scoutexh10_1.htm


    
      

    


    SHARE PURCHASE
AGREEMENT

    


    


    THIS
AGREEMENT made effective as of the       1st     
day of January, A.D. 2008.

    


    BETWEEN:

    


    BRIAN
MAHOOD, Businessman, of Suite 600, 600 - 6th Avenue
S.W., Calgary, Alberta, T2P 0S5;

    


    (hereinafter
referred to as the "Vendor")

    


    OF THE
FIRST PART

    AND:

    


    SCOUT
EXPLORATION, INC.,
a Nevada Corporation, with an office at 609 - 475 Howe Street, Vancouver,
British Columbia, V6C 2B3;

    


    (hereinafter
referred to as the "Purchaser")

    


    OF THE
SECOND PART

    AND:

    


    KERRISDALE
RESOURCES LTD., a company duly incorporated under the laws of the
Province of Alberta, and having an office at Suite 600, 600 - 6th Avenue
S.W., Calgary, Alberta, T2P 0S5;

    


    (hereinafter
referred as the "Company")

    


    OF THE
THIRD PART

    


    


    WHEREAS
the Vendor is the legal and beneficial owner of all of the issued shares in the
capital stock of the Company.

    


    AND
WHEREAS the Purchaser is desirous of purchasing and the Vendor is desirous of
selling the Shares on the terms and conditions hereinafter set
forth.

    


    NOW
THEREFORE in consideration of the mutual covenants and agreements hereinafter
set forth and in consideration of the sum of Two ($2.00) Dollars
paid  by each party to each of the other parties (the receipt and
sufficiency of which consideration is hereby acknowledged by all parties), the
parties hereto agree as follows:


    
      
         


      

      
         


        
          

        

      

      
        2

      

    


    


    
      	
              1.

            	
              DEFINITIONS AND
    INTERPRETATION

            


    

    


    
      	
              1.1

            	
              Definitions.   In
      this Agreement, including the recitals
hereto:

            


    

    


    "Agreement""
means the agreement constituted by the execution of this document by the parties
hereto, including all schedules referred to herein, as same may be supplemented
or amended from time to time.

    


    "Business
Day"" means a day other than a Saturday, Sunday, statutory holiday or day that
is declared by any governmental authority to be a civic holiday in the
jurisdiction in which an event contemplated hereby is to take
place.

    


    "Closing""
means the completion of the sale to the Purchaser and the purchase from the
Vendor of the Shares hereunder by the transfer and delivery of documents of
title thereto and the payment of the purchase price therefor as set out in
Section 2.2 hereof;

    


    "Closing
Day"" means the day upon which the events described in section 7 hereof
occur.

    


    "Company""
means Kerrisdale Resources Ltd., a company incorporated under the laws of the
Province of Alberta, having an office at Suite 600, 600 - 6th Avenue
S.W., Calgary, Alberta T2P 0S5.

    


    "Company's
Financial Statements"" means the unaudited financial statements of the Company
for the year ended September 30, 2007 as prepared by a Chartered Accountant and
the unaudited interim financial statements of the Company for the periods ended
March 31, 2008 prepared by management, copies of which are attached hereto as
Schedule "A".

    


    "Purchaser""
means Scout Exploration, Inc.

    


    "Place of
Closing""  means  2100, 777 – 8th
Avenue  S.W., Calgary, Alberta  or such other place as the
parties may mutually agree upon.

    


    “Property”
means the oil and gas interests set out in Schedule “C” to this
Agreement.

    


    "Purchaser's
Solicitors"" means Hemsworth, Schmidt or such other solicitors as are appointed
by the Purchaser from time to time.


    
      
         


      

      
         


        
          

        

      

      
        3

      

    

     

    "Shares""
means the 100 Class A voting shares, issued and outstanding,  in the
capital stock of the Company owned by the Vendor.

    


    "Vendor's
Solicitors"" means  Dunphy Best BlocksomBlocksom LLP, or such other
solicitors as are appointed by the Vendor from time to time.

    


    Any other
terms defined within the text of this Agreement shall have the meanings so
ascribed to them.

    


    1.2                      Headings and
Paragraphs.  The headings to, and the division of this
Agreement into Articles and paragraphs are for convenience of reference only and
shall not in any way affect or be used in interpreting any of the provisions of
this Agreement.

    


    1.3                      Gender and
Number.   The provisions of  this Agreement
shall be read with all changes in gender and number as may be required by the
context.

    


    1.4                      Currency and Method of
Payment.  All monetary amounts specified in this Agreement are
in reference to lawful currency of Canada, unless specifically stated
otherwise.  Any monies payable hereunder shall be paid in cash or by
bank draft, certified cheque or solicitor?s
trust cheque.

    


    1.5                      Severance.  If
any provision of this Agreement is determined to be illegal or unenforceable,
such provision shall be ineffective to the extent of such illegality or
unenforceability, but shall not invalidate or affect the validity or
enforceability of the remaining provisions of this Agreement.

    


    1.6                      Governing
Laws.  This Agreement shall be governed by and construed in
accordance with the laws of the Province of Alberta and the federal laws of
Canada applicable therein, and the parties agree to submit to the jurisdiction
of the courts of Alberta with respect to any legal proceedings arising
therefrom.

