Document:

United States Securities and Exchange Commission Edgar Filing

Exhibit 10.1

AIRCRAFT PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

GULFSTREAM INTERNATIONAL AIRLINES, INC.

 (“SELLER”)

AND

PIMEGAL CONSULTANTS LTD.

 (“PURCHASER”)

SEVEN (7) EMB-120ER AIRCRAFT

REGISTRATION NUMBERS: N205CA (msn 120.205), N282AS (msn 120.226), N285AS (msn 120.265), N280AS (msn 120.231), N283AS (msn 120.236), N261AS (msn 120.141), N268AS (msn 120.202)

AIRCRAFT PURCHASE AND SALE AGREEMENT

THIS AIRCRAFT PURCHASE AND SALE AGREEMENT ("Agreement") is entered into as of the 26th day of June, 2008, by and between Gulfstream International Airlines, Inc. ("Seller"), a Florida corporation, with its principal office located at 3201 Griffin Road, 4th Floor, Dania, Florida 33312 and Pimegal Consultants Ltd. ("Purchaser" or “Buyer”), a Cyprus corporation located at 70, Michail Georgiou, Athienou, P.C. 7600, Larnaca, Cyprus.

RECITALS

WHEREAS, the Seller desires to sell the Aircraft (as hereinafter defined) to the Purchaser and the Purchaser desires to purchase the Aircraft from the Seller as hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

Subject Matter of Sale

1.1

Aircraft:  Seller will sell to Purchaser seven (7) used Embraer EMB-120ER aircraft, each with two (2) Pratt & Whitney PW118 engines, as described in Exhibit “A” attached hereto (the “Aircraft”), including the documentation listed in Exhibit “D” hereto (the “Technical Documents”). All Technical Documents including any flight, engineering and maintenance manuals, drawings, documents and other Technical Documents pertaining to the Aircraft (the “Manuals") and the aircraft engine and propeller logbooks, manuals, and maintenance records and other Technical Documents, if any, pertaining to the Aircraft (the “Records") in their "as is" condition. 

1.2

Closing Date:  The parties agree that the Closing Date(s) shall be as provided in Schedule I (“Delivery Schedule”) attached hereto.

1.3       

Delivery Condition:  On the Closing Date(s), the Aircraft will be delivered in the

condition as specified in Schedule II (“Aircraft Delivery Condition”) attached    hereto.

ARTICLE 2

Purchase Price and Payment

2.1

Deposit: Purchaser shall make the deposits as specified and defined in Schedule III (“Purchase Price, Closing and Delivery”) attached hereto.

2.2

Purchase Price:  Purchaser shall pay the Purchase Price for the Aircraft to Seller as specified and defined in Schedule III attached hereto on the applicable Closing Date prior to the Delivery of the Aircraft.

2.3

U.S. Dollars:  The Purchase Price referred to herein shall be paid in United States Dollars in immediately available funds.

2.4

Payment:  Payment of the Purchase Price, together with any Taxes (as hereinafter defined) then due, shall be made to the escrow agent, Insured Aircraft Title Service, Inc. (“Escrow Agent”):

Account name: Insured Aircraft Title Service, Inc.

Bank Name: JP Morgan Chase

ABA # 021000021

Account # 0717213717 

Swift # CHASUS33

Purchaser shall bear all wire transfer expenses.

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ARTICLE 3

Inspection; Delivery of Used Aircraft; Title; Airworthiness Directives-

3.1

Inspection: Prior to Technical Acceptance of the Aircraft, Buyer may at its own cost and expense, conduct a complete examination of the Aircraft and Technical Documents, which examination may include (i) full power assurance runs on the engines. (ii) conduct a single flight test that shall not exceed one hour and one half hour flight time, and (iii) inspect all Aircraft records for such Aircraft.  Such inspection shall be conducted so as not to interfere with Seller’s business or the operation or maintenance of the Aircraft.  Seller shall provide Purchaser with access thereto on such date at a time that is mutually agreed upon by the parties.  In any event, Buyer shall have completed its’ inspection and given written notice of its’ intention to purchase the Aircraft by 5 p.m. Eastern Standard Time on Monday, June 2, 2008, unless an extension is agreed upon by the parties.    

3.2

Technical Acceptance: Prior to the Delivery, the Seller will give the Purchaser an opportunity to inspect the Aircraft and Technical Documents at the Delivery Location (as hereinafter defined) (or at another location agreed to by the Seller and Purchaser) (the “Delivery Inspection”).  The duration of Delivery Inspection shall be sufficient to permit the Purchaser to inspect the Aircraft and Technical Documents in order to verify that the Delivery Conditions have been satisfied.  After the Delivery Inspection and to the extent the Aircraft meet the Delivery Conditions as contained herein, the Purchaser shall sign and caused to be delivered to Seller an Aircraft Technical Acceptance of each Aircraft in the form substantially the same as Exhibit “E” hereto, acknowledging that such Aircraft and Technical Documents fully comply with the terms and conditions of this Agreement and, with the exception of a claim of title or for loss or physical damage to any of the Aircraft prior to Delivery at the Delivery Location, Purchaser waives all further claims as to the condition of the involved Aircraft and compliance with the terms of this Agreement.  

3.3

Aircraft Delivery Location:  

Seller shall deliver each Aircraft to Purchaser in Ft. Lauderdale, Florida, or at a mutually agreed location capable of accepting an EMB-120ER aircraft  ("Delivery Location").  Purchaser shall arrange and pay for ground support and aircraft parking at a facility at the Delivery Location suitable for the Aircraft prior to Delivery of such Aircraft.

