it purports
to have been signed and that the text of any notice and evidence is accurate and
the truth.  The Escrow Agent shall not be obliged to inquire into the
sufficiency or authority of the text or any signatures appearing on such notice
or evidence.

7.9                          Indemnity.   The Parties, jointly and severally,
covenant and agree to indemnify the Escrow Agent and to hold it harmless against
any loss, liability or expense incurred, without negligence or bad faith on its
part, arising out of or in connection with the administration of its duties
hereunder including, without limitation, the costs and expenses of defending
itself against any claim or liability arising therefrom.

7.10                        Not required to take any action.   In the event of
any disagreement between any of the Parties to these instructions or between
them or either or any of them and any other person, resulting in adverse claims
or demands being made in connection with the Transfer Documents, or in the event
that the Escrow Agent should take action hereunder, it may, at its option,
refuse to comply with any claims or demands on it, or refuse to take any other
action hereunder, so long as such disagreement continues or such doubt exists,
and in any such event, it shall not be or become liable in any way or to any
person for its failure or refusal to act, and it shall be entitled to continue
so to refrain from acting until:

 
(a)
the rights of all Parties shall have been fully and finally adjudicated by a
court of competent jurisdiction; or

 
(b)
all differences shall have been adjusted and all doubt resolved by agreement
among all of the interested persons, and it shall have been notified thereof in
writing signed by all such persons.

 
Article 8
DUE DILIGENCE INVESTIGATION

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

8.2                          Confidentiality.   Each Party may in a reasonable
manner carry out such investigations and due diligence as to the other Parties,
at all times subject to the confidentiality provisions of Articles “9” and “10”
hereinbelow, as each Party deems necessary.  In that regard the Parties agree
that each shall have full and complete access to the other Parties’ books,
records, financial statements and other documents, articles of incorporation,
by-laws, minutes of Board of Directors’ meetings and its committees, investment
agreements, material contracts and as well such other documents and materials as
the Parties, or their respective solicitors, may deem reasonable and necessary
to conduct an adequate due diligence investigation of each Party, its respective
operations and financial condition prior to the Closing.
 
 
39

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

 
 
Article 9
NON-DISCLOSURE

9.1                          Non-disclosure.   Subject to the provisions of
section “9.3” hereinbelow, the Parties, for themselves, their officers,
directors, shareholders, consultants, employees and agents, agree that they each
will not disseminate or disclose, or knowingly allow, permit or cause others to
disseminate or disclose to third parties who are not subject to express or
implied covenants of confidentiality, without the other Parties’ express written
consent, either: (i) the fact or existence of this Agreement or discussions
and/or negotiations between them involving, inter alia, possible business
transactions; (ii) the possible substance or content of those discussions; (iii)
the possible terms and conditions of any proposed transaction; (iv) any
statements or representations (whether verbal or written) made by either Party
in the course of or in connection with those discussions; or (v) any written
material generated by or on behalf of any Party and such contacts, other than
such disclosure as may be required under applicable securities legislation or
regulations, pursuant to any order of a Court or on a “need to know” basis to
each of the Parties’ respective professional advisors.

9.2                         Documentation.   Any document or written material
generated by either Party in the course of, or in connection with, the due
diligence investigations conducted pursuant to this Agreement shall be marked or
deemed “Confidential” and shall be treated by each Party as a trade secret of
the other Parties.  Upon termination of this Agreement prior to Closing all
copies of any and all documents obtained by any Party from any other Party
herein, whether or not marked “Confidential”, shall be returned to the other
Parties forthwith.

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

Article 10
PROPRIETARY INFORMATION AND
ADDITIONAL OBLIGATIONS OF THE PARTIES

10.1                        Confidential Information.   Each Party acknowledges
that any and all information which a Party may obtain from, or have disclosed to
it, about the other Parties constitutes valuable trade secrets and proprietary
confidential information of the other Parties (collectively, the “Confidential
Information”).  No such Confidential Information shall be published by any Party
without the prior written consent of the other Parties, however, such consent in
respect of the reporting of factual data shall not be unreasonably withheld, and
shall not be withheld in respect of information required to be publicly
disclosed pursuant to applicable securities or corporation laws.   Furthermore,
each Party undertakes not to disclose the Confidential Information to any third
party without the prior written approval of the other Parties and to ensure that
any third party to which the Confidential Information is disclosed shall execute
an agreement and undertaking on the same terms as contained herein.