    


    1.7                      Action on Non-Business
Day.  If by the terms hereof the Closing or any other event is
scheduled to take place at a time which falls on a day which is not a Business
Day, the Closing or other event shall take place on the first Business Day next
following.

    


    1.8                      Schedules.  Appended
to this Agreement are the following Schedules which form an integral part
hereof:

    


    Schedule
"A"" - Company’s Financial Statements

    Schedule
"B" - Vendor's and Company's Disclosures

    Schedule
"C"" - The Property


    
      
         


      

      
         


        
          

        

      

      
        4

      

    


    Schedule
"D"" - The General Security Agreement

    Schedule
"E" -"Management Agreement

     

     

    
      	
              2.

            	
              PURCHASE AND
SALE

            


    

    


    2.1                      
 Purchase and
Sale.  The Vendor hereby covenants and agrees to sell, assign
and transfer the Shares to the Purchaser and the Purchaser covenants and agrees
to purchase same from the Vendor on the Closing.

    


    2.2                       
Purchase
Price.  The Purchase Price payable for the Shares by the
Purchaser to the Vendor shall consist of:

    


    
      	 	
              (a)

            	
              the
      payment of $25,000.00 CDN to the Vendor upon the signing of a Letter of
      Intent (which sum has been paid);

            
	 	 
      	 
      
	 	
              (b)

            	
              the
      payment of $400,000.00 CDN to the Vendor upon the Closing
    Day;

            
	 	 
      	 
      
	 	
              (c)

            	
              the
      issue of a General Security Agreement (attached hereto as Schedule “D”) in
      the amount of $350,000.00 CDN bearing 6.75% interest for a term of three
      years.  Interest on the principal of $350,000.00 CDN at 6.75%
      (annual) to be paid quarterly, commencing with the effective
      date  of  January 1, 2008.  The first
      interest payment will be July 1, 2008 which payment will consist of two
      payments (April 1, 2008 and July 1, 2008).  After one year, the
      Purchaser will have the option of paying a sinking fund payment of
      $125,000.00 and continue to pay the interest quarterly on the outstanding
      principal or paying the entire principal ($350,000.00) with a six month
      interest payment.  After two years, if the entire principal is
      not paid at the end of the first year, the Purchaser will have the option
      of paying a sinking fund payment ($125,000) and continuing to pay the
      interest quarterly on the outstanding principal or paying the entire
      remaining principal with a three month interest payment.  After
      three years, the entire remaining principal is payable.  The
      amount contemplated under this paragraph shall be secured by the General
      Security Agreement being registered against the
  Property.

            


    

    


    


    
      	
              3.

            	
              ADDITIONAL
  PROVISIONS

            


    

    


    3.1                       
The Purchaser shall pay the Vendor's consulting company, Kerrisdale
Consulting  Inc.,  the sum of $1,000.00 CDN. (exclusive of
GST) per month, for one year, commencing January 1, 2008, in consideration for
consulting services to be performed by the Vendor for the Purchaser in respect
to the operations of the Company, including the consolidation of the interests
in the operating


    
      
         


      

      
         


        
          

        

      

      
        5

      

    


    assets of
the Company.  A copy of the Management Agreement shall be attached
hereto as Schedule “E”.   There will be a lump sum payment of
$6,000.00 CDN. plus GST on June 18th, 2008,
as per the terms of the Management Agreement.

    


    3.2                       
The Purchaser agrees to make a payment of $500.00 CDN. (exclusive of GST) per
month to
Kerrisdale  Consulting  Inc.  for  a  period  of
one year, commencing January 1, 2008, in consideration
of the lease of an office located at Suite 600, 600 - 6th Avenue
S.W., Calgary, Alberta  T2P 0S5.

    


    
      	
              4.

            	
              REPRESENTATIONS AND WARRANTIES OF THE VENDOR AND
      THE COMPANY

            


    

    


    4.1                       
Representations.  Each
of the Vendor and the Company jointly and severally represent and warrant to the
Purchaser (and acknowledge that the Purchaser is relying upon such
representations and warranties in entering into this Agreement and completing
the transactions contemplated hereby) that except as disclosed in Schedule "B""
attached hereto:

    


    
      	 	
              (a)

            	
              the
      Company is duly incorporated and organized, validly subsisting and in good
      standing under the laws of the Province of Alberta;

            
	 	 
      	 
      
	 	
              (b)

            	
              the
      authorized capital of the Company consists of an unlimited number of Class
      A voting shares and an unlimited number of Class B non-voting shares of
      which 100 Class A shares are validly issued and outstanding as fully paid
      and non-assessable as of the date hereof, and there are no other shares of
      the Company issued and outstanding;

            
	 	 
      	 
      
	 	
              (c)

            	
              all
      the issued and outstanding shares in the capital of the Company are duly
      authorized, validly issued, fully paid, non-assessable and issued in
      compliance with all applicable corporate, securities and other
      laws;

            
	 	 
      	 
      
	 	
              (d)

            	
              the
      Vendor is the legal and beneficial owner of the Shares, holds such Shares
      free and clear of any and all liens, adverse claims, charges, pledges,
      hypothecations and encumbrances whatsoever;

            
	 	 
      	 
      
	 	
              (e)