3.4

Delivery: Seller shall tender delivery of each Aircraft at the Delivery Location to Purchaser upon satisfaction of the closing conditions set forth in Article 6 hereto ("Delivery").  The approximate Delivery Schedule is set forth on Schedule I attached hereto; however, the exact dates within the identified months will be further negotiated by the parties in good faith.

3.5

Receipt for Delivery:  At Delivery of each Aircraft (with respect to each Aircraft, the “Closing Date”), the Purchaser shall sign and caused to be delivered to Seller, a Delivery Receipt for each Aircraft substantially in the form set forth in Exhibit "B" attached hereto which shall evidence the Delivery and acceptance of such Aircraft and Technical Documents by Purchaser.

3.6

Document of Title: Concurrent with the Delivery of each Aircraft to the Purchaser, the Seller shall (i) cause to be delivered to the Purchaser a Warranty Bill of Sale for the Aircraft, substantially in the form set forth in Exhibit "C" attached hereto, duly conveying to Purchaser all of the Seller's right, title and interest in and to such Aircraft in accordance with the terms of this Agreement; (ii) cause to be filed with the U.S. Federal Aviation Administration (“FAA”) an FAA Bill of Sale for such Aircraft; and (iii) an FAA Release of Lien.

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ARTICLE 4

Taxes; Duties; Fees

4.1

The Purchase Price does not include any tax, assessment, duty or similar governmental charge, fee or penalty on the sale or use of the Aircraft ("Taxes").  Except for taxes based on the net income or gross receipts of the Seller, the Purchaser agrees to assume and pay all Taxes of any nature, including penalties, fines or interest thereon incurred in any jurisdiction in connection with the sale or use of the Aircraft and to indemnify, defend and hold the Seller harmless from and against the payment of any and all such Taxes.  The Purchaser and the Seller further agree to furnish each other with such documents, certificates and information as each may reasonably request in connection with any claims for exemption from the payment of such Taxes.  The Purchaser and Seller, respectively, shall have the right, at its own expense, to contest the validity, applicability or amount of any Tax which is to be paid by it under this Article so long as such contest shall be conducted in good faith by appropriate proceedings.

ARTICLE 5

Representations and Warranties

5.1

Representations and Warranties of the Seller:  The Seller hereby represents and warrants that it is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida and has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and all other documents contemplated hereby (collectively, the "Documents"), and to convey to Purchaser good and unencumbered title to the Aircraft and consummate the transactions contemplated by the Documents.  The execution, delivery and performance of the Documents by the Seller and the consummation of the transactions contemplated by the Documents have been duly and validly authorized by all necessary corporate action on the part of the Seller, and the Documents are, or when executed and delivered will be, legal valid and binding obligations of the Seller, enforceable against the Seller in accordance with their terms.  Neither the execution or the delivery of, or performance pursuant to, the Documents by the Seller nor the consummation of any transaction contemplated by the Documents or the fulfillment of the terms of the Documents will conflict with, result in a violation of or constitute a default under any provision of the certificate of incorporation or bylaws of the Seller, in each case as amended to date.  No consent, approval, exemption or authorization is required to be made with any third party (including, without limitation, governmental and quasi-governmental agencies, authorities and instrumentalities of competent jurisdiction) by the Seller in order for this Agreement or the Documents to constitute a legal, valid and binding obligation of the Seller or to authorize or permit the consummation by the Seller of the transactions contemplated hereby or thereby. 

5.2

Representations and Warranties of the Purchaser:  The Purchaser hereby represents and warrants that it is a corporation duly organized, validly existing and in good standing under the laws of Cyprus and has all requisite corporate power and authority to execute, deliver and perform its obligations under the Documents to which it is a party and consummate the transactions contemplated thereby.  The execution, delivery and performance of the Documents by the Purchaser and the consummation of the transactions contemplated by the Documents have been duly and validly authorized by all necessary corporate action on the part of the Purchaser, and the Documents to which it is a party are, or when executed and delivered will be legal, valid and binding obligations of the Purchaser, enforceable against the Purchaser in accordance with their terms.  Neither the execution, delivery or performance by the Purchaser of the Documents to which it is a party nor the consummation of any transaction contemplated thereby, or the fulfillment of the terms thereof will conflict with, result in a violation of or constitute a default under any provision of the certificate of incorporation or the by-laws of the Purchaser, in each case as amended to date.  No consent, approval, exemption or authorization is required to be obtained from, no notice is required to be given to and no filing is required to be made with any third party (including, without limitation, governmental and quasi-governmental agencies, authorities and instrumentalities or competent jurisdiction) by the Purchaser in order for this Agreement or the Documents to constitute a legal, valid and binding obligation of the Purchaser or to authorize or permit the consummation by 

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the Purchaser of the transactions contemplated hereby or thereby. The Purchaser has not employed or retained a broker or finder nor incurred any liability for brokerage of finder fees or commissions in connection with the transactions contemplated by this Agreement. 