10.2                       Impact of breach of confidentiality.   The Parties
acknowledge that the Confidential Information is important to the respective
businesses of each of the Parties and that, in the event of disclosure of the
Confidential Information, except as authorized hereunder, the damage to each of
the Parties, or to either of them, may be irreparable.  For the purposes of the
foregoing sections the Parties recognize and hereby agree that a breach by any
of the Parties of any of the covenants therein contained would result in
irreparable harm and significant damage to each of the other Parties that would
not be adequately compensated for by monetary award.  Accordingly, the Parties
agree that in the event of any such breach, in addition to being entitled as a
matter of right to apply to a Court of competent equitable jurisdiction for
relief by way of restraining order, injunction, decree or otherwise as may be
appropriate to ensure compliance with the provisions hereof, any such Party will
also be liable to the other Parties, as liquidated damages, for an amount equal
to the amount received and earned by such Party as a result of and with respect
to any such breach.  The Parties also acknowledge and agree that if any of the
aforesaid restrictions, activities, obligations or periods are considered by a
Court of competent jurisdiction as being unreasonable, the Parties agree that
said Court shall have authority to limit such restrictions, activities or
periods as the Court deems proper in the circumstances.   In addition, the
Parties further acknowledge and agree that all restrictions or obligations in
this Agreement are necessary and fundamental to the protection of the respective
businesses of each of the Parties and are reasonable and valid, and all defenses
to the strict enforcement thereof by either of the Parties are hereby waived by
the other Parties.
 
 
40

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

 

10.3                        Compliance with applicable laws.   The Parties will
comply with all U.S., Canadian and foreign laws, whether federal, provincial or
state, applicable to their respective duties hereunder and, in addition, hereby
represent and warrant that any information which they may provide to any person
or company hereunder will, to the best of their respective knowledge,
information and belief, be accurate and complete in all material respects and
not misleading, and will not omit to state any fact or information which would
be material to such person or company.

10.4                        Public Announcement.   Each of the Vendors and the
Company further covenant and agree that no public references to the Purchaser,
the Company or the Vendors, or disclosure of the Vendors’ role in respect of the
Purchaser or the Company, be made by the Vendors without the prior written
consent of the Purchaser in each specific instance.

Article 11
ASSIGNMENT AND VARIATIONS

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

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

11.3                        Power of Attorney on behalf of the Vendors and the
Company.   In order to better provide for the administration and completion of
each of the transactions which are contemplated by the terms and conditions of
this Agreement, each Vendor and the Company does hereby make, constitute and
appoint Anthony Alda or such other present or future director or officer of the
Company as Anthony Alda may appoint in writing, and in his sole and absolute
discretion, in his time(s) of absence (the “Attorney”), as each Vendor’s and the
Company’s true and lawful Attorney for such Vendor and the Company and in such
Vendor’s and the Company’s name, place and stead and for the sole purpose and
power of specifically doing all acts and executing all deeds, resolutions,
documents, matters and things and including, without limitation, any agreement
supplemental thereto, which may be necessary to be done in such Vendor’s and the
Company’s place and stead and in order to complete all of transactions on such
Vendor’s and the Company’s behalf which may be required under the terms and
conditions of this Agreement (the “Power of Attorney”); provided, in no event
shall the Attorney (i) waive any rights of a Vendor or (ii) assume ay additional
obligation of a Vendor without such Vendor’s prior written consent.  In this
regard the within Power of Attorney for each particular Vendor and the Company
shall be effective from the Execution Date of this Agreement and shall continue
in full force and effect until the earlier of either the final Closing or the
termination of the within purchase and sale.

