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THE SHAREHOLDERS OF
PTL ELECTRONICS LTD.

–  and –

MOVENTIS CAPITAL, INC.

–  and –

PTL ACQUISTION CORP.

–  and –

PTL ELECTRONICS LTD.

 

 

AGREEMENT FOR THE PURCHASE OF SHARES OF

PTL ELECTRONICS LTD.

 

 

DATED AS OF May 8, 2006

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TABLE OF CONTENTS

      Page         ARTICLE 1 INTERPRETATION 3   1.1 Definitions 3   1.2 Headings
and Table of Contents 3   1.3 Number and Gender 3   1.4 Business Days 3   1.5
Currency and Payment Obligations 3   1.6 Calculation of Interest 3   1.7 Statute
References 3   1.8 Section and Schedule References 3         ARTICLE 2 PURCHASE
OF SHARES 4   2.1 Agreement to Purchase and Sell 4   2.2 Purchase Price 4   2.3
Payment of Purchase Price 5   2.4 Extension of Second Cash Payment Date and
Maturity Date 5   2.5 Preparation of Closing Statements 5   2.6 Payment on
Adjustment Date 6   2.7 Certain Obligations Secured 7   2.8 No Obligation 7  
2.9 Withholding Tax 7   2.10 Delivery of Audited Financial Statements 8   2.11
Allocation of Initial Cash Payment 8   2.12 Discharge of Sellers’ Guarantees 8  
      ARTICLE 3 CLOSING ARRANGEMENTS 8   3.1 Closing 8   3.2 Sellers’ Closing
Deliveries 8   3.3 Buyer’s Closing Deliveries 9         ARTICLE 4 CONDITIONS OF
CLOSING 10   4.1 Buyer’s Conditions 10   4.2 Condition not Fulfilled 12   4.3
Sellers’ Conditions 12   4.4 Condition not Fulfilled 13         ARTICLE 5
REPRESENTATIONS AND WARRANTIES 14   5.1 Representations and Warranties of the
Sellers – Personal 14   5.2 Representations and Warranties of the Corporation
and the Management Sellers 20   5.3 Representations and Warranties of the Buyer
31   5.4 Representations and Warranties of the Parent 32   5.5 Survival of
Representations and Warranties 33   5.6 Definition of Knowledge 34

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TABLE OF CONTENTS
(Continued)

      Page         ARTICLE 6 INDEMNIFICATION AND LIMITATION OF LIABILITY 34  
6.1 Indemnity by Individual Seller 34   6.2 Indemnity by Sellers Collectively 35
  6.3 Notice of Claim 35   6.4 Direct Claims 35   6.5 Third Party Claims 36  
6.6 Settlement of Third Party Claims 36   6.7 Interest on Claims 37   6.8 Tax
Adjustments 37   6.9 Set-off 37   6.10 Limitations on Liability 38        
ARTICLE 7 INTERIM PERIOD 38   7.1 Investigation 38   7.2 Authorizations 39   7.3
Confidentiality 39   7.4 Risk of Loss 39   7.5 Ordinary Course of Business 39  
7.6 Regulatory Approvals 41   7.7 Updates to Information 41         ARTICLE 8
EXCLUSIVITY, NON-SOLICITATION AND ACCESS TO INFORMATION 42   8.1 Covenants
Regarding Non-Solicitation 42   8.2 Access to Information 42   8.3 Remedies 42  
      ARTICLE 9 TERMINATION 43   9.1 Termination 43   9.2 No Prejudice on
Termination 43   9.3 Termination Fee Payable to Parent 43         ARTICLE 10
GENERAL 44   10.1 Expenses 44   10.2 Public Announcements 44   10.3 Corporation
Notices 44   10.4 Time of Essence 46   10.5 Entire Agreement 46   10.6 Waiver 46
  10.7 Severability 46   10.8 Non-Merger 46   10.9 Further Assurances 46   10.10
Governing Law 47   10.11 Successors and Assigns 47

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TABLE OF CONTENTS
(Continued)

      Page           10.12 Independent Legal Advice 47   10.13 Counterparts 47

-iii-

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SHARE PURCHASE AGREEMENT

This Agreement dated as of May 8, 2006, is made

AMONG:

> > > DAVID McALPINE, of Delta, British Columbia, having an address at 105
> > > Parkgrove Crescent, Delta, B.C., V4L 2J8

AND:

> > > PAUL HEATHCOTE, of Delta, British Columbia, having an address at 4871 12th
> > > Ave., Delta, B.C., V4M 2A5
> > > 
> > > (each individually, a “Management Seller” and together, the “Management
> > > Sellers”)

AND:

> > > ALBION SERVICES LTD., a corporation incorporated under the laws of the
> > > British Virgin Islands and having an office at 20th Floor, Eastern Central
> > > Plaza, 3 Yiu Hing Road, Shaukeiwan, Hong Kong

AND:

> > > TSANG FAMILY TRUST, a trust formed under the laws of British Columbia and
> > > having an office at 31451 Ponderosa Place, Abbotsford, B.C., V2T 5G3

AND:

> > > CENTURY I HOLDINGS INC., a corporation incorporated under the laws of
> > > British Columbia and having an office at #4 – 11240 Bridgeport Road,
> > > Richmond, B.C., V6X 1T2

AND:

> > > GUNDYCO, ITF MARILYN LEE / ANTHONY LEE, c/o CIBC World Markets Inc. 161
> > > Bay Street, 10th Floor, Toronto, Ontario, M5J 2S8

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AND:

> > > MARILYN LEE, of Abbotsford, British Columbia, having an address at 2171
> > > Everett Street, Abbotsford, B.C., V2S 7R9
> > > 
> > > (each individually, a “Non-Management Seller” and collectively, the
> > > “Non-Management Sellers” and together with the Management Sellers, the
> > > “Sellers”)

AND:

> > > PTL ELECTRONICS LTD., a corporation incorporated under the laws of British
> > > Columbia and having an office at Suite 208 – 1538 Clivedon Avenue, Delta,
> > > British Columbia, V3M 6J8
> > > 
> > > (the “Corporation”)

AND:

> > > MOVENTIS CAPITAL, INC., a corporation incorporated under the laws of
> > > Delaware and having an office at Suite 304, 1959 – 152nd Street, White
> > > Rock, British Columbia, Canada, V4A 9P3
> > > 
> > > (the “Parent”)

AND:

> > > PTL ACQUISITION CORP., a corporation incorporated under the laws of
> > > British Columbia and having its registered office at Suite 304, 1959 –
> > > 152nd Street, White Rock, British Columbia, Canada, V4A 9P3
> > > 
> > > (the “Buyer”)

RECITALS

A.                    The Corporation is in the business of the design and
manufacture of printed circuit boards using surface mount technology.

B.                    The Buyer is a wholly-owned subsidiary of the Parent.

C.                    The Sellers are the registered and beneficial owners of
all the issued and outstanding shares in the capital of the Corporation.

D.                    The Buyer desires to purchase and the Sellers desire to
sell all of the issued and outstanding shares in the capital of the Corporation.

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- 3 -

For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Parties agree as follows:

ARTICLE 1
INTERPRETATION

1.1                    Definitions. In this Agreement, certain terms have the
meanings set forth in Schedule 1.1.

1.2                    Headings and Table of Contents. The division of this
Agreement into Articles and Sections, the insertion of headings, and the
provision of any table of contents are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement.

1.3                    Number and Gender. Unless the context requires otherwise,
words importing the singular include the plural and vice versa and words
importing gender include all genders.

1.4                    Business Days. If any payment is required to be made or
other action is required to be taken pursuant to this Agreement on a day which
is not a Business Day, then such payment or action shall be made or taken on the
next Business Day.

1.5                    Currency and Payment Obligations. Except as otherwise
expressly provided in this Agreement:

  (1)

all dollar amounts referred to in this Agreement are stated in Canadian Dollars;
and

        (2)

any payment contemplated by this Agreement shall be made by cash, certified
cheque or any other method that provides immediately available funds.

1.6                    Calculation of Interest. In calculating interest payable
under this Agreement for any period of time, the first day of such period shall
be included and the last day of such period shall be excluded.

1.7                    Statute References. Any reference in this Agreement to
any statute or any section thereof shall, unless otherwise expressly stated, be
deemed to be a reference to such statute or section as amended, restated or
re-enacted from time to time.

1.8                    Section and Schedule References. Unless the context
requires otherwise, references in this Agreement to Sections, Exhibits or
Schedules are to Sections, Exhibits or Schedules of this Agreement. The Exhibits
and Schedules to this Agreement are as follows and each of the Exhibits and
Schedules to this Agreement are incorporated herein by reference:

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EXHIBITS

A                   Share Transfer Form
B                    Sellers’ Bring-Down Certificate
C                    Corporation’s Bring Down Certificate
D                    Resignation of Director/Officer
E                    Buyer’s Bring-Down Certificate
F                    Parent’s Bring Down Certificate
G                    Debenture
H                    General Security Agreement

SCHEDULES

  1.1

Definitions

  2.1

Purchase Shares

  2.11

Allocation of Initial Cash Payment

ARTICLE 2
PURCHASE OF SHARES

2.1                    Agreement to Purchase and Sell. At the Closing Time,
subject to the terms and conditions of this Agreement, each Seller shall sell to
the Buyer, and the Buyer shall purchase from the Seller, the Purchase Shares
listed opposite the Seller’s name in Schedule 2.1, and the Sellers Loans listed
opposite the Seller’s name in Schedule 2.11.

2.2                    Purchase Price. Subject to adjustment as provided in this
Agreement, the aggregate purchase price payable by the Buyer to the Sellers for
the Purchase Shares and the Sellers Loans (the “Purchase Price”) shall be:

  (1)

C$3,000,000 in cash (the “Initial Cash Payment”) less the Adjustment Amount;

        (2)

C$1,200,000 in Common shares (“Parent Common Shares”) in the capital of the
Parent (the “Share Consideration”). The Share Consideration will be issued at a
deemed price per share of the equivalent in Canadian funds of the price per
share at which the Parent Common Shares are issued or are issuable under the
Financing, with such deemed price being calculated using a currency conversion
rate equal to the average Bank of Canada Rate for converting Canadian funds to
US funds for the last thirty days before the Closing Date. In the event no
Parent Common Shares are issued or issuable pursuant to the Financing, the
deemed price per share will be $0.50;

        (3)

Debentures in the aggregate amount of C$2,300,000 in the form attached as
Exhibit G hereto (the “Debentures”), which Debentures will be non-interest
bearing and will be due and payable by the Buyer on the date which is 9 months
after the Closing Date, or such later date as is determined pursuant to Section
2.4 (the “Maturity Date”); and

        (4)

C$500,000 in cash (the “Second Cash Payment”).

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- 5 -

2.3                    Payment of Purchase Price. The Purchase Price shall be
paid as follows:

  (1)

on the Closing Date, the payment to the Sellers by the Buyer of the following:

          (a)

the Initial Cash Payment;

          (b)

the Share Consideration; and

          (c)

the Debentures;

          (2)

on the Adjustment Date, the Adjustment Amount shall be paid in the manner
provided for in Section 2.6;

          (3)

on the date which is 9 months after the Closing Date, or such later date as is
determined pursuant to Section 2.4 (the “Second Cash Payment Date”), the Second
Cash Payment. Notwithstanding the foregoing, the Buyer may in its sole
discretion pay any or all of the Second Cash Payment at any time prior to the
Second Cash Payment Date, provided that the full amount is paid on or before the
Second Cash Payment Date.

2.4                    Extension of Second Cash Payment Date and Maturity Date.
Notwithstanding Sections 2.2 and 2.3 above, the Buyer shall have the option of
extending the Second Cash Payment Date and/or the Maturity Date, for an
additional 3 months, by providing written notice to such effect, to the Sellers
at any time on or before the Second Payment Date and/or the Maturity Date, as
applicable. In the event that the Buyer elects to extend the Second Cash Payment
Date and/or the Maturity Date as provided for in this Section 2.4, the Buyer
will be required to pay interest on any portion of the Second Cash Payment and
the Debentures which remains unpaid as of the Second Payment Date and/or the
Maturity Date, as applicable. Such interest will accrue at a rate of 10% per
annum on any portion of the Second Cash Payment or Debentures from the original
Second Cash Payment Date or Maturity Date, as applicable, until the date on
which such payments are made. The interest will be payable in cash.

2.5                    Preparation of Closing Statements.

  (1)

As soon as practicable and in any event within 60 days after the Closing Date,
the Buyer shall prepare and deliver to the Sellers unaudited financial
statements of the Corporation for the period beginning on the first day of the
current financial year of the Corporation and ending on the Closing Date,
including a balance sheet, an income statement and a statement of changes in
financial position, prepared in accordance with GAAP on a basis consistent with
the Financial Statements together with a review engagement report of PTL
Electronics Ltd. thereon (the “Closing Statements”).

        (2)

During the period from the Closing Date until the date of delivery of the
Closing Statements, the Sellers will give the Buyer and its agents and
representatives such assistance and access to the Books and Records as the Buyer
and its agents and representatives may reasonably request in order to enable it
prepare the Closing Statements.

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  (3)

The Closing Statements shall be conclusive of the amount of the Closing Balance
and shall be final and binding upon the Parties for the purpose of determining
the Adjustment Amount unless before the 15th Business Day after the date on
which the Closing Statements are delivered to the Sellers, the Sellers&#146;
Representative gives to the Buyers a notice of objection to any matter stated in
the Closing Statements.

        (4)

If the Sellers give a notice of objection pursuant to Section 2.5(3) then the
Sellers and the Buyer shall consult with each other with respect to the
objection. If they are unable to reach agreement within 10 Business Days after
the notice of objection has been given, then the dispute shall be resolved by an
accountant to be selected by the Buyer and such selection communicated to the
Sellers, prior to Closing (the “Accountant”). The resolution of the dispute by
the Accountant will be final and binding on the Parties. The fees and expenses
of the Accountant, unless otherwise agreed by the Parties, will be borne equally
by the Sellers and the Buyer.

2.6                    Payment on Adjustment Date.

  (1)

If the Sellers have not delivered a notice of objection pursuant to Section
2.5(3), then on the 20th Business Day after delivery of the Closing Statements
pursuant to Section 2.5(1)(the “Adjustment Date”), an amount (the “Adjustment
Amount”) equal to the amount by which the Closing Balance is less than
C&#36;3,200,000 (after deduction for all applicable taxes owing up to March 31,
2006) shall be paid in the following manner:

          (a)

if the Closing Balance is less than C$3,200,000 (after deduction for all
applicable taxes owing up to March 31, 2006), then forthwith each Seller will
pay to the Buyer an amount equal to that Seller’s proportionate share of the
Adjustment Amount plus interest on that Seller’s proportionate share of the
Adjustment Amount at the Prime Rate from the Closing Date to the date of
payment; or

          (b)

if the Closing Balance is equal to or greater than C$3,200,000 (after deduction
for all applicable taxes owing up to March 31, 2006), no payment will be made in
respect of the Adjustment Amount.

          (2)

If the Sellers give a notice of objection to the Closing Statements pursuant to
Section 2.5(3), then the Sellers shall pay the portion, if any, of the
Adjustment Amount in respect of which there is no objection plus interest on
that undisputed portion of the Adjustment Amount in accordance with Section
2.6(1) on the Adjustment Date. Upon the resolution of the dispute with respect
to the Closing Statements, the Sellers shall pay any additional amounts as are
determined to be payable, together with interest thereon, in accordance with the
provisions of Section 2.6(1).

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2.7                    Certain Obligations Secured. On the Closing Date, the
Buyer shall cause the Corporation to enter into a General Security Agreement in
the form attached as Exhibit H (a “General Security Agreement” and collectively
the “General Security Agreements”) with each Seller, which grants such Seller a
security interest in the assets of the Corporation, for the value of such
Seller’s pro rata portion of the Second Cash Payment that remains outstanding
and the amount which remains outstanding pursuant to such Seller’s Debenture.
Such General Security Agreements shall be subordinate to any existing security
holders who may have a pre-existing security interest in any of the
Corporation’s assets. Upon request by the Corporation, the Sellers will
subordinate and postpone the obligations secured by such Seller’s General
Security Agreement to the prior payment in full of the Senior Loan Obligations
of a Senior Lender. Each of the Sellers will enter into a written agreement with
the Senior Lender acknowledging and agreeing directly with the Senior Lender
that the obligations secured by such Seller’s General Security Agreement shall
be subordinated and postponed to the prior payment in full of the Senior Lender
Obligations.

2.8                    No Obligation. The Buyer and the Parent shall have no
obligation to purchase any of the Purchase Shares unless all of the Purchase
Shares have been delivered and sold to the Buyer pursuant to this Agreement.

2.9                    Withholding Tax. In respect of each Seller who, at the
Closing Date, is a nonresident of Canada or has not certified that he or she is
a resident of Canada for income tax purposes (a “Non-Resident Seller”), each
such Non-Resident Seller will at the Closing Date deliver to the Buyer a
clearance certificate issued by the Canada Revenue Agency (the “CRA”) pursuant
to Section 116 of the Act for the Non-Resident Seller with a certificate limit
equal to or greater than the amount of the Purchase Price allocated to the
Non-Resident Seller (a “Clearance Certificate”) or, if a Non-Resident Seller
does not deliver such Clearance Certificate, the Buyer shall be entitled to
withhold 25% of the Purchase Price allocated to such Non-Resident Seller (the
“Withheld Funds”) and to pay the Withheld Funds to the Buyer’s Solicitors on
their undertaking to keep the Withheld Funds in their trust account, with
interest accruing for the benefit of the Non-Resident Seller, and make no use of
them whatsoever except in accordance with the following:

  (1)

if the Corporation’s Solicitors (on behalf of the Non-Resident Sellers) has not
delivered to the Buyer’s Solicitors a Clearance Certificate for each of the Non-
Resident Sellers by the 28th day of the month following the Closing Date, the
Buyer’s Solicitors will remit the balance of the Withheld Funds to the CRA by
the 30th day of such month unless they have previously received in writing
addressed to the Corporation’s Solicitors (on behalf of the Non-Resident
Sellers) and the Buyer the consent of the CRA to remit the Withheld Funds at a
later date without application of any interest or penalties, in which case the
Buyer’s Solicitors will remit the Withheld Funds in accordance with the
directions of the CRA, and

        (2)

with respect to each Non-Resident Seller, after the Corporation’s Solicitors
have (on behalf of that Non-Resident Seller) delivered to the Buyer’s Solicitors
a Clearance Certificate for that Non-Resident Seller, the Buyer’s Solicitors may
disburse to such Non-Resident Seller the excess of the Withheld Funds (if any),

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plus any interest accrued thereon, over the amount required to obtain such
Clearance Certificate.