5.3

DISCLAIMER AND RELEASE: EACH AIRCRAFT AND THE AIRCRAFT SUPPORT DELIVERED HEREUNDER IS SOLD TO THE PURCHASER "AS IS, WHERE IS", WITH ALL FAULTS, AND IS WITHOUT ANY WARRANTY WHATSOEVER. THE REPRESENTATIONS SET FORTH IN ARTICLE 5.1 ABOVE ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND PURCHASER HEREBY WAIVES, RELEASES AND RENOUNCES ANY AND ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES, EXPRESS OR IMPLIED, OF THE SELLER AND ITS OFFICERS, AGENTS, DIRECTORS, AFFILIATES, EMPLOYEES AND ASSIGNS.  EXCEPT WITH RESPECT TO THE WARRANTY OF TITLE TO EACH AIRCRAFT, THE PURCHASER ALSO HEREBY WAIVES, RELEASES AND RENOUNCES ANY AND ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES, EXPRESS OR IMPLIED, OF THE PURCHASER AGAINST THE SELLER AND ITS OFFICERS, AGENTS, DIRECTORS, AFFILIATES, EMPLOYEES AND ASSIGNS, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMANCE OR DEFECT IN SUCH AIRCRAFT OR AIRCRAFT SUPPORT, OR ANY OTHER THING DELIVERED UNDER THIS AGREEMENT, WHETHER LATENT, HIDDEN OR OTHERWISE UNDISCOVERABLE, AND WITH RESPECT TO ANY OTHER MATTER ARISING UNDER OR BY VIRTUE OF THE AGREEMENT, INCLUDING BUT NOT LIMITED TO:  (A) ANY WARRANTY AS TO THE AIRWORTHINESS OR CONDITION OF THE AIRCRAFT OR AIRCRAFT SUPPORT DELIVERED PURSUANT TO THIS AGREEMENT; (B) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; (C) STRICT LIABILITY; (D) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; (E) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE ACTUAL OR IMPUTED NEGLIGENCE OF THE SELLER OR ITS OFFICERS, AGENTS, DIRECTORS, AFFILIATES, EMPLOYEES AND ASSIGNS; (F) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO ANY TANGIBLE OR INTANGIBLE THING, FOR LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY OTHER DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES; IT BEING AGREED THAT NEITHER THE SELLER NOR ITS OFFICERS, AGENTS, DIRECTORS, AFFILIATES, EMPLOYEES SUCCESSORS OR ASSIGNS SHALL HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT TO ANY OF THE FOREGOING MATTERS AND THAT ALL RISKS OF ANY NATURE INCIDENT THERETO ARE TO BE BORNE BY THE PURCHASER.

5.4

Indemnity:  The Purchaser shall defend, indemnify and hold harmless the Seller and its respective assignees, agents, directors, officers, affiliates and employees (hereinafter collectively called "Indemnified Parties") from and against any and all claims, demands, suits, obligations, liabilities, damages, losses and judgments, including costs and expenses incident thereto, for injury to or death of any person or persons, or for loss of or damage to any property, including any of the Aircraft or Aircraft Support, arising out of or in any way connected with the possession, ownership, maintenance, repair, modification, storage, use or operations of such Aircraft or Aircraft Support, its components or any other item delivered, whether or not arising in tort or occasioned in whole or in part by the fault or negligence of the Indemnified Parties save and except such liabilities as arise solely from the breach of the warranty of title given by Seller. Purchaser’s indemnity obligations contained herein shall survive termination of this Agreement.

5.5

Insurance: For a period of two (2) years after the Delivery of each Aircraft, Purchaser shall, with respect to such Aircraft, carry and maintain or cause to be carried and maintained at its own cost and expense, Comprehensive General Liability (Aircraft Products and General Liability) Insurance with reputable insurers of recognized responsibility in a leading U.S. or European insurance market for an amount not less than the amount specified in Schedule IV attached hereto combined single limit on an occurrence basis, but in the aggregate in respect of product liability for bodily injury and property damage, including aircraft liability and products liability, to cover Purchaser's indemnity obligations under this Agreement.  The 

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insurance required under this Agreement shall name Seller as an additional insured, shall contain a standard cross-liability endorsement and a waiver of subrogation in favor of Seller, and shall provide Seller with thirty (30) days prior notice of cancellation, termination or material alteration.  

5.6

Negotiated Agreement:  The Purchaser and the Seller agree that (i) this Article 5 has been the subject of discussion and negotiation and is fully understood by the parties, (ii) the Aircraft and Technical Documents have been inspected by Purchaser's duly qualified technical experts who have independently determined the condition thereof, and (iii) the Purchase Price and the other mutual agreements of the parties set forth in this Agreement were arrived at in consideration of the provisions of this Article 5, specifically including the waiver, release and renunciation by the Purchaser set forth in Section 5.3 and the indemnification by the Purchaser set forth in Section 5.4.

ARTICLE 6

Conditions Precedent to Closing

6.1

The obligations of the Seller to consummate the transactions contemplated hereby are, unless waived by the Seller, subject to fulfillment on or before the applicable Closing Date, (i) the payment in full by Purchaser of the Purchase Price (ii) receipt by Seller of a Certificate evidencing Purchaser’s good standing from the Purchasers’ applicable governing body and (iii) receipt by Seller of an executed Aircraft Technical Acceptance Certificate.

6.2

The obligations of the Purchaser to consummate the transactions contemplated hereby are, unless waived by the Purchaser, subject to fulfillment on or before the applicable Closing Date, the Delivery of the Aircraft free of liens and in the condition evidenced by the Aircraft Technical Acceptance Certificate.