11.4                        Corrections and amendments to be made by
Attorney.   Without in any manner whatsoever limiting the Power of Attorney
granted to the Attorney by each Vendor and the Company as set forth immediately
hereinabove, the Vendors and the Company hereby also specifically authorize the
Attorney to correct any errors in, to complete any information missing from and
to make any amendments to this Agreement, together with any and all other
documents, resolutions and instruments as may be necessary, in the opinion of
Attorney, acting reasonably, to complete all of the transactions contemplated by
terms and conditions of this Agreement.
 
 
41

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

 

11.5                        Variation in the terms of this Agreement upon
review.   It is hereby acknowledged and agreed by each of the Parties that where
any variation in the terms and/or conditions of this Agreement is reasonably
required by any of the Regulatory Authorities as a condition of their respective
“Regulatory Approval” to any of the terms and conditions of this Agreement, any
such reasonable variation, having first been notified to all Parties, will be
deemed to be accepted by each of the Parties and form part of the terms and
conditions of this Agreement.  If any such Party, acting reasonably, deems any
such notified variation unreasonable, that Party may, in its sole and absolute
discretion, and within a period of not greater than 10 calendar days from its
original notification and at its cost, make such further applications or
submissions to the relevant Regulatory Authority as it considers necessary in
order to seek an amendment to any such variation; provided, however, that the
final determination by any such Regulatory Authority to any such application or
submission by such objecting Party will be deemed binding upon such Party who
must then provide notification to all other Parties as provided for hereinabove.
 
Article 12
FORCE MAJEURE

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

12.2                        Notice.   A Party shall, within seven calendar days,
give notice to the other Parties of each event of force majeure under section
“12.1” hereinabove, and upon cessation of such event shall furnish the other
Parties with notice of that event together with particulars of the number of
days by which the obligations of that Party hereunder have been extended by
virtue of such event of force majeure and all preceding events of force majeure.
 
 
42

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

 
 
Article 13
ARBITRATION

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

13.2                        Notice.   It shall be a condition precedent to the
right of any Party to submit any matter to arbitration pursuant to the
provisions hereof that any Party intending to refer any matter to arbitration
shall have given not less than five calendar days’ prior written notice of its
intention to do so to the other Parties together with particulars of the matter
in dispute.  On the expiration of such five calendar days the Party who gave
such notice may proceed to refer the dispute to arbitration as provided in
section “13.3” hereinbelow.

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

13.4                        Award.   The Parties agree that the award of a
majority of the arbitrators, or in the case of a single arbitrator, of such
arbitrator, shall be final and binding upon each of them.
 
Article 14
DEFAULT AND TERMINATION

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

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

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

 
 
43

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

 
 
14.2                        Arbitration.   If arbitration is sought, a Party
shall not be deemed in default until the matter shall have been determined
finally by appropriate arbitration under the provisions of Article “13”
hereinabove.

14.3                        Curing the Default.   If:

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

 
(b)
arbitration is not so sought; or

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

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

14.4                        Termination.   In addition to the foregoing it is
hereby acknowledged and agreed by the Parties that this Agreement will be
immediately terminated, unless otherwise extended in accordance with section
“6.2” hereinabove, in the event that:

 
(a)
the entire Ratification is not received within two calendar days of the
Execution Date;

 
(b)
either of the Parties has not either satisfied or waived each of their
respective conditions precedent prior to the Subject Removal Date in accordance
with the provisions of Article “5” hereinabove;

 
(c)
either of the Parties has failed to deliver or caused to be delivered any of
their respective documents required to be delivered by Articles “5”, “6” and “7”
hereinabove prior to each of the Subject Removal Date and the Closing Date in
accordance with the provisions of Articles “5”, “6” and “7”;

 
(d)
the final Closing has not occurred on or before June 15, 2012 in accordance with
section “6.2” hereinabove;

 
(e)
the Schedules have not been approved on or before June 5, 2012 in accordance
with section 1.2 hereinabove or

 
(f)
by agreement in writing by each of the Parties;

and in such event this Agreement will be terminated and be of no further force
and effect other than the obligations under Articles “9” and “10” hereinabove.
 