2.10                   Delivery of Audited Financial Statements. The Sellers
shall deliver the annual audited financial statements of the Corporation for the
fiscal year ended March 31, 2006 (the “Audited Financial Statements”) to the
Buyer forthwith upon delivery of the 2006 Audited Financials Statements to the
Corporation by the Corporation’s auditors.

2.11                   Allocation of Initial Cash Payment. The Initial Cash
Payment will be allocated and applied among the Sellers, the Purchase Shares and
the Sellers Loans in accordance with Schedule 2.11. Neither the Buyer nor the
Sellers will take a position with any governmental authority charged with the
collection of any Taxes or in any judicial proceeding which would be
inconsistent with the terms of any such allocation, without the written consent
of the other Parties.

2.12                   Discharge of Sellers’ Guarantees. The Buyer shall use its
best efforts to arrange for the release of the Sellers from the personal
guarantees, granted by any one or more of the Sellers, to the Corporation’s bank
in support of the Corporation’s existing financing arrangements.

ARTICLE 3
CLOSING ARRANGEMENTS

3.1                    Closing. The Closing shall take place at 10:00 a.m. on
the Closing Date at the offices of the Buyer’s Solicitors in Vancouver, British
Columbia, or at such other time on the Closing Date or such other place as may
be agreed orally or in writing by the Sellers, the Parent and the Buyer.

3.2                    Sellers’ Closing Deliveries. At the Closing, the Sellers
shall deliver or cause to be delivered to the Buyer and the Parent the following
documents:

  (1)

the certificate or certificates representing the Purchase Shares;

        (2)

assignments of the Purchase Shares in the form of Exhibit A, duly executed by
each Seller;

        (3)

the minute books, share certificate books and corporate seals of the
Corporation;

        (4)

a certificate of each of the Sellers dated as of the Closing Date in the form of
Exhibit B;

        (5)

a certificate of the co-CEOs of the Corporation dated as of the Closing Date in
the form of Exhibit C;

        (6)

evidence in form satisfactory to the Buyer and the Parent, both acting
reasonably, that the Corporation Consents and Approvals have been obtained;

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  (7)

the new Employment Agreements acceptable in form and substance to the Buyer,
executed by the Corporation and each of Paul Heathcote and David McAlpine;

        (8)

Non-competition Agreements acceptable in form and substance to the Buyer, duly
executed by the Corporation and each of the Sellers;

        (9)

the written resignation of each of Elaine Chueng, Dr. Gratio Tsang and David Lo
as Directors and Officers of the Corporation in the form of Exhibit D;

        (10)

the Sellers’ Solicitors Opinion; and

        (11)

all such other assurances, consents, agreements, documents and instruments as
may be reasonably required by the Buyer or the Parent to complete the
transactions provided for in this Agreement.

3.3                    Buyer’s Closing Deliveries. At the Closing, the Buyer and
the Parent shall deliver or cause to be delivered to the Sellers the following
documents and payments:

  (1)

a certificate of the President or other senior officer of the Buyer dated as of
the Closing Date in the form of Exhibit E;

        (2)

a certificate of the President or other senior officer of the Parent dated as of
the Closing Date in the form of Exhibit F;

        (3)

the payment of C$3,000,000 representing the Initial Cash Payment;

        (4)

the Debenture Agreements in the form of Exhibit G, duly executed by the Buyer
and the Parent in favour of each of the Sellers;

        (5)

the General Security Agreements in the form of Exhibit H, duly executed by the
Corporation in favour of each of the Sellers;

        (6)

the Buyer’s Solicitors Opinion; and

        (7)

all such other assurances, consents, agreements, documents and instruments as
may be reasonably required by the Sellers to complete the transactions provided
for in this Agreement.

ARTICLE 4
CONDITIONS OF CLOSING

4.1                    Buyer’s Conditions. The Buyer and the Parent shall not be
obliged to complete the purchase and sale of the Purchase Shares pursuant to
this Agreement unless, at or before the Closing Time, each of the following
conditions has been satisfied, it being understood that the following conditions
are included for the exclusive benefit of the Buyer and the Parent and may be
waived, in whole or in part, in writing by the Buyer and the Parent at any time;
and the Sellers agree with the Buyer and the Parent to take all such actions,
steps and proceedings as are

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reasonably within their control as may be necessary to ensure that the following
conditions are fulfilled at or before the Closing Time:

  (1)

Representations and Warranties - The representations and warranties of the
Sellers and the Corporation in Sections 5.1 and 5.2 shall be true and correct at
the Closing.

        (2)

Sellers’ Compliance - The Sellers and the Corporation shall have performed and
complied with all of the terms and conditions in this Agreement on their part to
be performed or complied with at or before Closing and shall have executed and
delivered or caused to have been executed and delivered to the Buyer and the
Parent at the Closing all the documents contemplated in Section 3.2 or elsewhere
in this Agreement.

        (3)

Agreement Continuing - This Agreement shall not have been terminated in
accordance with its terms.

        (4)

Closing Date - The Closing Date shall have occurred on or before December 31,
2006.

        (5)

Consents and Approvals - All the Buyer Consents and Approvals and the Parent
Consents and Approvals shall have been obtained.

        (6)

Convertible Securities – Any and all outstanding rights, options, warrants and
other securities convertible into or exercisable for shares in the capital of
the Corporation shall have been (a) acquired by the Buyer, (b) cancelled or (c)
exercised in accordance with their terms for underlying shares which are being
acquired by the Buyer pursuant to this Agreement.

        (7)

No Material Adverse Change - There shall have been no Material Adverse Change
from February 28, 2006 until the completing of the Closing.

        (8)

Employment Agreements – The Corporation shall have entered into the new
Employment Agreements acceptable in form and substance to the Buyer, with David
McAlpine and Paul Heathcote respectively.

        (9)

Non-Competition – Each of Paul Heathcote, David McAlpine, Albert Chueng, Dr.
Gratio Tsang, Anthony Lee and David Lo shall have entered into a non-
competition agreement with the Corporation, the Buyer and the Parent, acceptable
in form and substance to the Buyer.

        (10)

No Unapproved Material Contracts - Each of the Sellers and the Corporation shall
not have entered into any Material Contract, unless previously approved in
writing by the Buyer or the Parent, from the date hereof until the Closing which
may in the Buyer’s and the Parent’s opinion, acting reasonably:

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  (a)

materially adversely impact on the Buyer’s or the Parent’s ability to integrate
the Corporation and the Business with the operations of the Buyer or the Parent;
or

        (b)

materially adversely affect the value of the Business to the Buyer or the Parent
after the Closing; or

        (c)

materially adversely affect the financial condition, the business, the
operations or the assets of the Buyer or the Parent following the Closing.

  (11)

No Litigation - There shall be no litigation or judicial or administrative
proceedings:

          (a)

pending or threatened in writing against any of the Parties or against any of
their respective Affiliates or any of their respective directors or officers,
for the purpose of enjoining, preventing or restraining the completion of the
transactions contemplated by this Agreement; or

          (b)

pending or threatened in writing against any of the Parties or against any of
their respective Affiliates or any of their respective directors or officers
which in the result, could adversely affect the right of the Buyer to acquire or
retain the Shares.

          (12)

Corporation Consents and Approvals - All the Corporation Consents and Approvals
shall have been obtained.

          (13)

Securities Exemptions – There shall be available to the Parent, an exemption
from the registration requirements of the U.S. Securities Act of 1933 (the “U.S.
Securities Act”), and an exemption from the registration and prospectus
requirements of the Securities Act (British Columbia) (the “B.C. Securities
Act”). In the event that no such exemption(s) are available, the Parent may, at
its option seek such regulatory order or file such documents (including a
prospectus and/or registration statement) as are necessary to permit the
issuance of the Parent Securities without violating Applicable Law.

          (14)

Completion of Financing – The completion by the Parent of a debt or equity
financing of not less than C$3,500,000 on or before closing on terms acceptable
to the Parent (the “Financing”).

          (15)

Ongoing Due Diligence – The Buyer shall be satisfied with the results of its
ongoing due diligence work concerning the Corporation, including but not limited
to their review of its business, operations and affairs, the Corporation’s
facilities, lease agreements, customer and supplier relationships, management,
technology, product, sales and marketing processes, present financial condition
and financial forecasts, the Financial Statements, the Material Contracts,
financial agent’s fees and commissions, accounting systems and financial
controls.

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- 12 -

  (16)

Audited Financial Statements – The Audited Financial Statements shall have been
delivered to the Buyer in accordance with Section 2.10.

        (17)

Opinion – The Buyer and the Parent shall have received from counsel to the
Corporation and counsel to each of the Sellers, opinions with respect to the
Corporation, the Sellers, and the transactions contemplated hereby in form and
substance acceptable to the Buyer and the Parent, addressed to the Buyer and the
Parent and dated as of the Closing Date (the “Sellers’ Solicitors Opinion”).

4.2                    Condition not Fulfilled. If any condition in Section 4.1
has not been fulfilled at or before the Closing Time, then the Buyer and the
Parent in their sole discretion may, without limiting any rights or remedies
available to the Buyer or the Parent at law or in equity, either:

  (1)

terminate this Agreement by notice to the Sellers, in which event the Buyer and
the Parent shall be released from its obligations under this Agreement to
complete the purchase of the Shares; or

        (2)

waive compliance with any such condition without prejudice to its right of
termination in the event of non-fulfilment of any other condition.

4.3                    Sellers’ Conditions. The Sellers shall not be obliged to
complete the transactions contemplated by this Agreement unless, at or before
the Closing Time, each of the following conditions has been satisfied, it being
understood that the following conditions are included for the exclusive benefit
of the Sellers, and may be waived, in whole or in part, in writing by the
Sellers at any time; and the Buyer and the Parent agree with the Sellers to take
all such actions, steps and proceedings as are reasonably within the Buyer’s and
the Parent’s control as may be necessary to ensure that the following conditions
are fulfilled at or before the Closing Time:

  (1)

Representations and Warranties - The representations and warranties of the Buyer
in Section 5.3 and of the Parent in Section 5.4 shall be true and correct at the
Closing.

          (2)

Buyer’s Compliance – Each of the Buyer and the Parent shall have performed and
complied with all of the terms and conditions in this Agreement on its part to
be performed or complied with at or before the Closing Time and shall have
executed and delivered or caused to have been executed and delivered to the
Sellers at the Closing Time all the documents contemplated in Section 3.3 or
elsewhere in this Agreement.

          (3)

No Litigation - There shall be no litigation or judicial or administrative
proceedings:

          (a)

pending or threatened in writing against any of the Parties or against any of
their respective Affiliates or any of their respective directors or officers,
for the purpose of enjoining, preventing or restraining the completion of the
transactions contemplated by this Agreement; or

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- 13 -

  (b)

pending or threatened in writing against any of the Parties or against any of
their respective Affiliates or any of their respective directors or officers
which in the result, could adversely affect the right of the Buyer to acquire or
retain the Shares.

  (4)

Corporation Consents and Approvals - All the Corporation Consents and Approvals
shall have been obtained.

        (5)

Agreement Continuing - This Agreement shall not have been terminated in
accordance with its terms.

        (6)

Closing Date - The Closing Date shall have occurred on or before December 31,
2006.

        (7)

Debentures – The Buyer shall have executed a Debenture in favour of each of the
Sellers in the form attached hereto as Exhibit G.

        (8)

Opinion – The Sellers shall have received from counsel to the Buyer, opinions
with respect to the Buyer and the transactions contemplated hereby in form and
substance acceptable to the Sellers, addressed to the Sellers and dated as of
the Closing Date (the “Buyer’s Solicitors Opinion”).

4.4                    Condition not Fulfilled. If any condition in Section 4.3
shall not have been fulfilled at or before the Closing Time, then the Sellers in
their sole discretion may, without limiting any rights or remedies available to
the Sellers at law or in equity, either:

  (1)

terminate this Agreement by notice to the Buyer and the Parent in which event
the Sellers shall be released from all obligations under this Agreement; or

        (2)

waive compliance with any such condition without prejudice to its right of
termination in the event of non-fulfilment of any other condition.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES

5.1                    Representations and Warranties of the Sellers – Personal.
Each of the Sellers severally, but not jointly, represents and warrants to the
Buyer and the Parent as follows as of the date hereof and as of the Closing
Time:

  (1)

Authorization by Seller - The Seller has the power, authority and capacity to
enter into this Agreement and all other agreements and instruments to be
executed by him or it as contemplated by this Agreement and to carry out his or
its obligations under this Agreement and such other agreements and instruments.
If the Seller is a corporate entity, the Seller is a corporation incorporated
and validly subsisting under the laws of its jurisdiction of its incorporation,
and the execution and delivery of this Agreement and such other agreements and
instruments and the completion of the transactions contemplated by this
Agreement and such other

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- 14 -

 

agreements and instruments have been duly authorized by all necessary corporate
action on the part of the Seller and its shareholders.

          (2)

Enforceability of Seller’s Obligations - This Agreement constitutes a valid and
binding obligation of the Seller enforceable against the Seller in accordance
with its terms subject, however, to limitations on enforcement imposed by
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of the rights of creditors and others and to the extent that equitable remedies
such as specific performance and injunctions are only available in the
discretion of the court from which they are sought.

          (3)

Residence of Seller – Exception in the case of Albion Services Ltd., the Seller
is not a non-resident of Canada for purposes of Section 116 of the Income Tax
Act (Canada).

          (4)

Ownership of Shares - The Seller is the registered and beneficial owner of the
Purchase Shares, set opposite his or its name on Schedule 2.1. No Person other
than the Buyer and the Parent has any agreement, option, right or privilege
capable of becoming an agreement for the purchase from the Seller of any of such
Shares.

          (5)

Absence of Conflicting Agreements - The execution, delivery and performance of
this Agreement by the Seller and the completion (with any required Corporation
Consents and Approvals and Corporation Notices) of the transactions contemplated
by this Agreement do not and will not result in or constitute a default, breach
or violation or an event that, with notice or lapse of time or both, would be a
default, breach or violation of any of the terms, conditions or provisions of
any agreement to which the Seller is bound or, in the case of a Seller which is
a corporation, the constating documents of the Seller.

          (6)

Brokerage Fees - The Seller has not entered into any agreement which would
entitle any Person to any valid claim against any of the Corporation, the Buyer
or the Parent for a broker’s commission, finder’s fee or any like payment in
respect of the purchase and sale of the Shares or any other matters contemplated
by this Agreement.

          (7)

U.S. Securities Law Representations – Each of the Sellers hereby represents,
warrants and acknowledges all of the following:

          (a)

the Seller has been independently advised as to the restrictions with respect to
trading and the applicable hold period imposed in respect of the Parent
Securities by securities legislation in the jurisdiction in which the Seller
resides (if other than Canada), in Canada and in the United States and confirms
that no representation has been made respecting the restrictions with respect to
trading and the applicable hold periods for the Parent Securities (except as
otherwise expressly stated in this Agreement) and is aware of the risks and
other characteristics of the Parent Securities

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

- 15 -

 

and of the fact that the Seller may not resell the Parent Securities except in
accordance with the applicable securities legislation and regulatory policies;

        (b)

the Seller is resident in the province or jurisdiction set out on page 1 of this
Agreement;

        (c)

if the Seller is an entity, all of its stockholders, members, partners and
owners, as applicable reside outside the United States;

        (d)

the Seller is not an “affiliate” of the Parent or the Buyer as defined in the U.
S. Securities Act, and will not become an “affiliate” by virtue of its purchase
of the Parent Securities and does not intend to act in concert with any other
person to form a control group;

        (e)

the Seller is not purchasing the Parent Securities as a result of any
advertisement, article, notice or other communication regarding the Parent
Securities published in any newspaper, magazine or similar media or broadcast
over the television, radio, Internet or presented at any seminar or any other
general solicitation or general advertising;

        (f)

the Seller acknowledges that the Parent Securities have not been registered
under the U.S. Securities Act and may not be offered or sold in the United
States or abroad unless registered under the U.S. Securities Act and the
securities laws of all applicable states of the United States or an exemption
from such registration requirements is available, and that the Parent and the
Buyer have no obligation or present intention of filing a registration statement
under the U.S. Securities Act in respect of the Parent Securities;

        (g)

the Seller, whether acting as principal, trustee or agent, is neither (i) a U.S.
Person (as defined in Rule 902(k) of Regulation S promulgated under the U. S.
Securities Act, which definition includes, but is not limited to, a natural
person resident in the United States, an estate or trust of which an executor or
administrator or trustee is a U.S. Person and any partnership or corporation
organized or incorporated under the laws of the United States) nor (ii)
purchasing the Parent Securities for the account of a U.S. Person or a person in
the United States or for resale in the United States, and:

        (h)

the Seller was not in the United States when this Agreement was negotiated,
executed and/or delivered;

        (i)

the current structure of this transaction and all transactions and activities
contemplated herein is not a scheme to avoid the registration requirements of
the U.S. Securities Act;

        (j)

no securities commission or similar regulatory authority has reviewed or passed
on the merits of the Parent Securities;

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

- 16 -

  (k)

there are risks associated with the purchase of the Parent Securities;

        (l)

there are restrictions on the Seller’s ability to resell the Parent Securities
and it is the responsibility of the Seller to find out what those restrictions
are before purchasing the Parent Securities;

        (m)

the Parent and the Buyer have advised the Seller that the Parent is relying on
an exemption or exemptions from the requirements to provide the Seller with a
prospectus and to sell securities through a person registered to sell securities
under the U.S. Securities Act and other applicable United States securities
legislation and, as a consequence of acquiring securities pursuant to such
exemption or exemptions, certain protections, rights and remedies provided by
the U.S. Securities Act and other applicable United States securities
legislation, including statutory rights of rescission or damages, will not be
available to the Seller;

        (n)

the Seller has not received or been provided with a prospectus, offering
memorandum or similar document and the decision to enter into this agreement and
to purchase the Parent Securities has not been based upon any verbal or written
representations as to fact or otherwise made by or on behalf of the Buyer or the
Parent except as set forth in this Agreement and the Seller’s decision is based
entirely upon publicly available information concerning the Parent;

        (o)

the Seller has been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of the Buyer
and the Parent concerning the terms and conditions of the transactions
contemplated in this Agreement and the merits and risks of investing in the
Parent Securities, (ii) access to information about the Parent and its
subsidiaries and their respective financial condition, results of operations,
businesses, properties, management and prospects sufficient to enable it to
evaluate its investment; and (iii) opportunity to obtain such additional
information that the Parent possesses or can acquire without unreasonable effort
or expense that is necessary to make an informed investment decision with
respect to the investment;

        (p)

the Seller will immediately notify the Buyer and the Parent if any of the
Seller’s representations and warranties contained in section 5.1(7) would be
inaccurate if made after the date hereof but on or before the Closing Date; and