ARTICLE 7

Excusable Delay; Loss or Destruction of the Aircraft

7.1

Neither Purchaser nor Seller shall be liable or responsible, nor be obligated to perform hereunder, nor deemed to be in default hereunder, for any failure or delay in performing hereunder occasioned by any of the following causes: acts of God or the public enemy, acts of terrorism, civil war, insurrections, riots, or civil disobedience, war, fires, floods, explosions, earthquakes, epidemics, or quarantine restrictions; any act of government or agency or subdivision thereof, governmental priorities, allocations, regulations or orders affecting materials, facilities or personnel; strikes, labor difficulties causing cessation, slowdown or interruptions of work; inability after due and timely diligence to procure materials, fuel, supplies, accessories, equipment, parts, utility services; damage or destruction to Seller's facilities and equipment due to any cause whatsoever or any other cause beyond its reasonable control ("Excusable Delay").

7.2

Either Purchaser or Seller shall notify the other party as soon as it has reason to believe that an Excusable Delay may occur.  Such notice will include an explanation for such anticipated delay, the steps that the party providing such notice will take to resolve it, and as accurate an estimate as possible of its duration.

7.3

If, due to an Excusable Delay, the Delivery of any Aircraft is delayed for a period of more than sixty (60) days from the applicable Closing Date, then either Seller or Purchaser may terminate this Agreement, with respect to such Aircraft, by giving written notice to the other within fifteen (15) days after expiration of such sixty (60) day period and Seller shall refund Purchaser's Purchase Price, if and to the extent paid to Seller, on account of such Aircraft.

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7.4

In the event that prior to the Closing Date for an Aircraft, such Aircraft is lost, destroyed, or damaged to an extent where repair is economically unjustified in Seller's sole opinion, then Seller shall promptly notify Purchaser in writing of such occurrence and such notice shall discharge and terminate all obligations and liabilities of the parties hereunder with respect to that particular Aircraft.  Seller shall be entitled to all proceeds of insurance payable to Seller on account of the loss or damage and Purchaser shall have no claim to such proceeds and hereby renounces any such claim. Seller shall refund Purchaser's Purchase Price, if and to the extent paid to Seller, on account of such Aircraft.

7.5.

In the event that an Aircraft is damaged, but not, in the sole opinion of Seller, beyond economically justifiable repair, Purchaser may purchase the damaged Aircraft in its then present condition at a price to be agreed between Purchaser and Seller or Seller may elect to repair the Aircraft and deliver the Aircraft to Purchaser as soon as such repair may be completed and the purchase of the Aircraft shall continue at a purchase price to be agreed upon between Purchaser and Seller.  The time required to complete such repair shall be considered an Excusable Delay with respect to Seller's obligation to deliver the Aircraft to Purchaser on the applicable Closing Date.  

7.6.

Unless otherwise provided in this Agreement, Seller shall have no duty to repair the Aircraft or replace components under any circumstances.

ARTICLE 8

Default and Termination

8.1

Events of Default:  The occurrence of any or all of the following events shall constitute an Event of Default ("Event of Default"):

8.1.1

Purchaser fails or refuses to accept tender of delivery of a conforming Aircraft as and when required by this Agreement;

8.1.2

Purchaser fails or refuses to pay in full all payments as and when due hereunder or to perform any obligation as required hereunder;

8.1.3

Seller fails to tender delivery of an Aircraft as and when required by this Agreement that is not excused pursuant to Section 7 of this Agreement; or

8.1.4

Seller fails to deliver the Aircraft free of all Liens and title defects.

8.2

Termination:  Should any Event of Default occur, the non-defaulting party, by written notice to the other, may terminate this Agreement as to the Aircraft which is the subject of such Event of Default and may pursue any other remedy it may have in law or equity.  Notwithstanding the foregoing, in the event that Purchaser is in default of this Agreement, Seller may retain the Deposit (as hereinafter defined) portion of the Purchase Price not as a penalty, but as liquidated damages to Seller for administrative and other related costs and expenses associated with having such Aircraft removed from the market for sale and those additional costs and expenses incurred by Seller in furtherance of the negotiations with Purchaser and Delivery of such Aircraft to the Delivery Location.  

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ARTICLE 9

Notices and Requests

9.1

All notices, requests or other communications to either party by the other as provided herein shall be given in writing and given by U.S. registered or certified mail, courier service or facsimile, and any such notice shall be effective when delivered (or, if delivered by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was received) addressed as follows:

Seller:

Gulfstream International Airlines, inc.

3201 Griffin Rd., 4th Floor

Dania, Florida 33004

Attn: David Hackett, President

Telephone: (954) 985-1500

Facsimile: (954) 985--5245

.

Purchaser:

Pimegal Consultants Ltd.

121099 1st Smolensky Lane 24 

Moscow, Russia

Telephone: 7-495-241-5131

Facsimile:  7-495-241-1109

With copy to:

 Region Avia Airline

 12351, Molodogvardeiskaya st. 57

  Moscow, The Russian Federation  

Telephone:  7-495-980-87-48

Facsimile:   7-495-644-33-78

or to such other address or number as the party to receive the notice or request shall designate by notice to the other in writing in accordance with the terms hereof.

ARTICLE 10

Assignment

10.1

This Agreement shall inure to be benefit of and be binding upon each of the parties hereto and their respective successors and assigns.  The parties may not assign any of their rights or delegate any of their obligations hereunder without prior written consent of the other.

ARTICLE 11

Miscellaneous

11.1

Headings:  Headings used in this Agreement are for convenience of reference only and shall not affect the substantive interpretation of this Agreement.

11.2

Partial Invalidity:  If any provision of this Agreement is or becomes void or unenforceable by force or operation of law, the other provisions shall remain valid and in full force and effect.

