SHARE PURCHASE AGREEMENT
                            ------------------------


This AGREEMENT is made as of the ___ day of March, 2002.

     GARUDA  CAPITAL  CORP.,  a  company  incorporated  pursuant  to the laws of
     Nevada,  having an office  located  at 1895 26th  Street,  West  Vancouver,
     British Columbia, V7V 4K2

     (herein referred to as "Garuda")

                                                               OF THE FIRST PART

AND:

     HAGENSBORG FOODS LTD., a company  incorporated  pursuant to the laws of the
     Province of British Columbia, with its registered offices at 480 - 650 West
     Georgia Street, Vancouver, British Columbia, V6B 4N9

     (herein called "HFL")

                                                              OF THE SECOND PART

AND:

     THOSE  SHAREHOLDERS  OF HFL,  signatory  to this  agreement as evidenced by
     their names and signatures affixed to the execution pages hereof.

     (herein referred to as the "Vendors")

                                                               OF THE THIRD PART


WHEREAS:

A. Garuda,  HFL and the Vendors  entered a Letter  Agreement  dated February 26,
2002 for the  purchase  of all  issued  shares in the  capital  of HFL (the "HFL
Shares");

B. Garuda  wishes to acquire the HFL Shares  from the  Vendors,  and the Vendors
have  agreed  to sell to Garuda  all of their  respective  legal and  beneficial
interests in the HFL Shares on the terms and conditions contained herein.



<PAGE>

C. The  holders of the Series "A"  Convertible  Debentures  issued by HFL in the
principal  amount  of  CDN$600,000,  have  agreed  to  accept  payment  on their
Debentures  and  release  the  underlying   security  on  payment  in  total  of
US$365,000.

NOW THEREFORE THIS AGREEMENT  WITNESSES that in  consideration of the payment of
$10.00 to the Vendors the receipt and sufficiency of which is acknowledged,  the
premises and the mutual agreements herein contained (the receipt and adequacy of
such  consideration  is hereby  mutually  admitted by each  party),  the parties
hereby covenant and agree as follows:

1.   INTERPRETATION
     --------------

1.1  Definitions - In this Agreement the following  words and phrases shall have
the meanings set forth after each:


     (a)  "Common Shares" - means the Common shares in the capital of HFL issued
          and  outstanding  as of the  Closing  Date,  all of  which  are  being
          acquired hereunder;

     (b)  "Closing",  "Closing  Time",  "Closing  Date" - means 2:00 p.m. on the
          15th of March,  2002, or such later time or date as may be agreed upon
          in writing by the parties hereto;

     (c)  "Company Act" means the British  Columbia Company Act in effect at the
          date of this Agreement;

     (d)  "Directors"  - means the persons  holding the  position of director of
          Garuda;

     (e)  "Income Tax Act" - means the Income Tax Act of Canada in effect on the
          date of this Agreement;


     (f)  "Material  Contracts" means those subsisting  commitments,  contracts,
          agreements, instruments, leases or other documents entered into by any
          party  hereto,  by which it is bound or to which it or its  assets are
          subject which have total payment  obligations on the part of HFL which
          exceed  $10,000.00 or are for a term of or in excess of two years, all
          as set out in Schedule "B" hereto;

     (g)  "Garuda  Financial  Statements" - means the financial  statements  for
          Garuda, copies of which are contained in the Public Record;

     (h)  "Public Record" - means the information  filed by Garuda with the SEC,
          or on the EDGAR system, with the required  Securities  Commissions and
          with the Secretary of State for Nevada, as required in accordance with
          Securities  Legislation  requirements,  and which record  contains all
          material facts (as that term is defined by the Securities Legislation)
          relating  to the  corporate  structure,  business  and  operations  of
          Garuda;


                                       2
<PAGE>

     (i)  "HFL" means  Hagensborg  Foods Ltd.,  incorporated in British Columbia
          under the Company Act;

     (j)  "HFL Shares" - means the Common and Preferred shares in the capital of
          HFL being acquired by Garuda hereunder;

     (k)  "Preferred  Shares" - means the Class "A"  Preferred  shares of Garuda
          issued and  outstanding as of the Closing Date, all of which are being
          acquired hereunder;

     (l)  "Purchase  Price"  means  the  sum  of  US$700,000   allocated  as  to
          US$600,000  to the  Common  Shares  and  US$100,000  to the  Preferred
          Shares;

     (m)  "Securities  Legislation" means the Nevada Business  Corporations Act,
          the  Securities  Exchange Act of 1934,  the Securities Act of 1933 and
          the equivalent  securities  legislation of the States of America which
          apply to Garuda, each as now enacted or as the same may be amended and
          the applicable rules,  regulations,  rulings, orders and forms made or
          promulgated  under such  statutes  and the  published  policies of the
          regulatory authorities administering such statutes;


     (n)  "Vendors" - means the  registered  holder of the Preferred  Shares and
          Common Shares signatory hereto;

     (o)  "HFL Financial Statements" - means the audited financial statements of
          HFL for the  annual  period  ending  June 30,  2001,  to  consist of a
          balance sheet, statement of retained earnings, an income statement and
          a statement  of changes in  financial  position of HFL  including  the
          notes to such financial  statements,  a copy of which will be attached
          hereto as Schedule "C" upon their completion; and



1.2  Schedules - The following are the schedules to this Agreement:
     ---------

          Schedule "A" - Shareholders and Shareholdings of HFL
          Schedule "B" - Material Contracts
          Schedule "C" - HFL audited  Financial  Statements  for the year ended
                         June 30, 2001

                                       3
<PAGE>

1.3 Accounting  Interpretation  - For the purposes of this Agreement,  except as
otherwise  expressly  provided herein all accounting terms not otherwise defined
have  the  meanings  assigned  to them in  accordance  with  generally  accepted
accounting  principles  applicable  in Canada and applied on a basis  consistent
with prior years;