        (q)

the Seller is purchasing the Parent Securities as principal (or is deemed to be
purchasing as principal) for its own account and not for the benefit of any
other person, for investment only, and not with the view to resell or distribute
all or any of the Parent Securities;

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- 17 -

  (r)

the Seller understands that if it decides to offer, sell or otherwise transfer
the Parent Securities, it will not offer, sell or otherwise transfer any of such
securities directly or indirectly, unless:

          (i)

the transfer is to the Parent;

          (ii)

the transfer is made outside the United States in a transaction meeting the
requirements of Rule 904 of Regulation S under the U.S. Securities Act and in
compliance with applicable local laws and regulations;

          (iii)

the transfer is made in compliance with the exemption from the registration
requirements under the U.S. Securities Act provided by Rule 144 thereunder, if
available, and in accordance with applicable state securities laws; or

          (iv)

the Parent Securities are transferred in a transaction that does not require
registration under the U.S. Securities Act or any applicable state laws and
regulations governing the offer and sale of securities; and

          (v)

it has prior to such sale furnished to the Parent an opinion of counsel or other
evidence of exemption, in either case reasonably satisfactory to the Parent;

          (s)

the Seller understands that upon the issuance thereof, and until such time as
the same is no longer required under the applicable requirements of the U.S.
Securities Act or applicable U.S. state laws and regulations, the certificates
representing the Parent Securities will bear a legend in substantially the
following form:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES
ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (C) IN COMPLIANCE WITH THE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS, AND THE
HOLDER HAS,

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

- 18 -

PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER
EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY.
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA.”

provided, that if the Parent Securities are being sold under clause (B) above,
at a time when the Parent is a “foreign issuer” as defined in Rule 902 under the
U.S. Securities Act, the legend set forth above may be removed by providing a
declaration or other evidence of an exemption, including an opinion of counsel
acceptable to the Parent, and other documentation as required by the Parent and
its transfer agent to the effect that the sale of the securities is being made
in compliance with Rule 904 of Regulation S under the U.S. Securities Act;

  (t)

if any of the Parent Securities are being sold pursuant to Rule 144 of the U. S.
Securities Act, the legend may be removed by delivery to the Parent’s transfer
agent of an opinion satisfactory to the Parent to the effect that the legend is
no longer required under applicable requirements of the U. S. Securities Act or
state securities laws;

        (u)

the Seller understands and acknowledges that Parent is not obligated to remain a
“foreign issuer” within the meaning of Regulation S under the U. S. Securities
Act;

        (v)

the Seller has had the opportunity to ask questions of and receive answers from
the Buyer and the Parent regarding the investment, and has received all the
information regarding the Buyer and the Parent that it has requested;

        (w)

the Seller understands that the Parent may instruct its registrar and transfer
agent not to record any transfer of the Parent Securities without first being
notified by the Parent that it is satisfied that such transfer is exempt from or
not subject to the registration requirements of the U.S. Securities Act and
applicable state securities laws;

        (x)

the Seller consents to the Parent making a notation on its records or giving
instruction to the registrar and transfer agent of the Parent in order to
implement the restrictions on transfer set forth and described herein;

        (y)

the Seller understands and acknowledges that the Parent has no obligation to
file, or present intention of filing, with the United States Securities and
Exchange Commission or with any state securities administrator any registration
statement in respect of resales of the Parent Securities in the United States;
and

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- 19 -

  (z)

the Seller understands and agrees that there may be material tax consequences as
a result of its acquisition, disposition or exercise of any of the Parent
Securities. Neither the Buyer nor the Parent gives an opinion or makes a
representation with respect to the tax consequences to the Seller under United
States, state, local or foreign tax law of the undersigned’s acquisition or
disposition of such Parent Securities. In particular, no determination has been
made whether the Parent will be a “passive foreign investment company” (“PFIC”)
within the meaning of Section 1291 of the United States Internal Revenue Code.

  (8)

Canadian Securities Law Representations - Each of the Sellers hereby represents,
warrants and acknowledges all of the following:

            (a)

no person has made to the Seller any written or oral representations:

            (i)

that any person will resell or repurchase any of the Parent Securities;

            (ii)

that any person will refund the purchase price of any of the Parent Securities;
or

            (iii)

as to the future price or value of any of the Parent Securities;

            (b)

the Seller is not a “control person” of the Parent and will not become a control
person by virtue of the issuance of the Parent Securities, and does not intend
to act in concert with any other person to form a control group of the Parent;

            (c)

the Seller has been independently advised as to the applicable hold periods
imposed in respect of the Parent Securities by applicable securities legislation
and regulatory policies and confirms that no representations by the Parent have
been made respecting the hold periods applicable to the Parent Securities, and
is aware of the risks and other characteristics of the Parent Securities and of
the fact that the Seller may not be able to resell the Parent Securities
purchased by it except in accordance with the applicable securities legislation
and regulatory policies and that the Parent Securities may be subject to resale
restrictions and may bear a legend to this effect;

            (d)

if required by applicable securities legislation, policy or order or by any
securities commission, stock exchange or other regulatory authority, the Seller
will execute, deliver, file and otherwise assist the Parent in filing, such
reports, undertakings and other documents with respect to the issue of the
Parent Securities as may be required;

            (e)

the Seller has been advised to consult its own legal advisors with respect to
applicable resale restrictions and the Seller is solely responsible (and

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- 20 -

 

 

the Parent is not responsible) for compliance with applicable resale
restrictions; and             (f)

the Seller agrees that the Parent may be required by law or otherwise to
disclose to the BCSC and regulatory authorities the identity of the Seller and
each beneficial purchaser for whom the Seller may be acting.

            (9)

Canadian Securities Law acknowledgement - Each of the Sellers hereby
acknowledges all of the following:

            (a)

no prospectus has been filed by the Parent with the British Columbia Securities
Commission (“BCSC”) in connection with the issuance of the Parent Securities,
such issuance is exempted from the prospectus requirements of the B.C.
Securities Act and that:

            (i)

the Seller is restricted from using most of the civil remedies available under
the B.C. Securities Act;

            (ii)

the Seller may not receive information that would otherwise be required to be
provided to him under the B.C. Securities Act; and

            (iii)

the Parent is relieved from certain obligations that would otherwise apply under
the B.C. Securities Act.

5.2                    Representations and Warranties of the Corporation and the
Management Sellers. The Corporation and each of the Management Sellers jointly
and severally, represent and warrant to the Buyer and the Parent as follows as
of the date hereof and as of the Closing Time:

  (1)

Organization - The Corporation is continued and validly subsisting under the
laws of Canada. The Corporation has sent to the appropriate Person all annual
returns and financial statements required to be sent under the laws of its
jurisdiction of incorporation. The Corporation has full corporate power,
authority and capacity to carry on its Business, to own and operate its assets,
properties and Business as now carried on and owned and operated, to enter into
this Agreement and all other agreements and instruments to be executed by it as
contemplated by this Agreement and to carry out its obligations under this
Agreement and such other agreements and instruments. The execution and delivery
of this Agreement and such other agreements and instruments and the completion
of the transactions contemplated by this Agreement and such other agreements and
instruments have been duly authorized by all necessary corporate action on the
part of the Corporation and its shareholders.

        (2)

Capitalization - The authorized capital of the Corporation consists of an
unlimited number of common shares of which 1,000,000 common shares are validly
issued as fully paid and non-assessable, which issued and outstanding shares of
the Corporation are owned as listed in Schedule 2.1 With the exception of the
Tsang

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

- 21 -

Family Trust, which holds the Purchase Shares in Trust for the beneficiaries
thereof, the Persons named in Schedule 2.1 are the sole registered and
beneficial owners of all of the outstanding Shares set out beside his or its
name. There are no rights, subscriptions, warrants, options, conversion rights,
calls, commitments or plans or agreements of any kind outstanding which would
enable any Person to purchase or otherwise acquire any shares or other
securities of the Corporation including, without limitation, any securities
convertible into or exchangeable or exercisable for shares or other securities
of the Corporation, except as disclosed in Schedule 2.1. Each of the Shares was
issued in compliance with all Applicable Law, including, without limitation,
Applicable Law relating to corporate and securities laws.

  (3)

Bankruptcy - The Corporation is not an insolvent person within the meaning of
the Bankruptcy and Insolvency Act (Canada), it has not made an assignment in
favour of its creditors nor a proposal in bankruptcy to its creditors or any
class thereof and it has not had any petition for a receiving order presented in
respect of it. The Corporation has not initiated proceedings with respect to a
compromise or arrangement with its creditors or for its winding up, liquidation
or dissolution. No receiver has been appointed in respect of the Corporation or
any of its assets and no execution or distress has been levied upon any of its
assets.

        (4)

Financial Statements - True and complete copies of the unaudited financial
statements of the Corporation for the period ending February 28, 2006 are
annexed as Schedule 5.2(4) to the Disclosure Letter (the “Unaudited Financial
Statements”). The Unaudited Financial Statements and the Audited Financial
Statements (together, the “Financial Statements”) have been prepared, or will be
prepared, as the case may be, in accordance with GAAP. The balance sheets
contained in such Financial Statements fairly present the financial position of
the Corporation as of the date thereof and the statements of earnings and
retained earnings contained in the Financial Statements fairly present the
results of operations for the periods indicated.

        (5)

Operation of the Business - The Corporation has good and marketable title to all
the assets referred to in the Financial Statements, free and clear of any and
all Liens. The assets of the Corporation are sufficient to permit the continued
operation of the Business in substantially the same manner as conducted in the
year ending on the date of this Agreement. Schedule 5.2(5) to the Disclosure
Letter sets out a complete and accurate list of all locations where the assets
of the Corporation are situate, including a brief description of the assets
situate at each location. There is no agreement, option or other right or
privilege outstanding in favour of any Person for the purchase from the
Corporation of the Business or of any of the assets referred to in the Financial
Statements out of the ordinary course of business.

        (6)

Enforceability of Corporation’s Obligations - This Agreement constitutes a valid
and binding obligation of the Corporation enforceable against the Corporation in
accordance with its terms subject, however, to limitations on enforcement

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- 22 -

imposed by bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of the rights of creditors and others and to the extent that
equitable remedies such as specific performance and injunctions are only
available in the discretion of the court from which they are sought.

  (7)

Absence of Conflicting Agreements - The execution, delivery and performance of
this Agreement by the Corporation and the completion (with any required
Corporation Consents and Approvals and Corporation Notices) of the transactions
contemplated by this Agreement do not and will not result in or constitute a
default, breach or violation or an event that, with notice or lapse of time or
both, would be a default, breach or violation of any of the terms, conditions or
provisions of any agreement to which the Corporation is bound or the constating
documents of the Corporation.

        (8)

Material Contracts - Schedule 5.2(8) to the Disclosure Letter lists all the
Material Contracts. The Corporation is not in material default under any
Material Contract and there has not occurred any event which, with the lapse of
time or giving of notice or both, would constitute a default under any Material
Contract by the Corporation. Each Material Contract is in full force and effect
and has not been amended.

        (9)

Receivables - The Receivables are valid obligations which arose in the ordinary
course of business and will be collected in the ordinary course of business, in
the aggregate, at their full face value, subject to reserves for doubtful
accounts, which reserves are adequate for such accounts. None of the Receivables
is due from an Affiliate of the Corporation.

        (10)

Undisclosed Liabilities - The Corporation does not have any secured or unsecured
liabilities, obligations, indebtedness or commitments, whether accrued,
absolute, contingent or otherwise, other than the trade payables, leases
incurred in the ordinary course of business and a capital lease of C$13,308.88
which are disclosed in the Financial Statements or referred to or disclosed
herein.

        (11)

Corporation Consents and Approvals - All the Corporation Consents and Approvals
are listed in Schedule 5.2(11) to the Disclosure Letter. Except for the
Corporation Consents and Approvals, no consent or approval of any Person is
required to be obtained by the Corporation in connection with the completion of
the transactions contemplated by this Agreement or to permit the Corporation to
carry on the Business after the Closing as the Business is currently carried on
by the Corporation.

        (12)

Corporation Notices - All the Corporation Notices are listed in Schedule 5.2(12)
to the Disclosure Letter. Except for the Corporation Notices, no notice is
required to be delivered by the Corporation to any Person in connection with the
completion of the transactions contemplated by this Agreement or to permit the
Corporation to carry on the Business after the Closing as the Business is
currently carried on by the Corporation.

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- 23 -

  (13)

Litigation - There is no action, suit, proceeding, claim, application, complaint
or investigation in any court or before any arbitrator or before or by any
regulatory body or governmental or non-governmental body pending or, to the best
of the Sellers&#146; knowledge, threatened by or against the Corporation related
to the Business or affecting the Business or the operations or capital of the
Corporation or the transactions contemplated by this Agreement.

          (14)

Environmental Matters - The Business and the assets as carried on or used by the
Corporation and their predecessors (including the condition of the Lands and the
waters on or under the Lands) have been carried on and used and are currently
carried on and used in compliance in all material respects with all
Environmental Laws.

          (15)

Intellectual Property -

          (a)

Schedule 5.2(15) to the Disclosure Letter lists all of the registrations and
applications for registration of the Intellectual Property. All of the
registrations and applications for registration of the Intellectual Property are
valid and subsisting in good standing and are recorded in the name of the
Corporation.

          (b)

Except as set out in Schedule 5.2(15) to Disclosure Letter, the Corporation is
the first and only owner of the Intellectual Property and is entitled to the
exclusive and uninterrupted use of the Intellectual Property without payment of
any royalty or other fees. Except as set out in Schedule 5.2(15) to the
Disclosure Letter, no Person has any right, title or interest in any of the
Intellectual Property and all such persons have waived their moral rights in any
copyright works within the Intellectual Property. The Corporation has diligently
protected its legal rights to the exclusive use of the Intellectual Property.

          (c)

All of the Corporation&#146;s permissions and licences to use the industrial or
intellectual property of other Persons are disclosed in Schedule 5.2(15) to the
Disclosure Letter. The Corporation has not permitted or licensed any Person to
use any of the Intellectual Property except as disclosed in Schedule 5.2(15) to
the Disclosure Letter. Each licence referred to in Schedule 5.2(15) to the
Disclosure Letter is in full force and effect and neither the Corporation nor,
to the best knowledge of the Corporation, the licensor is in default of its
obligations thereunder.

          (d)

No Person has challenged the validity of any registrations for the Intellectual
Property or the Corporation’s rights to any of the Intellectual Property.

          (e)

Neither the use of the Intellectual Property nor the conduct of the Business has
infringed or currently infringes upon the industrial or intellectual property
rights of any other Person.

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- 24 -

  (16)

Licences and Permits - Schedule 5.2(16) to the Disclosure Letter lists all the
Licences and Permits and identifies the ones that by their terms are not
transferable. The Corporation holds the Licences and Permits free and clear of
any and all Liens. All the Licences and Permits are in full force and effect,
the Corporation is not in violation of any term or provision or requirement of
any such Licences and Permits, and no Person has threatened to revoke, amend or
impose any condition in respect of, or commenced proceedings to revoke, amend or
impose conditions in respect of, any Licence or Permit.

          (17)

Employment Contracts - Schedule 5.2(17) to the Disclosure Letter lists all the
Employees as of the date of this Agreement and the age, position, status, length
of service, compensation and benefits of each of them, respectively. Except as
set out in Schedule 5.2(17) to the Disclosure Letter, the Corporation is not a
party to or bound by any contracts or requirements of Applicable Law in respect
of any Employee or former employee, including:

          (a)

any contracts for the employment or statutorily required re-employment of any
Employee; or

          (b)

any bonus, deferred compensation, profit sharing, pension, retirement,
hospitalization insurance or other plans or arrangements providing employee
benefits, except for the plans providing employee benefits described in Schedule
5.2(19) to the Disclosure Letter.

          (18)

Collective Agreements - The Corporation is not a party to nor does it have any
obligation pursuant to, any oral or written agreement, collective bargaining or
otherwise, with any party regarding the rates of pay or working conditions of
any of their employees, nor are they obligated under any agreement to recognize
or bargain with any labour organization or union on behalf of such employees.

          (19)

Employee Plans -

          (a)

Schedule 5.2(19) to the Disclosure Letter lists all of the agreements, programs
or plans which are presently in effect or which have previously been in effect
and which currently cover employees of the Corporation employed in connection
with the Business including, without limitation, incentive, bonus, vacation,
severance programs, benefit, health, welfare, supplemental unemployment benefit,
pension, profit sharing, deferred compensation, stock compensation, stock
purchase, retirement, hospitalization insurance, medical, dental, legal,
disability and similar plans or arrangements or practices (the “Employee
Plans”).

          (b)

All of the Employee Plans are and have been established, registered, qualified,
invested and administered in all respects in accordance with all laws,
regulations, orders or other legislative, administrative or judicial
promulgations applicable to the Employee Plans (“Applicable Employee

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- 25 -

Benefit Laws”). No fact or circumstance exists that could adversely affect the
tax-exempt status of an Employee Plan.

  (c)

All obligations regarding the Employee Plans have been satisfied, to the best
knowledge of the Corporation there are no outstanding defaults or violations by
any party to any Employee Plan and no Taxes, penalties or fees are owing or
exigible under any of the Employee Plans.

        (d)

The Corporation may unilaterally amend, modify, vary, revoke or terminate, in
whole or in part, each Employee Plan and take contribution holidays under or
withdraw surplus from each Employee Plan, subject only to approvals required by
Applicable Employee Benefit Laws.

        (e)

The Corporation has not received any notice of any Employee Plan, or any related
trust or other funding medium thereunder, being subject to any pending
investigation, examination or other proceeding, action or claim initiated by any
governmental agency or instrumentality, or by any other party (other than
routine claims for benefits), and there exists no state of facts which after
notice or lapse of time or both could reasonably be expected to give rise to any
such investigation, examination or other proceeding, action or claim or to
affect the registration of any Employee Plan required to be registered.

        (f)

All contributions or premiums required to be made by the Corporation under the
terms of each Employee Plan or by Applicable Employee Benefit Laws have been
made in a timely fashion in accordance with Applicable Employee Benefit Laws and
the terms of the Employee Plans, and the Corporation does not have, and as of
the Closing Time will not have, any liability (other than liabilities accruing
after the Closing Time) with respect to any of the Employee Plans. Contributions
or premiums will have been paid by the Corporation on an accrual basis for the
period up to the Closing Time even though not otherwise required to be made
until a later date.

        (g)

No amendments have been made to any Employee Plan and no improvements to any
Employee Plan have been promised and no amendments or improvements to an
Employee Plan will have been made or promised by the Corporation before the
Closing Time.