            	
              the
      Vendor has full and absolute right, power and authority to enter into this
      Agreement on the terms and conditions herein set forth and to transfer the
      legal and beneficial title and ownership of the Shares to the Purchaser as
      contemplated hereby;

            
	 	 
      	 
      
	 	
              (f)

            	
              no
      person, firm or corporation has any agreement or option or a right capable
      of becoming an agreement or option for the purchase of any of the Shares
      or for the purchase of any of the
      unissued shares in the capital stock of the Company except as disclosed in
      Schedule "B"" attached hereto;

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        6

      

    

     

    
      	 	
              (g)

            	
              there
      are no shareholders agreements, proxies, voting trust agreements or
      similar agreements among the Vendor or any other parties with respect to
      the Shares;

            
	 	 
      	 
      
	 	
              (h)

            	
              the
      Vendor is not acting as nominee, agent, trustee, executor, administrator
      or other legal representative of any person in the sale of the Shares
      hereunder;

            
	 	 
      	 
      
	 	
              (i)

            	
              neither
      the Vendor nor the company have agreed to pay any finder?s
      fee or commissions in connection with the sale of the Shares contemplated
      by this Agreement for which the Purchaser or the Company shall have any
      obligation or liability;

            
	 	 
      	 
      
	 	
              (j)

            	
              the
      Company has full power and authority to enter into and perform its
      obligations under this Agreement;

            
	 	 
      	 
      
	 	
              (k)

            	
              the
      execution and delivery of this Agreement has been duly authorized by the
      Company and constitutes a valid and binding obligation of the Company
      enforceable in accordance with its terms, subject to the qualification
      that enforceability may be limited by bankruptcy, insolvency or similar
      laws affecting creditors' rights generally and to the extent that remedies
      of specific performance and injunction, being equitable remedies, may only
      be granted in the discretion of the court having
    jurisdiction;

            
	 	 
      	 
      
	 	
              (l)

            	
              the
      performance of this Agreement will not be in violation of  the
      Articles, Bylaws or other constating documents of the Company or
      of  any agreement to which the Vendor or the Company is a party
      and will not give any person, firm or corporation any right to terminate
      or cancel any agreement or any right enjoyed by the Company nor result in
      the creation or imposition of any lien, encumbrance or restriction of any
      nature whatsoever in favour of any third party upon or against the assets
      of the Company;

            
	 	 
      	 
      
	 	
              (m)

            	
              the
      Company has the corporate power to own the Property owned by it and to
      carry on the business carried on by it and is duly qualified or licensed
      to carry on business in every jurisdiction in which the character of the
      Property and assets owned by the Company or the nature of the business
      conducted by the Company requires the Company to be so licensed or
      qualified;

            
	 	 
      	 
      


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        7

      

    

     

    
      	 	
              (n)

            	
              the
      Company has good and marketable title to the Property and assets owned and
      used by it free and clear of any mortgage, pledge, deed of trust, lien,
      conditional sale agreement, encumbrance, security interest, charge or
      adverse claim whatsoever, except as disclosed in Schedule "B""
      hereto;

            
	 	 
      	 
      
	 	 
      	 
      
	 	
              (o)

            	
              the
      Company does not carry on business in any jurisdiction other than Alberta
      and is not extra-provincially registered in any
    jurisdiction;

            
	 	 
      	 
      
	 	
              (p)

            	
              the
      Company is not a party to, or any of its Property or assets bound or
      affected by any contract, agreement, deed, instrument or other document,
      including any agreement of guarantee, indemnification or other like
      commitment, whereby the Company may be held liable for the obligations,
      liabilities, contingent or otherwise, or indebtedness of any other person,
      firm or corporation;

            
	 	 
      	 
      
	 	
              (q)

            	
              there
      are no actions, suits, claims or proceedings, whether or not purportedly
      on behalf of the Company, pending or in existence or threatened against or
      affecting the Company at law or in equity or before or by any federal
      ,provincial, state, municipal or other governmental department,
      commission, board, bureau, agency or instrumentality, domestic or foreign
      and there is not now outstanding any  order, writ, injunction or
      judgment of any court, administrative agency or governmental body or
      arbitration tribunal issued and directed against the Company or any of its
      properties, assets, businesses or prospects or against any of the
      Shares;

            
	 	 
      	 
      
	 	
              (r)

            	
              the
      Company is not in material breach of any laws, ordinances, statutes,
      regulations, by-laws, orders or decrees to which it is subject or which
      apply to it;

            
	 	 
      	 
      
	 	
              (s)

            	
              the
      Company is not a party to any collective agreement with any labour union
      or other association of employees and the Company has no contract with any
      employee, officer, officer, professional advisor or other individual which
      cannot be lawfully terminated without recourse by the other party or
      parties thereto on not more than thirty (30) days'
  notice;

            
	 	 
      	 
      
	 	
              (t)

            	
              the
      Company is not a party to any material written or oral agreement
      respecting cessation of employment or compensation therefor, nor does it
      have any officers, employees or consultants who may be dismissed except on
      less than one month's prior notice, or payment in lieu
      thereof;

            
	 	 
      	 
      
	 	
              (u)