2.0  REPRESENTATIONS AND WARRANTIES
     -------------------------------

2.1 Representations and Warranties of the Vendors - In order to induce Garuda to
enter into and to consummate the  transactions  contemplated  by this Agreement,
the Vendors  jointly and  severally  hereby  represent  and warrant to Garuda as
follows:

     (a)  Organization  and Good Standing of HFL - HFL is duly  incorporated and
          validly  existing and in good  standing  with respect to the filing of
          all  reports in British  Columbia  , and has all  necessary  corporate
          powers, authorities and capacity to own its assets and to carry on its
          business as presently conducted;

     (b)  Vendors'  Title - The list of  Vendors  set out in  Schedule  "A" is a
          complete list of all persons or parties  having a beneficial  claim to
          the HFL Shares;

     (c)  Authority - The  Vendors,  and each of them,  have due and  sufficient
          right 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 HFL Shares to Garuda as  required by this
          Agreement;

     (d)  Absence of  Options,  etc. - No Person  has any  agreement  or option,
          present or future,  contingent,  absolute  or capable of  becoming  an
          agreement  or  option  or  which  with  the  passage  of  time  or the
          occurrence of any event could become an agreement or option:

          (i)  to  require  HFL to issue  any  further  or other  shares  in its
               capital or any other security  convertible or  exchangeable  into
               shares in its  capital or to convert or exchange  any  securities
               into or for shares in the capital of HFL;

          (ii) for the issue or allotment of any of the  authorized but unissued
               shares in the capital of HFL; or

          (iii) to acquire the issued shares of HFL;

     (e)  Financial  Statements - That, on or before Closing,  audited financial
          statements  for HFL shall be completed by Spicer,  Jeffries & Co., and
          delivered to Garuda, and the HFL Financial Statements will be prepared
          in accordance with generally accepted accounting principles applied on
          a basis  consistent  with that of prior fiscal years;  such  Financial
          Statements present fairly the financial position of HFL as at the date
          thereof and the  results of HFL's and the  changes in HFL's  financial
          position for the periods then ending;


                                       4
<PAGE>

     (e)  Absence of Undisclosed  Liabilities - Except as will be set out in the
          HFL Financial Statements or incurred subsequent to the date thereof in
          the  ordinary  and usual course of the business of HFL, to the best of
          the Vendors' knowledge,  information and belief, HFL will not have any
          outstanding  indebtedness or any  liabilities or obligations  (whether
          accrued, absolute, contingent or otherwise);

     (f)  Title  to  Assets  - HFL has  title  to all of the  assets,  real  and
          personal, including those reflected in the HFL Financial Statements or
          acquired  since the date of the HFL  Financial  Statements  (except as
          since  transferred,  sold or  otherwise  disposed  of in the  ordinary
          course  of  business),  as have  been  represented  to be held by HFL,
          subject to such charges on its assets as have been  required  pursuant
          to the  bank  and  debenture  debts  reflected  in the  HFL  Financial
          Statements;

     (g)  Material  Contracts  -  Except  for  the  contracts,   agreements  and
          debentures  listed  in  Schedule  "B",  neither  HFL  nor  any  of its
          subsidiaries  is  party  to or  bound  by  any  material  contract  or
          commitment, whether oral or written, and the contracts, agreements and
          debentures listed in Schedule "B" are all in full force and effect and
          unchanged,  no material  default exists in respect thereof on the part
          of any of the other parties thereto,  the Vendors are not aware of any
          intention on the part of any of the other parties thereto to terminate
          or materially  alter any such contracts or agreements,  or take action
          under  the   debentures   and  Schedule  "B"  lists  all  the  present
          outstanding  material  contracts  entered into by HFL in the course of
          carrying on its business;

     (h)  Litigation - There is not any suit,  action,  litigation,  arbitration
          proceeding  or   governmental   proceeding,   including   appeals  and
          applications for review, in progress,  pending or threatened  against,
          or relating to HFL, or affecting  its assets,  properties  or business
          which might  materially and adversely  affect the assets,  properties,
          business, future prospects or financial condition of HFL, and there is
          not  presently   outstanding   against  HFL  any   judgment,   decree,
          injunction,  rule or  order  of any  court,  governmental  department,
          commission, agency, instrumentality or arbitrator;

     (i)  Corporate Records - To the best of the knowledge of the Vendors,  HFL,
          has kept all corporate  records required to be kept by the Company Act
          of British  Columbia,  and such  records are complete and accurate and
          contain all minutes of all meetings of directors and members of HFL;


                                       5
<PAGE>

     (j)  Permits and Licenses - HFL holds all permits,  licenses,  consents and
          authorities issued by any government or governmental  authority or any
          municipal,  regional or other authority,  or any subdivision  thereof,
          which are  necessary or desirable in  connection  with the conduct and
          operation of HFL's business and the ownership or leasing of its assets
          and the conduct and operation of its business;

     (k)  Undisclosed  Information  - The  Vendors  do  not  have  any  specific
          information  relating to HFL which is not generally known or which has
          not been  disclosed to Garuda and which if known could  reasonably  be
          expected to have a materially  adverse  effect on the value of the HFL
          Shares; and

     (l)  Taxes - HFL has duly filed, if required to date, on a timely basis all
          tax  returns  required  to be filed by it and has paid all taxes which
          are due and payable,  and has paid all assessments and  reassessments,
          and all other taxes,  governmental  charges,  penalties,  interest and
          fines due and payable on or before the date hereof.


and the Vendors  covenants,  represents  and  warrants to Garuda that all of the
representations  and  warranties set forth in this Section 2.1 shall be true and
correct at the Closing as if made on that date.

2.2 Survival - The  representations  and warranties of the Vendors  contained in
this  Agreement  shall survive the Closing and the payment of the Purchase Price
and,  notwithstanding  the Closing and the  payment of the  Purchase  Price and,
notwithstanding  any  investigations  or  enquiries  made by Garuda prior to the
Closing  and  notwithstanding  the  waiver  of  any  condition  by  Garuda,  the
representations,  warranties,  covenants  and  agreements  of the Vendors  shall
(except where otherwise  specifically  provided in this  Agreement)  survive the
Closing  and shall  continue  in full  force and effect for a period of one year
from the Closing Date for all matters.

