Document:

Indemnification Agreement for Thomas J. Shafer

     

     

    
      

      

    

    
 

    INDEMNIFICATION
      AGREEMENT

     

    

    THIS
      INDEMNIFICATION AGREEMENT
      (this
“Agreement”) is entered into as of the 30th day of August, 2006 by and among
      AMERICAN COMMUNITY PROPERTIES TRUST, a Maryland real estate investment trust
      (the “Company”), and Thomas J. Shafer (the “Indemnitee”).

    

    WHEREAS,
      the
      Indemnitee is an officer or a member of the Board of Trustees of the Company
      and
      in such capacity is performing a valuable service for the Company;

    

    WHEREAS,
      Maryland law permits the Company to enter into contracts with its officers
      or
      members of its Board of Trustees with respect to indemnification of, and
      advancement of expenses to, such persons; 

    

    WHEREAS,
      the
      Restated Declaration of Trust of the Company (the “Declaration of Trust”)
      authorizes the Company to indemnify and advance expenses to its officers and
      trustees to the maximum extent permitted by Maryland law in effect from time
      to
      time;

     

    WHEREAS,
      the
      Bylaws of the Company (the “Bylaws”) provide that each officer and trustee of
      the Company shall be indemnified by the Company to the maximum extent permitted
      by Maryland law in effect from time to time and shall be entitled to advancement
      of expenses consistent with Maryland law; and

     

    WHEREAS,
      to
      induce the Indemnitee to provide services to the Company as an officer or a
      member of the Board of Trustees, and to provide the Indemnitee with specific
      contractual assurance that indemnification will be available to the Indemnitee
      regardless of, among other things, any amendment to or revocation of the
      Declaration of Trust, the Bylaws, or any acquisition transaction relating to
      the
      Company, the Company desires to provide the Indemnitee with protection against
      personal liability as set forth herein;

    

    NOW,
      THEREFORE,
      in
      consideration of the premises and the covenants contained herein, the Company
      and the Indemnitee hereby agree as follows:

    

    1. DEFINITIONS.

    

    For
      purposes of this Agreement:

    

    
      	 	
              (A)

            	
              “Change
                in Control” shall mean 

            

    

    

    
      	 	
              i.

            	
              the
                dissolution or liquidation of the
                Company;

            

    

    

    
      	 	
              ii.

            	
              the
                merger, consolidation, or reorganization of the Company with one
                or more
                other entities in which the Company is not the surviving entity or
                immediately following which the persons or entities who were beneficial
                owners (as determined pursuant to Rule 13d-3 under the Securities
                Exchange
                Act of 1934, as amended (the “Exchange Act”)) of voting securities of the
                Company immediately prior thereto cease to beneficially own more
                than
                fifty percent (50%) of the voting securities of the surviving entity
                immediately thereafter;

            

    

    

    
      	 	
              iii.

            	
              a
                sale of all or substantially all of the assets of the Company to
                another
                person or entity other than an affiliate of the
                Company;

            

    

    

    
      	 	
              iv.

            	
              any
                transaction (including without limitation a merger or reorganization
                in
                which the Company is the surviving entity) that results in any person
                or
                entity or “group” (within the meaning of Section 13(d)(3) or 14(d)(2) of
                the Exchange Act) (other than persons who are shareholders or affiliates
                immediately prior to the transaction) owning thirty percent (30%)
                or more
                of the combined voting power of all classes of shares of the
                Company;
                or

            

    

    

    
      	 	
              v.

            	
              individuals
                who, as of the date hereof, constitute the Board of Trustees (the
                “Incumbent Board”) cease for any reason to constitute at least a majority
                of the Board of Trustees; provided, however, that any individual
                becoming
                a trustee subsequent to the date hereof whose election, or nomination
                for
                election by the Company’s shareholders, was approved by a vote of at least
                a majority of the trustees then comprising the Incumbent Board (either
                by
                a specific vote or by approval of the proxy statement of the Company
                in
                which such person is named as a nominee for trustee, without written
                objection to such nomination) shall be considered as though such
                individual were a member of the Incumbent Board, but excluding, for
                this
                purpose, any such individual whose initial assumption of office occurs
                as
                a result of an actual or threatened election contest with respect
                to the
                election or removal of trustees or other actual or threatened solicitation
                of proxies or contests by or on behalf of a person other than the
                Board of
                Trustees.

            

    

    

    
      	 	
              (B)

            	
              “Corporate
                Status” describes the status of a person who is or was a trustee or
                officer of the Company (or of any domestic or foreign predecessor
                entity
                of the Company in a merger, consolidation or other transaction in
                which
                the predecessor's interest ceased upon consummation of the transaction)
                or
                is or was serving at the request of the Company (or any such predecessor
                entity) as a director, officer, partner (limited or general), member,
                trustee, employee or agent of any other foreign or domestic corporation,
                partnership, joint venture, limited liability company, trust, other
                enterprise (whether conducted for profit or not for profit) or employee
                benefit plan. The Company (and any domestic or foreign predecessor
                entity
                of the Company in a merger, consolidation or other transaction in
                which
                the predecessor's existence ceased upon consummation of the transaction)
                shall be deemed to have requested the Indemnitee to serve an employee
                benefit plan where the performance of the Indemnitee's duties to
                the
                Company (or any such predecessor entity) also imposes or imposed
                duties
                on, or otherwise involves or involved services by, the Indemnitee
                to the
                plan or participants or beneficiaries of the
                plan.

            

    

     

    

    
      	 	
              (C)

            	
              “Expenses”
                shall include all attorneys' and paralegals' fees, retainers, court
                costs,
                transcript costs, fees of experts, witness fees, travel expenses,
                duplicating costs, printing and binding costs, telephone charges,
                postage,
                delivery service fees, and all other disbursements or expenses of
                the
                types customarily incurred in connection with prosecuting, defending,
                preparing to prosecute or defend, investigating, or being or preparing
                to
                be a witness in a Proceeding.

            

    

    

    
      	 	
              (D)

            	
              “Proceeding”
                includes any action, suit, arbitration, alternate dispute resolution
                mechanism, investigation, administrative hearing, or any other proceeding,
                including appeals therefrom, whether civil, criminal, administrative,
                or
                investigative, except one initiated by the Indemnitee pursuant to
                paragraph 8 of this Agreement to enforce such Indemnitee's rights
                under
                this Agreement.

            

    

    

    
      	(E)         
               	
              “Special
                Legal Counsel” means a law firm, or a member of a law firm, that is
                experienced in matters of corporation law and neither presently is,
                or in
                the past two (2) years has been, retained to represent (i) the Company
                or
                the Indemnitee in any matter material to either such party, or (ii)
                any
                other party to the Proceeding giving rise to a claim for indemnification
                hereunder.

            

    

    

    
      
        
        

      

      
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    2. INDEMNIFICATION
      

    

    The
      Indemnitee shall be entitled to the rights of indemnification provided in this
      paragraph 2 and under applicable law, the Declaration of Trust, the Bylaws,
      any other agreement, a vote of shareholders or resolution of the Board of
      Trustees or otherwise if, by reason of such Indemnitee's Corporate Status or
      any
      act, omission or event which occurs prior to the date of the commencement of
      such Indemnitee’s Corporate Status, such Indemnitee is, or is threatened to be
      made, a party to any threatened, pending, or completed Proceeding, including
      a
      Proceeding by or in the right of the Company or any Proceeding brought by the
      Indemnitee against the Company. Subject to the other provisions of this
      Agreement, the Indemnitee shall be indemnified hereunder, to the maximum extent
      provided by Maryland law in effect from time to time, against judgments,
      penalties, fines, and settlements and reasonable Expenses actually incurred
      by
      or on behalf of such Indemnitee in connection with such Proceeding or any claim,
      issue or matter therein; provided, however, that if such Proceeding was one
      by
      or in the right of the Company, indemnification may not be made in respect
      of
      such Proceeding if the Indemnitee shall have been adjudged to be liable to
      the
      Company. For purposes of this paragraph 2, excise taxes assessed on the
      Indemnitee with respect to an employee benefit plan pursuant to applicable
      law
      shall be deemed fines.

    

    3. EXPENSES
      OF A SUCCESSFUL PARTY

    

    Without
      limiting the effect of any other provision of this Agreement and without regard
      to the provisions of paragraph 6 hereof, to the extent that the Indemnitee
      is,
      by reason of such Indemnitee's Corporate Status or any act, omission or event
      which occurs prior to the date of the commencement of such Indemnitee’s
      Corporate Status, a party to and is successful, on the merits or otherwise,
      in
      any Proceeding pursuant to a final non-appealable order, such Indemnitee shall
      be indemnified against all reasonable Expenses actually incurred by such
      Indemnitee in connection therewith. If the Indemnitee is not wholly successful
      in such Proceeding pursuant to a final non-appealable order but is successful,
      on the merits or otherwise, as to one or more but less than all claims, issues,
      or matters in such Proceeding pursuant to a final non-appealable order, the
      Company shall indemnify the Indemnitee against all reasonable Expenses actually
      incurred by such Indemnitee in connection with each successfully resolved claim,
      issue or matter. For purposes of this paragraph and without limitation, the
      termination of any claim, issue or matter in such Proceeding by dismissal,
      with
      or without prejudice, shall be deemed to be a successful result as to such
      claim, issue or matter.