            	
              the
      Company is not in default or breach of any contracts, agreements,
      indentures, leases or other instruments to which it is a party or by which
      it is bound, which default or breach could, if acted upon by the party or
      parties legally entitle to do so, materially,  adversely affect
      the business operations, assets or financial condition of the Company, and
      all contracts, agreements, indentures and leases to which the Company is a
      party are listed in Schedule "B""
hereto;

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        8

      

    

     

    
      	 	
              (v)

            	
              to
      the best of the Vendor?s
      knowledge, all facts relating to the Company or to its business,
      operations, assets or financial conditions that are known or which on
      reasonably enquiry ought to be known, to the Vendor and that are material
      to the business, operations, assets or financial condition of the Company
      have been disclosed to the Purchaser;

            
	 	 
      	 
      
	 	
              (w)

            	
              all
      material transactions of the Company have been promptly and properly
      recorded or filed in or with its books and records, and the record book of
      the Company contains complete and accurate minutes and records of all
      meetings and proceedings of and resolutions passed by the shareholders and
      the directors of the Company since its incorporation and all such meetings
      were duly called and held;

            
	 	 
      	 
      
	 	
              (x)

            	
              the
      Vendor is not aware of any event or occurrence which has had, or might
      reasonably be expected to have, a material adverse effect on the business
      of the Company or the results of any of its operations;

            
	 	 
      	 
      
	 	
              (y)

            	
              the
      Company has duly and timely filed all Canadian, local and foreign tax
      returns, reports, declarations and other similar reports required to be
      filed by it and all liabilities for taxes, assessments and other
      governmental charges (including installments on account of such taxes,
      assessments and charges and any interest or bounties thereon) upon all or
      any of the income of the Company or its assets which were required to be
      paid on or before the date hereof, have been duly paid or satisfied on or
      before their respective due dates and all liabilities for taxes,
      assessments or other governmental charges which fall due and become
      payable prior to closing will have been fully paid prior to the Closing
      Date;

            
	 	 
      	 
      
	 	
              (z)

            	
              the
      Company has not entered into any long term leases or other long term
      contracts of a material nature, except as disclosed in Schedule
      "B";

            
	 	 
      	 
      
	 	
              (aa)

            	
              the
      Company's Financial Statements  have been prepared in accordance
      with generally accepted accounting principles applied on a consistent
      basis and truly and accurately reflect the financial position of the
      Company as of the last day of the period for which they were prepared and
      since that time and except as disclosed in Schedule "B""
      hereto;

            


    

    


    
      	 	
              i)

            	
              there
      has been no material adverse change in the financial position or condition
      of the Company, nor any damage, loss or other change in any circumstances
      materially affecting the business, operations or properties of the
      Company;

            
	 	 
      	 
      
	 	
              ii)

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

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        9

      

    

     

    
      	 	
              iii)

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

            
	 	 	 
	 	
              iv)

            	
              the
      business of the Company has been carried on in the ordinary
      course.

            


    

    


    
      	 	
              (bb)

            	
              the
      Company has no liabilities of any sort except as disclosed in the
      Company's Financial Statements or Schedule "B"
      hereto;

            
	 	 
      	 
      
	 	
              (cc)

            	
              neither
      the Vendor nor members of his family nor any corporation controlled by the
      Vendor or members of his family owns any property or assets which are used
      by the Company;

            
	 	 
      	 
      
	 	
              (dd)

            	
              the
      names of directors and officers of the Company are as
follows:

               

              Brian
      Mahood - President, Secretary and Director;

            
	 	 
      	 
      
	 	
              (ee)

            	
              the
      Company maintains such insurance against loss or damage to its assets and
      with respect to public liability as is reasonably prudent for a company
      such as the Company;

            
	 	 
      	 
      
	 	
              (ff)

            	
              the
      Company has not entered into any non-disclosure, confidentiality,
      non-competition or similar agreement or arrangement with any person, firm
      or corporation;

            
	 	 
      	 
      
	 	
              (gg)

            	
              the
      Company is not indebted or under any financial obligation to the Vendor,
      or to any directors, officers, employees, shareholders and other insiders
      of the Company whatsoever;

            
	 	 
      	 
      
	 	
              (hh)

            	
              neither
      the Vendor nor any present or former officer, director, employee or
      shareholder of the Company is now indebted or under any financial
      obligation to the Company on any account whatsoever;

            
	 	 
      	 
      
	 	
              (ii)

            	
              the
      Vendor is not a non-resident of Canada as provided in the Income Tax Act
      (Canada);

            
	 	 
      	 
      
	 	
              (jj)

            	
              the
      Company has no outstanding options to purchase shares, management
      agreements or credit cards;

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        10

      

    

     

    4.2                      
 General
Covenants of the Vendor and the Company.  The Vendor and the
Company hereby jointly and severally covenant with and undertake to the
Purchaser that:

    


    
      	 	
              (a)

            	
              they
      will use reasonable efforts to assist the Purchaser to obtain all
      necessary consents, amendments, novations or other instruments as may be
      required, if any, of third parties in connection with the transactions
      contemplated by this Agreement;

            
	 	 
      	 
      
	 	
              (b)

            	
              between
      the date of this Agreement and the Closing Date, they will ensure that the
      Company will carry on its business in the ordinary and normal course and
      ensure that the Company will not enter into any transactions outside the
      ordinary and normal course of its business, or any transactions of a
      material nature, including without
limitation:

            


    

    


    
      	 	
              i)

            	
              entering
      into any agreement or doing any act or thing that might reasonably be
      expected to impair the ability of the Vendor or the company to complete
      the Closing;

            
	 	 
      	 
      
	 	
              ii)

            	
              issuing
      or re-issuing any capital stock (including, without limitation, treasury
      stock), bonds, notes, warrants, options or other securities or becoming
      subject to any obligation to issue any such securities;

            
	 	 
      	 
      
	 	
              iii)

            	
              incurring
      any liability or obligation, whether absolute or contingent, including
      without limitation, purchase on credit or installment
    basis;

            
	 	 
      	 
      
	 	
              iv)

            	
              failing
      to pay or discharge any material current liability when it may become due
      and payable;

            
	 	 
      	 
      
	 	
              v)

            	
              selling,
      transferring or otherwise disposing of, mortgaging, pledging or subject to
      any lien or any other encumbrance, any of the Company's assets, whether real or personal and whether tangible or
      intangible, excepting inventory items and other similar items of personal
      property in the ordinary course of business;

            
	 	 
      	 
      
	 	
              vi)

            	
              incurring
      any additional indebtedness beyond its current liability incurred in the
      normal course of business, except for reasonable accounting and legal fees
      and disbursements incurred on behalf of the Company only in connection
      with this transaction and the determination of its current tax liability
      triggered as a result of the transaction contemplated by this Agreement,
      register and transfer agent charges or amending the terms of, or extending
      the time for payment of, any existing indebtedness or guarantee, or
      mortgaging or 

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        11

      

    

     

    
      	 	 
      	pledging
      or subject to lien, charge, security interest or any other encumbrance,
      any of the Company's assets, real or personal, tangible or intangible, or
      making any loans, advances or guarantees to any person or entity,
      including without limitation, salary advances to any employee or
      officer;
	 	 	 
	 	
              vii)

            	
              making
      any changes in any method of accounting or accounting practice of the
      Company;

            


    

    


    
      	 	
              (c)

            	
              they
      will cooperate with the  Purchaser in support of all things
      necessary to give effect to the tenor and intent of this
      Agreement;

            
	 	 
      	 
      
	 	
              (d)

            	
              they
      shall within thirty (30) days of the Closing, deliver up or cause to be
      delivered up to the Purchaser at such address as the Purchaser may direct,
      all books, records, files, documents and other data of the Company which
      are not delivered to the Purchaser on
Closing.

            


    

    


    4.3                       
Survival.  The
covenants, representations and warranties of the Vendor and the Company
contained herein shall be true and correct at and as of the Closing Date as
though such representations
and warranties were made at and as of such time.  Notwithstanding any
investigations or inquiries made by the Purchaser prior to the Closing Date or
the waiver of any condition by the Purchaser, the covenants, representations and
warranties of the Vendor and the Company shall survive the Closing and continue
in full force an effect thereafter for the benefit of the Purchaser for a period
of one year from the Closing Date.

    


    4.4                       
Indemnity.   The
Vendor shall indemnify and hold harmless the Purchaser from and against any
loss, claims, actions, liability, damages and costs, including any payment made
in good faith in settlement of any claim or potential claim, arising directly or
indirectly:

    


    
      	 	
              (a)

            	
              by
      reason of any of the representations and warranties of the Vendor or the
      Company set forth in section 4 proving not to have been true and correct
      on the date hereof or as of the Closing Date;

            
	 	 
      	 
      
	 	
              (b)

            	
              out
      of the breach of the Vendor or the Company of any covenants or other
      provision or obligation of the Vendor or the company contained in this
      Agreement.

            


    

    


    4.5                       
The agreement to indemnify contained in this Article 4, shall survive and
continue in existence and enure to the benefit of the Purchaser for a period of
one year from the Closing Date unless such claim is based on fraud, in which
event, no limitation of time shall apply as between the parties.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        12

      

    

     

    4.6                      
 The indemnification pursuant to Section 4.4 and Section 4.5 shall be
limited to $700,000.00 CDN.

    


    4.7                      
 The obligation of indemnification shall not be applicable to single claims
for damages unless the damages in respect of any such single claim exceeds Five
Thousand ($5,000.00) Dollars.

    


    4.8                      
 Ongoing
Operations.  Notwithstanding anything herein contained, the
Company shall

    have the
right to conduct such business and to enter into such agreements as may be
necessary in the ordinary course of its business.

    


    
      	
              5.