2.3  Reliance - The Vendors  acknowledge  and agree that Garuda has entered into
this Agreement relying on the warranties and representations and other terms and
conditions  of  this  Agreement  notwithstanding  any  independent  searches  or
investigations  that may be  undertaken  by or on behalf  of Garuda  and that no
information  which is now known or which may hereafter become known to Garuda or
its officers,  directors or professional  advisers shall limit or extinguish the
right to indemnification hereunder.

2.4  Independent  Legal  Advice - the  Vendors  acknowledge  that they have been
advised that this  agreement has been prepared by legal counsel  acting  jointly
for and by the consent of Garuda and HFL.  The  Vendors  are  advised  that they
should  seek  their  own  independent  legal  advice  prior  to  executing  this
agreement.



                                       6
<PAGE>

3.0      REPRESENTATIONS AND WARRANTIES OF GARUDA
         ----------------------------------------

3.1 Garuda  represents  and  warrants to and in favour of the Vendors as follows
and  acknowledges  that the Vendors are relying  upon such  representations  and
warranties in connection with the transactions contemplated herein:

     (a)  Garuda is a Nevada  company duly  organized,  validly  existing and in
          good standing with respect to all filings  required  under  applicable
          laws,  has the  corporate  power  and  capacity  to own or  lease  its
          property and assets and to carry on its  business as now  conducted by
          it, is duly  licensed or  qualified as a foreign  corporation  in each
          jurisdiction  in which the  character  of the  property and assets now
          owned by it or the  nature  of its  business  as now  conducted  by it
          requires it to be so licensed or qualified (save where failure to have
          such license or  qualification  is not in the aggregate  material) and
          has the corporate  power and capacity to enter into this Agreement and
          perform its obligations hereunder;

     (b)  There are 1,247,575 Common Shares issued and outstanding as fully paid
          and  non-assessable  in the capital of Garuda,  as at the date hereof,
          inclusive of the 1,000,000  shares  issued on the most recent  private
          placment;

     (c)  with the exception of the Series "A" Convertible  Debentureholders who
          maintain the right to convert their outstanding principal and interest
          into  shares of HFL at $0.20 per share,  no person at present  has any
          agreement,  option, understanding or commitment (including convertible
          securities,  warrants or convertible  obligations of any nature),  for
          the purchase or issue of or conversion into any of the unissued shares
          of Garuda or any unissued securities of Garuda;

     (d)  the financial statements contained in the Public Record present fairly
          the financial position of Garuda at the relevant dates and the results
          of its operations and cash flows for the periods indicated in the said
          statements  and have  been  prepared  in  accordance  with  accounting
          principles  generally  accepted  in  the  United  States  consistently
          applied;

     (e)  except as disclosed in the Public  Record,  there has been no material
          adverse  change in the business or condition,  financial or otherwise,
          of Garuda from that shown in the financial  statements  referred to in
          Paragraph (d) of this Section 3.0 and Garuda has not experienced,  nor
          is it aware of any occurrence or event which has, or might  reasonably
          be expected to have, a material  adverse effect on the business or the
          result of its operations which would  materially  adversely affect the
          value of its business;

     (f)  the execution and delivery of this Agreement and the  consummation  of
          the transaction contemplated herein do not and will not:


                                       7
<PAGE>

          (i)  result in the breach or violation of any term or provision of the
               constating documents of Garuda; or

          (ii) conflict with,  result in a breach or cancellation of, constitute
               a default under, invalidate or impair rights to properties under,
               or  accelerate  or permit  the  acceleration  of the  performance
               required  by,  any  agreement,  instrument,  license,  permit  or
               authority  to which  Garuda is a party or by which it is bound or
               to which  any  property  of Garuda  is  subject  or result in the
               creation  of any  lien,  charge  or  encumbrance  upon any of the
               assets of Garuda under any such agreement or instrument,  or give
               to others any material  interest or rights,  including  rights of
               purchase,  termination,  cancellation or acceleration,  under any
               such agreement, instrument, license, permit or authority; or

          (iii)violate any provision of law or administrative  regulation or any
               judicial  or  administrative  order,  award,  judgment  or decree
               applicable to Garuda;

     (g)  the  execution,  delivery and  performance  of this  Agreement and the
          performance  of the  transactions  contemplated  herein are within the
          corporate  power and  authority of Garuda and have been  authorized by
          all  necessary  corporate  action of Garuda;  the  directors of Garuda
          believe this  transaction  is in the best interests of Garuda and this
          Agreement constitutes a valid and binding obligation of Garuda;

     (h)  Garuda  is not a party to, or bound  by,  any  agreements,  covenants,
          undertakings  or other  commitments,  on its own or as a result of any
          partnership or joint venture in which it is a partner or participant:

          (i)  under which the  transaction  contemplated  herein would have the
               effect  of  imposing   restrictions   or  obligations  on  Garuda
               materially  greater  than those  imposed  upon Garuda or any such
               partnership or joint venture at the date hereof;

          (ii) which would give a third party,  as a result of the  consummation
               of the transaction  contemplated herein, a right to terminate any
               material  agreement  to which Garuda or any such  partnership  or
               joint  venture is a party or to purchase any of their  respective
               assets; or

          (iii)under  which the  consummation  of the  transaction  contemplated
               herein  would  impose  material  restrictions  on the  ability of
               Garuda to carry on any business which it might choose to carry on
               within any  geographical  area, to acquire property or dispose of
               its  property  and  assets in their  entirety  or to  change  its
               corporate status;


                                       8
<PAGE>

     (j)  the  description of the business of Garuda,  its financial  condition,
          assets and properties in the Public Record does not contain any untrue
          statement  of a  material  fact or omit to  state  any  material  fact
          necessary to make such description not misleading;