    

    4. ADVANCEMENT
      OF EXPENSES

    

    The
      Company shall advance all reasonable Expenses incurred by the Indemnitee in
      connection with any Proceeding within ten (10) days after the receipt by the
      Company of a statement from the Indemnitee requesting such advance from time
      to
      time, whether prior to or after final disposition of such Proceeding. Such
      statement shall reasonably evidence the Expenses incurred or to be incurred
      by
      the Indemnitee and shall include or be preceded or accompanied by (i) a written
      affirmation by the Indemnitee of the Indemnitee's good faith belief that the
      standard of conduct necessary for indemnification by the Company as authorized
      by this Agreement has been met and (ii) a written undertaking by or on behalf
      of
      the Indemnitee to repay the amounts advanced if it should ultimately be
      determined that the standard of conduct has not been met. The undertaking
      required by clause (ii) of the immediately preceding sentence shall be an
      unlimited general obligation of the Indemnitee but need not be secured and
      may
      be accepted without reference to financial ability to make the
      repayment.

    

    5. WITNESS
      EXPENSES

    

    Notwithstanding
      any other provision of this Agreement, to the extent that the Indemnitee is,
      by
      reason of such Indemnitee's Corporate Status or any act, omission or event
      which
      occurs prior to the date of the commencement of such Indemnitee’s Corporate
      Status, a witness for any reason in any Proceeding to which such Indemnitee
      is
      not a named defendant or respondent, such Indemnitee shall be indemnified by
      the
      Company against all Expenses actually incurred by or on behalf of such
      Indemnitee in connection therewith.

    

    
      
        
        

      

      
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    6. DETERMINATION
      OF ENTITLEMENT TO AND AUTHORIZATION OF INDEMNIFICATION

    

    
      	 	
              (A)

            	
              To
                obtain indemnification under this Agreement, the Indemnitee shall
                submit
                to the Company a written request, including therewith such documentation
                and information reasonably necessary to determine whether and to
                what
                extent the Indemnitee is entitled to
                indemnification.

            

    

     

    
      	(B)        
               	
              Indemnification
                under this Agreement may not be made unless authorized for a specific
                Proceeding after a determination has been made in accordance with
                this
                Section 6(B) that indemnification of the Indemnitee is permissible
                in the
                circumstances because the Indemnitee has met the following standard
                of
                conduct: the Company shall indemnify the Indemnitee in accordance
                with the
                provisions of paragraph 2 hereof, unless it
                is established that: (a) the act or omission of the Indemnitee was
                material to the matter giving rise to the Proceeding and (x) was
                committed
                in bad faith or (y) was the result of active and deliberate dishonesty;
                (b) the Indemnitee actually received an improper personal benefit
                in
                money, property or services; or (c) in the case of any criminal
                proceeding, the Indemnitee had reasonable cause to believe that the
                act or
                omission was unlawful. Upon receipt by the Company of the Indemnitee's
                written request for indemnification pursuant to subparagraph 6(A),
                a
                determination as to whether the applicable standard of conduct has
                been
                met shall be made within the period specified in paragraph 6(E):
                (i) if a
                Change in Control shall have occurred, by Special Legal Counsel in
                a
                written opinion to the Board of Trustees, a copy of which shall be
                delivered to the Indemnitee, with Special Legal Counsel selected
                by the
                Indemnitee (unless the Indemnitee shall request that such determination
                be
                made by the person or persons and in the manner provided in clause
                (ii) of
                this paragraph 6(B), in which event the provisions of such clause
                (ii)
                shall apply) (if the Indemnitee selects Special Legal Counsel to
                make the
                determination under this clause (i), the Indemnitee shall give prompt
                written notice to the Company advising them of the identity of the
                Special
                Legal Counsel so selected); or (ii) if a Change in Control shall
                not have
                occurred, (A) by the Board of Trustees by a majority vote of a quorum
                consisting of trustees not, at the time, parties to the Proceeding,
                or, if
                such quorum cannot be obtained, then by a majority vote of a committee
                of
                the Board of Trustees consisting solely of two or more trustees not,
                at
                the time, parties to such Proceeding and who were duly designated
                to act
                in the matter by a majority vote of the full Board of Trustees in
                which
                the designated trustees who are parties may participate, (B) by Special
                Legal Counsel in a written opinion to the Board of Trustees, a copy
                of
                which shall be delivered to the Indemnitee, with Special Legal Counsel
                selected by the Board of Trustees or a committee of the Board of
                Trustees
                by vote as set forth in subparagraph (ii)(A) of this paragraph 6(B),
                or,
                if the requisite quorum of the full Board of Trustees cannot be obtained
                therefor and the committee cannot be established, by a majority of
                the
                full Board of Trustees in which trustees who are parties to the Proceeding
                may participate (if the Company selects Special Legal Counsel to
                make the
                determination under this clause (ii), the Company shall give prompt
                written notice to the Indemnitee advising him or her of the identity
                of
                the Special Legal Counsel so selected) or (C) by the shareholders
                of the
                Company. If it is so determined that the Indemnitee is entitled to
                indemnification, payment to the Indemnitee shall be made within ten
                (10)
                days after such determination. Authorization of indemnification and
                determination as to reasonableness of Expenses shall be made in the
                same
                manner as the determination that indemnification is permissible.
                However,
                if the determination that indemnification is permissible is made
                by
                Special Legal Counsel under clause (B) above, authorization of
                indemnification and determination as to reasonableness of Expenses
                shall
                be made in the manner specified under clause (B) above for the selection
                of such Special Legal Counsel.

            

    

    

    
      	 	
              (C)

            	
              The
                Indemnitee shall cooperate with the person or entity making such
                determination with respect to the Indemnitee's entitlement to
                indemnification, including providing upon reasonable advance request
                any
                documentation or information which is not privileged or otherwise
                protected from disclosure and which is reasonably available to the
                Indemnitee and reasonably necessary to such determination. Any reasonable
                costs or expenses (including reasonable attorneys' fees and disbursements)
                incurred by the Indemnitee in so cooperating shall be borne by the
                Company
                (irrespective of the determination as to the Indemnitee's entitlement
                to
                indemnification) and the Company hereby indemnifies and agrees to
                hold the
                Indemnitee harmless therefrom.

            

    

     

    
      	 	
              (D)
                

            	
              The
                knowledge and/or actions, or failure to act, of any trustee, officer,
                agent or employee of the Company shall not be imputed to the Indemnitee
                for purposes of determining entitlement to indemnification under
                this
                Agreement.

            

    

    

    (E)     In
      the
      event the determination of entitlement to indemnification is to be made by
      Special Legal Counsel pursuant to paragraph 6(B) hereof, the Indemnitee, or
      the
      Company, as the case may be, may, within seven (7) days after such written
      notice of selection shall have been given, deliver to the Company or to the
      Indemnitee, as the case may be, a written objection to such selection. Such
      objection may be asserted only on the grounds that the Special Legal Counsel
      so
      selected does not meet the requirements of “Special Legal Counsel” as defined in
      paragraph 1 of this Agreement. If such written objection is made, the Special
      Legal Counsel so selected may not serve as Special Legal Counsel until a court
      has determined that such objection is without merit. If, within twenty (20)
      days
      after submission by the Indemnitee of a written request for indemnification
      pursuant to paragraph 6(A) hereof, no Special Legal Counsel shall have been
      selected or, if selected, shall have been objected to, either the Company or
      the
      Indemnitee may petition a court for resolution of any objection which shall
      have
      been made by the Company or the Indemnitee to the other's selection of Special
      Legal Counsel and/or for the appointment as Special Legal Counsel of a person
      selected by the court or by such other person as the court shall designate,
      and
      the person with respect to whom an objection is so resolved or the person so
      appointed shall act as Special Legal Counsel under paragraph 6(B) hereof. The
      Company shall pay all reasonable fees and expenses of Special Legal Counsel
      incurred in connection with acting pursuant to paragraph 6(B) hereof, and all
      reasonable fees and expenses incident to the selection of such Special Legal
      Counsel pursuant to this paragraph 6(D). In the event that a determination
      of
      entitlement to indemnification is to be made by Special Legal Counsel and such
      determination shall not have been made and delivered in a written opinion within
      ninety (90) days after the receipt by the Company of the Indemnitee's request
      in
      accordance with paragraph 6(A), upon the due commencement of any judicial
      proceeding in accordance with paragraph 8(A) of this Agreement, Special Legal
      Counsel shall be discharged and relieved of any further responsibility in such
      capacity.

     

    
      	 	
              (F)

            	
              If
                the person or entity making the determination whether the Indemnitee
                is
                entitled to indemnification shall not have made a determination within
                sixty (60) days after receipt by the Company of the request therefor,
                the
                requisite determination of entitlement to indemnification shall be
                deemed
                to have been made and the Indemnitee shall be entitled to such
                indemnification, absent: (i) a misstatement by the Indemnitee of
                a
                material fact, or an omission of a material fact necessary to make
                the
                Indemnitee's statement not materially misleading, in connection with
                the
                request for indemnification, or (ii) a prohibition of such indemnification
                under applicable law. Such sixty (60) day period may be extended
                for a
                reasonable time, not to exceed an additional thirty (30) days, if
                the
                person or entity making said determination in good faith requires
                additional time for the obtaining or evaluating of documentation
                and/or
                information relating thereto. The foregoing provisions of this paragraph
                6(E) shall not apply: (i) if the determination of entitlement to
                indemnification is to be made by the shareholders and if within fifteen
                (15) days after receipt by the Company of the request for such
                determination the Board of Trustees resolves to submit such determination
                to the shareholders for consideration at an annual or special meeting
                thereof to be held within seventy-five (75) days after such receipt
                and
                such determination is made at such meeting, or (ii) if the determination
                of entitlement to indemnification is to be made by Special Legal
                Counsel
                pursuant to paragraph 6(B) of this
                Agreement.

            

    

    

    7. PRESUMPTIONS

    

    
      	 	
              (A)

            	
              In
                making a determination with respect to entitlement or authorization
                of
                indemnification hereunder, the person or entity making such determination
                shall presume that the Indemnitee is entitled to indemnification
                under
                this Agreement and the Company shall have the burden of proof to
                overcome
                such presumption.