Article 15
INDEMNIFICATION AND LEGAL PROCEEDINGS

15.1                        Indemnification.   The Parties agree to indemnify
and save harmless the other Parties and including, where applicable, their
respective affiliates, directors, officers, employees and agents (each such
party being an “Indemnified Party”) harmless from and against any and all
losses, claims, actions, suits, proceedings, damages, liabilities or expenses of
whatever nature or kind, including any investigation expenses incurred by any
Indemnified Party, to which an Indemnified Party may become subject by reason of
the terms and conditions of this Agreement.
 
 
44

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

 

15.2                        No indemnification.   This indemnity will not apply
in respect of an Indemnified Party in the event and to the extent that a court
of competent jurisdiction in a final judgment shall determine that the
Indemnified Party was grossly negligent or guilty of willful misconduct.

15.3                        Claim of indemnification.   The Parties agree to
waive any right they might have of first requiring the Indemnified Party to
proceed against or enforce any other right, power, remedy, security or claim
payment from any other person before claiming this indemnity.

15.4                        Notice of claim.   In case any action is brought
against an Indemnified Party in respect of which indemnity may be sought against
any of the Parties, the Indemnified Party will give the relevant Party prompt
written notice of any such action of which the Indemnified Party has knowledge
and such Party will undertake the investigation and defense thereof on behalf of
the Indemnified Party, including the prompt Consulting of counsel acceptable to
the Indemnified Party affected and the payment of all expenses.  Failure by the
Indemnified Party to so notify shall not relieve any Party of such Party’s
obligation of indemnification hereunder unless (and only to the extent that)
such failure results in a forfeiture by any Party of substantive rights or
defenses.

15.5                        Settlement.   No admission of liability and no
settlement of any action shall be made without the consent of each of the
Parties and the consent of the Indemnified Party affected, such consent not to
be unreasonably withheld.

15.6                        Legal proceedings.   Notwithstanding that the
relevant Party will undertake the investigation and defense of any action, an
Indemnified Party will have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel will be at the expense of the Indemnified Party unless:

 
(a)
such counsel has been authorized by the relevant Party;

 
(b)
the relevant Party hereto has not assumed the defense of the action within a
reasonable period of time after receiving notice of the action;

 
(c)
the named parties to any such action include any Party hereto and the
Indemnified Party shall have been advised by counsel that there may be a
conflict of interest between any Party hereto and the Indemnified Party; or

 
(d)
there are one or more legal defenses available to the Indemnified Party which
are different from or in addition to those available to any Party hereto.

15.7                        Contribution.   Subject to the limitations section
forth in section 15.1 hereinbelow, if for any reason other than the gross
negligence or bad faith of the Indemnified Party being the primary cause of the
loss claim, damage, liability, cost or expense, the foregoing indemnification is
unavailable to the Indemnified Party or insufficient to hold them harmless, the
relevant Party hereto shall contribute to the amount paid or payable by the
Indemnified Party as a result of any and all such losses, claim, damages or
liabilities in such proportion as is appropriate to reflect not only the
relative benefits received by any Party hereto on the one hand and the
Indemnified Party on the other, but also the relative fault of the Parties and
other equitable considerations which may be relevant.  Notwithstanding the
foregoing, the relevant Party hereto shall in any event contribute to the amount
paid or payable by the Indemnified Party, as a result of the loss, claim,
damage, liability, cost or expense (other than a loss, claim, damage, liability,
cost or expenses, the primary cause of which is the gross negligence or bad
faith of the Indemnified Party), any excess of such amount over the amount of
the fees actually received by the Indemnified Party hereunder.
 