            	
              PURCHASERS' REPRESENTATIONS AND
      WARRANTIES

            


    

    


    5.1                     
   In order to induce the Vendor to enter into and consummate this
Agreement, the Purchaser represents and warrants in favour of the Vendor, as of
the date hereof, as follows:

     

    
      	 	
              (a)

            	
              the
      Purchaser is a corporation duly incorporated under the laws of Nevada and
      is a valid and subsisting corporation under the laws of
      Nevada;

            
	 	 	 
	 	
              (b)

            	
              the
      Purchaser has the requisite power, capacity and authority to enter into
      this Agreement on the terms and conditions herein set forth, and all
      necessary corporate action has been taken by the Purchaser to authorize
      the execution, delivery and performance of this Agreement and the
      transaction contemplated herein;

            
	 	 	 
	 	
              (c)

            	
              this
      Agreement and all documents required hereunder, when executed and
      delivered by the Purchaser and when duly and properly executed and
      delivered by the Vendor will be valid and binding agreements and
      obligations, enforceable against the Purchaser in accordance with their
      terms, subject to bankruptcy, insolvency, fraudulent transfer,
      reorganization, moratorium and other laws relating to or affecting
      creditors' rights generally and subject to general principles of
      equity;

            
	 	 	 
	 	
              (d)

            	
              there
      is no suit, action, litigation, arbitration proceeding or governmental
      proceeding, including appeals and application for review, in progress,
      pending or, as far as the Purchaser is aware threatened, against or
      relating to the Purchaser or affecting the properties or business of the
      Purchaser which if determined adversely to the Purchaser might materially
      and adversely affect the properties, business, future prospects or
      financial condition of the Purchaser, or the right of the Purchaser to
      use, produce or sell its property and assets in whole or in
      part.  There is not presently outstanding against the Purchaser
      any judgment, decree, injunction, rule or order of any court, governmental
      department, commission, agency or arbitrator.

            
	 	 	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        13

      

    

     

    
      	 	
              (e)

            	
              the
      entering into by the Purchaser of this Agreement and the completion of the
      transaction contemplated herein will not be in violation
    of:

            


    

     

    
      	 	
              (i)

            	
              the
      constating documents and by-laws of the Purchaser;

            
	 	 	 
	 	
              (ii)

            	
              any
      agreement to which the Purchaser is a party and will not give any person
      or company any right to terminate or cancel any agreement or any right
      enjoyed by the Purchaser because of such agreement, and will not result in
      the acceleration, creation or imposition of any obligation, lien,
      encumbrance or restriction of any nature whatsoever in favour of a third
      party upon or against the Purchaser or the assets of the Purchaser;
      or

            
	 	 	 
	 	
              (iii)

            	
              any
      statute, regulation, rule, by-law, order, judgment, or decree by which the
      Purchaser is bound; and

            


    

     

    
      	 	
              (f)

            	
              the
      Purchaser has not incurred any obligation or liability, contingent or
      otherwise, for broker's or finder's fees in respect of the transaction
      contemplated by this Agreement

            


    

     

    5.2                       
Survival.   The
representations and warranties of the Purchaser set forth herein shall be true
and correct at and as of the Closing Date as though such covenants,
representations and warranties were made at and as of such
time.  Notwithstanding any investigations or inquiries made by the
Vendor prior to the Closing Date or the waiver of any condition by the Vendor,
the representations and warranties of the Purchaser shall survive the Closing
and shall continue in full force and effect thereafter for the benefit of the
Vendor.

    


    5.2                       
Indemnity.  The
Purchaser shall indemnify and save harmless the Vendor from and against any
loss, claims, damages, actions, liability and costs, including any payment made
in good faith in settlement of any claim or potential claim, arising directly or
indirectly form any of the said representations and warranties of the Purchaser
set forth in this Article 5 being incorrect or breached.

    


    


    
      	
              6.

            	
              CONDITIONS
  PRECEDENT

            


    

    


    6.1                      
 Conditions
Precedent of Purchaser.  The obligation of the Purchaser to
complete the purchase of the Shares contemplated by this Agreement is subject to
the fulfillment, at or prior to Closing, of each of the following conditions
precedent:

    


    
      	 	
              (a)

            	
              The
      representations and warranties of the Vendor and the Company set forth in
      Article 4 of this
      Agreement  shall  be  true  and
      correct as  of the Closing as if such representations and
      warranties were made at and as of such time, and the Purchaser shall have
      received a certificate to that effect from the Vendor;

            
	 	 
      	 
      
	 	
              (b)

            	
              the
      Vendor and the Company shall have performed and complied with all
      agreements, covenants and conditions required by this Agreement to be
      performed or complied with by them prior to or at the
    Closing;

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        14

      

    

     

    
      	 	
              (c)

            	
              the
      Vendor and the Company shall have made available to the Purchaser or its
      nominees, at all reasonable times prior to the Closing Date, the minute
      book of the Company and all other material contracts, books, accounts,
      records and other information with respect to the affairs of the
      Company;

            
	 	 
      	 
      
	 	
              (d)

            	
              from
      the date hereof through the Closing
Date;

            


    

    


    
      	 	
              i)

            	
              there
      has been no material adverse change in the business, prospects, financial
      condition, results of operations or the assets of the
    Company;

            
	 	 
      	 
      
	 	
              ii)

            	
              the
      Company shall not have suffered any liability, judgement, lien or
      termination of any contract or the imposition of any obligation, the
      effect of  which shall be materially adverse to the
      Company;

            
	 	 
      	 
      
	 	
              iii)

            	
              there
      shall have been no other material adverse change of any kind with respect
      to the Company other than in the ordinary course of its business
      consistent with past practices or as permitted or contemplated by this
      Agreement;

            


    

    


    
      	 	
              (e)

            	
              the
      Company shall deliver the written resignations of the directors and
      officers of the Company and the Company and the Vendor shall deliver
      certified resolutions of the shareholders of the Company appointing such
      persons to the board of directors of the Company as the Purchaser may
      direct;

            
	 	 
      	 
      
	 	
              (f)

            	
              the
      Company shall deliver to the Purchaser certified copies of resolutions
      changing the existing bank signing officers to nominees of the
      Purchaser.