            

    

    

    
      	(B)          	
              The
                termination of any Proceeding by conviction, or upon a plea of nolo
                contendere or its equivalent, or an entry of an order of probation
                prior
                to judgment, creates a rebuttable presumption that the Indemnitee
                did not
                meet the requisite standard of conduct described herein for
                indemnification.

            

    

    

    
      
        
        

      

      
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    8. REMEDIES

    

    
      	 	
              (A)

            	
              In
                the event that: (i) a determination is made in accordance with the
                provisions of paragraph 6 that the Indemnitee is not entitled to
                indemnification under this Agreement, or (ii) advancement of reasonable
                Expenses is not timely made pursuant to this Agreement, or (iii)
                payment
                of indemnification due the Indemnitee under this Agreement is not
                timely
                made, the Indemnitee shall be entitled to an adjudication in an
                appropriate court of competent jurisdiction of such Indemnitee's
                entitlement to such indemnification or advancement of
                Expenses.

            

    

    

    
      	 	
              (B)

            	
              In
                the event that a determination shall have been made pursuant to paragraph
                6 of this Agreement that the Indemnitee is not entitled to
                indemnification, any judicial proceeding commenced pursuant to this
                paragraph 8 shall be conducted in all respects as a de novo trial
                on the
                merits. The fact that a determination had been made earlier pursuant
                to
                paragraph 6 of this Agreement that the Indemnitee was not entitled
                to
                indemnification shall not be taken into account in any judicial proceeding
                commenced pursuant to this paragraph 8 and the Indemnitee shall not
                be
                prejudiced in any way by reason of that adverse determination. In
                any
                judicial proceeding commenced pursuant to this paragraph 8, the Company
                shall have the burden of proving that the Indemnitee is not entitled
                to
                indemnification or advancement of Expenses, as the case may
                be.

            

    

    

    
      	 	
              (C)

            	
              If
                a determination shall have been made or deemed to have been made
                pursuant
                to this Agreement that the Indemnitee is entitled to indemnification,
                the
                Company shall be bound by such determination in any judicial proceeding
                commenced pursuant to this paragraph 8, absent: (i) a misstatement
                by the
                Indemnitee of a material fact, or an omission of a material fact
                necessary
                to make the Indemnitee's statement not materially misleading, in
                connection with the request for indemnification, or (ii) a prohibition
                of
                such indemnification under applicable
                law.

            

    

    

    
      	 	
              (D)

            	
              The
                Company shall be precluded from asserting in any judicial proceeding
                commenced pursuant to this paragraph 8 that the procedures and
                presumptions of this Agreement are not valid, binding and enforceable
                and
                shall stipulate in any such court that the Company is bound by all
                the
                provisions of this Agreement.

            

    

    

    
      	 	
              (E)

            	
              In
                the event that the Indemnitee, pursuant to this paragraph 8, seeks
                a
                judicial adjudication of such Indemnitee's rights under, or to recover
                damages for breach of, this Agreement, if successful on the merits
                or
                otherwise as to all or less than all claims, issues or matters in
                such
                judicial adjudication, the Indemnitee shall be entitled to recover
                from
                the Company, and shall be indemnified by the Company against, any
                and all
                reasonable Expenses actually incurred by such Indemnitee in connection
                with each successfully resolved claim, issue or
                matter.

            

    

    

    9. NOTIFICATION
      AND DEFENSE OF CLAIMS

    

    The
      Indemnitee agrees promptly to notify the Company in writing upon being served
      with any summons, citation, subpoena, complaint, indictment, information, or
      other document relating to any Proceeding or matter which may be subject to
      indemnification or advancement of Expenses covered hereunder, but the failure
      so
      to notify the Company will not relieve the Company from any liability that
      the
      Company may have to Indemnitee under this Agreement unless the Company is
      materially prejudiced thereby. With respect to any such Proceeding as to which
      Indemnitee notifies the Company of the commencement thereof:

     

    

    (A)   The
      Company will be entitled to participate therein at their own
      expense.

    

    
      	 	
              (B)

            	
              Except
                as otherwise provided below, the Company will be entitled to assume
                the
                defense thereof, with counsel reasonably satisfactory to Indemnitee.
                After
                notice from the Company to Indemnitee of the Company's election so
                to
                assume the defense thereof, the Company will not be liable to Indemnitee
                under this Agreement for any legal or other expenses subsequently
                incurred
                by Indemnitee in connection with the defense thereof other than reasonable
                costs of investigation or as otherwise provided below. Indemnitee
                shall
                have the right to employ Indemnitee's own counsel in such Proceeding,
                but
                the fees and disbursements of such counsel incurred after notice
                from the
                Company of the Company's assumption of the defense thereof shall
                be at the
                expense of Indemnitee unless (a) the employment of counsel by
                Indemnitee has been authorized by the Company, (b) the Indemnitee
                shall
                have reasonably concluded that there may be a conflict of interest
                between
                the Company and the Indemnitee in the conduct of the defense of such
                action, (c) such Proceeding seeks penalties or other relief against
                the Indemnitee with respect to which the Company could not provide
                monetary indemnification to the Indemnitee (such as injunctive relief
                or
                incarceration) or (d) the Company shall not in fact have employed
                counsel
                to assume the defense of such action, in each of which cases the
                fees and
                disbursements of counsel shall be at the expense of the Company.
                The
                Company shall not be entitled to assume the defense of any Proceeding
                brought by or on behalf of the Company, or as to which Indemnitee
                shall
                have reached the conclusion specified in clause (b) above, or which
                involves penalties or other relief against Indemnitee of the type
                referred
                to in clause (c) above. 

            

    

     

    

    
      	 	
              (C)

            	
              The
                Company shall not be liable to indemnify Indemnitee under this Agreement
                for any amounts paid in settlement of any action or claim effected
                without
                the Company's written consent. The Company shall not settle any action
                or
                claim in any manner that would impose any penalty or limitation on
                Indemnitee without Indemnitee's written consent. Neither the Company
                nor
                Indemnitee will unreasonably withhold or delay consent to any proposed
                settlement.

            

    

     

    10. NON-EXCLUSIVITY;
      SURVIVAL OF RIGHTS; INSURANCE SUBROGATION

    

    
      	 	
              (A)

            	
              The
                rights of indemnification and to receive advancement of reasonable
                Expenses as provided by this Agreement shall not be deemed exclusive
                of
                any other rights to which the Indemnitee may at any time be entitled
                under
                applicable law, the Declaration of Trust, the Bylaws, any other agreement,
                a vote of shareholders, a resolution of the Board of Trustees or
                otherwise, except that any payments otherwise required to be made
                by the
                Company hereunder shall be offset by any and all amounts received
                by the
                Indemnitee from any other indemnitor or under one or more liability
                insurance policies maintained by an indemnitor or otherwise and shall
                not
                be duplicative of any other payments received by an Indemnitee from
                the
                Company in respect of the matter giving rise to the indemnity hereunder.
                No amendment, alteration or repeal of this Agreement or any provision
                hereof shall be effective as to the Indemnitee with respect to any
                action
                taken or omitted by the Indemnitee as a member of the Board of Trustees
                prior to such amendment, alteration or
                repeal.

            

    

    

    
      	 	
              (B)

            	
              In
                addition to the indemnification protection provided to the Indemnitee
                by
                this Agreement, the Company shall also purchase and maintain Directors'
                and Officers' Liability Insurance, at its expense, and in amounts
                and
                subject to such terms as shall be determined by the Board of Trustees.
                The
                Indemnitee shall be covered by such policy or policies in accordance
                with
                its or their terms to the maximum extent of the coverage available
                and
                upon any Change in Control the Company shall use commercially reasonable
                efforts to obtain or arrange for continuation and/or “tail” coverage for
                the Indemnitee on terms at least as favorable to the Indemnitee as
                in
                effect immediately prior to the consummation of the Change in
                Control.

            

    

    

    
      	 	
              (C)

            	
              In
                the event of any payment under this Agreement, the Company shall
                be
                subrogated to the extent of such payment to all of the rights of
                recovery
                of the Indemnitee, who shall execute all papers required and take
                all
                actions necessary to secure such rights, including execution of such
                documents as are necessary to enable the Company to bring suit to
                enforce
                such rights.

            

    

    

    
      	 	
              (D)

            	
              The
                Company shall not be liable under this Agreement to make any payment
                of
                amounts otherwise indemnifiable hereunder if and to the extent that
                the
                Indemnitee has otherwise actually received such payment under any
                insurance policy, contract, agreement, or
                otherwise.

            

    

     

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    11. CONTINUATION
      OF INDEMNITY

    

    
      	 	
              (A)

            	
              All
                agreements and obligations of the Company contained herein shall
                continue
                during the period the Indemnitee is an officer or a member of the
                Board of
                Trustees of the Company and shall continue thereafter so long as
                the
                Indemnitee shall be subject to any threatened, pending or completed
                Proceeding by reason of such Indemnitee's Corporate Status and during
                the
                period of statute of limitations for any act, omission or event occurring
                during the Indemnitee's term of Corporate Status or prior to the
                date of
                the commencement of such Indemnitee’s Corporate Status. This Agreement
                shall be binding upon the Company and their respective successors
                and
                assigns and shall inure to the benefit of the Indemnitee and such
                Indemnitee's heirs, executors and
                administrators.

            

    

    

    
      	 	
              (B)

            	
              The
                Company shall require and cause any successor (whether direct or
                indirect
                by purchase, merger, consolidation or otherwise) to all, substantially
                all
                or a substantial part, of the business and/or assets of the Company,
                by
                written agreement in form and substance reasonably satisfactory to
                the
                Indemnitee, expressly to assume and agree to perform this Agreement
                in the
                same manner and to the same extent that the Company would be required
                to
                perform if no such succession had taken
                place.