 
45

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

 

15.8                        LIMITATIONS ON INDEMNIFICATION OR
CONTRIBUTION.   NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR ANY
DOCUMENT OR CERTIFICATE DELIVERED PURSUANT HERETO:

(a)           OTHER THAN IN THE EVENT IN WHICH FRAUD OR BAD FAITH OF A VENDOR IS
THE PRIMARY CAUSE OF THE LOSS, CLAIM, DAMAGE, LIABILITY, COST OR EXPENSE, THE
AGGREGATE LIABILITY OF ANY VENDOR MAY NOT EXCEED THE VALUE OF THE SHARES
ACTUALLY RECEIVED BY SUCH VENDOR PURSUANT TO THE TERMS OF THIS AGREEMENT, AS
SUCH VALUE IS DETERMINED ON THE CLOSING DATE BY MULTIPLYING THE NUMBER OF SHARES
RECEIVED BY $0.03; AND

(b)           IN NO EVENT SHALL A VENDOR BE LIABLE FOR ANY LOSS, CLAIM, DAMAGE,
LIABILITY, COST OR EXPENSE, ARISING FROM THE BREACH OF ANY REPRESENTATION,
WARRANTY OR COVENANT OF ANOTHER VENDOR IF SUCH REPRESENTATION, WARRANTY OR
COVENANT RELATES TO SUCH OTHER VENDOR AND NOT TO THE COMPANY AS A WHOLE.

Article 16
NOTICE

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

16.2                        Change of address.   Either Party may at any time
and from time to time notify the other Parties in writing of a change of address
and the new address to which notice shall be given to it thereafter until
further change.
 
Article 17
GENERAL PROVISIONS

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

17.2                        Enurement.   This Agreement will enure to the
benefit of and will be binding upon the Parties, their respective heirs,
executors, administrators and assigns.
 
 
46

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

 

17.3                        Schedules.   The Schedules to this Agreement are
hereby incorporated by reference into this Agreement in its entirety.

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

17.5                        Representation and Costs.

(a)           The Purchaser’s Counsel.  It is hereby acknowledged by each of the
Parties that Diane Dalmy, Lawyer, acts solely for the Purchaser, and,
correspondingly, that each of the Vendors and the Company have been required by
Diane Dalmy and the Purchaser to obtain independent legal advice with respect to
their respective reviews and execution of this Agreement.   In addition, it is
hereby further acknowledged and agreed by the Parties that Diane Dalmy, from
time to time, may have both an economic or shareholding interest in and to the
Purchaser and/or a fiduciary duty to the same arising from either a
directorship, officership or similar relationship arising out of the request of
the Purchaser for certain of such persons to act in a similar capacity while
acting for the Purchaser as counsel.  Correspondingly, and even where, as a
result of this Agreement, the consent of each Party to the role and capacity of
Diane Dalmy, as the case may be, is deemed to have been received, where any
conflict or perceived conflict may arise, or be seen to arise, as a result of
any such capacity or representation, each Party acknowledges and agrees to, once
more, obtain independent legal advice in respect of any such conflict or
perceived conflict and, consequent thereon, Diane Dalmy shall be at liberty at
any time to resign any such position if it or any Party is in any way affected
or uncomfortable with any such capacity or representation.

(a)           The Company’s Counsel.  It is hereby acknowledged by each of the
Parties that Vandeberg, Johnson & Gandara LLP, Lawyer, acts solely for the
Company, and, correspondingly, that each of the Vendors and the Purchaser have
been required by Vandeberg, Johnson & Gandara LLP and the Company to obtain
independent legal advice with respect to their respective reviews and execution
of this Agreement.  In addition, it is hereby further acknowledged and agreed by
the Parties that Vandeberg, Johnson & Gandara LLP or its individual lawyers
(including limitation, Daren Nitz), from time to time, may have both an economic
or shareholding interest in and to the Company and/or a fiduciary duty to the
same arising from either a officership or similar relationship arising out of
the request of the Company for certain of such persons to act in a similar
capacity while acting for the Company as counsel.  Correspondingly, and even
where, as a result of this Agreement, the consent of each Party to the role and
capacity of Vandeberg, Johnson & Gandara LLP and its individual lawyers, as the
case may be, is deemed to have been received, where any conflict or perceived
conflict may arise, or be seen to arise, as a result of any such capacity or
representation, each Party acknowledges and agrees to, once more, obtain
independent legal advice in respect of any such conflict or perceived conflict
and, consequent thereon, Vandeberg, Johnson & Gandara LLP shall be at liberty at
any time to resign any such position if it or any Party is in any way affected
or uncomfortable with any such capacity or representation.