11.3

Applicable Law and Jurisdiction:  This Agreement shall be governed by and construed in accordance with, the laws of the State of Florida.  Purchaser hereby consents to the non-exclusive jurisdiction of the state and federal courts situated in Broward County, Florida for any suit, action or judicial proceeding instituted arising out of or connected with this Agreement.

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11.4

Non-Waiver:  Any failure at any time of either party to enforce any provision of this Agreement shall not constitute a waiver of such provision or prejudice the right of the other party to enforce such provision at any subsequent time.

11.5

Disclosure of Terms:  The Purchaser and Seller each agrees, except for disclosure to each party’s respective attorneys, internal auditors, lenders and insurers or other employees or to government officials on a “need to know” basis, it will not disclose to any third party the terms of this Agreement except with the prior written consent of the other party.

11.6

Counterparts:  This Purchase Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

11.7

Entire Agreement:  This instrument constitutes the entire agreement of the parties with respect to the matters set forth herein and supersedes all prior agreements and understandings of the parties with respect to such matters.  This Agreement shall not be modified or varied in its terms and conditions by oral agreement or representation or otherwise than by written agreement dated even herewith or subsequent hereto signed on behalf of the Purchaser and the Seller by their respective duly authorized representatives.

11.8

No Third-Party Beneficiaries:  No third-party is intended to benefit from, nor may any third party seek to enforce any of the provisions of, this Agreement.

[SIGNATURE PAGE TO FOLLOW]

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IN WITNESS WHEREOF, the Seller and the Purchaser have each cause this Agreement to be duly executed and delivered as of the day and year first written above.

			
	GULFSTREAM INTERNATIONAL AIRLINES, INC.

	 
	  

	 
	 

	By:  

	/s/ 

	Corporate Seal:

	 
	David Hackett

Chief Executive Officer and President

(“Seller”)

			
	PIMEGAL CONSULTANTS LTD.

	 
	  

	 
	 

	By:  

	/s/ 

	 

	 
	Denis Pavshinsky

Attorney-in-Fact

(“Purchaser”)

              

SCHEDULE I

TO

AIRCRAFT PURCHASE AND SALE AGREEMENT

DELIVERY SCHEDULE

			
	S/N

	Reg #

	Delivery Date

	 
	 
	 

	120.205

	N205CA

	June 30, 2008

	120.236

	N283AS

	July 15, 2008

	120.265

	N285AS

	July 15, 2008

	120.231

	N280AS

	July 15, 2008

	120.226

120.141

120.202

	N282AS

N261AS

N268AS

	August 15, 2008

August 15, 2008

August 15, 2008

Accepted and Agreed:

			
	GULFSTREAM INTERNATIONAL AIRLINES, INC.

	 
	  

	 
	 

	By:  

	/s/ 

	 

	 
	David Hackett

Chief Executive Officer and President

(“Seller”)

			
	PIMEGAL CONSULTANTS LTD.

	 
	  

	 
	 

	By:  

	/s/ 

	 

	 
	Denis Pavshinsky

Attorney-in-Fact

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SCHEDULE II

TO

AIRCRAFT PURCHASE AND SALE AGREEMENT

AIRCRAFT DELIVERY CONDITION

On the Closing Date, the Aircraft will be in the following condition:

All Aircraft will be delivered AS IS WHERE IS with ANY AND ALL FAULTS PRESENT.  

Notwithstanding, each Aircraft shall be airworthy, complete, current on its maintenance program, cleaned and serviceable by international commercial airline standards and ready for flight, normal wear and tear excepted, with all equipment, components, and systems functioning in accordance with their intended use within the limits and/or guidelines established by the relevant manufacturers.  

Each Aircraft will have no open/outstanding Airworthiness Directives (ADs), manufacturer service bulletins (SBs), or manufacturer approved modifications mandated by the FAA for which terminating action is due or coming due within one hundred and eighty (180) days of delivery of the Aircraft. 

The Technical Documents, including Manuals shall be complete, current, accurate, and up-to-date as required by the Seller’s Aviation Authority (e.g., FAA). 

The Technical Documents shall provide “back to birth” traceability for life limited parts (“LLPs”) and shall be in such condition as qualifies for immediate certificate of airworthiness by, and registration with the Seller’s Aviation Authority.

[SIGNATURES TO FOLLOW]

Accepted and Agreed:

			
	GULFSTREAM INTERNATIONAL AIRLINES, INC.

	 
	  

	 
	 

	By:  

	/s/ 

	 

	 
	David Hackett

Chief Executive Officer and President

(“Seller”)

			
	PIMEGAL CONSULTANTS LTD.

	 
	  

	 
	 

	By:  

	/s/ 

	 

			
	 
	Denis Pavshinsky

Attorney-in-Fact

SCHEDULE III

TO

AIRCRAFT PURCHASE AND SALE AGREEMENT

PURCHASE PRICE, CLOSING AND DELIVERY

1.

Purchase Price:

Purchaser shall pay the following amounts (the “Purchase Price”) to Seller for the Aircraft as follows:

		
	N205CA (msn 120.205)

	US$ 2,300,000

	N283AS (msn 120.236)

	US$ 1,300,000

	N285AS (msn 120.265)

	US$ 1,900,000

	N280AS (msn 120.231)

	US$ 1,400,000

	N282AS (msn 120.226)

	US$ 1,700,000

	N261AS (msn 120.141)

	US$ 1,650,000

	N268AS (msn 120.202)

	US$ 1,400,000

	TOTAL  

	US$ 11,650,000

The Purchase Price shall be remitted to the Seller from an escrow account in accordance with this Agreement and the Escrow Agreement by and between Seller, Purchaser, and Insured Aircraft Title Service, Inc. (“IATS”) dated May 9, 2008 (the “Escrow Agreement”).