            

    

    

    12. SEVERABILITY

    

    If
      any
      provision or provisions of this Agreement shall be held to be invalid, illegal,
      or unenforceable for any reason whatsoever, (i) the validity, legality, and
      enforceability of the remaining provisions of this Agreement (including, without
      limitation, each portion of any paragraph of this Agreement containing any
      such
      provision held to be invalid, illegal, or unenforceable, that is not itself
      invalid, illegal, or unenforceable) shall not in any way be affected or impaired
      thereby, and (ii) to the fullest extent possible, the provisions of this
      Agreement (including, without limitation, each portion of any paragraph of
      this
      Agreement containing any such provision held to be invalid, illegal, or
      unenforceable, that is not itself invalid, illegal, or unenforceable) shall
      be
      construed so as to give effect to the intent manifested by the provisions held
      invalid, illegal, or unenforceable.

    

    13. NOTICE
      TO THE COMPANY SHAREHOLDERS

    

    Any
      indemnification of, or advancement of reasonable Expenses, to an Indemnitee
      in
      accordance with this Agreement, if arising out of a Proceeding by or in the
      right of the Company, shall be reported in writing to the shareholders of the
      Company with the notice of the next Company shareholders' meeting or prior
      to
      the meeting.

     

    

    14. HEADINGS

    

    The
      headings of the paragraph of this Agreement are inserted for convenience only
      and shall not be deemed to constitute part of this Agreement or to affect the
      construction thereof.

    

    15. MODIFICATION
      AND WAIVER

    

    No
      supplement, modification, or amendment of this Agreement shall be binding unless
      executed in writing by each of the parties hereto. No waiver of any of the
      provisions of this Agreement shall be deemed or shall constitute a waiver of
      any
      other provisions hereof (whether or not similar) nor shall such waiver
      constitute a continuing waiver.

    

    16. NOTICES

    

    All
      notices, requests, demands, and other communications hereunder shall be in
      writing and shall be deemed to have been duly given if (i) delivered by hand
      and
      receipted for by the party to whom said notice or other communication shall
      have
      been directed, or (ii) mailed by certified or registered mail with postage
      prepaid, on the third business day after the date on which it is so mailed,
      if
      so delivered or mailed, as the case may be, to the following
      addresses:

     

    
           If
        the to Indemnitee, addressed to the
        Indemnitee at the address set forth in the records of the Company.

       

       
     If
      to the
      Company, addressed to the Company at the following address:

    

    American
      Community Properties Trust

    Attention:
      Chief Financial Officer

    222
      Smallwood Village Center

    St.
      Charles, Maryland 20602

    

    or
      to
      such other address as may have been furnished to the Indemnitee by the Company
      or to the Company by the Indemnitee, as the case may be.

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    17. GOVERNING
      LAW

    

    The
      parties agree that this Agreement shall be governed by, and construed and
      enforced in accordance with, the laws of the State of Maryland, without
      application of the conflict of laws principles thereof.

    

    18. NO
      ASSIGNMENTS

    

    The
      Indemnitee may not assign its rights or delegate obligations under this
      Agreement without the prior written consent of the Company. Any assignment
      or
      delegation in violation of this Section 18 shall be null and void.

    

    19. NO
      THIRD PARTY RIGHTS

    

    Nothing
      expressed or referred to in this Agreement will be construed to give any person
      other than the parties to this Agreement any legal or equitable right, remedy
      or
      claim under or with respect to this Agreement or any provision of this
      Agreement. This Agreement and all of its provisions are for the sole and
      exclusive benefit of the parties to this Agreement and their successors and
      permitted assigns.

    

    20. COUNTERPARTS

    

    This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together constitute an agreement binding
      on
      all of the parties hereto.

    

    

    (Remainder
      of page intentionally left blank.)

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

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

    

    AMERICAN
      COMMUNITY PROPERTIES TRUST

    

    By: /s/
      Cynthia L. Hedrick

    Name: Cynthia
      L. Hedrick

    Title: Executive
      Vice President/Chief Financial Officer

     

    

    

    

    INDEMNITEE:

    

    /s/
      Thomas J. Shafer

    Thomas
      J.
      Shafer

     

    
      
        
        

      

      
        -7-VivaTRU ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT

THIS AGREEMENT is made the 28th day of August, 2006

BETWEEN:

ICON DEVELOPMENT, INC., a Nevada company with its registered office at 1236 Quayside Drive, Suite 703, New Westminster, BC V3M 6J5

(hereinafter referred to as the “Purchaser”)

AND:

NETRIX, INC., a Delaware company with an office at 1150 19th Street, Vero Beach, FL 32960

(“Netrix”)

AND:

RICHARD COTTON, an individual with an address at 1175 11th Terrace, Vero Beach, FL  32960

(“Richard”)

AND:

ANTONIO ALVAREZ, an individual with an address at 2123 FM 1960 W., Houston, TX.  77090-3103

(“Antonio”)

AND:

DON COTTON, an individual with an address at 5860 40th Lane, Vero Beach, FL  32966

(“Don”)

AND:

AHARON FRIEDMAN, an individual with an address at 1638 Windsor Drive, Clearwater, FL 33755

(“Aharon” and, together with Richard, Antonio and Don, referred to herein as the “Founders”).

WHEREAS:

A.

Netrix carries on the business of the development, marketing, exporting, importing, distribution and sale of health and dietary products and supplements and related sales and analytical software under various tradenames including VivaTRU, VivaTOUCH and VivaSLIM and similar “Viva”-based tradenames and trademarks (the “Business”); 

B.

Complete Security Investments Ltd. (“CSI”) entered into a letter agreement with Netrix and the Founders dated February 15, 2006, as amended, (the “Letter Agreement”) which, among other things, contemplated that CSI would find a “Purchaser” (as defined in the Letter Agreement) to enter into a “Purchase Agreement” (again, as defined in the Letter Agreement), and broker a transaction between such “Purchaser” and Netrix, and the Purchaser has been accepted by Netrix and the Founders pursuant to the Letter Agreement and has agreed to enter into the “Purchase Agreement” as contemplated by the Letter Agreement;

C.

The Founders are the owners of the majority of the issued and outstanding shares of Netrix, and have agreed to becomes parties to this Agreement to, among other things, cause Netrix to fulfil its obligations under this Agreement; and

D.

The Purchaser has agreed to purchase from Netrix, and Netrix has agreed to sell to the Purchaser, all of the Assets (as hereinafter defined) to the Purchaser on the terms and conditions of this Agreement;

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained herein, and subject to and on the terms and conditions herein set forth, the parties hereto agree as follows:

1.

DEFINITIONS AND INTERPRETATION

1.1.

Defined Terms.  Unless otherwise specifically defined in this Agreement or the context otherwise requires, capitalized terms used in this Agreement shall have the following meanings:

1.1.1.

“Affiliate” means, in relation to any Party, any company or other commercial entity or person which directly or indirectly controls, is controlled by or is under common control with such party or any of such party’s directors, supervisors or management personnel.

1.1.2.

“Agreement” means this agreement, the recitals hereto and all Schedules attached to this Agreement, in each case, as they may be amended or supplemented from time to time, and the expressions “hereof”, “herein”, “hereto”, “hereunder”, “hereby”, and similar expressions, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement; and unless otherwise indicated, references to Sections and subsections are to sections and subsections in this Agreement.

1.1.3.

“Applicable Law” means any domestic or foreign statute, law, ordinance, regulation, by-law or Order that applies to Netrix, the Purchaser, the Founders, or the Business.

1.1.4.

“Assets” means all of the properties, rights and assets of Netrix including, without limitation, all of the Inventories, cash and cash equivalents, prepaid expenses, all investments, accounts receivable, the Goodwill and IP, the Personal Property and the Material Contracts. 

1.1.5.

“Business” has the meaning set out in Recital A.

1.1.6.

“Business Day” means any day other than a Saturday, a Sunday or a day on which chartered banks in Delaware, USA, are authorized or obligated by law to close.

1.1.7.

“Closing” has the meaning set forth in subsection .

1.1.8.

“Closing Date” means October 30, 2006, or such other date as may be agreed to by the Parties.

1.1.9.

“Deposits” means the amount of $525,000 previously deposited with Netrix by CSI, plus the amounts referred to in Section 2.8 totalling, in aggregate, $675,000, and all interest accrued thereon.

1.1.10.

“Encumbrance” means any encumbrance of any kind whatever and includes, without limitation, any adverse claim, security interest, mortgage, lien, hypothec, pledge, assignment, charge, trust or deemed trust (whether contractual, statutory or otherwise arising), or any other right, option or claim of others affecting the Assets, and any covenant or other agreement, restriction or limitation on the transfer of the Assets.

1.1.11.

“Environmental Laws” includes all applicable laws, statutes, regulations, by-laws, rules and Orders of any Governmental Authority where Netrix has carried on business and the common law, relating, in whole or in part, to the environment, and includes those laws relating to the storage, generation, use, handling, manufacture, processing, transportation, import, export, treatment, release or disposal of any Hazardous Substance and any laws relating to asbestos or asbestos-containing materials in the workplace environment.

1.1.12.

“Environmental Permits” includes all certificates, approvals, consents, authorizations, registrations, and licences issued, granted, conferred, created or required by any Governmental Authority pursuant to any Environmental Laws.

1.1.13.

“Facility” means the main office facility for the Business located at 1150 19th  Street, Vero Beach, FL 32960

1.1.14.