(c)           Costs.  Each Party to this Agreement will also bear and pay its
own costs, legal and otherwise, in connection with its respective preparation,
review and execution of this Agreement and, in particular, that the costs
involved in the preparation of this Agreement, and all documentation necessarily
incidental thereto, by Diane Dalmy shall be at the cost of the Purchaser, and
Vandeberg Johnson & Gandara LLP shall be at the cost of the Company.

17.6                        Applicable law.  This Agreement will be governed by
and construed under the laws of the State of Nevada without regard to
conflicts-of-laws principles that would require the application of any other
law.
 
 
47

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

 

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

17.8                        Invalid provisions.   If any provision of this
Agreement is at any time unenforceable or invalid for any reason it will be
severable from the remainder of this Agreement and, in its application at that
time, this Agreement will be construed as though such provision was not
contained herein and the remainder will continue in full force and effect and be
construed as if this Agreement had been executed without the invalid or
unenforceable provision.

17.9                        Currency.   Unless otherwise stipulated, all
payments required to be made pursuant to the provisions of this Agreement and
all money amount references contained herein are in lawful currency of the
United States.

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

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

17.12                      Counterparts.   This Agreement may be signed by the
Parties in as many counterparts as may be necessary and, if required, by
facsimile, each of which so signed being deemed to be an original, and such
counterparts together shall constitute one and the same instrument and,
notwithstanding the date of execution, will be deemed to bear the Execution Date
as set forth on the front page of this Agreement.

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

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

 
 
48

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

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

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

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

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

[The balance of this page intentionally left blank]

 
49

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

 
 
IN WITNESS WHEREOF each of the Parties has hereunto set its seal by the hand of
its duly authorized signatory as of the Execution Date as set forth on the front
page of this Agreement.
 
SIGNED and DELIVERED by  
)   WILLAM G. CALSBECK )   a Vendor herein    )   was hereunto affixed in the
presence of:   )     )     )    /s/ )   Witness Signature   )  /s/ William G.
Calsbeck   ) WILLAM G. CALSBECK   )   Witness Address  )     )     )   Witness
name and Occupation   )         The COMMON SEAL of   )   COVECAP CONSULTING
INC., )   a Vendor herein    )   was hereunto affixed in the presence of:    )
(C/S)   )     )    /s/ )      Authorized Signatory   )           )  
DIGITAL CONCEPTS3 HOLDINGS INC.,
)   a Vendor herein   )   was hereunto affixed in the presence of:  ) (C/S)   )
    )    /s/ )   Authorized Signatory     )  

 
 
50

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

 
 

The COMMON SEAL of   )   FINTER BANK ZURICH,    )   a Vendor herein  )   was
hereunto affixed in the presence of:   ) (C/S)   )     )    /s/ )   Authorized
Signatory   )        
SIGNED and DELIVERED by  
)   BRENT BYSOUTH,    )   a Vendor herein    )   was hereunto affixed in the
presence of:   )     )     )    /s/ )   Witness Signature   )  /s/ Brent Bysouth
  ) BRENT BYSOUTH   )   Witness Address  )     )     )   Witness name and
Occupation   )         The COMMON SEAL of   )   ORION GROUP INTERNATIONAL   )  
a Vendor herein    )   was hereunto affixed in the presence of:    ) (C/S)   )  
  )    /s/ )      Authorized Signatory   )         SIGNED and DELIVERED by    )
  SAMSIN FAMILY HOLDINGS LLC., )   a Vendor herein   )   was hereunto affixed in
the presence of:  )     )     )    /s/ )   Authorized Signatory     )  

 
 
51

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

 
 

The COMMON SEAL of     )  
UBEQUITY CAPITALPARTNERS INC.,
 )   the Purchaser herein,    )   was hereunto affixed in the presence of:   )
(C/S)    )    /s/  )   Authorized Signatory    )  