     (k)  Garuda has not incurred any  liability for  brokerage  fees,  finder's
          fees,  agent's  commissions or other similar forms of  compensation in
          connection with this Agreement;

     (l)  except as  disclosed in the Public  Record,  there is no basis for and
          there are no actions, suits, proceedings or investigations  commenced,
          or to the knowledge of Garuda  contemplated or threatened,  against or
          affecting Garuda or by any person or before any arbitrator of any kind
          which would prevent or hinder the  consummation  of this  Agreement or
          which have resulted in,  involve the  possibility  of or could involve
          the  possibility of any judgment or liability  which can reasonably be
          expected to have a material adverse effect on the business operations,
          properties, assets or condition, financial or otherwise, of Garuda;

     (m)  there are no known or  anticipated  material  liabilities  of any kind
          whatsoever (including absolute, accrued or contingent liabilities) nor
          any commitments whether or not determined or determinable,  in respect
          of which  Garuda is or may become  liable  other than the  liabilities
          disclosed on, reflected in or provided for in the financial statements
          referred to in Paragraph (d) of Section 3.0 hereof or reflected in the
          Public Record or incurred in the ordinary course of business;

     (n)  the  corporate  records  and minute  books of Garuda as required to be
          maintained by it under the laws of its  jurisdiction of  incorporation
          are up to date  and  contain  complete  and  accurate  minutes  of all
          meetings  of  its  respective   directors  and  shareholders  and  all
          resolutions consented to in writing;

     (o)  except as  disclosed  in the Public  Record  Garuda  does not have any
          material  contracts,  and each material  contract or agreement between
          Garuda and any other  person is in full force and effect  and,  to the
          best of the  knowledge  and belief of Garuda,  is valid,  binding  and
          enforceable against each of the parties thereto in accordance with its
          terms and no material  breach or default exists in respect  thereof on
          the part of any party  thereto and no event has occurred  which,  with
          the giving of notice or lapse of time or both, would constitute such a
          material breach or default;

     (p)  Garuda has duly filed on a timely basis all tax returns required to be
          filed by it and has paid all taxes which are due and payable,  and has
          paid  all  assessments  and   reassessments,   and  all  other  taxes,
          governmental charges, penalties, interest and fines due and payable on
          or before the date hereof;  adequate provision has been made for taxes
          payable  for the  current  period  for which tax  returns  are not yet
          required  to be  filed;  there  are no  agreements,  waivers  or other
          arrangements  providing  for an  extension of time with respect to the
          filing of any tax  return  by,  or  payment  of any tax,  governmental
          charge or  deficiency  against  Garuda;  there are no actions,  suits,
          proceedings,  investigations  or  claims  now  threatened  or  pending


                                       9
<PAGE>

          against   Garuda  in  respect  of  taxes,   governmental   charges  or
          assessments,  or any matters under  discussion  with any  governmental
          authority  relating  to taxes,  governmental  charges  or  assessments
          asserted by any such authority;

     (q)  Garuda has withheld  from each  payment  made to any of its  officers,
          directors,  former  directors  and  employees  the amount of all taxes
          including,  but  not  limited  to,  income  tax and  other  deductions
          required to be withheld  therefrom and has paid the same to the proper
          tax and other  receiving  officers  within the time required under any
          applicable tax legislation;

     (r)  the  common  shares of Garuda  are at  present  listed  and posted for
          trading on the NASD Over the Counter  Market (OTC Bulletin  Board) and
          on no other stock exchange;

     (s)  Garuda is a reporting issuer pursuant to the U.S.  Securities Exchange
          Act of 1934 in good  standing and in compliance  with its  obligations
          under such legislation and the rules and regulations  thereunder,  and
          all other Securities legislation, both Federal and State;

     (t)  all of Garuda's  issued Common  Shares were issued in compliance  with
          applicable securities laws;

     (u)  to  Garuda's  knowledge,  Garuda  is in  compliance,  in all  material
          respects, with all applicable laws; and

     (v)  none of the representations,  warranties or statements of fact made in
          this Section  contain any untrue  statement of a material fact or omit
          to state any  material  fact  necessary  to make any such  warranty or
          representation not misleading.

3.2 Survival - The  representations  and warranties of Garuda  contained in this
Agreement  shall  survive the Closing and the  purchase of the HFL Shares,  and,
notwithstanding   the  Closing  and  the   purchase  of  the  HFL  Shares,   the
representations and warranties of Garuda shall continue in full force and effect
for the benefit of the Vendors for a period of one year from the Closing Date.

3.3 Reliance - Garuda acknowledges and agrees that the Vendors have entered into
this Agreement relying on the warranties and representations and other terms and
conditions  of  this  Agreement  notwithstanding  any  independent  searches  or
investigations that may be undertaken by or on behalf of the Vendors and that no
information  which is now known or should be known or which may hereafter become
known  to any of the  Vendors  or their  professional  advisers  shall  limit or
extinguish the right to indemnification hereunder.



                                       10
<PAGE>

4.0  PURCHASE AND SALE
     -----------------

4.1 HFL Shares - Based and relying on the  representations  and  warranties  set
forth in Part 2,  Garuda  hereby  agrees to  purchase  the HFL  Shares  from the
Vendors and the Vendors agrees to sell the HFL Shares to Garuda,  free and clear
of all liens, claims,  charges,  options and encumbrances  whatsoever and Garuda
hereby agrees to pay the Purchase Price on the terms and conditions  hereinafter
set forth.

4.2  Purchase Price - The Purchase Price shall be US$700,000 allocated:


     US$600,000 to the 6,894,000Common Shares - US$0.087 per Common Share, and

     US$100,000 to the 240,000 Preferred Shares - US$0.4167 per Preferred Share



4.3 Payment of Purchase  Price - The Purchase Price shall be paid by Bank Drafts
or  Solicitor's  Trust  Cheques  totalling  the Purchase  Price,  each Vendor to
receive that  portion of the Purchase  Price as is set out beside their names in
Schedule "A" hereto.