        (h)

There have been no improper withdrawals, applications or transfers of assets
from any Employee Plan or the trusts or other funding media relating thereto,
and neither the Corporation nor any of its agents has been in breach of any
fiduciary obligation with respect to the administration of the Employee Plans or
the trusts or other funding media relating thereto.

        (i)

Subject to approvals under Applicable Employee Benefit Laws, the Corporation may
amend, revise or merge any Employee Plan or the assets

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- 26 -

transferred from any Employee Plan with any other arrangement, plan or fund.

  (j)

The Corporation has furnished to the Buyer or the Parent true, correct and
complete copies of all the Employee Plans as amended as of the date hereof
together with all related documentation including funding agreements, actuarial
reports, funding and financial information returns and statements, all
professional opinions (whether or not internally prepared) with respect to each
Employee Plan, all material internal memoranda concerning the Employee Plans,
copies of material correspondence with all regulatory authorities with respect
to each Employee Plan and plan summaries, booklets and personnel manuals. No
material changes have occurred to the Employee Plans or are expected to occur
which would affect the actuarial reports or financial statements required to be
provided to the Buyer pursuant to this Section 5.2(19).

        (k)

Each Employee Plan is fully funded or fully insured on both an ongoing and
solvency basis pursuant to the actuarial assumptions and methodology set out in
Schedule 5.2(19) to the Disclosure Letter.

        (l)

None of the Employee Plans enjoys any special tax status under Applicable
Employee Benefit Laws, nor have any advance tax rulings been sought or received
in respect of the Employee Plans.

        (m)

All employee data necessary to administer each Employee Plan has been provided
by the Corporation to the Buyer or the Parent and is true and correct.

        (n)

No insurance policy or any other contract or agreement affecting any Employee
Plan requires or permits a retroactive increase in premiums or payments due
thereunder. To the best knowledge of the Corporation the level of insurance
reserves under each insured Employee Plan is reasonable and sufficient to
provide for all incurred but unreported claims.

        (o)

Except as disclosed in Schedule 5.2(19) to the Disclosure Letter, none of the
Employee Plans provides benefits to retired employees or to the beneficiaries or
dependants of retired employees.

        (p)

The Corporation has not paid any bonus, fee, distribution, remuneration or other
compensation to any Person (other than salaries, wages or bonuses paid or
payable to Employees in the ordinary course of business in accordance with
current compensation levels and practices as set out in Schedules 5.2(17) and
5.2(19)).

  (20)

Tax Filings - The Corporation has prepared and filed on time with all
appropriate governmental bodies all tax returns, declarations, remittances,
information returns, reports and other documents of every nature required to be
filed by or on

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- 27 -

behalf of the Corporation in respect of any Taxes or in respect of any other
provision in any domestic or foreign federal, provincial, municipal, state,
territorial or other taxing statute for all fiscal periods ending prior to the
date hereof and will continue to do so in respect of any fiscal period ending on
or before the Closing Date. All such returns, declarations, remittances,
information returns, reports and other documents are correct and complete in all
material respects, and no material fact has been omitted therefrom. No extension
of time in which to file any such returns, declarations, remittances,
information returns, reports or other documents is in effect. All Taxes shown on
all such returns, or on any assessments or reassessments in respect of any such
returns have been paid in full.

  (21)

Taxes Paid - The Corporation has paid in full all Taxes required to be paid on
or prior to the date hereof and has made adequate provision in the Financial
Statements, or will make adequate provision in the Financial Statements, as
applicable, in accordance with GAAP for the payment of all Taxes in respect of
all fiscal periods ending on or before the Closing Date.

        (22)

Reassessments of Taxes - There are no reassessments of the Corporation’s Taxes
that have been issued and are outstanding and there are no outstanding issues
that have been raised and communicated to the Corporation by any governmental
body for any taxation year in respect of which a Tax return of the Corporation
has been audited. No governmental body has challenged, disputed or questioned
the Corporation in respect of Taxes or of any returns, filings or other reports
filed under any statute providing for Taxes. The Corporation is not negotiating
any draft assessment or reassessment with any governmental body. There are no
contingent liabilities for Taxes or any grounds for an assessment or
reassessment of the Corporation, including, without limitation, unreported
benefits conferred on any shareholder of the Corporation, aggressive treatment
of income, expenses, credits or other claims for deduction under any return or
notice other than as disclosed in the Financial Statements, or as will be
disclosed in the Financial Statements, as the case may be. Neither the
Corporation nor any of the Sellers has received any indication from any
governmental body that an assessment or reassessment of the Corporation is
proposed in respect of any Taxes, regardless of its merits. The Corporation has
not executed or filed with any governmental body any agreement or waiver
extending the period for assessment, reassessment or collection of any Taxes.

        (23)

Withholdings and Remittances - The Corporation has withheld from each payment
made to any of its present or former employees, officers and directors, and to
all persons who are non-residents of Canada for the purposes of the Income Tax
Act (Canada) all amounts required by law to be withheld, and furthermore, has
remitted such withheld amounts within the prescribed periods to the appropriate
governmental body. The Corporation has remitted all Canada Pension Plan
contributions, provincial pension plan contributions, employment insurance
premiums, employer health taxes and other Taxes payable by it in respect of its
employees and has remitted such amounts to the proper governmental body

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- 28 -

within the time required under the applicable legislation. The Corporation has
charged, collected and remitted on a timely basis all Taxes as required under
applicable legislation on any sale, supply or delivery whatsoever, made by the
Corporation.

  (24)

Depreciable Property - At the Closing Date, for purposes of the Income Tax Act
(Canada), the Corporation will own depreciable property of the prescribed
classes and having undepreciated capital costs as set out in Schedule 5.2(24) to
the Disclosure Letter.

          (25)

Capital Gains - The Corporation will not at any time be deemed to have a capital
gain pursuant to subsection 80.03(2) of the Income Tax Act (Canada) as a result
of any transaction or event taking place in any taxation year ending on or
before the Closing Date.

          (26)

Absence of Certain Changes or Events - Since the date to which the Financial
Statements are made up, the Corporation has not:

          (a)

suffered any Material Adverse Change;

          (b)

amended its articles;

          (c)

declared or made any payment of any dividend or other distribution in respect of
its shares and has not redeemed, purchased or otherwise acquired any shares;

          (d)

issued or sold any shares or other securities or issued, sold or granted any
option, warranty or right to purchase any shares or other securities;

          (e)

disposed of any of the assets or real property reflected on the balance sheet
forming part of the Financial Statements, except sales of assets or real
property in the normal course of business;

          (f)

changed any accounting or costing systems or methods in any material respect;

          (g)

suffered any extraordinary loss or cancelled or waived any debt, claim or other
right;

          (h)

incurred or assumed any liabilities, obligations or indebtedness (whether
accrued, absolute, contingent or otherwise), except unsecured current
liabilities, obligations and indebtedness incurred in the normal course of
business;

          (i)

made or granted any bonus, increased the compensation paid (other than for
normal merit and cost of living increases) or made loans or advances to any
Director, Officer or Employee, other than as set forth in Schedule 5.2(17) to
the Disclosure Letter;

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- 29 -

  (j)

mortgaged, pledged, granted a security interest in or otherwise encumbered any
of its assets, except in the normal course of business and in amounts which,
individually and in the aggregate are not material to the financial condition of
the Corporation or operation of the Business;

        (k)

entered into any Material Contract or any other transaction that was not in the
normal course of business; or

        (l)

terminated, cancelled or modified in any material respect or received notice or
a request for termination, cancellation or modification in any material respect
of any Material Contract.

  (27)

Brokerage Fees - The Corporation has not entered into any agreement which would
entitle any Person to any valid claim against any of the Corporation, the Buyer
or the Parent for a broker’s commission, finder’s fee or any like payment in
respect of the purchase and sale of the Shares or any other matters contemplated
by this Agreement.

        (28)

Subsidiaries - The Corporation has no subsidiaries and has a 6% minority
interest in Peripheron Technologies, Ltd.

        (29)

Data Protection - The Corporation has complied in all material respects with
applicable data protection and privacy Laws governing the collection, use and
disclosure of personal information in all applicable jurisdictions, including
but not limited to the Personal Information Protection and Electronic Documents
Act (Canada), as amended from time to time, and any comparable provincial law.

        (30)

Product Warranty - Each product manufactured, sold, leased or delivered by the
Corporation or service provided by the Corporation has been in conformity with
all applicable contractual commitments and all express and implied warranties,
and the Corporation has no Liabilities (and the Corporation and the Sellers have
no knowledge of a basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand against it giving
rise to any Liabilities for replacement or repair thereof or other damages in
connection therewith, except for product warranty claims for which product
manufacturers are responsible. No product manufactured, sold, leased or
delivered by the Corporation is subject to any guaranty, warranty or other
indemnity beyond the applicable standard terms and conditions of sale or lease

        (31)

Product Liability - There are no existing or threatened, claims against the
Corporation arising out of any injury to individuals or property as a result of
the ownership, possession or use of any product manufactured, sold, leased or
delivered by the Corporation which could result in Liabilities to the
Corporation and the Corporation and the Sellers have no knowledge of a
reasonable basis for any such claim.

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- 30 -

  (32)

Inventory - The inventory of the Corporation consists of manufactured and
purchased parts, goods in process and finished goods, all of which is
merchantable and fit for the purpose for which it was procured or manufactured,
and adequate and full accruals have been made in the Financial Statements for
slow moving (except for parts and components on hand for servicing products
already sole), obsolete, damaged or defective inventory.

        (33)

Leases -

  (a)

The Corporation is not a party to or bound by or subject to nor has the
Corporation agreed or become bound to enter into any real or personal property
lease or other right of occupancy relating to real property, whether as lessor
or lessee, except for the Leases set forth and described in Schedule 5.2(33) to
the Disclosure Letter.

        (b)

Each of the Leases is valid and subsisting and in good standing, there is no
default thereunder and the Corporation is entitled to all rights and benefits
thereunder. Neither the Corporation or any other party thereto is in breach of
any of the provisions of any Lease and (subject to obtaining any consents,
approvals, permits and acknowledgements required thereunder to the change in
control of the Corporation herein contemplated) the completion of the
transactions herein contemplated will not afford any of the parties to any Lease
or any other Person (other than the Corporation) the right to terminate any
Lease nor will the completion of the transactions herein contemplated result in
any additional or more onerous obligation on the Corporation under any Lease.

  (34)

Real Property &#150; Schedule 5.2(34) to the Disclosure Letter contains accurate
descriptions of all real property in respect of which the Corporation holds an
interest, whether freehold, lease hold or otherwise.

        (35)

Full Disclosure - None of the foregoing representations and warranties and no
document furnished by or on behalf of the Corporation or the Sellers to the
Buyer or the Parent in connection with the negotiation of the transactions
contemplated by this Agreement contain any untrue statement of a material fact
or omit to state any material fact necessary to make any such statement or
representation not misleading to a prospective buyer of the Shares seeking full
information as to the Corporation and its properties, businesses and affairs.
Except for those matters disclosed in this Agreement, there are no facts not
disclosed in this Agreement which, if learned by the Buyer or the Parent, might
reasonably be expected to materially diminish the Buyer’s or the Parent’s
evaluation of the value of the Shares or which, if learned by the Buyer or the
Parent, might reasonably be expected to deter the Buyer or the Parent from
completing the transactions contemplated by this Agreement on the terms of this
Agreement.

5.3                    Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Sellers as follows as of the date hereof and as
of the Closing Time:

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- 31 -

  (1)

Incorporation and Power - The Buyer is a corporation duly incorporated under the
laws of the jurisdiction of its incorporation and is duly organized, validly
subsisting and in good standing under such laws.

        (2)

Due Authorization - The Buyer has all necessary corporate power, authority and
capacity to enter into this Agreement and all other agreements and instruments
to be executed by it as contemplated by this Agreement and to carry out its
obligations under this Agreement and such other agreements and instruments.

       

The execution and delivery of this Agreement and such other agreements and
instruments and the completion of the transactions contemplated by this
Agreement and such other agreements and instruments have been duly authorized by
all necessary corporate action on the part of the Buyer.

        (3)

Enforceability of Obligations - This Agreement constitutes a valid and binding
obligation of the Buyer enforceable against the Buyer in accordance with its
terms subject, however, to limitations on enforcement imposed by bankruptcy,
insolvency, reorganization or other laws affecting creditors’ rights generally
and to the extent that equitable remedies such as specific performance and
injunctions are only available in the discretion of the court from which they
are sought.

        (4)

Absence of Conflicting Agreements - The execution, delivery and performance of
this Agreement by the Buyer and the completion (with any required Buyer Consents
and Approvals) of the transactions contemplated by this Agreement do not and
will not result in or constitute a default, breach or violation or an event
that, with notice or lapse of time or both, would be a default, breach or
violation of any of the terms, conditions or provisions of any agreement to
which the Buyer is bound or the constating documents of the Buyer.

        (5)

Litigation - To the best of the Buyer’s knowledge there is no action, suit,
proceeding, claim, application, complaint or investigation in any court or
before any arbitrator or before or by any regulatory body or governmental or
non- governmental body pending or threatened by or against the Buyer for the
purpose of enjoining, preventing or restraining the completion of the
transactions contemplated by this Agreement, or which in the result, could
adversely affect the right of the Buyer to acquire or retain the Purchase
Shares.

        (6)

No Broker Fees - The Buyer has not incurred any Liabilities or obligations to
pay any fees or commissions to any broker, finder, or agent with respect to this
Agreement for which the Sellers could become liable or obligated.

        (7)

Acquisition of Purchase Shares - The Buyer is not acquiring the Purchase Shares
with a view toward resale or with the current intention of making a public
distribution of the same.

        (8)

Debentures - Upon issuance thereof to the Sellers in accordance with Section
2.2(3) the Debentures will be duly and validly created, authorized and issued in
compliance with all applicable legal requirements.

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- 32 -

5.4                    Representations and Warranties of the Parent. The Parent
represents and warrants to the Sellers as follows as of the date hereof and as
of the Closing Time:

  (1)

Incorporation and Power - The Parent is a corporation duly incorporated under
the laws of the jurisdiction of its incorporation and is duly organized, validly
subsisting and in good standing under such laws.

        (2)

Due Authorization - The Parent has all necessary corporate power, authority and
capacity to enter into this Agreement and all other agreements and instruments
to be executed by it as contemplated by this Agreement and to carry out its
obligations under this Agreement and such other agreements and instruments. The
execution and delivery of this Agreement and such other agreements and
instruments and the completion of the transactions contemplated by this
Agreement and such other agreements and instruments have been duly authorized by
all necessary corporate action on the part of the Parent.

        (3)

Enforceability of Obligations - This Agreement constitutes a valid and binding
obligation of the Parent enforceable against the Parent in accordance with its
terms subject, however, to limitations on enforcement imposed by bankruptcy,
insolvency, reorganization or other laws affecting creditors’ rights generally
and to the extent that equitable remedies such as specific performance and
injunctions are only available in the discretion of the court from which they
are sought.

        (4)

Absence of Conflicting Agreements - The execution, delivery and performance of
this Agreement by the Parent and the completion (with any required Parent
Consents and Approvals) of the transactions contemplated by this Agreement do
not and will not result in or constitute a default, breach or violation or an
event that, with notice or lapse of time or both, would be a default, breach or
violation of any of the terms, conditions or provisions of any agreement to
which the Parent is bound or the constating documents of the Parent.

        (5)

Litigation - To the best of the Parent’s knowledge there is no action, suit,
proceeding, claim, application, complaint or investigation in any court or
before any arbitrator or before or by any regulatory body or governmental or
non- governmental body pending or, to the best of the Parent’s knowledge,
threatened by or against the Parent for the purpose of enjoining, preventing or
restraining the completion of the transactions contemplated by this Agreement,
or which in the result, could adversely affect the right of the Parent to issue
the Share Consideration or the Conversion Shares.

        (6)

No Broker Fees - The Buyer has not incurred any Liabilities or obligations to
pay any fees or commissions to any broker, finder, or agent with respect to this
Agreement for which the Sellers could become liable or obligated.

        (7)

Share Consideration - The Share Consideration will be duly and validly created,
authorized, allotted and issued in compliance with all applicable legal

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- 33 -

requirements and will be duly and validly authorized, allotted and issued as
fully-paid and non-assessable Common shares in the capital of the Parent.

5.5                    Survival of Representations and Warranties.

  (1)

The representations and warranties of the Sellers contained in Section 5.1 and
of the Management Sellers and the Corporation contained in Sections 5.2(1),
5.2(2) and 5.2(3) shall survive the Closing, and notwithstanding the Closing and
any inspection or inquiries made by or on behalf of the Buyer and the Parent,
shall continue in full force and effect for the benefit of the Buyer and the
Parent.

        (2)

The representations and warranties of the Management Sellers and the Corporation
contained in Sections 5.2(20), 5.2(21), 5.2(22), 5.2(23), 5.2(24) and 5.2(25)
shall survive the Closing, and notwithstanding the Closing and any inspection or
inquiries made by or on behalf of the Buyer and the Parent, shall continue in
full force and effect for the benefit of the Buyer and the Parent.

        (3)

The representations and warranties of the Management Sellers and the Corporation
contained in Sections 5.2(4) through 5.2(19) and 5.2(26) through 5.2(34) or any
other agreement, certificate or instrument delivered pursuant to this Agreement
shall survive the Closing for a period of two years from the Closing Date, and
notwithstanding the Closing and any inspection or inquiries made by or on behalf
of the Buyer and the Parent, shall continue in full force and effect for the
benefit of the Buyer and the Parent, after which time the Sellers shall be
released from all obligations in respect of such representations and warranties
except with respect to any Claims asserted by the Buyer and the Parent in
writing (setting out in reasonable detail the nature of the Claim and the
approximate amount of such Claim) before the expiration of such period.

        (4)

The representations and warranties of the Buyer contained in Section 5.3 or any
other agreement, certificate or instrument delivered pursuant to this Agreement
shall survive the Closing for a period of two years from the Closing Date, and
notwithstanding the Closing, shall continue in full force and effect for the
benefit of the Sellers, after which time the Buyer shall be released from all
obligations in respect of such representations and warranties except with
respect to any claims asserted by the Sellers in writing (setting out in
reasonable detail the nature of the claim and the approximate amount thereof)
before the expiration of such period.

        (5)

The representations and warranties of the Parent contained in Section 5.4 or any
other agreement, certificate or instrument delivered pursuant to this Agreement
shall survive the Closing for a period of two years from the Closing Date, and
notwithstanding the Closing, shall continue in full force and effect for the
benefit of the Sellers, after which time the Parent shall be released from all
obligations in respect of such representations and warranties except with
respect to any claims asserted by the Sellers in writing (setting out in
reasonable detail the nature of the claim and the approximate amount thereof)
before the expiration of such period.