 

SIGNED and DELIVERED by  )   JEFF MAXWELL,   )   a Vendor herein   )   was
hereunto affixed in the presence of:   )      )    /s/  )  /s/ Jeff Maxwell
Witness Signature   ) JEFF MAXWELL    )   Witness Address   )      )   Witness
name and Occupation    )  

 

SIGNED and DELIVERED by  )   JOHN CARTAGO,     )   a Vendor herein   )   was
hereunto affixed in the presence of:   )      )    /s/  )  /s/ John Cartago
Witness Signature   )
JOHN CARTAGO
   )   Witness Address   )      )   Witness name and Occupation  

 

SIGNED and DELIVERED by  )   JOHN GRAHAM DOUGLAS,   )   a Vendor herein   )  
was hereunto affixed in the presence of:   )      )    /s/  )  /s/ John Graham
Douglas Witness Signature   ) JOHN GRAHAM DOUGLAS    )   Witness Address   )    
 )   Witness name and Occupation  

 
 
52

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

 
 

SIGNED and DELIVERED by  )   JOHN M. PULOS,    )   a Vendor herein   )   was
hereunto affixed in the presence of:   )      )    /s/  )  /s/ John M. Pulos
Witness Signature   ) JOHN M. PULOS    )   Witness Address   )      )   Witness
name and Occupation  

 

SIGNED and DELIVERED by  )   JUSTIN KIRKWOOD,     )   a Vendor herein   )   was
hereunto affixed in the presence of:   )      )    /s/  )  /s/ Justin Kirkwod
Witness Signature   ) JUSTIN KIRKWOOD    )   Witness Address   )      )  
Witness name and Occupation  

 
 
53

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

 
 

SIGNED and DELIVERED by  )   PETER HOGENDOORN,    )   a Vendor herein   )   was
hereunto affixed in the presence of:   )      )    /s/  )  /s/ Peter Hogendoorn
Witness Signature   ) PETER HOGENDOORN    )   Witness Address   )      )  
Witness name and Occupation  

The COMMON SEAL of    )   GLOB MEDIA WORKS INC.,   )   the Company herein,   )  
was hereunto affixed in the presence of:    ) (C/S)    )    /s/  )   Authorized
Signatory    )  

 

The COMMON SEAL of     )   MORGAN CREEK ENERGY CORP.     )   the Purchaser
herein,    )   was hereunto affixed in the presence of:   ) (C/S)    )    /s/  )
  Authorized Signatory    )  

 
 
54

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

 
 
Schedule A
 
This is Schedule “A” to that certain Share Exchange Agreement as entered into
among each of the Vendors, the Company (Glob Media Works Inc.) and the Purchaser
(Morgan Creek Energy Corp.).
 
Purchased Shares and Vendors
 
 
Name of Vendor
 
Number of Purchased Shares
 
Number of Shares of the Purchaser to Receive
 
William G. Calsbeck
5883 Walker Avenue, Burnaby, B.C., V5E 3B3
 
 
8,507 Purchased Shares
 
17,014 Shares
Finter Bank Zurich
Attn: Franz Zimmermann
Claridenstrasse 35, Zurich, Switzerland, CH-8022
 
643,331 Purchased Shares
1,125,552 Shares
Digital Concepts3
Holdings Inc.
Suite 2424, 600 University Street, Seattle, WA  98101
 
1,025,366 Purchased Shares
1,800,732 Shares
Brent Bysouth
1701 - 1600L Beach Avenue, Vancouver, B.C.  V6G 1Y6
 
682,000 Purchased Shares
1,114,000 Shares
Orion Group International
180 Lithia Way, Suite 303, Ashland, OR  97520
 
359,000 Purchased Shares
643,000 Shares
Samsin Family Holdings, LLC
6541 50th Avenue NE, Seattle, WA  98115
 
168,000 Purchased Shares
236,000 Shares
Ubequity Capital
Partners Inc.
900-925 W. Georgia Street, Vancouver, B.C.  V6C 3L2
 