5.0  CLOSING
     -------

5.1 Closing Date and Location - The  transactions  contemplated  herein shall be
completed at 2:00 p.m. on March 15, 2002, at the offices of Armstrong & Company,
480-650 West Georgia  Street,  Vancouver,  B.C. or at such other time or at such
other location as may be mutually agreed upon in writing by the parties hereto.

5.2 Vendor's Closing Documents - On the Closing Date, the Vendors shall deliver,
or cause to be delivered, to Garuda the documents set forth in subsection 6.1(e)
hereof and such other documents as Garuda may reasonably  require to perfect the
purchase and sale intended hereby.

5.3  Payment of  Purchase  Price - On the  Closing  Date,  Garuda  shall pay the
Purchase  Price by  delivering  to the Vendors or their  representative,  a bank
draft or  solicitor's  trust  cheque  representing  that portion of the Purchase
Price as is set out opposite their respective names in Schedule "A" hereto.



<PAGE>

6.0  CONDITIONS  PRECEDENT TO THE PERFORMANCE BY GARUDA OF ITS OBLIGATIONS UNDER
     ---------------------------------------------------------------------------
     THIS AGREEMENT
     --------------

6.1 The  obligations  of Garuda to complete the purchase of the HFL Shares shall
be subject to the  satisfaction of, or compliance with, at or before the Closing
Time, each of the following conditions precedent:

     (a)  HFL  Financials - The HFL  Financials  shall have been  completed  and
          delivered to Garuda and be as represented herein;

     (b)  Approvals  -  The   directors  of  Garuda  shall  have   approved  the
          acquisition contemplated herein at the Meeting called to consider this
          matter;

     (c)  Truth and Accuracy of  Representations of the Vendors at Closing - The
          representations  and warranties of the Vendors made in Section 2 shall
          be true and correct in all material respects as at the Closing and the
          Vendors  shall  have  complied  in  all  material  respects  with  his
          obligations and covenants hereunder;

     (d)  Performance of Obligations - The Vendors shall have caused HFL to have
          performed  and complied with all the  obligations  to be performed and
          complied with by it in order to complete the intent of this Agreement;

     (e)  Absence of Injunctions,  etc. - No injunction or restraining  order of
          any Court or administrative  tribunal of competent  jurisdiction shall
          be in effect prohibiting the transactions  contemplated  hereby and no
          action or proceeding  shall have been  instituted or be pending before
          any Court or  administrative  tribunal to  restrain  or  prohibit  the
          transactions between the parties contemplated hereby;

     (f)  Absence of Change of  Conditions  - No event  shall have  occurred  or
          condition  or state of facts of any  character  shall  have  arisen or
          legislation  (whether  by  statute,   rule,   regulation,   by-law  or
          otherwise)  shall  have been  introduced  which  might  reasonably  be
          expected  to have a  materially  adverse  effect  upon  the  financial
          conditions, results of operations or business prospects of HFL;

     (g)  Closing  Documentation  - Garuda shall have  received from the Vendors
          and, where applicable, HFL the following closing documentation:

          (i)  share  certificates  representing all of the issued preferred and
               common  shares  in HFL  issued in the name of the  Vendors,  duly
               endorsed for transfer to Garuda;



                                       12
<PAGE>

          (ii) a  certified   copy  of  resolutions  of  the  directors  of  HFL
               authorizing the transfer of the shares  contemplated  herein, the
               registration  of the respective  shares in the name of Garuda and
               the issuance of share  certificates  representing  the respective
               shares registered in the name of Garuda;

          (iii)share  certificates  registered in the name of Garuda,  signed by
               the President of HFL  representing  the HFL Shares being acquired
               hereunder;

          (iv) all  other  necessary  consents,   waivers,   and  authorizations
               required  to enable  the  transfer  of the  respective  shares to
               Garuda as provided for in this Agreement;

          (v)  all such  instruments of transfer,  duly  executed,  which in the
               opinion of Garuda acting  reasonably  are necessary to effect and
               evidence  the  transfer  of the HFL  Shares  from the  Vendors to
               Garuda  free and clear of all  liens,  charges  and  encumbrances
               whatsoever;

          (vi) the corporate minute books and all other books and records of HFL
               and such  copies of  corporate  records  for HFL as  counsel  for
               Garuda may determine is appropriate; and

          (vii) the corporate seals for HFL.



     (h)  Completion  of Due  Diligence - Garuda  shall have  completed  its due
          diligence  on HFL,  and the  results  of such due  diligence  shall be
          satisfactory  to Garuda in its  discretion,  failing which at any time
          Garuda may provide  written notice of its intent to terminate and this
          Agreement will be terminated  immediately  upon receipt of such notice
          by the Vendors ("Termination Date").

6.2 The conditions set forth in this Section 6 are for the exclusive  benefit of
Garuda and,  with the  exception of item (a), may be waived by Garuda in writing
in whole or in part on or before  the  Closing  Date.  Notwithstanding  any such
waiver,  the completion of the purchase and sale  contemplated by this Agreement
by Garuda  shall  not  prejudice  or  affect in any way the  rights of Garuda in
respect  of the  warranties  and  representations  of the  Vendors  set forth in
Section 2 of this  Agreement,  and the  representations  and  warranties  of the
Vendors set forth in Section 2 of this  Agreement  shall survive the  completion
and payment of the Purchase Price.



                                       13
<PAGE>

7.0  CONDITIONS PRECEDENT TO THE PERFORMANCE OF THE VENDORS OF THEIR OBLIGATIONS
     ---------------------------------------------------------------------------
     UNDER THIS AGREEMENT
     --------------------

7.1 The obligations of the Vendors to complete the sale of HFL Shares  hereunder
shall be subject to the  satisfaction  of or  compliance  with, at or before the
Closing Time, each of the following conditions precedent:

     (a)  Truth and Accuracy of  Representations of Garuda at Closing Time - All
          of the  representations  and warranties of Garuda set forth in Section
          3.1 hereof  shall be true and correct in all  material  respects as at
          the Closing  Time and with the same effect as if made at and as of the
          Closing Time;

     (b)  Performance  of  Agreements - Garuda shall have  complied  with and/or
          performed all its obligations, covenants and agreements herein;

     (c)  Approvals - Garuda shall have received, on or before the Closing Date,
          all approvals necessary to this transaction;

     (d)  Private  Placement  Financing - At the Closing Date, or within 21 days
          thereafter,  Garuda shall have  arranged a private  placement to raise
          not less than $1,000,000; and

     (e)  Purchase Price - The delivery at Closing, in accordance with paragraph
          5.3, of the Purchase Price.