 “Fixed Plant and Equipment” means all plant, machinery and equipment situate on the Lands, whether forming part of the Lands or not, including the plant, machinery and equipment described in Schedule F hereto.

1.1.15.

“Governmental Authority” includes any domestic or foreign government whether state, federal, provincial, or municipal and any governmental agency, governmental authority, governmental tribunal or governmental commission of any kind whatsoever.

1.1.16.

“Goodwill and IP” means:

1.1.16.1.

all contracts, files, records and outstanding quotations;

1.1.16.2.

all trade marks (registered or not), tradenames, designs, URL and domain names, logos, patents, patent applications, licences and any other rights to the use of patents, industrial design applications and copyright (registered or not) used in the Business, including those set forth in Schedule B;

1.1.16.3.

all trade secrets and confidential information of Netrix or any Affiliate in relation to the Business;

1.1.16.4.

all point of sale computer software and related manuals owned by or licensed to Netrix in relation to the Business; and

1.1.16.5.

all know-how and show-how of the Business including:

1.1.16.5.1.

all information of a scientific or technical nature whether in oral, written, graphic, machine readable, electronic or physical form; and

1.1.16.5.2.

all patterns, plans, designs, research data, research plans, trade secrets and other proprietary know-how, processes, formulas, drawings, technology, unpatented blue prints, flow sheets, recipes, formulae, equipment and parts lists, instructions, manuals, records and procedures.

1.1.17.

“Hazardous Substance” means any hazardous waste, hazardous substance, hazardous material, toxic substance, dangerous substance or dangerous good or contaminant as defined or identified in any Environmental Law.

1.1.18.

“Inventory” means all inventories of products relating to the Business, and all supplies, spare parts and equipment relating thereto.

1.1.19.

“Lands” means the lands owned and/or occupied by Netrix in relation to the Business including, without limitation, the lands on which the Facility is located.

1.1.20.

“Loss” means any and all loss, liability, damage, cost or expense actually suffered or incurred by a party resulting from the subject matter of any claim, including the costs and expenses of any action, suit, proceeding, demand, assessment, judgment, settlement or compromise relating thereto (including legal fees on a solicitor’s and his own client basis), net of any tax savings arising as a result of expensing the same, less the amount of any judgment awarded as a result of any counterclaim or set-off relating to that claim.

1.1.21.

“material” or “materially” means having an actual or potential economic impact on the Business of at least $50,000.

1.1.22.

“Material Contracts” means the agreements referred to in Schedule C.

1.1.23.

“Non-Compete Agreements” means the non-competition agreement referred to in Section 3 to be entered into at the Closing by the Purchaser, Netrix and the Founders.

1.1.24.

“Non-Compete Shares” has the meaning set out in Section 3.

1.1.25.

“Order” means any order, judgment, injunction, decree, award or writ of any court, tribunal, arbitrator, Governmental Authority, or other person who is authorized to make legally binding determinations.

1.1.26.

“Permits” means all permits, licences, authorizations, agreements or understandings relating to the Business and issued by any Governmental Authority, or to which any Governmental Authority is a party, including, without limitation, the Environmental Permits and those referred to in Schedule D.

1.1.27.

“Permitted Encumbrances” means the Encumbrances listed in Schedule E hereto.

1.1.28.

“Personal Property” means all of the equipment, vehicles, machinery, furniture, chattels and other tangible personal property used in the Business as at the Closing Date including, without limitation, those referenced in Schedule G hereto, and any and all operating manuals, warranty information or other documentation relating thereto.

1.1.29.

“Pollution” means any type of environmental damage or contamination which contravenes any Environmental Law, including, without limiting the generality of the foregoing, damage to or contamination by any substance, waste, or goods including, without limiting the generality of the foregoing, any Hazardous Substance. 

1.1.30.

“Purchase Price” means the purchase price for the Assets and the Non-Compete Agreements as set forth in Sections  and 3 of this Agreement.

1.1.31.

“Purchase Price Shares” means the shares in the capital of the Purchaser issued by the Purchaser to Netrix on account of the Purchase Price as contemplated by subsection 2.3.2.

1.1.32.

“Taxes” means all taxes and similar governmental charges, including:

1.1.32.1.

state, federal, provincial, municipal and local, foreign or other income, franchise, capital, real property, personal property, withholding, payroll, employer health, transfer, sales, use, excise, goods and services, consumption, anti-dumping, counter-vail and value added taxes, all other taxes of any kind relating to Netrix or the Business and imposed any Governmental Authority, whether disputed or not; and

1.1.32.2.

assessments, charges, duties, fees, imposts, levies or other governmental charges and interest, penalties or additions associated therewith.

1.1.33.

“Tax Returns” means all reports, returns and other documents filed or required to be filed by Netrix in relation to the Business in respect of Taxes or in respect of or pursuant to any domestic or foreign federal, provincial, state, municipal, territorial or other taxing statute.

1.2.

Gender and Number.  The terms defined in the singular shall have a comparable meaning when used in the plural and vice versa, and words importing gender include all genders.

1.3.

Currency.  All references to currency in this Agreement shall mean United States dollars.

1.4.

Schedules.  The following Schedules are attached hereto and form part of this Agreement:

	Schedule

	Description

	A

B

C

D

E

F

G

H

I

J

	Representations and Warranties of Netrix and the Founders (Part I) and of the Purchaser (Part II) 

Tradenames/Trademarks, Copyright, Proprietary Software and Patents

Material Contracts

Permits

Permitted Encumbrances

Fixed Plant and Equipment [To be Provided by Netrix Prior to Closing and Approved by Purchaser]

Personal Property

[Intentionally Deleted] 

Claims and Proceedings

Purchase Price Allocation [To be Provided by Netrix Prior to Closing and Approved by Purchaser].

1.5.

Section Headings.  The section and subsection headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

1.6

Severability.  Any provision of this Agreement which is unenforceable as determined by a court of competent jurisdiction shall be severable from this Agreement without affecting the validity or enforceability of the remainder of this Agreement.  If permitted by Applicable Laws, the offending provision shall be deemed to be amended to a form and content necessary to bring it within the parameters of Applicable Laws.

2.

PURCHASE AND SALE OF ASSETS

2.1.

Purchase and Sale.  Upon and subject to the terms of this Agreement, the Purchaser hereby agrees to purchase from Netrix, and Netrix hereby agrees to sell, assign, transfer and set over to the Purchaser (or an Affiliate of the Purchaser), the Assets effective on the Closing Date. For greater certainty, the Purchaser is not assuming, and is in no way responsible for, any debts, liabilities or obligations of Netrix, other than obligations under the Material Contracts arising from and after the Closing Date in the ordinary course.

2.2.

Purchase Price.  

Subject to subsection 2.3, the Purchase Price for the Assets shall be equal to $620,000 the value of the Purchase Price Shares plus the value of the Deposits.  The Purchase Price shall be allocated to the Assets as set out in Schedule J.  

2.3.

Purchase Price Payment.  Subject to subsections 2.7 and 10.3, the Purchaser shall pay the Purchase Price to Netrix as follows:

2.3.1.

by release of the Deposits to Netrix;

2.3.2.

an amount equal to the value of 46% of the issued and outstanding shares of the Purchaser by way of the allotment and issuance to Netrix at the Closing of restricted common shares (the “Purchase Price Shares”) in the capital of the Purchaser, representing 46% of the total issued and outstanding shares of the Purchaser as at such time, as soon as practicable after the Closing Date in accordance with all Applicable Laws, including, without limitation, the regulations of the Securities Exchange Commission of the United States; and

2.3.3.

 deleted intentionally  

2.3.4.

$150,000 by payment, by way of certified cheque or wire transfer, as directed by Netrix, before Closing (as stated in 2.8. and 2.8.1):

2.3.4.1.

$5,000 in monthly instalments on the last Business Day of each month, commencing on the month after the month containing the Closing Date, and continuing for 23 months thereafter (i.e. total of $120,000); and

2.3.4.2.

 $500,000 on the second anniversary of the Closing Date;

all without interest.

2.4.

Taxes.  The Purchaser shall pay all sales and transfer Taxes which may be payable as a result of the transfer of the Assets contemplated by this Agreement.

2.5.

[INTENTIONALLY DELETED]

2.6.

Closing.  The completion of the purchase and sale of the Assets as herein contemplated (the “Closing”) shall take place on the Closing Date upon execution and delivery of the Non-Competition Agreements and upon execution and delivery of all other documents contemplated by Section 9.

2.7.

Escrowed Shares.  Netrix shall deliver the share certificates representing the Purchase Price Shares less the Non-Compete Shares to the Purchaser’s solicitors to be held in escrow by the Purchaser’s solicitors until such time as the Purchase Price Shares and the Non-Compete Shares are freely tradable by Netrix and the Founders, respectively, in accordance with Applicable Laws.

2.8.

Deposits.  The Purchaser shall make additional, deposits, to Netrix only if prior to Closing on account of the Purchase Price as follows:

2.8.1.

$150,000 on October 11 , 2006.

For greater certainty, in the event that the purchase and sale of the Assets does not close, due to reasons other than Netrix’s breach of this Agreement, any deposits paid by the Purchaser is non-refundable to the Purchaser, but in any event if the purchase and sale of the Assets has not closed by October 30, 2006 the Purchaser, Netrix, and Founders (jointly and severally) agree that all such other amounts paid on account of the Deposits by CSI (ie $525,000.) shall be immediately and directly refunded and paid to CSI.  

3.

AGREEMENTS AT CLOSING

3.1.

At the Closing, Netrix, the Purchaser and the Founders shall enter into an agreement (together, the “Non-Compete Agreements”), in a form acceptable to the Purchaser’s solicitors, acting reasonably, by which the Founders agree not to compete with the Business as carried on by the Purchaser, or any affiliated or related entity, anywhere in the world for a period of 2 years from the date they cease to be engaged or employed as a director or officer or in any other capacity with the Purchaser.