            


    

    


    6.2                      
 Waiver by
Purchaser.  The conditions precedent referred to in paragraph
6.1 are inserted for the exclusive benefit of the Purchaser and may be waived in
whole or in part by the Purchaser at any time prior to Closing by delivering to
the Vendor written notice to that effect.  If any of the said
conditions are not complied with or performed to the Purchaser's reasonable
satisfaction on or before the Closing Date or compliance is not waived in
writing by the Purchaser, then the Purchaser shall be relieved of its
obligations to consummate the Closing.

    


    6.3                       
Conditions Precedent
of Vendor.  All obligations of the Vendor under this Agreement
are subject to the fulfillment, prior to or at Closing, of each of the following
conditions.

     

    
      	 	
              (a)

            	
              the
      representations and warranties of the Purchaser set forth in Articles 5 of
      this Agreement shall be true and correct as of the date of this Agreement
      and shall be true and correct in all material respects as of the Closing
      Day as if made by the Purchaser again at that time, and the Purchaser
      shall deliver at Closing a certificate to such effect regarding the
      Purchaser's representations and warranties dated on the Closing
      Day;

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        15

      

    

     

    
      	 	
              (b)

            	
              the
      Purchaser shall have performed and satisfied, in all material respects,
      all covenants required by this Agreement to be performed and satisfied
      prior to the Closing Day including payment
      of the Purchase Price;

            
	 	 	 
	 	
              (c)

            	
              at
      the Closing, no action or proceeding shall have been instituted or
      threatened by any person or entity before any court or governmental agency
      to obtain damages in respect of this Agreement or to restrain or prohibit
      the consummation of the transactions contemplated
  herein;

            
	 	 	 
	 	
              (d)

            	
              the
      Vendor shall have been provided with copies of any consents necessary to
      give effect to the transactions contemplated herein;
and

            
	 	 	 
	 	
              (e)

            	
              the
      Vendor shall have been provided with evidence that the GSA have been duly
      issued and registered.

            


    

     

    6.4                       
Waiver by
Vendor.  The conditions precedent referred to in paragraph 6.3
are inserted for the exclusive benefit of the Vendor and may be waived in whole
or in part by the Vendor at any time prior to Closing by delivering to the
Purchaser written notice to that effect.  If any of the said
conditions are not complied with or performed to the Vendor's reasonable
satisfaction on or before the Closing Date or compliance is not waived in
writing by the Vendor, then the Vendor shall be relieved of his obligations to
consummate the Closing.

    


    6.5                       
If at the Closing all conditions of this Agreement have not been fulfilled or
waived by the party having discretion to waive such condition, then unless both
parties by mutual consent  in writing agree to extend the Closing,
this Agreement shall terminate on that date, and upon such termination, the
parties shall be released from all further obligations hereunder except to the
extent that a party may have any claim against the other party hereto based on
an alleged breach or repudiation of this Agreement.

    


    


    
      	
              7.

            	
              CLOSING
  ARRANGEMENTS

            


    

    


    7.1                       
Time of
Closing.  Subject to the terms and conditions hereof, the
Closing of the transactions contemplated hereby shall take place at the Place of
Closing at 2:00 p.m. Pacific time, on the
Closing Date, provided always, that the Closing shall take place on or before
June 18, 2008 unless otherwise agreed upon in writing by the parties
hereto.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        16

      

    

     

    7.2                       
Deliveries by Vendor
and the Company.  Upon Closing, the Vendor and/or the Company
shall deliver or cause to be delivered to the Purchaser:

    


    
      	 	
              (a)

            	
              the
      Shares;

            
	 	 
      	 
      
	 	
              (b)

            	
              the
      Vendor's Certificate referred to in paragraph 6.1(a);

            
	 	 
      	 
      
	 	
              (c)

            	
              the
      certified true copy of the directors and shareholders resolutions referred
      to in paragraphs 6.1(e)(f);

            
	 	 
      	 
      
	 	
              (d)

            	
              the
      resignations of the directors and officers referred to in paragraph
      6.1(e);

            
	 	 
      	 
      
	 	
              (e)

            	
              a
      certificate of good standing;

            
	 	 
      	 
      
	 	
              (f)

            	
              the
      corporate seal and the minute books of the Company; and

            
	 	 
      	 
      
	 	
              (g)

            	
              such
      other documents as the Purchaser may reasonably require to give effect to
      the terms and intention of this
Agreement.