62,500 Purchased Shares
125,000 Shares
Jeff Maxwell
629 Ferndale Road West, Wayzata, MN  55391
440,000 Purchased Shares
880,000 Shares

 
 
1

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

 
 
John Graham Douglas
Condo 6B, Calle Hortencias 118, Cal.Amapas, Puerto Vallarta, Jalisco,
Mexico  48399
 
124,999 Purchased Shares
249,998 Shares
John Cartago
#1008 - 128 W Cordova St., Vancouver, B.C.  V6B 0E6
 
150,000 Purchased Shares
150,000 Shares
John M. Pulos
2711 N. Sepulveda Blvd, Suite 323, Manhattan Beach, CA  90266
 
693,331 Purchased Shares
1,225,551 Shares
Justin Kirkwood
2824 Triumph Street, Vancouver, B.C.  V5K 1T5
 
300,000 Purchased Shares
350,000 Shares
Covecap Consulting Inc.
180 Lithia Way Suite 303, Ashland, OR  97520
 
50,000 Purchased Shares
100,000 Shares
Peter Hogendoorn
13288 Amble Greene Place, Surrey, B.C.  V4A 6P5
 
609,999 Purchased Shares
1,058,887 Shares
 
Totals:
5,317,033
Purchased Shares
 
9,075,734 Shares

 
2

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

 

Schedule B
 
This is Schedule “B” to that certain Share Exchange Agreement as entered into
among each of the Vendors, the Company (Glob Media Works Inc.) and the Purchaser
(Morgan Creek Energy Corp.).
 
 Financial Statements Glob Media Works Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 

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

 

Schedule C

This is Schedule “C” to that certain Share Exchange Agreement as entered into
among each of the Vendors, the Company (Glob Media Works Inc.) and the Purchaser
(Morgan Creek Energy Corp.).

 Glob Media Works Inc. – Intellectual Property
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

 
 
Schedule D

This is Schedule “D” to that certain Share Exchange Agreement as entered into
among each of the Vendors, the Company (Glob Media Works Inc.) and the Purchaser
(Morgan Creek Energy Corp.).

 Glob Media Works Inc. – Leases and Licenses
 
 
 
 
 
 
 
 
 
 
 
 
 

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

 
 
Schedule E

This is Schedule “E” to that certain Share Exchange Agreement as entered into
among each of the Vendors, the Company (Glob Media Works Inc.) and the Purchaser
(Morgan Creek Energy Corp.).

Glob Media Works Inc. – Contracts of Employment
 
 
 
 
 
 
 
 
 
 
 
 
 

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

 
 
Schedule F
 
This is Schedule “F” to that certain Share Exchange Agreement as entered into
among each of the Vendors, the Company (Glob Media Works Inc.) and the Purchaser
(Morgan Creek Energy Corp.).

Glob Media Works Inc. – Material Contracts

 
 
 
 
 
 
 

 
 
 

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

 

Schedule G

This is Schedule “G” to that certain Share Exchange Agreement as entered into
among each of the Vendors, the Company (Glob Media Works Inc.) and the Purchaser
(Morgan Creek Energy Corp.).

 Glob Media Works Inc. – List of Bank Accounts
 
 
 
 
 
 
 
 
 
 
 

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

 
 
Schedule H

This is Schedule “H” to that certain Share Exchange Agreement as entered into
among each of the Vendors, the Company (Glob Media Works Inc.) and the Purchaser
(Morgan Creek Energy Corp.).

Morgan Creek Energy Corp.  – Material Contracts

The following represent the Company’s Material Contracts:

1.

Refer to the materials attached hereto.
__________
 
 
 
 
 
 
 
 
 

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

 
 
Schedule I

This is Schedule “I” to that certain Share Exchange Agreement as entered into
among each of the Vendors, the Company (Glob Media Works Inc.) and the Purchaser
(Morgan Creek Energy Corp.).

Vendors’ Certificates

Refer to the forms of Vendors’ Certificates attached hereto.
__________

End of Share Exchange Agreement
 
 
 
 
 
 
 
 
 
 

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