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- 34 -

5.6                    Definition of Knowledge. The words “to the knowledge of”
mean, when modifying a representation, warranty or other statement of any
Person, that the fact or situation described therein is or was known by the
Person (or, in the case or a Person other than a natural Person, known by any
current or former director or officer of that Person) making the representation,
warranty or other statement, or with the exercise of reasonably comprehensive
due diligence under the circumstances (in accordance with the standard of what a
reasonable and prudent Person in similar circumstances would have done),
including without limitation after having made reasonably comprehensive
inquiries to and investigations of the Corporation and its Directors and
Officers, would have been known by the Person (or, in the case of a Person other
than a natural Person, would have been known by such Director or Officer of that
Person).

ARTICLE 6
INDEMNIFICATION AND LIMITATION OF LIABILITY

6.1                    Indemnity by Individual Seller. Each Seller shall
severally, but not jointly, indemnify and hold each of the Buyer, the Parent and
the Corporation and their respective directors, officers, employees, agents,
representatives and the Buyer’s and the Parent’s Affiliates (each an
“Indemnified Party”) harmless in respect of any claim, demand, action, cause of
action, damage, loss, cost, liability or expense (including without limitation
reasonable attorneys’ fees on a solicitor and own client basis) (hereinafter
referred to as a “Claim”) which may be made or brought against an Indemnified
Party or which it may suffer or incur directly or indirectly as a result of, in
respect of or arising out of:

  (1)

any incorrectness in or breach of any representation or warranty of the Seller
contained in Section 5.1 of this Agreement or under any other agreement,
certificate or instrument executed and delivered by the Seller pursuant to this
Agreement; or

        (2)

any breach of or any non-fulfilment of any covenant or agreement on the part of
the Seller under this Agreement or under any other agreement, certificate or
instrument executed and delivered by the Seller pursuant to this Agreement.

6.2                    Indemnity by Sellers Collectively. The Sellers shall
jointly and severally indemnify and hold each of the Indemnified Parties
harmless in respect of any Claim which may be made or brought against an
Indemnified Party or which it may suffer or incur directly or indirectly as a
result of, in respect of or arising out of:

  (1)

any incorrectness in or breach of any representation or warranty of the
Corporation, or the Sellers contained in Section 5.2 of this Agreement or under
any other agreement, certificate or instrument executed and delivered by the
Corporation, or by Sellers in their capacities as officers of the Corporation
and not in their personal capacities, pursuant to this Agreement; or

        (2)

any breach or non-fulfillment of any covenant or agreement on the part of the
Corporation under this Agreement or under any other agreement, certificate or
instrument executed and delivered by the Corporation pursuant to this Agreement.

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6.3                    Notice of Claim. If an Indemnified Party becomes aware of
a Claim in respect of which indemnification is provided for pursuant to either
of Sections 6.1 or 6.2, as the case may be, the Indemnified Party shall promptly
give written notice of the Claim to the Indemnifying Party. Such notice shall
specify whether the Claim arises as a result of a claim by a Person against the
Indemnified Party (a “Third Party Claim”) or whether the Claim does not so arise
(a “Direct Claim”), and shall also specify with reasonable particularity (to the
extent that the information is available):

  (1)

the factual basis for the Claim; and

        (2)

the amount of the Claim, if known.

6.4                    Direct Claims. In the case of a Direct Claim, the
Indemnifying Party shall have 60 days from receipt of notice of the Claim within
which to make such investigation of the Claim as the Indemnifying Party
considers necessary or desirable. For the purpose of such investigation, the
Indemnified Party shall make available to the Indemnifying Party the information
relied upon by the Indemnified Party to substantiate the Claim, together with
all such other information as the Indemnifying Party may reasonably request. If
both parties agree at or before the expiration of such 60 day period (or any
mutually agreed upon extension thereof) to the validity and amount of such
Claim, the Indemnifying Party shall immediately pay to the Indemnified Party the
full agreed upon amount of the Claim, failing which the matter shall be referred
to binding arbitration in such manner as the parties may agree or shall be
determined by a court of competent jurisdiction.

6.5                    Third Party Claims. In the case of a Third Party Claim,
the Indemnifying Party shall have the right, at its expense, to participate in
or assume control of the negotiation, settlement or defence of the Claim. If the
Indemnifying Party elects to assume such control, the Indemnifying Party shall
reimburse the Indemnified Party for all of the Indemnified Party’s out-of-pocket
expenses incurred as a result of such participation or assumption. The
Indemnified Party shall have the right to participate in the negotiation,
settlement or defence of such Third Party Claim and to retain counsel to act on
its behalf, provided that the fees and disbursements of such counsel shall be
paid by the Indemnified Party unless the Indemnifying Party consents to the
retention of such counsel at its expense or unless the named parties to any
action or proceeding include both the Indemnifying Party and the Indemnified
Party and a representation of both the Indemnifying Party and the Indemnified
Party by the same counsel would be inappropriate due to the actual or potential
differing interests between them (such as the availability of different
defences). The Indemnified Party shall cooperate with the Indemnifying Party so
as to permit the Indemnifying Party to conduct such negotiation, settlement and
defence and for this purpose shall preserve all relevant documents in relation
to the Third Party Claim, allow the Indemnifying Party access on reasonable
notice to inspect and take copies of all such documents and require its
personnel to provide such statements as the Indemnifying Party may reasonably
require and to attend and give evidence at any trial or hearing in respect of
the Third Party Claim. If, having elected to assume control of the negotiation,
settlement or defence of the Third Party Claim, the Indemnifying Party
thereafter fails to conduct such negotiation, settlement or defence with
reasonable diligence, then the Indemnified Party shall be entitled to assume
such control and the Indemnifying Party shall be bound by the results obtained
by the Indemnified Party with respect to such Third Party Claim. If any Third
Party Claim is of a nature such that (i)

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the Indemnified Party is required by Applicable Law or the order of any court,
tribunal or regulatory body having jurisdiction, or (ii) it is necessary in the
reasonable view of the Indemnified Party acting in good faith and in a manner
consistent with reasonable commercial practices, in respect of (A) a Third Party
Claim by a customer relating to products or services supplied by the Business or
(B) a Third Party Claim relating to any Contract which is necessary to the
ongoing operations of the Business or any material part thereof in order to
avoid material damage to the relationship between the Indemnified Party and any
of its major customers or to preserve the rights of the Indemnified Party under
such an essential Contract, to make a payment to any person (a “Third Party”)
with respect to the Third Party Claim before the completion of settlement
negotiations or related legal proceedings, as the case may be, then the
Indemnified Party may make such payment and the Indemnifying Party shall,
promptly after demand by the Indemnified Party, reimburse the Indemnified Party
for such payment.

6.6                    Settlement of Third Party Claims. If the Indemnifying
Party fails to assume control of the defence of any Third Party Claim, the
Indemnified Party shall have the exclusive right to contest, settle or pay the
amount claimed. Whether or not the Indemnifying Party assumes control of the
negotiation, settlement or defence of any Third Party Claim, the Indemnifying
Party shall not settle any Third Party Claim without the written consent of the
Indemnified Party, which consent shall not be unreasonably withheld or delayed;
provided, however, that the Liability of the Indemnifying Party shall be limited
to the proposed settlement amount if any such consent is not obtained for any
reason within a reasonable time after the request therefor.

6.7                    Interest on Claims. The amount of any Claim submitted
under Section 6.1 or Section 6.2 as damages or by way of indemnification shall
bear interest from and including the date any Indemnified Party is required to
make payment in respect thereof at the Prime Rate calculated from and including
such date to but excluding the date reimbursement of such Claim by the
Indemnifying Party is made, and the amount of such interest shall be deemed to
be part of such Claim.

6.8                    Tax Adjustments.

  (1)

The amount of any Claim submitted under Sections 6.1 and 6.2 as damages or by
way of indemnification shall be determined on an after-Tax basis, and without
limiting the generality of the foregoing shall:

          (a)

be net of the present value of any Tax benefits to the Indemnified Party
resulting from the claim for indemnity and indemnification; and

          (b)

include the amount necessary to hold the Indemnified Party harmless after Tax;

and the present value of any Tax benefits shall be the amount, calculated on the
date that is the Business Day immediately preceding the date of payment of the
Claim, that is required to provide a yield from such date to the last day of the
latest taxation year of the Indemnified Party to which the Tax benefits relate
that is equal to the sum of the yield to maturity on such date, assuming
semi-annual

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compounding, that a non-callable Government of Canada bond would carry if issued
in Canadian dollars in Canada at 100% of its principal amount on such date and
maturing approximately on the last day of the latest taxation year of the
Indemnified Party to which the Tax benefits relate, plus five percent.

  (2)

The amount of any Claim submitted under Sections 6.1 and 6.2 as damages or by
way of indemnification as determined without regard to this Section 6.8 shall be
increased, if said amount is taxable according to applicable legislation, by an
amount equal to the rate of Goods and Services Tax applied to such amount.

6.9                    Set-off. Subject to the provisions of Section 6.10, the
Buyer and the Parent shall be entitled to set-off the amount of any Claim
submitted under Sections 6.1 and 6.2 as damages or by way of indemnification
against any other amounts payable by the Buyer or the Parent to the Sellers
whether under this Agreement, the Debentures, or otherwise.

6.10                   Limitations on Liability.

  (1)

No Indemnified Party shall deliver a first notice under Section 6.3 of a Claim
for indemnification pursuant to Sections 6.1 and 6.2, in connection with a
breach of a representation or warranty after the expiry date of the applicable
representation or warranty as set forth in Section 5.5. This Section 6.10(1)
shall not prevent the Indemnified Party from being indemnified in full for all
Claims in respect of a breach of a representation or warrant if the general
subject matter of the Claim was set out in a notice delivered prior to the
expiry date of the applicable representation or warranty.

        (2)

The liability of each Seller to the Indemnified Parties pursuant to Section 6.2,
(other than in connection with a breach of a representation or warranty in
Section 5.2(1), 5.2(2) or 5.2(3) of this Agreement) shall be limited to that
Seller’s proportionate share of amount of the Claim. The proportionate share of
liability of each Seller shall be determined by the fraction of which the
numerator is the aggregate consideration received by that Seller for that
Seller’s Shares and before deducting any Expenses and the denominator is the
total Purchase Price.

        (3)

(3) Notwithstanding sections 6.10(1) and 6.10(2), no Indemnified Party shall
make a Claim against the Sellers in respect of the breach of any warranty,
representation, covenant or obligation of the Sellers in or under this Agreement
or in or under any document, instrument or agreement delivered pursuant to this
Agreement unless and until the aggregate amount of all Claims exceeds C$20,000,
and the Sellers shall have liability only to the extent that the aggregate
amount of the Claims exceedsC$20,000.

ARTICLE 7
INTERIM PERIOD

7.1                    Investigation. Until the Closing, the Buyer, the Parent
and their representatives and advisers shall be permitted to make such
investigations, inspections, surveys or tests of the

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properties and assets of the Corporation and its Affiliates and of their
respective financial and legal condition as the Buyer or the Parent deems
necessary or desirable to familiarize itself with such properties, assets and
other matters. Without limiting the generality of the foregoing, the Buyer and
the Parent shall, during normal business hours, be permitted complete access to
all documents relating to information scheduled or required to be disclosed
under this Agreement, to the Books and Records, the Material Contracts, the Real
Property, the Leased Premises, the Employees, records regarding suppliers,
customers and regulators and environmental reports, surveys, inspection reports
and all other reports prepared by advisers of the Corporation, its predecessor
companies and its Affiliates (and the Corporation and the Sellers shall provide
photocopies to the Buyer of all such written information and documents as may be
reasonably requested by the Buyer or the Parent). The Buyer or the Parent shall
not access any Employees without first notifying the Corporation of the
intention to do so, and then only under the supervision of the Corporation; the
Buyer or the Parent shall not interfere with the Employee’s performance of his
or her duties.

7.2                    Authorizations. The Sellers shall cause the Corporation
to execute and deliver any authorizations required to permit the investigations,
inspections, surveys or tests described in Section 7.1.

7.3                    Confidentiality. Each Party shall keep this Agreement and
its terms confidential, and shall make no press release or public disclosure,
either written or oral, regarding the transactions contemplated by this
Agreement without the prior knowledge and consent of the other parties hereto;
provided that the foregoing shall not prohibit any disclosure (i) by press
release, filing or otherwise as required by securities laws or rules of any
applicable stock exchange and (ii) to attorneys, accountants, investment bankers
or other agents of the parties assisting the parties in connection with the
transactions contemplated by this Agreement.

7.4                    Risk of Loss. Until the Closing, the Sellers shall cause
the Corporation to maintain in force all the policies of property damage
insurance under which any of the assets is insured. If before the Closing any of
the assets is lost, damaged or destroyed and the loss, damage or destruction
constitutes a Material Adverse Change, then:

  (1)

the Buyer and the Parent may terminate this Agreement in accordance with the
provisions of Article 4; or

        (2)

the Buyer and the Parent may require the Sellers to reduce the Purchase Price by
the amount of the replacement cost of the assets which were lost, damaged or
destroyed less the amount of any proceeds of insurance payable as a result of
the occurrence.

7.5                    Ordinary Course of Business. Prior to the Closing, except
with the prior written consent of the Buyer and the Parent (which may be
withheld for any reason), the Corporation agrees and the Sellers shall cause the
Corporation:

  (a)

not to make any cash withdrawals, except that the Corporation may declare a
cumulative divided of 100% of the after tax profit for each full month of the
period January 1, 2006 to Closing (collectively, the

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“Aggregate Cumulative Dividend”). Effective Closing, interest will accrue at a
rate of 5% per annum on any and all outstanding portion of the Aggregate
Cumulative Dividend. The Aggregate Cumulative Dividend shall be payable in 15
equal payments (each a “Dividend Payment”), to be paid once every month (the
“Payment Period”) commencing on the first day of the fourth calendar month
immediately following the Closing Date; provided however, that no Dividend
Payment shall be made in a particular Payment Period unless the Payment
Period-end Working Capital is at least C$1,000,000 (after deduction for all
applicable taxes owing up to March 31, 2006). In the event that in any
particular Payment Period the Payment Period-end Working Capital is less than
C$1,000,000 (after deduction for all applicable taxes owing up to March 31,
2006) any Dividend Payment that is payable in such Payment Period shall be
postponed until the next Payment Period in which the Payment Period-end Working
Capital exceeds C$1,000,000 (after deduction for all applicable taxes owing up
to March 31, 2006);

Initials            

  (b)

not to make or agree to make any material change in the compensation of any
Director, Officer or Employee and not to pay or agree to pay or set aside any
bonus, profit sharing, retirement, insurance, death, severance or fringe benefit
or other extra-ordinary or indirect compensation to, for or on behalf of any
Director, Officer or Employee other than as set out in Schedule 5.2(17) to the
Disclosure Letter;

        (c)

not to sell, pledge, allot, reserve, set aside or issue, purchase or redeem any
shares in its capital stock or of any subsidiary or any class of securities
convertible or exchangeable into, or rights, warrants or options to acquire, any
such shares or other convertible or exchangeable securities, except for the
issuance of Shares upon the exercise or conversion in accordance with their
terms of convertible securities outstanding prior to the date hereof;

        (d)

not to guarantee the payment of material indebtedness or incur material
indebtedness for money borrowed or issue or sell any debt securities;

        (e)

not to sell, assign, transfer, mortgage, pledge or otherwise encumber any of the
assets, except for sales of Inventories or purchase money security interests
made or granted, as the case may be, in the normal course of business;

        (f)

not to enter into any contract, agreement, commitment or transaction outside the
normal course of business;

        (g)

not to declare or cause to be paid any dividend or make any other form of
distribution or payment on the Shares or any other securities of the
Corporation;

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  (h)

not to cancel or amend any policy of insurance which relates to the Corporation
or any of the assets, except with the prior written consent of the Buyer and the
Parent;

          (i)

not to enter into any Material Contracts, except in the normal course of
business;

          (j)

not to deviate materially from any of its sales, expenditures or overhead
forecasts;

          (k)

to pay before delinquency all Taxes and other obligations which become due and
payable by the Corporation;

          (l)

generally, to carry on the Business in the normal course and substantially in
the manner in which such Business has been operated to date and use all
reasonable efforts to preserve intact its present business organization and
assets, keep available the services of its present officers and employees and
others having business dealings with it to the end that its goodwill, business
and assets shall be maintained, perform all of its obligations under all
agreements to which it is a party or by which it is bound, maintain its books
and records and accounts in the ordinary and regular course and record all
transactions on a basis consistent with past practice; and

          (m)

promptly advise the Buyer and the Parent orally and, if then requested, in
writing:

          (i)

of any event occurring subsequent to the date of this Agreement that would
render any representation or warranty of the Corporation contained in this
Agreement (except any such representation or warranty which speaks as of a date
prior to the occurrence of such event), if made on or as of the date of such
event or the Closing Date, untrue or inaccurate in any material respect;

          (ii)

of any Material Adverse Change in respect of the Corporation; and

          (iii)

of any material breach by the Corporation of any covenant or agreement contained
in this Agreement.

7.6                    Regulatory Approvals. The Sellers shall cooperate, and
shall cause the Corporation to cooperate, with the Buyer and the Parent and
render all necessary assistance required by the Buyer or the Parent in
connection with any application, notification or filing of the Buyer or the
Parent to or with the Bureau of Competition Policy pursuant to the Competition
Act (Canada) or the Director under the Investment Canada Act.

7.7                    Updates to Information. The Sellers shall update on or
before the Closing, by amendment or supplement, any of the informational
disclosure schedules referred to in this

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Agreement and any other disclosure in writing from the Sellers to the Buyer and
the Parent as soon as reasonably possible after new or conflicting information
comes to the attention of the Sellers. The Buyer or the Parent shall not be
obligated to accept any such amendment or supplement and receipt of any such
amendment or supplement shall not be deemed to be a waiver or release by the
Buyer or the Parent of any provision of this Agreement.

ARTICLE 8
EXCLUSIVITY, NON-SOLICITATION AND ACCESS TO INFORMATION

8.1                    Covenants Regarding Non-Solicitation. The Corporation and
each of the Sellers will, and will cause the Corporation and its management,
directors, officers, advisors and subsidiaries to, immediately cease all
existing discussions or negotiations with any Person other than the Buyer and
the Parent, and not commence or continue discussions or negotiations with any
other Person in relation to the sale of the Shares (or the sale of the
Corporation’s assets and undertaking) or (except as required by law) furnish to
any person any information with respect to the Corporation until December 31,
2006 (“Exclusivity Period”). In particular each of the Persons named above shall
not solicit, initiate or knowingly encourage any offer for all or any of the
Shares from any person (and ensure that the Corporation does not solicit,
initiate or knowingly encourage any offer for the whole or part of its assets
and undertaking, except for the sale of assets in the ordinary course of
business).