     (f)  Appointment  of Director - Garuda  shall,  at the Closing  Date, or at
          such later time as is advised by Robin Relph,  appoint  Robin Relph to
          the board of directors of Garuda.


7.2 The conditions set forth in this Section 7 are for the exclusive  benefit of
the  Vendors  and may be waived by the Vendors in writing in whole or in part on
or before the Closing Date.  Notwithstanding any such waiver,  completion of the
purchase  and sale  contemplated  by this  Agreement  by the  Vendors  shall not
prejudice  or affect in any way the  rights of the  Vendors  in  respect  of the
warranties  and  representations  of  Garuda  set  forth  in  Section  3 of this
Agreement, and the representations and warranties of Garuda set forth in Section
3 of this Agreement shall survive for a period of one year from the date hereof.



                                       14
<PAGE>

8.0  COVENANTS
     ---------

8.1  Covenants of Garuda - Garuda hereby covenants and agrees as follows:

     (a)  until the  Closing  Date,  Garuda  will carry on its  business  in the
          ordinary course, except as otherwise contemplated in this Agreement;

     (b)  until  the  Closing  Date,  Garuda  will not  merge  into or with,  or
          amalgamate  or  consolidate  with,  or enter into any other  corporate
          reorganization  with,  any other  corporation or person or perform any
          act or enter into any transaction or negotiation  which  interferes or
          is inconsistent  with the completion of the transactions  contemplated
          hereby,  other  than  as  contemplated  in  this  Agreement  or in the
          Circular and, without limiting the generality of the foregoing, Garuda
          will not:

          (i)  make any  distribution  by way of dividend,  return of capital or
               otherwise to or for the benefit of Garuda's shareholders;

          (ii) with the  exception of a private  placement of 1,000,000  shares,
               issue any of its  shares  or other  securities  convertible  into
               shares or enter into any commitment or agreement therefor,  other
               than as is contemplated  by this  agreement,  or as may be agreed
               upon in writing by the Vendors;

          (iii) make any payment to any director, officer or employee;

     (c)  Garuda shall not alter or amend its  constating  documents as the same
          exist at the date of this  Agreement  except  as  contemplated  in the
          Circular;

     (d)  except as consented  to in writing by the  Vendors,  Garuda shall not,
          until the Closing Date,  engage in any  business,  enterprise or other
          activity  different  from  that  carried  on by it at the date of this
          Agreement or enter into any transaction or incur (except in respect of
          obligations or liabilities to which it is already legally subject) any
          obligation,   expenditure   or  liability   other  than   obligations,
          expenditures  and  liabilities  relating  to  the  maintenance  of its
          corporate existence and this Agreement;

     (e)  Garuda shall furnish to the Vendors such  information,  in addition to
          the information contained in this Agreement, relating to the financial
          condition,   business,   properties  and  affairs  of  Garuda  as  may
          reasonably  be requested by the Vendors,  which  information  shall be
          true and  complete in all  material  respects and shall not contain an
          untrue  statement of any  material  fact or omit to state any material
          fact  required to be stated  therein or necessary in order to make the
          statements  therein,  in the light of the  circumstances in which they
          are made, not misleading;

     (f)  Garuda  shall ensure that the  information  and  financial  statements
          related to Garuda and  provided by Garuda  shall be true,  correct and
          complete  in all  material  respects  and shall not contain any untrue
          statement  of any  material  fact or omit to state any  material  fact
          required  to be  stated  therein  or  necessary  in  order to make the
          statements  therein not  misleading in light of the  circumstances  in
          which they are made; and



                                       15
<PAGE>

     (g)  Garuda  shall do all such other acts and things as may be necessary or
          desirable in order to give effect to the  transaction  contemplated by
          this Agreement and,  without limiting the generality of the foregoing,
          Garuda shall use its best efforts:

          (i)  to obtain, before the Closing Date, all authorizations,  waivers,
               exemptions, consents, orders and other approvals from domestic or
               foreign  courts,  governmental  or regulatory  agencies,  boards,
               commissions or other authorities,  shareholders and third parties
               as  are  necessary  for  the  consummation  of  the  transactions
               contemplated hereby; and

          (ii) to satisfy each of the conditions precedent to be satisfied by it
               and to take,  or cause to be taken,  all other actions and to do,
               or cause to be done,  all other  things  necessary  or  advisable
               under applicable laws and regulations to permit the completion of
               the  transaction  contemplated  herein  in  accordance  with  the
               provisions of this Agreement.

8.2  Covenants  of the Vendors and HFL The Vendors and HFL hereby  covenant  and
agree as follows:

     (a)  The Vendors  and/or HFL shall furnish to Garuda such  information,  in
          addition to the information  contained in this Agreement,  relating to
          the financial  condition,  business,  properties and affairs of HFL as
          may reasonably be requested by Garuda, which information shall be true
          and complete in all material  respects and shall not contain an untrue
          statement  of any  material  fact or omit to state any  material  fact
          required  to be  stated  therein  or  necessary  in  order to make the
          statements  therein,  in the light of the  circumstances in which they
          are made, not misleading;

     (b)  The Vendors  and/or HFL shall ensure that the  information  related to
          HFL and provided by the Vendors or the directors of HFL shall be true,
          correct and  complete in all  material  respects and shall not contain
          any  untrue  statement  of any  material  fact or omit  to  state  any
          material fact  required to be stated  therein or necessary in order to
          make  the   statements   therein  not   misleading  in  light  of  the
          circumstances in which they are made;