2.

Aircraft Prepayments:

A.

First Prepayment:

On or about 02/07/2008, the Purchaser shall make a prepayment towards the Purchase Price for the remaining Aircraft deliveries (“First Prepayment”).  The First Prepayment shall be credited against the Purchase Price of each respective Aircraft as provided below:

		
	N283AS (msn 120.236)

	US$ 350,000

	N285AS (msn 120.265)

	US$ 350,000

	N280AS (msn 120.231)

	US$ 350,000

	N282AS (msn 120.226)

	US$ 350,000

	N261AS (msn 120.141)

	US$ 350,000

	N268AS (msn 120.202)

	US$ 350,000

	TOTAL  

	US$ 2,100,000

B.

Second Prepayment:

At the Closing of the second set of Aircraft, the Purchaser shall make, in addition to the Purchase Price for the second set of Aircraft, a prepayment towards the Purchase Price for the remaining Aircraft deliveries (“Second Prepayment”).  The Second Prepayment shall be credited against the Purchase Price of each respective Aircraft as provided below:

		
	N282AS (msn 120.226)

	US$ 350,000

	N261AS (msn 120.141)

	US$ 350,000

	N268AS (msn 120.202)

	US$ 350,000

	TOTAL  

	US$ 1,350,000

C.

Refund of Prepayments:

In the event any or all of the Aircraft listed in this Section 2.A. and 2.B.  The First and Second Prepayments as described herein shall be refunded less five hundred thousand dollars (US$ 500,000) as liquidated damages (as more fully described below) by Seller to Purchaser in the event any or all of the respective Aircraft are not delivered for any reason whatsoever.

3.

Escrow Account Schedule of Deposits:

The Purchaser shall deposit (“Escrow Deposits”) with the Escrow Agent the following amounts on or before the corresponding dates in accordance with this Agreement and the Escrow Agreement:

			
	Deposit

	Date             

	Amount

	1st

	13/05/2008

	US$    500,000

	2nd

	30/06/2008

	US$ 1,800,000

	3rd

	02/07/2008

	US$ 2,100,000

	4th

	15/07/2008

	US$ 4,900,000

	5th

	15/08/2008

	US$ 2,350,000 (subject to reduction per below)

	 
	TOTAL

	US$ 11,650,000

 

The first deposit of US$ 500,000 has previously been deposited with the Escrow Agent.  The fourth deposit of US$ 2,350,000 is subject to reduction by US$ 200.00 per flight hour per Aircraft as a maintenance reserve for propellers, landing gears, engines, and APU (“Maintenance Reserve”) for each Aircraft remaining in Seller’s operations after the first Aircraft Closing Date until Delivery of such Aircraft.  Any maintenance event on the Aircraft that cost five thousand dollars (US$ 5,000) or less per event shall be borne by the Seller.  Any maintenance event on the Aircraft that is in excess of five thousand dollars (US$ 5,000), but less than the Maintenance Reserve (i.e., approximately US$ 90,000) per event shall be borne as follows:  (1) the first US$ 5,000 shall be borne by the Seller, and (2) the balance shall be paid from the Maintenance Reserve.  Any maintenance event that is greater than the Maintenance Reserve (i.e., approximately US$ 90,000) shall be borne as follows: (1) the first US$ 5,000 shall be borne by the Seller; (2) the balance shall be paid first from the Maintenance Reserve; and (3) any remainder shall be borne by Seller.   

4.

Escrow Account Schedule of Disbursements:

 

At Closing, the Purchaser shall direct the Escrow Agent to disburse from the escrow account to the Seller the following respective amounts:

			
	Deposit

	Date        

	Amount

	1st

	30/06/2008    

	US$ 2,300,000 (Purchase of N205CA)

	2nd

	02/07/2008    

	US$ 2,100,000 (First Prepayments on remaining Aircraft)

	3rd

	15/07/2008    

	US$ 3,550,000 (Purchase of N283AS, N285AS, & N280AS)

	4th

	15/07/2008

	US$ 1,350,000 (Second Prepayments on remaining Aircraft)

	5th

	15/08/2008    

	US$ 2,350,000 (Purchase of N282AS, N261AS, & N268AS, subject to reduction per Section 3 above)

	 
	TOTAL

	US$ 11,650,000

5.

Escrow Documents:

Prior to the Closing Date, Seller shall place or cause to be placed in escrow with IATS in Oklahoma City, Oklahoma, (i) a Federal Aviation Administration (“FAA”) form Bill of Sale on AC Form 8050-2 duly executed, (ii) a Warranty Bill of Sale for the Aircraft in the form attached hereto as Exhibit “C”, and (iii) a FAA form Release of Lien duly executed by Seller, and Purchaser shall place in escrow with the  Escrow Agent the (i) Periodic Deposit as described in this Schedule III above, (ii) an Aircraft Delivery Receipt (the "Receipt") for the Aircraft in substantially the form attached hereto as Exhibit “B”, and (iii) an Aircraft 

Technical Acceptance (“Technical Acceptance Receipt”) in substantially the form attached hereto as Exhibit “E”.