8.2                    Access to Information. The Corporation and each of
Sellers has since February 21, 2006 and will until the Closing, and has caused
since February 21, 2006 and will cause until the Closing the Corporation and its
management, directors, officers and advisors to:

  (1)

not disclose any confidential or proprietary information relating to the
Corporation (or the assets and undertaking of the Corporation) to any Person and
ensure that the Corporation does not disclose any such information, except in
the ordinary course of its business;

        (2)

promptly make available to the Buyer, the Parent and their professional advisers
all information requested as part of the Buyer’s and the Parent’s due diligence,
or in connection with the proposed acquisition; and

        (3)

use all reasonable endeavours to ensure that Closing occurs by the date
specified in Section 9.1(3)(c).

8.3                    Remedies. The Parties hereto acknowledge and agree that
an award of money damages would be inadequate for any breach of this Agreement
by any Party or its representatives and any such breach would cause the
non-breaching Party irreparable harm. Accordingly, the Parties hereto agree
that, in the event of any breach or threatened breach of this Agreement by one
of the Parties, the non-breaching Party will also be entitled, without the
requirement of posting a bond or other security, to equitable relief, including
injunctive relief and specific performance. Such remedies will not be the
exclusive remedies for any breach of this Agreement but will be in addition to
all other remedies available at law or equity to each of the Parties.

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ARTICLE 9
TERMINATION

9.1                    Termination.

  (1)

If any condition contained in Section 4.1 is not satisfied at or before December
31, 2006 to the satisfaction of the Buyer and the Parent, then the Buyer and the
Parent may by notice to the other Parties terminate this Agreement and the
obligations of the Parties hereunder, but without detracting from the rights of
the Buyer and the Parent arising from any breach by the other Parties but for
which the condition would have been satisfied.

          (2)

If any condition contained in Section 4.3 is not satisfied at or before December
31, 2006, to the satisfaction of the Sellers, then the Sellers may by notice to
the Buyer and the Parent terminate this Agreement and the obligations of the
Parties hereunder, but without detracting from the rights of the Sellers arising
from any breach by the Buyer and the Parent but for which the condition would
have been satisfied.

          (3)

This Agreement may be terminated by:

          (a)

the mutual written agreement of the Parties hereto;

          (b)

either the Buyer and the Parent or the Sellers, if there shall be passed any law
or regulation that makes consummation of the transactions contemplated by this
Agreement illegal or otherwise prohibited or if any injunction, order or decree
enjoining the Buyer, the Parent or the Sellers from consummating the
transactions contemplated by this Agreement is entered and such injunction,
order or decree shall become final and non- appealable; or

          (c)

if the Closing does not occur on or prior to December 31, 2006 then either the
Buyer, the Parent or the Sellers may by notice to the other Parties terminate
this Agreement and the obligations of the Parties hereunder; or

          (d)

if there has been a Material Adverse Change from February 21, 2006, until the
Closing, then the Buyer or the Parent may by notice to the Sellers terminate
this Agreement and the obligations of the Parties hereunder.

9.2                    No Prejudice on Termination. Any termination of this
Agreement under Section 9.1 shall be without prejudice to the rights of the
parties arising on or before termination of this Agreement under Section 7.3 and
Article 8.

9.3                    Termination Fee Payable to Parent. Notwithstanding any
other provisions hereof, if this Agreement is terminated or the transactions
contemplated hereunder are not consummated because the Buyer or the Parent has
terminated this Agreement pursuant to Section 9.1(1) hereof, the Corporation and
the Sellers shall jointly and severally pay to the Buyer, within 10 business
days of such termination, a fee equal to C&#36;150,000 as liquidated damages, in

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immediately available funds to an account designated by the Buyer, provided that
such fee shall not be payable if the Buyer or Parent shall have terminated this
Agreement pursuant to Section 9.1(1) under circumstances where the failure to
satisfy a condition in Section 4.1 was a direct result of circumstances that
were beyond the control of the Corporation and the Sellers.

ARTICLE 10
GENERAL

10.1                    Expenses. Each of the Sellers shall be responsible for
its own legal and other expenses (including any Taxes imposed on such expenses)
incurred in connection with the due diligence, negotiation, preparation,
execution, delivery and performance of this Agreement and the transactions
contemplated by this Agreement and for the payment of any broker’s commission,
finder’s fee or like payment payable by it in respect of the purchase and sale
of the Shares pursuant to this Agreement (and including without limitation any
fees or other payments to Directors, Officers and Employees in connection with
the foregoing) whether accruing before, at or after the Closing (collectively,
the “Expenses”), but excluding the costs of the annual audit of the Corporation
incurred in preparation of the Audited Financial Statements, which are
acknowledged to be a cost in the normal course of business of the Corporation.
The Sellers shall pay from the Purchase Price on a pro rata basis all Expenses
of the Corporation or its subsidiaries for which the Corporation or its
subsidiaries would otherwise be liable and such Expenses shall not be paid by
the Corporation or its subsidiaries. The Buyer and the Parent shall be
responsible for their own Expenses.

10.2                    Public Announcements. Except to the extent otherwise
required by law or with the prior consent of the other Parties, neither Party
shall make any public announcement regarding this Agreement or the transactions
contemplated by this Agreement.

10.3                    Corporation Notices.

  (1)

Any notice, certificate, consent, determination or other communication required
or permitted to be given or made under this Agreement shall be in writing and
shall be effectively given and made if (i) delivered personally, (ii) sent by
prepaid courier service or mail, or (iii) sent prepaid by fax or other similar
means of electronic communication, in each case to the applicable address set
out below:

if to any of the Sellers or the Corporation, to:

Albion Services Ltd., the Tsang Family Trust, Century I Holdings Inc., David
McAlpine, Paul Heathcote, Gundyco ITF Marilyn Lee / Anthony Lee, Marilyn Lee
and/or PTL Electronics Ltd.

  #208 – 1538 Cliveden Ave.   Delta, B.C., V3M 6J8   Phone: (604) 515-9886  
Fax: (604) 515-1484   Attention: Mr. Paul Heathcote

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  with a copy to:           Cohan, Buchan, Edwards   #208 – 4940 No. 3 Road  
Richmond, B.C., V6X 3A5   Phone: (604) 273-6411   Fax: (604) 273-4512  
Attention: Mr. Barry Grabowski         if to the Buyer or the Parent, to:      
  Moventis Capital, Inc.   Suite 304, 1959 – 152nd Street   White Rock, BC,
Canada V4A 9P3   Phone: 604-288-2430   Fax: 604-357-1266   Attention: Blake
Ponuick         with a copy to:           Fasken Martineau DuMoulin LLP   2100 –
1075 West Georgia Street   Vancouver, BC, Canada V6E 3G2   Phone: 604 631 4734  
Fax: 604 632 4734   Attention: Iain Mant

  (2)

Any such communication so given or made shall be deemed to have been given or
made and to have been received on the day of delivery if delivered, or on the
day of faxing or sending by other means of recorded electronic communication,
provided that such day in either event is a Business Day and the communication
is so delivered, faxed or sent before 4:00 p.m. (recipient location time) on
such day. Otherwise, such communication shall be deemed to have been given and
made and to have been received on the next following Business Day. Any such
communication sent by mail shall be deemed to have been given and made and to
have been received on the fifth Business Day following the mailing thereof;
provided however that no such communication shall be mailed during any actual or
apprehended disruption of postal services. Any such communication given or made
in any other manner shall be deemed to have been given or made and to have been
received only upon actual receipt.

        (3)

Any Party may from time to time change its address under this Section by notice
to the other Parties given in the manner provided by this Section.

10.4                    Time of Essence. Time shall be of the essence of this
Agreement in all respects.

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10.5                    Entire Agreement. This Agreement constitutes the entire
agreement between the Parties pertaining to the subject matter of this Agreement
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written. There are no conditions, warranties,
representations or other agreements between the Parties in connection with the
subject matter of this Agreement (whether oral or written, express or implied,
statutory or otherwise) except as specifically set out in this Agreement.

10.6                    Waiver. A waiver of any default, breach or
non-compliance under this Agreement is not effective unless in writing and
signed by the party to be bound by the waiver. No waiver shall be inferred from
or implied by any failure to act or delay in acting by a party in respect of any
default, breach or non-observance or by anything done or omitted to be done by
the other party. The waiver by a party of any default, breach or non-compliance
under this Agreement shall not operate as a waiver of that party’s rights under
this Agreement in respect of any continuing or subsequent default, breach or
non-observance (whether of the same or any other nature).

10.7                    Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such prohibition or unenforceability and shall
be severed from the balance of this Agreement, all without affecting the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

10.8                    Non-Merger. Each party hereby agrees that all provisions
of this Agreement, other than (a) the conditions in Article 4 and (b) the
representations and warranties contained in Article 5 and the related
indemnities in Sections 6.1 and 6.2 hereof (which shall be subject to the
special arrangements provided in such Articles or Sections) shall forever
survive the execution, delivery and performance of this Agreement, Closing and
the execution, delivery and performance of any and all documents delivered in
connection with this Agreement.

10.9                    Further Assurances. Each Party shall promptly do,
execute, deliver or cause to be done, executed and delivered all further acts,
documents and things in connection with this Agreement that the other Parties
may reasonably require for the purposes of giving effect to this Agreement.

10.10                    Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Province of Alberta and the laws of
Canada applicable in that Province and shall be treated, in all respects, as an
Alberta contract. Each of the Parties agrees that any action or proceeding
related to this Agreement or the transactions contemplated herein may (but need
not) be brought in any court of competent jurisdiction in the Province of
Alberta, and for that purpose hereby attorns and submits to the jurisdiction of
such Alberta court.

10.11                   Successors and Assigns. This Agreement shall enure to
the benefit of, and be binding on, the Parties and their respective successors
and permitted assigns. Neither Party may assign or transfer, whether absolutely,
by way of security or otherwise, all or any part of its respective rights or
obligations under this Agreement without the prior written consent of the other
Parties.

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10.12                    Independent Legal Advice. Each of the Sellers
acknowledges and agrees that the Seller has been given an opportunity to obtain
independent legal advice with respect to the subject matter of this Agreement
and the transactions contemplated hereby and represents and warrants to the
Buyer and to the Corporation that the Seller has sought and obtained such
independent legal advice as the Seller considers necessary or advisable in
connection herewith.

10.13                    Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which taken together shall be deemed to constitute one and the same
instrument. Counterparts may be executed either in original or faxed form and
the Parties adopt any signatures received by a receiving fax machine as original
signatures of the Parties. Any Party providing its signature in such manner
shall promptly forward to the other Parties an original of the signed copy of
this Agreement which was so faxed.

IN WITNESS WHEREOF the Parties have executed this Agreement.

 )   Witness  ) DAVID McALPINE  )      )        )   Witness  ) PAUL HEATHCOTE  )
     )        )   Witness  ) MARILYN LEE  )      )       GUNDYCO, ITF MARILYN
LEE /     ANTHONY LEE           By: ________________________________________    
Authorized Signatory                 ALBION SERVICES LTD.           By:
________________________________________     Authorized Signatory

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

- 47 -

  THE TSANG FAMILY TRUST       By: ________________________________________    
           Dr. Gratio Tsang, as Trustee       CENTURY I HOLDINGS INC.       By:
________________________________________   Authorized Signatory       MOVENTIS
CAPITAL, INC.       By: ________________________________________   Authorized
Signatory       PTL ACQUISITON CORP.       By:
________________________________________   Authorized Signatory       PTL
ELECTRONICS LTD.       By: ________________________________________   Authorized
Signatory

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

EXHIBIT A

Share Transfer Form

          FOR VALUE RECEIVED, [NAME OF SELLER] hereby sells, assigns and
transfers unto PTL ACQUISITION CORP., a corporation incorporated under the laws
of British Columbia, ____________ Common Shares of PTL ELECTRONICS LTD., a
corporation incorporated under the laws of British Columbia (the “Corporation”),
standing in his/her/its name on the books of said Corporation represented by
Certificate(s) No._______herewith, and does hereby irrevocably constitute and
appoint _________________________attorney to transfer the said shares on the
books of said Corporation with full power of substitution in the premises.

Dated the ____ day of ___________, 2006.

_______________________________________________

Print Name: ______________________________________

 

In presence of:

_______________________________________________

Print Name: ______________________________________

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EXHIBIT B

Seller’s Bring-Down Certificate

[NAME OF SELLER]

TO: MOVENTIS CAPITAL, INC.   PTL ACQUISITION CORP.  

 

RE:

Share Purchase Agreement dated as of the ____ day of __________, 2006 (the
“Purchase Agreement”) among PTL Electronics Ltd. (the “Corporation”), Moventis
Capital, Inc., PTL Acquisition Corp., and the shareholders of the Corporation.

 

(Capitalized words and phrases used but not defined herein have the meanings
attributed to them in or for the purpose of the Purchase Agreement.)

Except as otherwise set forth in Appendix “A”, attached hereto, the undersigned,
<*>, being a Seller, hereby certifies after making due inquiry that:

  (a)

All representations and warranties of the Seller set forth in the section 5.1 of
the Purchase Agreement, and in the event the Seller is a also a Management
Seller, all representations and warranties of the Management Seller set forth in
the section 5.2 of the Purchase Agreement, are true and correct on the Closing
Date with the same force and effect as though made on the Closing Date.

        (b)

All covenants and obligations to be complied with and performed by the Seller
under the Purchase Agreement on or before the Closing Date have been duly
complied with and duly performed in all respects.

DATED as of the ______ day of ____________, 2006.           <*>

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

EXHIBIT C

Corporation’s Bring Down Certificate

PTL ELECTRONICS LTD.
(the “Corporation”)

TO: MOVENTIS CAPITAL, INC.   PTL ACQUISITION CORP.     RE:

Share Purchase Agreement dated as of the ____ day of __________ , 2006 (the
“Purchase Agreement”) among the Corporation, Moventis Capital, Inc., PTL
Acquisition Corp., and the shareholders of the Corporation.

(Capitalized words and phrases used but not defined herein have the meanings
attributed to them in or for the purpose of the Purchase Agreement.)

Except as otherwise set forth in Appendix “A”, attached hereto, the undersigned,
Paul Heathcote, being the CEO and Chief Operating Officer of the Corporation,
and David McAlpine, being the Co-CEO and Vice President of Sales of the
Corporation hereby certify on behalf of the Corporation and not in any personal
capacity and without assuming any personal liability whatsoever, after making
due inquiry that:

  (c)

All representations and warranties of the Corporation set forth in the Purchase
Agreement are true and correct on the Closing Date with the same force and
effect as though made on the Closing Date.

        (d)

All covenants and obligations to be complied with and performed by the
Corporation under the Purchase Agreement on or before the Closing Date have been
duly complied with and duly performed in all respects.

DATED as of the ____ day of _____________, 2006.   Paul Heathcote, Co-CEO and  
Chief Operating Officer of PTL Electronics Ltd.           David McAlpine, Co-CEO
and   Vice President of Sales of PTL Electronics Ltd.

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

EXHIBIT D

Resignation of Director/Officer

TO: <*> AND TO: The Directors Thereof

I, the undersigned, do hereby resign as a Director of PTL Electronics Ltd.
without any compensation for so resigning, such resignation to be effective
immediately prior to the completion of the sale of all of the shares of PTL
Electronics Ltd. (the “Corporation”) by the Sellers.

Dated this ______ day of ____________, 2006.

__________________________________________
<*>

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

EXHIBIT E

Buyer’s Bring-Down Certificate

PTL ACQUISITION CORP.
(the “Corporation”)

TO: PTL ELECTRONICS LTD. AND TO: THE SHAREHOLDERS OF PTL ELECTRONICS LTD.

RE:

Share Purchase Agreement dated as of the ____ day of __________, 2006 (the
“Purchase Agreement”) among the Corporation, Moventis Capital, Inc., PTL
Electronics Ltd. and the shareholders of PTL Electronics Ltd.

(Capitalized words and phrases used but not defined herein have the meanings
attributed to them in or for the purpose of the Purchase Agreement.)

Except as otherwise set forth in Appendix “A”, attached hereto, the undersigned,
Blake Ponuick, being the President of the Corporation, and Walter Kloeble, being
the Chief Financial Officer of the Corporation hereby certify on behalf of the
Corporation and not in any personal capacity and without assuming any personal
liability whatsoever, after making due inquiry that:

  (e)

All representations and warranties of the Corporation set forth in the Purchase
Agreement are true and correct on the Closing Date with the same force and
effect as though made on the Closing Date.

        (f)

All covenants and obligations to be complied with and performed by the
Corporation under the Purchase Agreement on or before the Closing Date have been
duly complied with and duly performed in all respects.

DATED as of the ____ day of _____________, 2006.   Blake Ponuick, President    
of PTL Acquisition Corp.           Walter Kloeble, Chief Financial Officer   of
PTL Acquisition Corp.

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

EXHIBIT F

Parent’s Bring-Down Certificate

MOVENTIS CAPITAL, INC.
(the “Corporation”)

TO: PTL ELECTRONICS LTD. AND TO: THE SHAREHOLDERS OF PTL ELECTRONICS LTD.

RE:

Share Purchase Agreement dated as of the ____ day of __________, 2006 (the
“Purchase Agreement”) among the Corporation, [PTL. Acquisition Corp.], PTL
Electronics Ltd. and the shareholders of PTL Electronics Ltd.

 

 

(Capitalized words and phrases used but not defined herein have the meanings
attributed to them in or for the purpose of the Purchase Agreement.)

Except as otherwise set forth in Appendix “A”, attached hereto, the undersigned,
Blake Ponuick, being the President of the Corporation, and Walter Kloeble, being
the Chief Financial Officer of the Corporation hereby certify on behalf of the
Corporation and not in any personal capacity and without assuming any personal
liability whatsoever, after making due inquiry that:

  (g)

All representations and warranties of the Corporation set forth in the Purchase
Agreement are true and correct on the Closing Date with the same force and
effect as though made on the Closing Date.

        (h)

All covenants and obligations to be complied with and performed by the
Corporation under the Purchase Agreement on or before the Closing Date have been
duly complied with and duly performed in all respects.

DATED as of the ____ day of _____________, 2006.   Blake Ponuick, President   of
Moventis Capital, Inc.         Walter Kloeble, Chief Financial Officer   of
Moventis Capital, Inc.

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

EXHIBIT G

Debenture

THIS DEBENTURE AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.

PTL ACQUISTION CORP.