     (c)  The Vendors  and/or HFL shall do all such other acts and things as may
          be necessary  or desirable in order to give effect to the  transaction
          contemplated hereby;

     (d)  until the  Closing,  HFL agrees,  and the  Vendors  will cause HFL, to
          carry on its  business in the  ordinary  course,  except as  otherwise
          contemplated in this Agreement;


                                       16
<PAGE>

     (e)  until the Closing,  HFL agrees, and the Vendors will not cause, HFL to
          merge into or with, or amalgamate or  consolidate  with, or enter into
          any other  corporate  reorganization  with,  any other  corporation or
          person or perform any act or enter into any transaction or negotiation
          which  interferes  or is  inconsistent  with  the  completion  of  the
          transactions  contemplated  hereby, other than as contemplated in this
          Agreement  or  as  disclosed  to  Garuda  and,  without  limiting  the
          generality of the foregoing, HFL will not:

               (i)  make any distribution by way of dividend,  return of capital
                    or  otherwise  to or for the  benefit  of  their  respective
                    shareholders;

               (ii) cause  the  issuance  of  any  shares  or  other  securities
                    convertible  into  shares or enter  into any  commitment  or
                    agreement therefore, other than with respect to issuances to
                    Vendor's  whose  interest  is as  set  out in  Schedule  "A"
                    hereto;

               (iii)make  any  payment  to any  director,  officer  or  employee
                    except pursuant to existing employment arrangements;

     (f)  except as otherwise  consented to in writing by Garuda, HFL shall not,
          and the Vendors shall not permit HFL, until the Closing,  to engage in
          any business, enterprise or other activity different from that carried
          on by it at the date of this Agreement;

     (g)  The  Vendors  and HFL shall  furnish  to  Garuda  such  valuation  and
          technical  reports  and  financial  statements,  in  addition  to  the
          information  contained in this  Agreement,  relating to the  financial
          condition,  business,  properties and affairs of HFL as may reasonably
          be   requested   by  Garuda  and  all  other   applicable   regulatory
          authorities,  which  information  shall  be true and  complete  in all
          material  respects  and shall not contain an untrue  statement  of any
          material fact or omit to state any material fact required to be stated
          therein or necessary in order to make the statements  therein,  in the
          light of the circumstances in which they are made, not misleading;

     (h)  The  Vendors and HFL shall do all such other acts and things as may be
          necessary  or  desirable  in order to give effect to the  transactions
          contemplated  herein  and,  without  limiting  the  generality  of the
          foregoing,  the Vendors and HFL shall use their best  efforts to apply
          for and obtain such other consents, orders or approvals as counsel for
          Garuda may advise are necessary or desirable for the implementation of
          this Agreement.


9.   EXAMINATIONS AND WAIVERS
     ------------------------

                                       17
<PAGE>

9.1  Access  for  Investigation  - The  Vendors  shall  permit  Garuda  and  its
employees, agents, legal counsel, accountants and other representatives, between
the date hereof and the Closing  Date,  to have access  during  normal  business
hours to the premises and to all the key employees, books, accounts, records and
other data of HFL (including, without limitation, all corporate,  accounting and
tax records and any electronic or computer  accessed data) and to the properties
and assets of HFL,  and HFL will  furnish,  and  require  that  their  principal
bankers,  appraisers and  independent  auditors and other advisors  furnish,  to
Garuda such financial and operating data and other  information  with respect to
the  business,  properties  and assets of HFL as Garuda  shall from time to time
reasonably request to enable  confirmation of the matters warranted in Section 2
hereof.  It is also the intention of the parties that Garuda will be entitled to
meet with HFL's major clients, customers and suppliers prior to Closing.

9.2  Disclosure of Information - Until the Closing Time and, in the event of the
termination  of  this  Agreement   without   consummation  of  the  transactions
contemplated  hereby,  thereafter,  Garuda  will  use its best  efforts  to keep
confidential  any  information   (unless  otherwise  required  by  law  or  such
information is readily  available or becomes readily  available,  from public or
published  information  or sources)  obtained from HFL. If this  Agreement is so
terminated, promptly after such termination all documents, work papers and other
written material obtained from a party in connection with this Agreement and not
theretofore made public (including all copies and photocopies thereof), shall be
returned to the party which provided such material.


10.0 GENERAL
     -------

10.1 Public Notices - The parties hereto agree that all notices to third parties
and  all  other  publicity  concerning  the  transactions  contemplated  by this
Agreement  shall be jointly planned and  co-ordinated  and no party hereto shall
act  unilaterally in this regard without the prior approval of the others,  such
approval not to be unreasonably withheld.

10.2  Expenses - All costs and expenses  including  legal  expenses  incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by Garuda.

10.3 Currency - Unless otherwise specified, all dollar figures contained in this
agreement refer to U.S. currency.

10.4 Time - Time shall be of the essence hereof.

10.5  Notices - Any notice or other  writing  required or  permitted to be given
hereunder or for the purposes hereof shall be sufficiently given if delivered or
telecopied to the party to whom it is given or if mailed, by prepaid  registered
mail, addressed to such party at:


                                       18
<PAGE>

(a)      If to Garuda,
                                    John Curry,  President
                                    1895 West 26th Street
                                    West Vancouver,  BC, V7V 2K4
                                    Fax: 604-482-0111

(b)      If to the Vendors,
                                    C. Robin Relph, Chairman
                                    1576 Rand Avenue
                                    Vancouver, BC V6P 3G2
                                    Fax: 604-266-9919

with a copy in each case to:

                  Paul Simpson, Esq.  Barrister & Solicitor
                  480 - 650 West Georgia Street
                  Vancouver, British Columbia
                  V6B 4N9
                  Fax (604) 662-3231


or at such other  address as the party to whom such writing is to be given shall
have last  notified to the party giving the same in the manner  provided in this
section.  Any notice mailed as aforesaid  shall be deemed to have been given and
received on the fifth business day next following the date of its mailing unless
at the time of mailing or within five (5) business days thereafter  there occurs
a postal  interruption  which could have the effect of delaying  the mail in the
ordinary course,  in which case any notice shall not be effectively given unless
it is actually delivered or sent by telecopy. Any notice delivered or telecopied
to the party to whom it is  addressed  shall be  deemed  to have been  given and
received  on the  day it was  delivered,  provided  that  if  such  day is not a
business  day then the notice shall be deemed to have been given and received on
the business day next following such day.