On the Closing Date, Purchaser shall direct the Escrow Agent on the dating and delivery to Seller of the Receipt.  Purchaser shall cause the wire transfer of the balance of the Purchase Price, plus the amount of applicable taxes, if any, which shall be payable by Purchaser (or in lieu thereof evidence of payment of such taxes reasonably satisfactory to Seller), delivered to the account set forth above or to such other account as Seller may advise Purchaser in writing.

Upon receipt of the Purchase Price by Seller, Seller shall direct the dating and delivery to Purchaser of the Warranty Bill of Sale in the form of Exhibit “C” for filing with the FAA.  Purchaser shall instruct the Escrow Agent to record the FAA Bill(s) of Sale

DEPOSIT IN ESCROW

The Purchase Price will be paid by crediting against the Purchase Price the amount of five hundred thousand dollars (US$ 500,000) in respect of the deposit previously made by Purchaser into an escrow account established for this transaction at Insured Aircraft Title Services, Inc. (“IATS”) located in Oklahoma City, Oklahoma.  If the Purchaser does not fulfill its obligations under this Agreement the Seller shall retain the amount of five hundred thousand dollars (US$ 500,000) by way of liquidated damages, not as a penalty.  Seller acknowledges that Purchaser has deposited with IATS a total of five hundred thousand dollars (US$ 500,000) into the escrow account. 

[SIGNATURE PAGE TO FOLLOW]

Accepted and Agreed:

			
	GULFSTREAM INTERNATIONAL AIRLINES, INC.

	 
	  

	 
	 

	By:  

	/s/ 

	 

	 
	David Hackett

Chief Executive Officer and President

(“Seller”)

			
	PIMEGAL CONSULTANTS LTD.

	 
	  

	 
	 

	By:  

	/s/ 

	 

	 
	Denis Pavshinsky

Attorney-in-Fact

SCHEDULE IV

TO 

AIRCRAFT PURCHASE AND SALE AGREEMENT

COMPREHENSIVE GENERAL LIABILITY (AIRCRAFT

PRODUCTS AND GENERAL LIABILITY)

Two Hundred and Fifty Million United States Dollars (US$ 250,000,000)

Accepted and Agreed:

			
	GULFSTREAM INTERNATIONAL AIRLINES, INC.

	 
	  

	 
	 

	By:  

	/s/ 

	 

	 
	David Hackett

Chief Executive Officer and President

(“Seller”)

			
	PIMEGAL CONSULTANTS LTD.

	 
	  

	 
	 

	By:  

	/s/ 

	 

	 
	Denis Pavshinsky

Attorney-in-Fact

EXHIBIT "A"

DESCRIPTION OF AIRFRAME, ENGINES AND PROPELLERS

EMBRAER EMB-120ER AIRFRAMES, EACH WITH TWO (2) PRATT & WHITNEY PW118 ENGINES AND TWO (2) PROPELLER ASSEMBLIES

						
	FAA 

	Aircraft

	Engine #1

	Engine #2

	Prop Assy

	Prop Assy

	Reg. No.

	MSN

	MSN

	MSN

	#1 MSN

	#2 MSN

	N205CA

	120.205

	115460

	115459

	900620

	900513

	N282AS

	120.226

	115324

	115280

	880815

	890324

	N285AS

	120.265

	115634

	115008

	900246

	910622

	N280AS

	120.231

	115453

	115064

	920410

	901113

	N283AS

	120.236

	115009

	115279

	900337

	890902

	N261AS

	120.141

	115358

	115369

	901021

	901628

	N268AS

	120.202

	115225

	115088

	900316

	900121

With notice prior to Delivery, the parties may substitute engines or propeller assemblies by mutual agreement.

EXHIBIT "B"

AIRCRAFT DELIVERY RECEIPT

Pimegal Consultants Ltd.. ("Purchaser") hereby acknowledges delivery to and receipt by it of one (1) Embraer EMB-120ER airframe, manufacturer's serial number 120.____, together with two (2) Pratt & Whitney PW118 engines bearing serial numbers _______ and _______, from Gulfstream International Airlines, Inc. ("Seller") at __________________,] U.S.A. on _____________, 2008, at ________ o'clock ___ .m. __T.

Purchaser further acknowledges that the condition of the Aircraft at delivery fully complies with the terms and conditions of the Aircraft Purchase and Sale Agreement dated as of _____________, 2008 ("Agreement") and that Purchaser hereby waives all rights and remedies it has or may have regarding delivery and acceptance of the Aircraft, including Purchaser's right of revocation of acceptance, except as set forth in the Agreement.

			
	         

	PIMEGAL CONSULTANTS, LTD.

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	 
	 

	 
	Name:

	 

	 
	 
	 

	 
	Title:

	 

	 
	 
	 

EXHIBIT "C"

WARRANTY BILL OF SALE

FOR VALUE RECEIVED, Gulfstream International Airlines, Inc, ("Seller"), has bargained, sold, conveyed, and delivered and by these presents does hereby bargain, sell, convey, and deliver unto Pimegal Consultants, Ltd. ("Purchaser") in accordance with, and subject to the terms, conditions and limitations of that Aircraft Purchase and Sale Agreement dated       , 2008 ("Agreement") the following described property:

one (1) Embraer EMB-120 airframe, manufacturer's serial number 120.____, including all instruments, accessories, and equipment installed thereon, together with two (2) Pratt & Whitney PW118 engines bearing serial numbers ______ and ________.