DEBENTURE

               FOR VALUE RECEIVED, the undersigned PTL ACQUISTION CORP., a
company incorporated under the laws of British Columbia (the “Company”), hereby
promises to pay to, or to the order of, <*> (the “Holder”), the principal sum of
<*> DOLLARS ($<*>) of lawful money of Canada. The Company may prepay any amount
of the principal outstanding without notice, penalty or bonus. Except as set
forth in Section 7.2 hereof, the Holder has no right to demand repayment of the
principal outstanding under this Debenture prior to the Maturity Date (as
defined below).

               This Debenture is subject to the following terms and conditions
and the Holder is entitled to the benefits set out herein:

ARTICLE 1
DEFINITIONS AND INTERPRETATION

1.1          Definitions

               For the purposes of this Debenture, in addition to the words or
expressions defined parenthetically herein, the following words and expression
shall have the following meanings, respectively:

  (a)

“Business Day” means a day other than a Saturday, Sunday or any other day that
is a statutory or civic holiday in the City of Vancouver;

        (b)

“Common Shares” means the common shares in the capital of Moventis bearing such
designation, as such shares exist on the issue date of this Debenture, provided
that in the event of any adjustment pursuant to Section 4.1, “Common Shares”
shall thereafter mean the shares or other securities or property resulting from
such adjustment and any shares of any other class of the shares in the capital

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

 

of Moventis resulting from the reclassification or change of such Common Shares;

        (c)

“Conversion Price” means the price at which the principal outstanding hereunder
may be repaid at the Company’s option by issuance of Common Shares, such price
being the equivalent in Canadian funds of eight-five percent (85%) of the Market
Price determined as at the date of repayment pursuant to Section 3.1 (the
“Conversion Date”), provided that such price shall not be less than US$0.35 and
not more than US$1.10. The Conversion Price shall be calculated using a currency
conversion rate for the last thirty (30) days before the Conversion Date;

        (d)

“Debenture” means this non-negotiable Debenture of the Company in the principal
sum of <*> DOLLARS ($<*>);

        (e)

“Event of Default” means any of the events described in Section 7.1;

        (f)

“Market Price” on any date, means the average, during the period of twenty (20)
consecutive Trading Days ending on the fifth Trading Day before such date, of
the closing prices per share at which the Common Shares have traded on the
NASDAQ OTC Bulletin Board (the “Exchange”) or, if the Common Shares are not
listed on the Exchange, then on such stock exchange on which the Common Shares
are listed as may be selected for that purpose by the directors, provided that
if, on any such Trading Day, and provided further that if the Common Shares are
not listed on any stock exchange, then the Current Market Price of the Common
Shares shall be determined by the directors of the Company;

        (g)

“Maturity Date” means 10:00 a.m. (Vancouver time) on the date which is <*>;

        (h)

“Moventis” means Moventis Capital, Inc., the parent of the Company;

        (i)

“Person” includes any individual, corporation, company, partnership,
association, estate, trust or government or any agency or political subdivision
of any government;

        (j)

“Share Purchase Agreement” has the meaning given in Section 2.4 hereof; and

        (k)

“Trading Day” means with respect to any stock exchange, a day on which shares
may be traded through the facilities of the principal stock exchange on which
the Common Shares are listed.

1.2         Interpretation

               For the purposes of this Debenture, except as expressly provided
or unless the context requires otherwise:

  (a)

the headings used throughout this Debenture are for ease of reference only and
shall not in any way affect the meaning or interpretation of this Debenture;

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

  (b)

any reference herein to a numbered or lettered part or section refers to the
specified part or section of this Debenture;

        (c)

“hereto”, “herein”, “hereof”, “hereunder” and similar expressions refer to this
Debenture and not to any particular part or section of this Debenture;

        (d)

any words or expressions contained in this Debenture which impart the singular
number include the plural number and vice versa;

        (e)

any words or expressions contained in this Debenture which impart any gender
include all genders; and

        (f)

unless otherwise provided herein, all dollar amounts expressed herein refer to
lawful currency of Canada.

1.3         Proper Law and Attornment

               This Debenture and all matters arising hereunder shall be
governed by and construed in accordance with the laws of the Province of British
Columbia and the laws of Canada applicable therein. Each of the parties hereto,
by the execution and delivery of this Debenture, irrevocably and
unconditionally, with respect to any matter or thing arising out of or
pertaining to this Debenture, hereby attorns and submits to the jurisdiction of
the courts of the Province of British Columbia for the determination of all
matters arising pursuant to this Debenture.

1.4         Non-Business Days

               Whenever any payment hereunder shall become due on a day which is
not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day.

ARTICLE 2
TERMS OF CONVERIBLE DEBENTURE

2.1         Issue

               This Debenture is issued in the principal sum of <*> DOLLARS
($<*>) of lawful money of Canada.

2.2         Payments

               The principal amount outstanding hereunder is payable by the
Company on the Maturity Date.

2.3         Adjustments for Conversion

               In the event that part of the Debenture is repaid in accordance
with Section 3.1, the principal amount repaid pursuant to Section 3.1 shall be
applied to reduce the amount repayable on the Maturity Date.

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

2.4         Witholding for Indemnification Claim

               In the event that the Company or the Buyer makes a written claim
for indemnification pursuant to Article 6 of the share purchase agreement (the
“Share Purchase Agreement”) dated as of May 6, 2006 among Moventis, the Company,
the Holder, and certain others (an “Indemnification Claim”), the Company shall
be entitled to withhold the amount of the Indemnification Claim from any and all
amounts owing under this Debenture pending a final determination of the
Indemnification Claim (a “Final Determination”). If the Company makes an
Indemnification Claim prior to the Maturity Date, pending a Final Determination,
the Company shall withhold the amount of the Indemnification Claim from the
amount repayable on the Maturity Date, and the amount payable to the Holder on
the Maturity Date will be reduced accordingly. The amount owed to the Company
pursuant to the Indemnification Claim upon a Final Determination is referred to
as the “Determined Amount”.

2.5         Adjustment of Final Repayment Amount

               Where a Final Determination has been made with respect to an
Indemnification Claim, the Company shall be entitled to set off the Determined
Amount against the amount repayable on the Maturity Date, which amount shall be
deemed to be reduced by the Determined Amount, and the amount payable to the
Holder on the Maturity Date will be reduced accordingly. Upon Final
Determination, any amounts withheld pursuant to this Section 2.5 in excess of
the Determined Amount shall be paid promptly to the Holder, if the Maturity Date
has passed.

ARTICLE 3
REPAYMENT BY CONVERSION

3.1         Company’s Right to Repay by Common Shares

               At the option of the Company, at any time prior to the Maturity
Date the principal due hereunder may be repaid in whole or in part by the
delivery by the Company of that number of fully-paid and non-assessable Common
Shares equal to the amount of principal to be converted divided by the
Conversion Price. If following the repayment under this Section 3.1, principal
remains outstanding, the Company shall deliver to the Holder, against receipt of
this Debenture for cancellation, a replacement Debenture in the same form as
this Debenture in respect of the principal balance remaining outstanding.

ARTICLE 4
ADJUSTMENTS

4.1         Adjustment to Common Shares

               If, prior to the Maturity Date, Moventis undertakes any
reclassification of, or other change in (including a change resulting from
consolidation or subdivision) the outstanding Common Shares; or in case of any
issue of Common Shares (or securities convertible into Common Shares) to all or
substantially all of the holders of its outstanding Common Shares by way of a
formal stock dividend; the number of Common Shares to be issued upon exercise of
the repayment option under Section 3.1 shall, after such reclassification,
change, issue, or dividend,

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

be equal to the number of shares or other securities or property of Moventis, to
which the Holder would have been entitled to upon such reclassification, change,
or dividend.

4.2         Applicable Securities Legislation

               The Company will not, directly or indirectly, do any act or thing
or, to the extent that it is able, permit any act or thing to be done, which
would remove or deny any registration or prospectus exemption available under
any applicable securities legislation with respect to the issuance of Common
Shares under this Debenture.

4.3         Waiver of Presentment

               The Company hereby waives presentment for payment, notice of
dishonour, protest and notice of protest.

ARTICLE 5
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE COMPANY

5.1         Representations and Warranties

               The Company represents and warrants to the Holder that:

  (a)

with the exception of applicable regulatory approvals for any full or partial
repayment by the issuance of Common Shares of the outstanding principal under
Section 3.1 due pursuant to this Debenture as provided herein, the execution and
delivery of this Debenture by the Company, the performance by the Company of its
obligations hereunder and the consummation by the Company of the transactions
contemplated hereby do not require any consent, approval or action of any
federal, provincial, municipal, regulatory, administrative or governmental
authority or court or self-regulatory body to whose jurisdiction the Company is
subject or any party to any agreement, contract, mortgage, Debenture or any
other instrument to which the Company is a party or is subject or by which the
Company may be bound, except which has been obtained;

        (b)

the Company is a corporation duly organized and validly subsisting in good
standing under the laws of British Columbia, has the corporate power and
authority to own its property and to carry on its business as now being
conducted by it or as currently proposed to be conducted in the future, is duly
qualified as a corporation to do business and is in good standing in each
jurisdiction in which the nature of its business makes such qualification
necessary, has the corporate power and authority to execute, deliver and perform
the terms and provisions of this Debenture, and has taken all necessary action
to authorize the execution and delivery of this Debenture, and when executed and
delivered this Debenture will constitute a legal, valid and binding obligation
of the Company; and

        (c)

neither the execution nor delivery of this Debenture nor the transactions
contemplated herein nor compliance with nor performance nor observance of the

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

terms and provisions of this Debenture will, subject to the requirement to
obtain all applicable regulatory approvals in respect of the conversion into
Common Shares as herein contemplated:

  (i)

contravene any provision of law, statute, rule or regulation to which the
Company is subject or any judgment, decree, order or permit applicable to it;

        (ii)

contravene the Notice of Articles or Articles of the Company; or

        (iii)

conflict with or result in a breach of or constitute a default under any
agreement or instrument, written or oral, to which the Company is a party or by
which it is bound.

5.2         Covenants

               The Company covenants and agrees that so long as this Debenture
is outstanding, unless agreed in writing by the Holder:

  (a)

the Company shall preserve and maintain its corporate existence and shall remain
in good standing in each jurisdiction in which the nature of its business makes
such qualification necessary; and

        (b)

the Company will give the Holder written notice of the occurrence of any Event
of Default pursuant to Section 7.2 below.

ARTICLE 6
SUPPORT BY MOVENTIS

6.1         Support by Moventis

               Moventis will take all such actions and do all such things as are
reasonably necessary or desirable to enable and permit the Company, in
accordance with applicable law, to perform its obligations upon the exercise by
the Company pursuant to Section 3.1 hereof, of the Company’s option to repay the
principal due hereunder by the issuance of Common Shares.

ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES

7.1         Events of Default

               As used herein, and “Event of Default” occurs if:

  (a)

the Company fails to make any principal payment when due and such failure is not
cured within 5 days;

        (b)

the Company fails to comply with any of its material covenants, or covenants
which in the aggregate are material, contained in this Debenture and such
failure

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

 

is not cured within 30 days after the Company receives written demand from the
Holder to remedy the same;

        (c)

a court of competent jurisdiction enters an order or decree under the bankruptcy
legislation of any federal, provincial or state law for the relief of debtors
against the Company in an involuntary case commenced under any such law;
appoints any receiver, trustee, assignee, liquidator or similar official of the
Company or for all or substantially all of its property; or orders the
liquidation of the Company; and, in any such case, the order, decree or
appointment remains unstayed and in effect for 60 days; or

        (d)

the Company shall execute a general assignment for the benefit of creditors.

7.2         Notice of Event of Default

               If an Event of Default described in Section 7.1(b),(c) or (d)
above occurs, the Company shall give written notice to the Holder of the
occurrence of such Event of Default within 5 days thereof.

7.3         Right to Demand Repayment

  (a)

If any Event of Default exists, the Holder may, in addition to the exercise of
any right, power or remedy permitted by law, declare (by written notice or
notices to the Company) the entire principal sum then outstanding to be due and
payable, and such Debenture shall thereupon become forthwith due and payable in
cash without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Company. If this Debenture is not paid
when due, the Company agrees to pay all costs of collection, including
reasonable attorneys’ fees.

        (b)

A delay or omission by the Holder in exercising any right or remedy arising upon
an Event of Default shall not impair such right or remedy or constitute a waiver
of or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.

7.4         Resale Restrictions

               The Holder further acknowledges that:

  (a)

any resale of the Debenture, and the Common Shares issuable upon conversion
hereunder may only occur in accordance with applicable securities legislation;
and

        (b)

the certificates representing the Common Shares issuable hereunder may bear a
legend denoting the restrictions on transfer imposed by applicable securities
legislation.

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

7.5         Lost Debenture

               If the Holder claims that this Debenture has been lost, destroyed
or wrongfully taken the Company shall issue a replacement Debenture upon:

  (a)

receipt of an indemnity bond or other assurance requested by the Company to
protect it from any loss which it may suffer by reason of such replacement or
subsequent presentment of the original Debenture; and

        (b)

payment by the Holder of any expenses incurred by the Company in replacing the
Debenture.

ARTICLE 8
DISCHARGE OF DEBENTURE

8.1         Cancellation

               The Debenture shall forthwith after full payment be surrendered
to the Company for cancellation.

ARTICLE 9
GENERAL PROVISIONS

9.1         Notices

               All notices and other communications required or permitted
pursuant to or in relation to this Debenture shall be in writing and shall be:

  (a)

personally served upon the Company or upon the Holder, as the case may be, in
which case such notice or other communication shall conclusively be deemed to
have been given to the addressee at the time of service; or

        (b)

communicated by regular mail posted in Canada to the addressee at the following
respective addresses:

  (i)

For the Company or Moventis:

  PTL ACQUISTION CORP. / Copy to:   MOVENTIS CAPITAL, INC. FASKEN MARTINEAU
DuMOULIN LLP   Suite 304, 1959 152nd Street 2100 – 1075 West Georgia Street  
White Rock, BC, Canada V4A 9P3 Vancouver, BC, Canada, V6E 3G2   Attention: Blake
Ponuick Attention: Iain Mant   Facsimile: 604.288.2430 Facsimile: 604.631.3232

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

  (ii)

For the Holder:

  <*> Copy to:     <*>   <*> <*>   Attention: <*> Attention: <*>   Facsimile:
<*> Facsimile: <*>

in which case such notice shall conclusively be deemed to have been given to the
addressee thereof upon the third Business Day from the date of mailing in
Canada.

               Each party hereby may, from time to time, by notice to the other
parties, change its address for service.

9.2         Equitable Remedies

               The Company acknowledges that damages may be an inadequate remedy
for the breach or default in observance or performance of its obligations under
this Debenture, and accordingly the Company agrees that in the event of an
actual or anticipatory breach or default in observance of performance of any of
its obligations hereunder, the same may be enforced by specific performance,
injunction or such other equitable remedy, in lieu of damages, as the Holder may
in its sole and absolute discretion consider advisable and as may be awarded by
a court of competent jurisdiction.

9.3         Amendments

               Neither this Debenture nor any provision hereof may be amended,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the amendment, waiver,
discharge, or termination is sought.

9.4         Time of the Essence

               Time is expressly declared to be of the essence of this Debenture
in respect of all payments to be made hereunder, the exercise of any redemption
and conversion rights hereunder, and all covenants and agreements to be
performed and fulfilled.

9.5         Severability

               If any covenant or obligation of any party contained herein, or
if any provision of this Debenture or its application to any Person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Debenture or the application of such covenant or obligation to Persons or
circumstances other than those to which it is held invalid or unenforceable
shall not be affected, and each provision and each covenant and obligation
contained in this Debenture shall be separately valid and enforceable, to the
fullest extent permitted by law or at equity.

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

9.6         Parties In Interest

               This Debenture shall enure to the benefit of and be binding on
the parties hereto and their respective successors and permitted assigns.

9.7         No Assignment

               The rights of the Holder under this Debenture shall be not
assignable in whole or in part.

9.8        No Recourse Against Others

               A director, officer, employee or shareholder of the Company shall
not have any liability for any obligations of the Company under this Debenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. The Holders, by accepting the Debenture, waives and releases all
such liability and such waiver and release are part of the consideration for the
issue of the Debenture.

9.9         Subsequent Debentures and Security

               If the Holder and the Company agree to additional financing, the
parties hereby agree that such additional financing shall rank pari passu with
the Debentures previously issued, and security therefore shall be aggregated
between all such Debentures on a pro rated basis. The parties further agree that
an amendment shall be issued to the Debenture, subject to this agreement of the
Holder, adjusting the security and ranking of debt.

               IN WITNESS WHEREOF the Company and Moventis have executed this
Debenture as of the <*> day of <*>, 2006

PTL ACQUITSION CORP.         Per:   Authorized Signatory       MOVENTIS CAPITAL,
INC.         Per:   Authorized Signatory  

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

EXHIBIT H

GENERAL SECURITY AGREEMENT

PTL Electronics Ltd. (the “Debtor”) mortgages and charges in favour of <*> (the
“Secured Party”), and grants to the Secured Party a security interest in, all of
the Debtor’s present and after-acquired personal property, including all
inventory, equipment and fixtures, all contracts, accounts and other
intangibles, and all securities, instruments, chattel paper, money and documents
of title, and also all of the Debtor’s present and after-acquired real property
and other assets and undertaking, (collectively, the “Charged Property”) to
secure payment and performance of all present and future debts, liabilities and
other obligations of PTL Acquisition Corp. (“PTL”) to the Secured Party pursuant
to: (a) a Debenture of even date among, inter alia, PTL and the Secured Party
and (b) section 2.2(4) of the Share Purchase Agreement dated the 8th day of May,
2006, among, inter alia, the Secured Party, the Debtor and PTL (collectively,
the “Secured Obligations”).

The Debtor will not sell, lease or otherwise dispose of any Charged Property
except that, until default, the Debtor may deal with inventory, accounts and
money in the ordinary course of business. The Debtor will not allow any Charged
Property to be situate outside of British Columbia. The Debtor will not allow
the Debtor’s chief executive office, main place of business or principal
residence to be located outside of British Columbia, nor will the Debtor change
its name or have any other form of name (except upon 10 days’ prior written
notice to the Secured Party).

The Debtor will be in default under this agreement if default is made in payment
or performance of any of the Secured Obligations, or if there is a default under
any document evidencing any of the Secured Obligations, or if the Secured Party
in good faith believes that the prospect of payment or performance of any of the
Secured Obligations is or is about to be impaired or that any of the Charged
Property is or is about to be placed in jeopardy.