            


    

    


    
      	
              7.3

            	
              Deliveries by
      Purchaser.  Upon Closing, the Purchaser shall deliver to
      the Vendor, all in a form approved by the Vendor’s
    Solicitors:

            


    

     

    
      	 	
              (a)

            	
              the
      balance of the Purchase Price as provided for in paragraph 2.2(b)
      hereof;

            
	 	 	 
	 	
              (b)

            	
              the
      sum of Six Thousand ($6,000.00) Dollars plus GST as per the terms of the
      Management Agreement;

            
	 	 	 
	 	
              (c)

            	
              resolution
      of directors of the Purchaser approving the purchase;

            
	 	 	 
	 	
              (d)

            	
              GSA
      and related documents:

            


    

     

    
      	 	
              (i)

            	
              Financing
      Statement;

            
	 	 	 
	 	
              (ii)

            	
              Officer's
      Certificate;

            
	 	 	 
	 	
              (iii)

            	
              Incumbency
      Certificate;

            
	 	 	 
	 	
              (iv)

            	
              Acknowledgement
      and Waiver;

            
	 	 	 
	 	
              (v)

            	
              resolution
      of the directors of the Company approving the General Security Agreement
      as provided for in paragraph
6.2(e);

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        17

      

    

     

    
      	 	
              (e)

            	
              opinion
      of the Purchaser's Solicitors regarding the GSA in a form satisfactory to
      the Vendor's Solicitors.

            
	 	 	 
	 	
              (f)

            	
              an
      Officers Certificate regarding the truth and accuracy of the Purchaser’s
      representations and warranties.

            
	 	 	 
	 	
              (g)

            	
              such
      other documents as the Vendor's solicitor may reasonably require to give
      effect to the terms and intention of this
  Agreement.

            


    

    


    


    
      	
              8.

            	
              GENERAL
  PROVISIONS

            


    

    


    8.1                       
Further
Assurances.  The parties shall deliver to each other such
further documentation and shall perform such further acts as and when the same
may be required to carry out and give effect to the terms and intent of this
Agreement.

    


    8.2                       
Communications and
Notices.  All notices and other communications given in
connection with this Agreement shall be in writing and shall, except in the
event of mail strike, during which time all notices must be personally
delivered, be sufficiently given if delivered in person or telefaxed or sent by
registered mail, postage prepaid, to the parties as the following
addresses:

     

     

    
      	
               
      

            	
              To
      the Vendor:

            	
              BRIAN
      MAHOOD

              Suite
      600, 600 - 6th
      Avenue S.W.

              Calgary,
      Alberta T2P 0S5

            


    

    
       

       

    

    
      	
               
      

            	
              To
      the Purchaser:

            	
              SCOUT
      EXPLORATION INC.

              609
      - 475 Howe Street

              Vancouver,
      B.C.  V6C 2B3

            


    

    
       

       

    

    
      	
               
      

            	
              To
      the Company:

            	
              KERRISDALE
      RESOURCES LTD.

              Suite
      600, 600 - 6th
      Avenue S.W.

              Calgary,
      Alberta T2P 0S5

            


    

     

    Any such
notices or other communications sent by registered mail addressed as aforesaid
shall be deemed to be received by the addressee thereof on the third business
day after the mailing thereof.  Any such notices personally delivered
or telefaxed shall be deemed delivered on the day of delivery.  Any
party hereto may change its address for service by notices in writing to the
other parties hereto.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        18

      

    

     

    8.3                       
Time of
Essence.  Time shall be of the essence of this
Agreement.

    


    8.4                       
Waiver and
Amendment.  This Agreement may only be amended by further
written agreement executed and delivered by all of the parties.  No
wavier or consent by a part of or to any breach or default by any other party
shall be effective unless evidenced in writing, executed and delivered by the
party so waiving or consenting and no waiver or consent effectively given as
aforesaid shall operate as a waiver of or consent to any further or other breach
or default in relating to the same or any other provision of this
Agreement.

     

    8.5                       
Entirety of
Agreement.  This Agreement contains the entire agreement among
the parties pertaining to the subject matter hereof and supercedes and replaces
all previous written and oral agreements among the parties with respect to the
subject matter hereof.

    


    8.6                       
Successors and
Permitted Assigns.  This Agreement shall enure to the benefit
of and be binding upon the parties hereto and their respective heirs,
successors, personal representatives and permitted assigns.  Neither
the Vendor, the Company nor the Purchaser shall assign, transfer or encumber
this Agreement or any interest herein without the prior written consent of the
other parties hereto.

    


    8.7                       
Execution in
Counterparts.  This Agreement may be signed by the parties in
as many counterparts as may be necessary, each of which so signed shall be
deemed to be an original and such counterparts together shall constitute one and
the same instrument and notwithstanding the date of execution shall be deemed to
bear the date as et forth above.

     

     

    IN
WITNESS WHEREOF the parties hereto have duly executed this Agreement as of the
day and year first above written.

    


    


    
      	
               

              SIGNED,
      SEALED AND DELIVERED

              by
      BRIAN MAHOOD, in
      the presence

              of:

               

              ________________________________

              Name

               

              ________________________________

              Address

               

              ________________________________

              Occupation

            	
               

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

            	
               

               

               

               

               

               

              ______________________________

              BRIAN
      MAHOOD

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        19

      

    

     

    
      	
               

              THE
      CORPORATE SEAL of

              SCOUT EXPLORATION INC.,
      in
      the

              presence
      of:

               

              ________________________________

               

               

              ________________________________

            	
               

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

            	
               

               

               

               

              C/S

            


    

     

     

    
 

    


    
      	
               

              THE
      CORPORATE SEAL of

              KERRISDALE RESOURCES
      LTD., in

              the
      presence of:

               

              ________________________________

               

               

              ________________________________

            	
               

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

            	
               

               

               

               

              C/S