TO HAVE AND HOLD the above-described property unto Purchaser, its successors, and assigns to its and their own use forever.

Seller hereby warrants that it has good and sufficient legal and beneficial title to the above-described property and that such property is subject to no lease, mortgage, pledge, lien, charge, or other encumbrance.  Seller will warrant and defend unto Purchaser good title to the property against the claims of all persons claiming under Seller.

IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed this ____ day of _____________, 2008.

			
	         

	GULFSTREAM INTERNATIONAL AIRLINES, INC.

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	 
	 

	 
	Name:

	 

	 
	 
	 

	 
	Title:

	 

	 
	 
	 

EXHIBIT “D”

DOCUMENTS TO BE DELIVERED WITH AIRCRAFT

One copy of each of the following documents (the “Technical Documents”) and the applicable records for each Aircraft will be supplied in the medium of microfiche, microfilm, paper, disk or any then current medium or a combination of these media . 

 

Aircraft 

1.

Aircraft Maintenance Manual (MM)*

2.

Aircraft Illustrated Parts Catalog (IPC)*

3.

Aircraft Wiring Diagram Manual (WDM)*

4.

Aircraft Weight and Balance Manual (WBM)*

5.

Aircraft Weight and Balance Report

6.

All Aircraft Historical Flight & Technical Logs

7.

Aircraft Historical Maintenance Records

8.

Aircraft Engineering Order (EO) Completion List

9.

Aircraft Time Log (ACTL) 

10. 

Aircraft Airworthiness Directive (AD Status Report)

11. 

Aircraft Flight Manual (AFM)

12.

Paper or digital copy of all applicable ASA Engineering Orders*

13. 

PW118 Engine Manual*

14.

PW118 Illustrated Parts Catalog*

15.    

Letter detailing that aircraft was maintained according to an approved 

maintenance program

16.

Statement that aircraft did not have any Incidents or Accidents

17.

Dents and Patches Maps and Records

18.

All historical records

19.

Engines last overhaul/shop report

20.

Engine LLP records

21.

Engine AD and SB status

22.

Engine logbooks and acceptance records

23.

Engines last months trend monitoring sheets, if available

24.

APU AD and SB status

25.

APU logbooks and acceptance records

26.

Landing Gear component records

27.

List and Copy of Supplemental Type Certificates, if available

28.

AD current and repetitive inspections list

29.

AD compliance sheets and alternate means of compliance sheet

30.

Rotable components current inventory list

31.

Maintenance Program status report of routine inspections

32.

List of major repairs and alterations

33.

Time Controlled Components list (HT) with the accomplishment data, including Serviceable Tags/FAA Forms

34.

Corrosion Prevention and Control Program (CPCP) status 

35.

Letter detailing the implementation of the CPCP, that the Program was incorporated during maintenance inspections, that either no corrosion was found or if found was Level 1 or below and therefore no reporting was required

36.

Status of SB’s and EO’s, as provided by previous operator information must include method of compliance, date of accomplishment and stamp or signature of person accomplishing work in previous operation format

37.

Work sheets for last checks accomplished

38.

Time Controlled and Replaced Parts list

39.

Minimum Equipment List

40.

Quick Reference list/hand book

41.

OPS Manual

42.

MARS Status Report

* Only one set of these documents will be delivered for all seven (7) Aircraft and not on a per Aircraft basis.

APU

1.

APU Last Shop Visit

2.

APU Life Limited Parts List

Landing Gear

1. 

Landing Gear Last Shop Visit

2. 

Landing Gear Life Limited Parts List 

Notwithstanding anything to the contrary contained herein, if within six (6) months of the Delivery of the Aircraft and Technical Documents, Purchaser discovers an error or incompleteness in the Technical Documents, Seller will use reasonable efforts to correct or complete such Technical Documents at no charge to Purchaser, provided that Purchase promptly makes a written claim that references this Exhibit D of the Agreement and describes in detail the nature of the alleged error or incompleteness.  After expiration of such six month period, Seller agrees, subject to having available manpower, to assist Purchaser with completing or correcting any such Technical Documents for a charge of $100 per man-hour for time spent by Seller’s employees in correcting or completing such records unless the omission or error was caused by the negligence or willful misconduct of Seller.

EXHIBIT “E”

AIRCRAFT TECHNICAL ACCEPTANCE

This Aircraft Technical Acceptance Receipt is given, on and as of the date set forth below, by Pimegal Consultants Ltd. (“Purchaser”) to Gulfstream International Airlines, Inc. ("Seller") pursuant to the Aircraft Purchase and Sale Agreement dated as of _____________, 2008 between Purchaser and Seller (hereinafter referred to as the "Agreement," terms used herein being used as defined in the Agreement):

Purchaser hereby indicates and confirms to Seller, its successors and assigns, that the Purchaser has, at ___ o'clock _. m. __T on this ___ day of ________, 2008 in ______________, completed its inspection of and accepted for purposes of technical compliance with the terms of the Agreement, the following Aircraft:

one (1) Embraer EMB-120 airframe, manufacturer's serial number 120.___U.S. registration number N_________, together with two (2) Pratt & Whitney PW118 engines bearing serial numbers ________ and ________.

 

			
	         

	PIMEGAL CONSULTANTS, LTD.

	 
	 
	  

	 
	 
	 

	 
	By:  

	 

	 
	 
	 

	 
	Name:

	 

	 
	 
	 

	 
	Title:

	 

	 
	 
	 

2843461_1scoutexh10_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

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