Upon a default hereunder, the Secured Party will have all the rights and
remedies of a secured party under the British Columbia Personal Property
Security Act and of a mortgagee at law or in equity and, in addition, will be
entitled to declare payment and performance of all of the Secured Obligations to
be immediately due, and will be entitled to appoint any legal person as receiver
or receiver and manager (a “Receiver”) of all or any part of the Charged
Property. Any Receiver so appointed will have all the rights and remedies of the
Secured Party (except the right to appoint a Receiver). Without limiting the
rights and remedies referred to above, the Secured Party and any Receiver may,
after default, use any or all of the Charged Property in the manner and to the
extent it considers commercially reasonable, and may sell, lease or otherwise
dispose of the same either for cash or in any manner involving deferred payment.
Neither the Secured Party nor any Receiver will be obligated to take any
necessary or other steps to preserve rights against others with respect to any
securities, instruments or chattel paper now or hereafter in its possession.

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The Debtor acknowledges receipt of a copy of this agreement and waives its right
to receive copies of all financing statements, financing change statements and
verification statements that may be filed or issued with respect to the security
interests created hereby.

Dated: _____________________, 2006 PTL ELECTRONICS LTD.         Per:            
                             Authorized Signatory

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SCHEDULE 1.1

Definitions

In the Agreement, the following terms shall have the meanings set out below
unless the context requires otherwise:

“Accountant” has the meaning given in Section 2.5(4) .

“Adjustment Amount” has the meaning given in Section 2.6(1) .

“Adjustment Date” has the meaning given in Section 2.6(1) .

“Affiliate” means, with respect to any Person, any other Person who directly or
indirectly controls, is controlled by, or is under direct or indirect common
control with, such Person, and includes any Person in like relation to an
Affiliate. A Person shall be deemed to control a Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise; and the term “controlled” shall
have a similar meaning.

“Aggregate Cumulative Divided” has the meaning given in Section 7.5(a) .

“Agreement” means the Agreement to which this Schedule 1.1 is attached,
including the Exhibits and the Schedules to the Agreement, as it or they may be
amended or supplemented from time to time, and the expressions “hereof”,
“herein”, “hereto”, “hereunder”, “hereby” and similar expressions refer to the
Agreement and not to any particular Section or other portion of the Agreement.

“Applicable Employee Benefit Laws” has the meaning given in Section 5.2(19)(b) .

“Applicable Law” means, with respect to any Person, property, transaction, event
or other matter, any law, rule, statute, regulation, order, judgment, decree,
treaty or other requirement having the force of law (collectively, the “Law”)
relating or applicable to such Person, property, transaction, event or other
matter. Applicable Law also includes, where appropriate, any interpretation of
the Law (or any part thereof) by any Person having jurisdiction over it, or
charged with its administration or interpretation.

“Audited Financial Statements&#148; has the meaning given in Section 2.10.

“B.C. Securities Act” has the meaning given in Section 4.1(13) .

“Books and Records” means all books, records, files and papers of the
Corporation including drawings, engineering information, computer programs and
procedures (including designs, architecture, specifications, source code and
executable code), software programs, manuals and data, sales and advertising
materials, sales and purchases correspondence, trade association files, research
and development records, lists of present and former customers and suppliers,

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personnel, employment and other records, and the minute and share certificate
books of the Corporation, and all copies and recordings of the foregoing.

“Business” means the business carried on by the Corporation which primarily
involves the design and manufacture of printed circuit boards using surface
mount technology.

“Business Day” means any day except Saturday, Sunday or any day on which banks
are generally not open for business in the City of Vancouver, British Columbia,
Canada.

“Buyer” means PTL Acquisition Corp.

“Buyer Consents and Approvals” means all consents and approvals required to be
obtained by the Buyer in connection with the execution and delivery of this
Agreement by the Buyer and the completion of the transactions contemplated by
this Agreement by the Buyer.

“Buyer’s Solicitors” means Fasken Martineau DuMoulin LLP.

“Buyer’s Solicitors Opinion” has the meaning given in Section 4.3(8) .

“Canadian Dollars” and “C$” means the lawful currency of Canada.

“Claim” has the meaning given in Article 6.

“Clearance Certificate” has the meaning given in Section 2.9.

“Closing” means the completion of the purchase and sale of the Purchase Shares
in accordance with the provisions of this Agreement.

“Closing Balance” means the value of the Net Assets of the Corporation plus the
deferred revenue of the Corporation as of the Closing Date as shown in the
Closing Statements.

“Closing Date” means date which is the later of: (a) 90 days following the date
of the Agreement; and (b) 90 days following the date on which the Audited
Financial Statements are delivered to the Buyer, or such earlier or later date
as may be agreed upon in writing by the Parties; provided however, that the
Buyer and the Parent may extend the Closing Date to December 31, 2006.

“Closing Time” means the time of Closing on the Closing Date provided for in
Section 3.1.

“Closing Statements” has the meaning given in Section 2.5(1) .

“Confidential Information” shall mean any and all proprietary business
information relating to the Corporation, the Buyer, the Parent or the Business
which would reasonably be considered confidential to the Corporation, the Buyer
or the Parent including financial data, know-how, marketing strategies, Customer
and employee data, business plans and product, service or process enhancement
plans, other than such proprietary business information that constitutes a Trade
Secret.

“Corporation” means PTL Electronics Ltd.

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“Corporation Consents and Approvals” means all consents and approvals required
to be obtained by the Corporation in connection with the execution and delivery
of this Agreement by the Sellers and the completion of the transactions
contemplated by this Agreement by the Sellers.

“Corporation Notices” means the notices required to be given to any Person under
Applicable Law or pursuant to any contract or other obligation to which the
Corporation is a party or by which the Corporation is bound or which is
applicable to any of the assets in connection with the execution and delivery of
this Agreement or the completion of the transactions contemplated by this
Agreement.

“CRA” has the meaning given in Section 2.9.

“Debentures” or “Debenture” has the meaning given in Section 2.2(3) .

“Debt” means all debts of the Corporation, including, without limitation,
mortgages, equipment leases and overdrafts.

“Direct Claim” has the meaning given in Section 6.3.

“Director” means a director of the Corporation; and “Directors” means every
Director.

“Disclosure Letter” means the disclosure letter dated as of the date of this
Agreement, to be delivered to the Buyer and the Parent by the Management Sellers
and the Corporation concurrently with this Agreement concerning the
representations and warranties of the Corporation and the Management Sellers set
forth in Section 5.2 of this Agreement.

“Dividend Payment” has the meaning given in Section 7.5(a) .

“Employee” means an individual who is employed by the Corporation; and
“Employees” means every Employee.

“Employee Plans” has the meaning given in Section 5.2(19)(a) .

“Employment Agreement” means in the case of David McAlpine, the new employment
agreement in form and substance acceptable to the Buyer to be entered into
immediately prior to Closing between the Corporation and David McAlpine, in the
case of Paul Heathcote, the new employment agreement in form and substance
acceptable to the Buyer to be entered into immediately prior to Closing between
the Corporation and Paul Heathcote.

“Environmental Laws” means Applicable Law in respect of the natural environment,
public or occupational health or safety, and the manufacture, importation,
handling, transportation, storage, disposal and treatment of Hazardous
Substances.

“Exclusivity Period” has the meaning given in Section 8.1.

“Expenses” has the meaning given in Section 10.1.

“Financial Statements” has the meaning given in Section 5.2(4) .

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“Financing” has the meaning given in Section 4.1(14) .

“GAAP” means those accounting principles which are recognized as being generally
accepted in Canada from time to time as set out in the handbook published by the
Canadian Institute of Chartered Accountants, consistently applied (which in the
case of Inventory is as consistently applied by the Corporation).

“General Security Agreement” and “General Security Agreements” has the meaning
given in Section 2.7.

“including” means “including without limitation”, and “includes” means “includes
without limitation”.

“Indemnified Party” means a Person whom the Sellers have agreed to indemnify
under Article 6.

“Indemnifying Party” means, in relation to an Indemnified Party, the Party to
this Agreement that has agreed to indemnify that Indemnified Party under Article
6.

“Initial Cash Payment” has the meaning given in Section 2.2(1) .

“Intellectual Property” means all rights to and interests in:

(a)           all business and trade names, corporate names, brand names and
slogans Related to the Business;

(b)           all inventions, patents, patent rights, patent applications
(including all reissues, divisions, continuations, continuations-in-part and
extensions of any patent or patent application), industrial designs and
applications for registration of industrial designs Related to the Business;

(c)           all copyrights and trade-marks (whether used with wares or
services and including the goodwill attaching to such trade-marks),
registrations and applications for trade-marks and copyrights (and all future
income from such trade-marks and copyrights) Related to the Business;

(d)           all rights and interests in and to processes, computer programs
and procedures (including designs, architecture, specifications, source code and
executable code), software, lab journals, notebooks, data, trade secrets,
designs, know-how, product formulae and information, manufacturing, engineering
and other drawings and manuals, technology, blue prints, research and
development reports, agency agreements, technical information, technical
assistance, engineering data, design and engineering specifications, and similar
materials recording or evidencing expertise or information Related to the
Business;

(e)           all other intellectual and industrial property affected by the
registrations and applications for registration and the permissions and licences
listed in Schedule 5.2(15) to the Disclosure Letter;

(f)           all other intellectual and property rights throughout the world
Related to the Business;

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(g)           all licences of the intellectual property listed in items (a) to
(f) above;

(h)           all future income and proceeds from any of the intellectual
property listed in items (a) to (f) above and the licences listed in item (g)
above; and

(h)           all rights to damages and profits by reason of the infringement of
any of the intellectual property listed in items (a) to (g) above.

“Inventories” means all inventories of stock-in-trade and merchandise including
materials, supplies, work-in-progress, finished goods, and purchased finished
goods owned by the Corporation (including those in possession of suppliers,
customers and other third parties).

“Lands” means all real property that is owned by the Corporation.

“Leased Premises” means all real property that is leased or occupied by the
Corporation under the Premises Leases.

“Leases” means Personal Property Leases and Premises Leases.

“Liabilities” means all costs, expenses, charges, debts, liabilities, claims,
demands and obligations, whether primary or secondary, direct or indirect,
fixed, contingent, absolute or otherwise, under or in respect of any contract,
agreement, arrangement, lease, commitment or undertaking, Applicable Law and
Taxes.

“Licences and Permits” means all licences, permits, filings, authorizations,
approvals or indicia of authority issued to the Corporation.

“Lien” means any lien, mortgage, charge, hypothec, pledge, security interest,
prior assignment, option, warrant, lease, sublease, right to possession,
encumbrance, claim, right or restriction which affects, by way of a conflicting
ownership interest or otherwise, the right, title or interest in or to any
particular property.

“Management Seller” or “Management Sellers” means David McAlpine and Paul
Heathcote.

“Material Adverse Change” means any change, effect, event or occurrence with
respect to the Corporation’s condition (financial or otherwise), properties,
capital, assets, liabilities, obligations (whether absolute, accrued conditional
or otherwise), Business, operations or results of operations or those of its
subsidiaries that is, or could reasonably be expected to be, significant and
adverse to the value of the Shares or the Business, operations or financial
condition of the Corporation and its subsidiaries taken as a whole.

“Material Contract” means an agreement (whether oral or written) to which the
Corporation is a party or by which the Corporation or any of the assets of the
Corporation or the Business is bound or affected except an agreement which
involves or may reasonably be expected to involve the payment to or by the
Corporation of less than C$20,000 over the term of the agreement and is not
otherwise material to the operation of the Business.

“Maturity Date” has the meaning given in Section 2.2(3) .

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“Net Assets” means all assets of the Corporation referred to in the Financial
Statements minus all Liabilities (excluding the aggregate amount of the Sellers
Loans).

“Non-Management Seller” or “Non-Management Sellers” means Albion Services Ltd.,
Dr. Gratio Tsang Inc., Century Electronics, Gundyco ITF Anthony Lee / Marilyn
Lee and Marilyn Lee.

“Non-Resident Seller” has the meaning given in Section 2.9.

“Officer” means an officer of the Corporation; and “Officers” means every
Officer.

“Parent” means Moventis Capital, Inc.

“Parent Consents and Approvals” means all consents and approvals required to be
obtained by the Parent in connection with the execution and delivery of this
Agreement by the Parent and the completion of the transactions contemplated by
this Agreement by the Parent.

“Parent Common Shares” has the meaning given in Section 2.2(2) .

“Parent Securities” means the Share Consideration and the Debentures.

“Party” means a party to this Agreement and any reference to a Party includes
its successors and permitted assigns; and “Parties” means every Party.

“Payment Period” has the meaning given in Section 7.5(a) .

“Person” is to be broadly interpreted and includes an individual, a corporation,
a partnership, a trust, an unincorporated organization, the government of a
country or any political subdivision thereof or any agency or department of any
such government, and the executors, administrators or other legal
representatives of an individual in such capacity.

“Personal Property” means all machinery, equipment, furniture, motor vehicles
and other chattels owned or leased by the Corporation (including those in
possession of third parties).

“Personal Property Leases” means all chattel leases, equipment leases, rental
agreements, conditional sales contracts and other similar agreements.

“Premises Leases” means all the leases, agreements to lease, subleases, licence
agreements and occupancy or other agreements relating to the Leased Premises.

“Prime Rate” means the rate of interest per annum quoted by Bank of Montreal
from time to time as its reference rate for Canadian Dollar demand loans made to
its commercial customers in Canada and which it refers to as its “prime rate”,
as such rate may be changed by it from time to time.

“Proprietary Information” shall mean collectively the Confidential Information
and the Trade Secrets, but shall not include any information that (i) is or
becomes publicly known other than through a breach of a confidentiality
agreement or a legal or fiduciary obligation of

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confidentiality owed to the Corporation, the Buyer or the Parent by the Sellers,
or (ii) is lawfully received by the Seller from another source without breaching
any confidentiality agreement or other legal or fiduciary obligation of
confidentiality owed by such source.

“Purchase Price” has the meaning given in Section 2.2.

“Purchase Shares” means the shares in the capital of the Corporation to be
purchased by the Buyer from the Sellers on the Closing Date, as set out in
Schedule 2.1 hereof.

“Real Property” means the Lands.

“Receivables” means all accounts receivable (including volume rebates and
discounts), bills receivable, trade accounts, book debts and insurance claims of
the Corporation together with any unpaid interest accrued on such items and any
security or collateral for such items, including recoverable deposits.

“Related to the Business” means, directly or indirectly, used in, arising from
or relating in any manner to the Business.

“Second Cash Payment” has the meaning given in Section 2.2(4) .

“Second Cash Payment Date” has the meaning given in Section 2.3(3) .

“Seller” or “Sellers” means Albion Services Ltd., the Tsang Family Trust,
Century I Holdings Inc., David McAlpine, Paul Heathcote, Gundyco ITF Anthony Lee
/ Marilyn Lee and Marilyn Lee.

“Sellers Loans” means all (and not less than all) of the loans described in
Schedule 2.11 including all evidence of and security for those loans.

“Sellers’ Solicitors” means Cohen, Buchan, Edwards.

“Sellers’ Solicitors Opinion” has the meaning given in Section 4.1(17) .

“Senior Lender” means a financial institution that has agreed to provide
operating and term credit facilities to the Corporation having an aggregate
principal amount of not more than C$1,000,000 (the “Senior Loan Obligations”).

“Share Consideration” had the meaning given in Section 2.2(2) .

“Shares” means the 1,000,000 Common shares in the capital of the Corporation as
set out in Schedule 2.1.

“Taxes” means all taxes, charges, fees, levies, imposts and other assessments,
including all income, sales, use, goods and services, value added, capital,
capital gains, alternative, net worth, transfer, profits, withholding, payroll,
employer health, excise, franchise, real property and personal property taxes,
and any other taxes, customs duties, fees, assessments or similar charges in the
nature of a tax including Canada Pension Plan and provincial pension plan
contributions,

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unemployment insurance payments and workers’ compensation premiums, together
with any instalments with respect thereto, and any interest, fines and penalties
imposed by any governmental authority (including federal, state, provincial,
municipal and foreign governmental authorities), and whether disputed or not.

“Third Party” has the meaning given in Section 6.5.

“Third Party Claim” has the meaning given in Section 6.3

“Trade Secrets” shall mean information relating to the Corporation, the Buyer,
the Parent or the Business which (i) derives economic value, actual or
potential, from not being generally known to or readily ascertainable by other
Persons who can obtain economic value from its disclosure or use and (ii) is the
subject of efforts by the Corporation, the Buyer or the Parent that are
reasonable under the circumstances to maintain its secrecy, including marking
any information reduced to tangible form clearly and conspicuously with a legend
identifying its confidential or proprietary nature; or otherwise treating such
information as confidential or secret; or is otherwise defined as a “trade
secret” under applicable federal or provincial law. Assuming the criteria in
clauses (i) and (ii) above are met, “Trade Secrets” include, but are not limited
to, technical and non-technical data, formulae, patterns, designs, compilations,
computer programs and software, devices, inventions, techniques, drawings,
research, development and existing and future products and services.

“Unaudited Financial Statements&#148; has the meaning given in Section 5.2(4) .

“US$” means the lawful currency of the United States of America.

“U.S. Securities Act” has the meaning given in Section 4.1(13) .

“Withheld Funds” has the meaning given in Section 2.9.

“Working Capital” means (i) cash, accounts receivable and inventory; less (ii)
any bank indebtedness (including line of credit) and accounts payable (excluding
all payables in respect of taxes).

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SCHEDULE 2.1

Purchase Shares

For the purposes of Section 2.1 of the Agreement, the Sellers and Purchase
Shares are as follows:

Seller Common Shares     Albion Services Ltd. 400,000     The Tsang Family Trust
200,000     Century I Holdings Inc. 200,000     David McAlpine 75,000     Paul
Heathcote 75,000     GundyCo ITF (Anthony Lee) 20,961 RRSP#562-63831-10      
GundyCo ITF (Marilyn Lee) 21,834 RRSP#562-63875-17       Marilyn Lee 7,205

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SCHEDULE 2.11

Allocation of Initial Cash Payment for the Purchase Shares and Sellers Loans

For the purpose of Section 2.11 of the Agreement, the Initial Cash Payment shall
be allocated among the Sellers, the Purchase Shares and Sellers Loans as
follows:

Seller Purchase Shares Sellers Loans       Albion Services Ltd. $284,710.40
$915,289.60       Dr. Gratio Tsang in trust for the
Tsang Family Trust $142,355.20 $457,644.80       Century I Holdings Inc.
$142,355.20 $457,644.80       David McAlpine $53,383.20 $171,616.80       Paul
Heathcote $53,383.20 $171,616.80       Gundyco ITF Anthony Lee $62,883.00 $0    
  Gundyco ITF Marilyn Lee $65,502.00 $0       Marilyn Lee $5,128.35 $16,486.65  
    Total $809,700.55 $2,190,299.45

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