10.6  Governing  Law - This  Agreement  shall be  governed by and  construed  in
accordance  with the laws of the  Province of British  Columbia  and the parties
hereto  submit and attorn to the  jurisdiction  of the Courts of the Province of
British Columbia.

10.7  Severability  - If any  one or more of the  provisions  contained  in this
Agreement  should be  invalid,  illegal or  unenforceable  in any respect in any
jurisdiction,  the validity,  legality and  enforceability  of such provision or
provisions  shall not in any way be affected  or  impaired  thereby in any other
jurisdiction  and the  validity,  legality and  enforceability  of the remaining
provisions  contained  herein  shall  not in any  way be  affected  or  impaired
thereby,  unless in either case as a result of such determination this Agreement
would fail in its essential purpose.


                                       19
<PAGE>

10.8 Entire Agreement - This Agreement  constitutes the entire agreement between
the parties hereto and supersedes all prior agreements and understandings,  oral
or written, by and between any of the parties hereto with respect to the subject
matter hereof.

10.9 Further Assurances - The parties hereto shall with reasonable  diligence do
all such things and provide all such reasonable assurances as may be required to
consummate the  transactions  contemplated  hereby,  and each party hereto shall
provide such further documents or instruments required by the other party as may
be reasonably necessary or desirable to effect the purpose of this Agreement and
carry out its provisions whether before or after the Closing Date.

10.10  Enurement - This  Agreement and each of the terms and  provisions  hereof
shall enure to the benefit of and be binding  upon the parties  hereto and their
respective   heirs,   executors,   administrators,   personal   representatives,
successors and assigns.

10.11  Counterparts - This Agreement may be executed in as many  counterparts as
may be  necessary  or by  facsimile  and each such  agreement  or  facsimile  so
executed shall be deemed to be an original and such counterparts  together shall
constitute one and the same instrument.


                                       20
<PAGE>


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

GARUDA CAPITAL CORP.


per: /s/
     ---------------------------------------
       Authorized Signatory

HAGENSBORG FOODS LTD


per: /s/
     ---------------------------------------
       Robin Relph, Director


SIGNED, SEALED AND DELIVERED        )
by ROBIN RELPH in the presence of:  )
                                    )
__________________________________  )
Name                                )
                                    )        /s/
__________________________________  )        ________________________________
Address                             )        ROBIN RELPH
                                    )
                                    )
                                    )
__________________________________  )
Occupation                          )


HAGENSBORG FOODS CORPORATION


per: /s/
     ---------------------------------------
       Authorised Signatory



                                       21
<PAGE>

LAMONT ASSET MANAGEMENT S.A.


per: /s/
     ---------------------------------------
       Authorised Signatory

THE RIGPA FOUNDATION LTD


per: /s/
     ---------------------------------------
       Authorised Signatory


HAGENSBORG LIMITED


per: /s/
     ---------------------------------------
       Authorised Signatory



                                       22
<PAGE>

<TABLE>
<CAPTION>



                                                     SCHEDULE "A"
                                                      The Vendors

         Common Shares
---------------------------------------------------------- ------------------------------- ---------------------------
Name and address for delivery of Purchase Proceeds:               Number of Common         Portion of Purchase Price:
                                                                    Shares Held
---------------------------------------------------------- ------------------------------- ---------------------------
<S>                                                        <C>                             <C>
LaMont Asset Management S.A.
c/o A & A Actienbank                                                   72,000                      $6,266.32
Bahnhofstrasse 92
8023 Zurich, Switzerland
---------------------------------------------------------- ------------------------------- ---------------------------
The Rigpa Foundation Ltd.
PO Box N-596, 3rd Floor                                                72,000                      $6,266.32
George House, George Street
Nassau, Bahamas
---------------------------------------------------------- ------------------------------- ---------------------------
Hagensborg Foods Corporation
6613 S. 192nd Pl., Suite K-104                                        500,000                      $43,516.10
Kent, WA 98032
---------------------------------------------------------- ------------------------------- ---------------------------
Hagensborg Limited
3rd Floor, George House                                              6,250,000                    $543,951.26
George Street, PO Box N-8159
Nassau, Bahamas
---------------------------------------------------------- ------------------------------- ---------------------------

Total:                                                               6,894,000                     US$600,000
---------------------------------------------------------- ------------------------------- ---------------------------




         Preferred Shares
---------------------------------------------------------- ------------------------------- ---------------------------
Name and address for delivery of Purchase Proceeds:             Number of Preferred        Portion of Purchase Price:
                                                                    Shares Held
---------------------------------------------------------- ------------------------------- ---------------------------
LaMont Asset Management S.A.
c/o A & A Actienbank                                                  120,000                       $50,000
Bahnhofstrasse 92
8023 Zurich, Switzerland
---------------------------------------------------------- ------------------------------- ---------------------------
                                                                                                    $50,000
Robin Relph                                                           120,000
#4, Arbour Island, Old Fort Bay
New Providence, Bahamas
---------------------------------------------------------- ------------------------------- ---------------------------
                                                                      240,000                      US$100,000
Total:
---------------------------------------------------------- ------------------------------- ---------------------------

</TABLE>



<PAGE>


SCHEDULE "B"
                               Material Contracts


     (a)  Lease of Premises at 1576 Rand  Avenue,  Vancouver,  B.C.  pursuant to
          Lease Agreement dated July 29, 1996, as Modified August 30, 1996

     (b)  Series "A" Convertible Debentures in the total sum of $600,000