3.2.

In consideration of the Non-Compete Agreements and in consideration of the Founders being parties to this Agreement and sharing the risk involved with this Agreement, the Purchaser shall,  at the Closing Date in accordance with all Applicable Laws, including, without limitation, the regulations of the Securities Exchange Commission of the United States, insure that 67.4% of the Purchase Price Shares  (the “Non-Compete Shares”) equal, in aggregate, to 31% of the total issued and outstanding shares of the Purchaser at such time (i.e. such that the Purchase Price Shares and the Non-Compete Shares comprise 46% of the total issued and outstanding shares in the capital of the Purchaser effective on Closing) will be non-dilutable (see Article 3.3) and delivered to the Founders’ Trust (to be designated by the Founders prior to Closing).  

3.3.

Anti-Dilution.   The Purchaser shall, from time to time upon an issuance of shares or any other capital alteration, issue to the Founders’ Trust  the number of shares in the capital of the Purchaser as are required to ensure that the Founders’ Trust has shares issued to it representing at least 31% of all of the total issued and outstanding shares in the capital of the Purchaser at the time of issuance.

4.

[INTENTIONALLY DELETED]

5.

REPRESENTATIONS AND WARRANTIES 

5.1.

Netrix and the Founders.  Netrix and the Founders, jointly and severally, make the representations and warranties set out in Part I of Schedule A hereto to the Purchaser, recognizing that the Purchaser is relying on such representations and warranties in entering into the transactions contemplated by this Agreement.  All due diligence searches, investigations or inspections by CSI and/or the Purchaser up to the Closing Date are without prejudice to the Purchaser’s right to rely upon the representations and warranties of Netrix and the Founders contained in this Agreement.

5.2.

Purchaser.  The Purchaser makes the representations and warranties set out in Part II of Schedule A hereto to Netrix and the Founders, recognizing that Netrix and the Founders are relying on such representations and warranties in entering into the transactions contemplated by this Agreement.  All due diligence searches, investigations or inspections by Netrix and/or the Founders up to the Closing Date are without prejudice to Netrix’s or the Founders’ right to rely upon the representations and warranties of the Purchaser in entering into the transactions contemplated by this Agreement.

6.

PURCHASER’S FUTURE FUNDING COMMITMENTS

The Purchaser shall use its best commercial efforts to raise financing, or to dedicate existing financing and/or resources, in the amount of $3,500,000 within 30 days after the Closing Date all for the purposes of increasing market and investor awareness of the Business, and to promote the Business, market and product strategy and to increase brand and product awareness through video, digital, print and electronic media, endorsements, sponsorships and media campaigns.

7.

[INTENTIONALLY DELETED]

8.

FOUNDERS’ FUTURE INVOLVEMENT WITH PURCHASER

Each of the Founders will agree to be hired at a salary and on other terms and conditions determined by the Board of Directors of the Purchaser within five days after the Closing Date, all as agreed to by the parties acting reasonably and in good faith.

9.

CLOSING 

9.1.

Founders’ and Netrix’s Deliveries at Closing.  At the Closing, Netrix and the Founders covenant, jointly and severally, to deliver to the Purchaser the following:

9.1.1.

Assets:  clear title and possession of the Assets, and all related data and information;

9.1.2.

Netrix’s Corporate Resolutions:  a certified copy of resolutions of the board of directors and, if necessary under Applicable Laws, of the shareholders of Netrix authorizing:

9.1.2.1.

the transfer of the Assets to the Purchaser; and

9.1.2.2.

the execution and delivery of this Agreement and all documents to be executed and delivered by Netrix at Closing;

9.1.3.

Non-Compete Agreements:  the Non-Compete Agreements, duly executed by the Founders; 

9.1.4.

Consents:  any consents or approvals required to transfer the Assets to the Purchaser including, without limitation, in relation to any permits or licenses and in relation to the Material Contracts;

9.1.5.

Discharges:  all discharges and notices of discharge, estoppel letters, pay-out letters or similar discharging documentation, in registrable form if required, which are necessary or desirable to effect or evince the discharge of any Encumbrances other than Permitted Encumbrances, or instructions and directions to pay out all monies owing in respect of such Encumbrances from the Purchase Price due at the Closing, all of which are satisfactory in form and content to the Purchaser, acting reasonably;

9.1.6.

Officer’s Certificates:  a certificate jointly signed by the Founders, certifying that at and as of the Closing, the representations and warranties contained in this Agreement are true and correct as if made at the Closing and that all covenants, agreements and conditions required by this Agreement to be performed or complied with by Netrix, the Founders prior to or at the Closing have been performed and complied with; and

9.1.7.

Other Documents:  such other documents, certificates, instruments and agreements as are reasonably required or contemplated to be delivered by Netrix or the Founders pursuant to this Agreement.

9.2.

The Purchaser’s Deliveries at Closing.  At the Closing, the Purchaser shall deliver to Netrix:

9.2.1.

Purchaser’s Corporate Resolutions:  a certified copy of resolutions of the board of directors of the Purchaser authorizing:

9.2.1.1.

the purchase of the Assets by the Purchaser; 

9.2.1.2.

the appointment of the Board of Directors of the Purchaser and officers of the Purchaser as approved by Netrix; and

9.2.1.3.

the execution and delivery of this Agreement and all documents to be executed and delivered by the Purchaser at Closing;

9.2.2.

Non-Compete Agreements:  the Non-Compete Agreements, duly executed by the Purchaser;

9.2.3.

Officer’s Certificate:  a certificate of an officer of the Purchaser, dated the Closing Date, certifying on behalf of the Purchaser that at and as of the Closing the representations and warranties of the Purchaser contained in this Agreement are true and correct as if made at the Closing and that all covenants, agreements and conditions required by this Agreement to be performed or complied with by the Purchaser prior to or at the Closing have been performed and complied with, except as otherwise specifically disclosed to Netrix by notice in writing; and

9.2.4.

Other Documents:  such other documents, certificates, instruments and agreements as are required or contemplated to be delivered by the Purchaser pursuant to this Agreement.

10.

INDEMNIFICATION

10.1.

Indemnification by the Netrix/Founders.  Netrix and the Founders shall, jointly and severally, indemnify, defend and save harmless the Purchaser from and against any and all Loss suffered or incurred by the Purchaser arising out of or in connection with:

10.1.1.

any breach of any representation or warranty made or given by the Founders or Netrix in this Agreement; and

10.1.2.

any failure by Netrix or the Founders to observe or perform any covenant or obligation contained in this Agreement or the agreements entered into pursuant hereto to be observed or performed by them.

10.1.3.

any liability of Netrix or the Founders which was not disclosed to Purchaser or otherwise brought to the attention of Purchaser due to the negligence or wilful misconduct of the Founders or the officers or directors of Netrix.

10.2.

Indemnification by the Purchaser.  The Purchaser shall indemnify, defend and save harmless Netrix and the Founders from and against any and all Loss suffered or incurred by the Founders as a result of:

10.2.1.

any breach of any representation or warranty made or given by the Purchaser in this Agreement; 

10.2.2.

any failure by the Purchaser to observe or perform any covenant or obligation contained in this Agreement or the agreements to be entered into pursuant hereto to be observed or performed by it or an Affiliate; and

10.2.3.

any liability of the Purchaser which was not disclosed in its public disclosure or otherwise brought to the attention of Netrix and/or the Founders due to the negligence or wilful misconduct of the officers or directors of the Purchaser.

10.3.

The Purchaser’s Right of Set-off.  The Purchaser shall be entitled to set-off the amount of any Loss suffered or incurred by the Purchaser arising out of, or in connection with, this Agreement, or any of the agreements contemplated hereby, against any purchase monies paid by the Purchaser or other consideration (including the Purchase Price Shares and the Non-Compete Shares) owing to Netrix or the Founders, or any of them, at any time under this Agreement.

11.

CONDITIONS OF CLOSING

11.1.

Purchaser’s Conditions.  The Purchaser’s obligation to complete the transactions contemplated by this Agreement are subject to the following conditions, all of which are for its sole benefit and may only be waived if waived in writing:

11.1.1.

at or before the Closing, all representations and warranties of Netrix and of the Founders are true as at the Closing Date as if made as at such date, and all covenants of Netrix and the Founders have been fulfilled in all material respects;

11.1.2.

Netrix and the Founders have produced Schedule F and Schedule J in form and content satisfactory to the Purchaser, acting reasonably but with a view to its best interests;

11.1.3.

Netrix and the Founders have produced unqualified audited statements for Netrix’s past two fiscal years, satisfactory to the Purchaser, acting reasonably, with respect to the values itemized for the Assets as required under US GAAP Rules and the regulations of the Securities and Exchange Commission of the United States; and

11.1.4.

all material consents of third parties have been received, and all necessary or desirable assignment and release agreements in relation the Goodwill and IP have been obtained and delivered to the Purchaser in a form reasonably acceptable to the Purchaser.

11.2.

Netrix’s and Founders’ Conditions.  Netrix’s and the Founders’ obligations to complete the transactions contemplated by this Agreement are subject to the following conditions, all of which are for their joint benefit and may only be waived if waived in writing by all of them:

11.2.1.

at or before the Closing, all representations and warranties of the Purchaser are true as at the Closing Date as if made as at such date, and all covenants of the Purchaser have been fulfilled in all material respects; and

11.2.2.

Netrix and the Founders, acting reasonably, approve of the Board of Directors of the Purchaser, at or prior to the Closing Date.

12.

SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  

All representations and warranties of the parties contained in this Agreement and in all ancillary agreements, instruments and certificates delivered at the Closing will not merge on, and shall survive the Closing, the transfer of the Assets, the payment of the Purchase Price and any reorganization, amalgamation, sale or transfer of Netrix or the Purchaser and will continue in full force and effect thereafter for a period of 2 years after the Closing Date.

13.

MISCELLANEOUS

13.1.

Broker/Finder Agreement.   As contemplated by Section 9.1 of the Letter Agreement, the Purchaser hereby declares and confirms that it shall pay CSI a broker/finder fee and other costs as set out in a “Broker/Finder Agreement” entered into by it and CSI dated August 29, 2006 in relation to CSI’s efforts and involvement with the Letter Agreement and this transaction in general. This provision and the payment obligation set out in 2.8 shall enure to the benefit of CSI, who can enforce these provisions against the Purchaser, Netrix and the Founders, as if CSI were a party to this Agreement.

13.2.

Amendment and Modification; Waiver.  This Agreement may only be amended or modified in writing, signed by all of the parties hereto.  No waiver in writing of any provision of this Agreement shall constitute a waiver of any other provision nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.

13.3.

Further Assurances.  The parties will execute and deliver such further documents and do such further and other things as may be necessary to carry out and give effect to the intent of this Agreement and the transactions contemplated hereby.

13.4.

Expenses.  Except as otherwise expressly provided in this Agreement and whether or not the transactions contemplated by this Agreement are completed, the parties shall bear their own respective expenses (including, but not limited to, all compensation and expenses of counsel, consultants, actuaries and independent accountants) incurred in connection with this Agreement and the transactions contemplated hereby.

13.5.

Public Disclosure.  The parties agree that, except as may be required to comply with the requirements of Applicable Laws, the parties shall keep the terms of this Agreement, and the agreements entered into in relation hereto, confidential.  In this regard, Netrix and the Founders acknowledge that the Purchaser is a publicly traded company and that the Purchaser may decide, in its sole discretion, when and how to comply with applicable reporting requirements emerging from its publicly traded status.

13.6.

Assignment.  No party to this Agreement may assign any of its rights or obligations under this Agreement without the prior written consent of the other parties hereto, such consent not to be unreasonably withheld.

13.7.

Parties in Interest.  This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors, heirs or other personal legal representatives and permitted assigns.  Except as expressly provided in this Agreement, nothing in this Agreement is intended to confer upon any person other than the Purchaser, Netrix and the Founders or their respective successors, heirs or other personal legal representatives or permitted assigns, any rights or remedies under or by reason of this Agreement.

13.8.

Counterparts.  This Agreement and any amendments hereto may be executed in one or more counterparts, each of which shall be deemed to be an original by the parties executing such counterpart, but all of which shall be considered one and the same instrument.  A signed facsimile or telecopied copy of this Agreement shall be effectual and valid proof of execution and delivery.

13.9.

Performance on Holidays.  If any action is required to be taken pursuant to this Agreement on or by a specified date which is not a Business Day, then such action shall be valid if taken on or by the next succeeding Business Day.

13.10.

Notices.  All notices hereunder shall be deemed given if in writing and delivered personally or sent by facsimile or by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other addresses as shall be specified by like notice):

13.10.1.

if to the Founders, to:

Richard Cotton

1175 11th Terrace

Vero Beach, FL  32960

Fax No.:

(772) 679-0877.

13.10.2.

if to the Purchaser, to:

Icon Development, Inc.

1235 Quayside Drive, Suite 703

New Westminster, BC V3M 6J5

Attention:

Kennedy Kerster

Fax No.:

(604) __________.

13.10.3.

if to Netrix, to:

1150 19th Street

Vero Beach, FL 32960

Attention:

Dr. Aharon Friedman

Fax No.:

(772) 679-0877.

Any notice given by mail shall be effective, if mailed at any other time than during a general discontinuance of postal service due to strike, lockout or otherwise, on the fourth Business Day after the post-marked date thereof.  Any notice given by facsimile shall be effective on the Business Day following the sending.  Any notice delivered personally shall be effective at the time it is delivered to the applicable address noted above either to the individual designated above or to an individual at such address having apparent authority to accept deliveries on behalf of the addressee.  In the event of a general discontinuance of postal service due to strike, lock-out or otherwise, notices or other communications shall be delivered personally or by facsimile.

13.11.

Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada, and the federal laws of the United States of America applicable therein, without reference to the choice of law principles thereof.  Each party hereto attorns to the non-exclusive jurisdiction of the Courts of the State of Nevada (the “Chosen Courts”) and (i) irrevocably submits to the non-exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to venue in any such action or proceeding in the Chosen Courts, and (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party hereto.

13.12.

Entire Agreement.  This Agreement constitutes the entire agreement between the parties, and supersede all agreements, discussions, negotiations and understandings, whether written or oral, between the parties up to the date hereof pertaining to the subject matter herein including, without limitation, the Letter Agreement.

IN WITNESS WHEREOF, this Agreement has been executed by each of the parties hereto as of the date first written above.

ICON DEVELOPMENT INC.

Per:

/s/Kennedy Kerster

President, Secretary, Treasurer 

Chief Executive Officer  

NETRIX INC.

Per:

/s/ Richard Cotton

President

	SIGNED, SEALED and DELIVERED by RICHARD COTTON in the presence of:

	)

)

)

) 

	 
	

Witness Signature

Witness Name

Witness Address

	)

)

)

)

)

)

)

	/s/ Richard Cotton

RICHARD COTTON

	SIGNED, SEALED and DELIVERED by ANTONIO ALVAREZ in the presence of:

	)

)

)

) 

	 
	

Witness Signature

Witness Name

Witness Address

	)

)

)

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)

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	/s/Antonio Alvarez

ANTONIO ALVAREZ

	

SIGNED, SEALED and DELIVERED by AHARON FRIEDMAN in the presence of:

	)

)

)

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Witness Signature

Witness Name

Witness Address

	)

)

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	/s/ Aharon Friedman

AHARON FRIEDMAN

	

SIGNED, SEALED and DELIVERED by DON COTTON in the presence of:

	)

)

)

) 

	 
	

Witness Signature

Witness Name

Witness Address

	)

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	/s/ Don Cotton

DON COTTON

1

SCHEDULE A (Part I)

SCHEDULE A (Part I)

REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS 

OF NETRIX AND THE FOUNDERS 

14.

Incorporation and Qualification.  Netrix is duly incorporated, organized and validly subsisting under the laws of the State of Delaware.  Netrix has all requisite corporate power and authority to own, lease and operate the Assets.  Netrix is duly registered, licensed or qualified to carry on the Business in the jurisdictions in which the nature of the business as now being conducted by it or the property owned or leased by it makes such registration, licensing or qualification necessary.  

15.

Authority, Filings, Consents and Approvals.  Netrix has the corporate power and authority to enter into this Agreement and to perform the transactions contemplated by this Agreement.  This Agreement has been duly authorized, executed and delivered by Netrix and constitutes a legal, valid and binding obligation of Netrix and the Founders, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.  No other proceedings on the part of Netrix are necessary to authorize the entering into of this Agreement and the consummation of the transactions contemplated hereby.  The execution, delivery and performance of this Agreement and the agreements contemplated herein will not require the Founders or Netrix, or to Founders’ knowledge, the Purchaser, to obtain any consent, waiver, authorization or approval of, or make any filing with or give notice to, any person, except for such consents, waivers, authorizations or approvals which the failure to obtain would not be reasonably likely to have a material adverse effect on the Business.

16.

Capitalization of Netrix.  The Founders own the majority of the issued and outstanding shares in the capital of Netrix.

17.

Corporate Records.  All transactions of Netrix have been promptly and properly recorded or filed in or with its respective books and records, and the minute books contain complete and accurate records of the meetings and proceedings of shareholders and directors thereof.

18.

Company Directors.  The directors and officers of Netrix are as follows:

Directors 

Officers

Richard Cotton

Richard Cotton

Dr. Aharon Friedman 

Dr. Aharon Friedman

Antonio Alvarez

Donald Cotton

19.

Corporate Records and Financial Statements.  All material transactions relating to the Business have been promptly and properly recorded or filed in or with Netrix’s books and records.  The minute books of Netrix contain complete and accurate records of the meetings and proceedings of shareholders and directors thereof.   

20.

Assets.  Netrix has good and marketable, legal and beneficial title to all of the assets comprising the Assets, free and clear of all Encumbrances except for the Permitted Encumbrances.  The Assets constitute all of the property, rights and other assets used by Netrix, or which are necessary or desirable to conduct the Business as conducted prior to the date hereof.  Without limiting the generality of the foregoing, none of the Personal Property or the Goodwill or IP is leased or licensed or otherwise used in the Business subject to any agreement with any third party, other than by a Material Contract.

21.

Condition of Assets.  The Personal Property and the Fixed Plant and Equipment is in good working condition, has been properly maintained in the ordinary course of business and is suitable for the operation of the Business as now operated by Netrix.

22.

Lands and Fixed Plant and Equipment

22.1.

The Lands and the Fixed Plant and Equipment are free and clear of any material Pollution;

22.2.

Netrix has not received any notice of or is aware of any change or proposed change in the regulations of or by an Government Authority pertaining to any of the Lands or the Fixed Plant and Equipment; 

22.3.

there are no outstanding work orders or deficiency notices against Netrix, or other Orders relating to the Lands or the Fixed Plant and Equipment from or required by any police or fire department, sanitation or health authorities or from any other Government Authority, or any matters under discussion with any such departments or authorities relating to work or other Orders;

22.4.

the location, operation and construction of the Fixed Plant and Equipment and all other improvements on the Lands comply with all Applicable Laws including, without limitation, all zoning requirements, municipal by-laws and Environmental Laws, and none of the Fixed Plant and Equipment or any other improvements on the Lands encroach upon any easement or utility right­ of-way on such lands or upon lands adjacent to the Lands and the Fixed Plant and Equipment and all other improvements on such lands are not in contravention in whole or in part of any restrictive covenant of any other Encumbrance on title to such lands; and

22.5.

Netrix has paid and is currently up to date in the payment to the persons properly entitled thereto, of all public utility charges, all insurance premiums, all property taxes and all other costs and expenses and Taxes relating to the Lands and the Fixed Plant and Equipment for which Netrix is currently responsible.

23.

Environmental Compliance.  Except in compliance with Environmental Laws Netrix has not caused or permitted, and Netrix and the Founders have no knowledge of, any material release or disposal by any person of any Hazardous Substance on or from any premises formerly or presently used in the Business.  All Hazardous Substances generated, handled, stored, treated, processed, transported or disposed of in the course of the Business have been generated, handled, stored, treated, processed, transported or disposed of in all material respects, in compliance with applicable Environmental Laws and the Environmental Permits.

24.

Intellectual Property Rights.  Schedule B sets forth a true and complete list of all patents and trademarks and all software (“Intellectual Property Rights”), registered or unregistered, owned by or licensed to Netrix and used in the Business.  The Intellectual Property Rights constitute all of the intellectual property necessary to process, market and sell the products of the Business in the manner presently conducted by Netrix.  Netrix does not use any trademarks or patents other than those listed in Schedule B, nor does it use any other intellectual property of any third party that it is not licensed or otherwise entitled to use.  All registrations with respect to Intellectual Property are valid, current and in good standing.  

25.

Payment of Taxes.  Netrix has paid all Taxes due and payable in relation to the Business and has paid all assessments that Netrix has received in respect of Taxes.  

26.

Reassessments.  No reassessments of Taxes have been issued against Netrix in relation to the Business nor is Netrix aware of any pending or threatened assessment or reassessment for Taxes.  Netrix has not executed or filed with any Governmental Authority any agreement extending the period for assessment, reassessment or collection of any Taxes.  

27.

Contracts.  Netrix is not a party to, or bound by, any material contract, agreement or commitment of any kind in relation to the Business other than this Agreement and the Material Contracts.  The Material Contracts are in full force and effect.  There is not any pending or threatened cancellation, existing default, or event under any of the Material Contracts which, after notice or lapse of time, or both, would constitute a default under any of the Material Contracts and all of the Material Contracts are terminable on reasonable notice as required by Applicable Law if termination of any of the Material Contracts is not expressly provided for in any of the Material Contracts, or 60 days’ notice or less if termination of any of the Material Contracts is expressly provided for in any of the Material Contracts.  All quotations and price lists provided and outstanding to customers of the Business up to the Closing contain normal business terms for the Business and have been provided in the ordinary course of the Business.

28.

Insurance.  The Assets are insured by reputable insurers against liability, loss and damage in such amounts and against such risks as is prudent for the Business, and such insurance coverage will be continued in full force and effect up to and including the Closing Date.  All insurance policies relating to the Business are in full force and effect and Netrix is not in default with respect to any of the provisions contained in any such insurance policy.  Netrix is not aware of any events or occurrences that could reasonably form the basis for a claim under Netrix’s policies of insurance.

29.

Permits.  Netrix owns, possesses and is in compliance with, all Permits required by any Governmental Authority and necessary to conduct the Business.  Schedule D sets forth a list of all Permits required to conduct the Business, all of which Permits are in good standing.

30.

Absence of Legal Conflicts.  The execution and delivery of this Agreement by the Founders and Netrix does not, and the performance of this Agreement by such Parties and the completion by them of the transactions contemplated by this Agreement will not:

30.1.

conflict with or violate the constating documents of Netrix or any resolution of the directors or shareholders of Netrix;

30.2.

conflict with or violate any Applicable Law; or

30.3.

result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of an Encumbrance on any of Assets pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, licence, permit, franchise or other instrument or obligation to which the Founders or Netrix is a party in relation to the Business or by which the Business or the Assets is bound or affected, which, in any such case, would prohibit or delay such Parties’ ability to perform their respective obligations under this Agreement.

31.

Litigation.  There are no claims, actions, proceedings, suits, investigations or reviews pending or threatened against the Founders or Netrix or otherwise in relation to the Business or the Assets or the Assets, before or by any Governmental Authority.

32.

Conduct of Business - Changes.  Since December 31, 2005:

32.1.

there has not been any material adverse change in the Assets, affairs or financial condition of the Business; and

32.2.

Netrix has not modified, amended or terminated any contract to which it is or was a party in relation to the Business, except in the ordinary course of business with a view to the best interests of the Business.

33.

Copies of Documents etc.  True and complete copies of the documents and agreements listed in the Schedules hereto which are in writing have been made available to the Purchaser and its solicitors for review.

34.

Investment Intent.  Netrix and the Founders are acquiring the Purchase Price Shares and the Non-Compete Shares for investment purposes only and not with a view of immediate resale or distribution and will not resell or otherwise transfer or dispose of the Purchase Price Shares except in accordance with the provisions of all Applicable Laws.

1

SCHEDULE A (Part I)

SCHEDULE A (PART II)

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to Netrix as follows, recognizing that Netrix is relying on such representations and warranties in entering into the transactions contemplated by this Agreement:

35.

Incorporation and Qualification.  The Purchaser is a company duly incorporated, organized and validly subsisting under the laws of Nevada.

36.

Authority, Filings, Consents and Approvals.  The Purchaser has the corporate power and authority to enter into this Agreement and to perform the transactions contemplated by this Agreement.  This Agreement has been duly authorized, executed and delivered by the Purchaser and constitutes a legal, valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.  No other proceedings on the part of the Purchaser are necessary to authorize the entering into of this Agreement and the consummation of the transactions contemplated hereby.  The execution, delivery and performance of this Agreement and the agreements contemplated herein will not require the Purchaser to obtain any consent, waiver, authorization or approval of, or make any filing with or give notice to, any person, except for any such consents, waivers, authorizations or approvals which the failure to obtain would not be reasonably likely to materially delay the Purchaser’s ability to perform its obligations hereunder.

37.

Absence of Legal Conflict.  The execution and delivery of this Agreement by the Purchaser does not, and the performance of this Agreement by the Purchaser and the consummation by it of the transactions contemplated by this Agreement will not:

37.1.

conflict with or violate the constating documents of the Purchaser;

37.2.

conflict with or violate any Applicable Law; or

37.3.

result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any note, bond, mortgage, indenture, contract, agreement, lease, licence, permit, franchise or other instrument or obligation to which the Purchaser is a party or by which the Purchaser or any of its properties is bound or affected, which, in any such case, would prohibit or delay the Purchaser's ability to perform its obligations under this Agreement.

1

SCHEDULE A (Part I)

SCHEDULE B

TRADENAMES/TRADEMARKS/CORPORATE NAMES/PATENTS/SOFTWARE

Tradenames:

·

Netrix, Inc.

·

Multiple Income Solutions

·

MIS

·

VivaTRU

·

VivaTRU, International

·

Natura Medical, Inc.

·

Drs. Natural Solutins

Trademarks:

·

VivaTRU

·

MIS

·

Viva Touch

·

Viva Slim

·

Viva Slim Chocolate

·

Viva Slim Booster

·

Pure Relief

·

Pro Zyme

·

Ziwi

·

Multi Viva

·

Viva Omega

·

Noni Plus

·

Food Triggers

·

Sugar Consumption Index

·

Viva Energy

·

Energy Trace

·

Trace Dermal

VivaSlim ChocolateTM

VivaSlim ChocolateTM is a healthy and natural weight loss chocolate.  It is designed to promote weight loss.  VivaSlim Chocolate does not contain sugar or any artificial sweeteners.  It contains a unique blend of herbs that help regulate sugar absorption, blood sugar levels, and appetite.  It is completely safe for children and for type I and type II diabetics.  VivaSlim ChocolateTM tastes like a very high quality dark chocolate.

It is our estimate that reverse engineering of the VivaSlim Chocolate is virtually impossible since it is not only a complex formula, but also a unique and complex process.

Owner: Glenkirk International

Netrix has an exclusive perpetual agreement with the owner of the IP.

VivaSlimTM 

VivaSlimTM is a unique weight loss formula that is designed to help people lose weight while promoting good health.  VivaSlim helps control blood sugar levels, reduce cholesterol, and convert fat body mass to lean body mass.  It contains ingredients that have been proven in clinical studies in the US.

We are currently the process of writing the patent disclosure for VivaSlim.

Owner: Glenkirk International

Netrix has an exclusive perpetual agreement with the owner of the IP.

ZiwiTM 

ZiwiTM is a drink that helps reduce inflammation in the body while at the same time it increases the pH of the body.  Hence, creating an environment that is antagonistic to cancer cells.  Ziwi tastes like Kiwi Juice, and is enjoyed by children and adults alike.

We are currently the process of writing the patent disclosure for Ziwi.

Inventors: Michelle LeSueur, Dr. Aharon Friedman 

Owner: Netrix

Sweetener

Our sweetener which has not yet been given a marketing name is a powder that is 25 times sweeter than sugar when cold and 16 times sweeter that sugar when hot.  It is 100% natural and does not contain any harmful ingredients. It has the added benefit of retarding tooth decay bacteria, as well as cold and flu viruses.

We are currently the process of writing the patent disclosure for the Sweetener.

Owner: Glenkirk International

Netrix has an exclusive perpetual agreement with the owner of the IP.

Delivery System

The delivery system is a unique formulation of herbs, vitamin, mineral, and enzymes that when given in small quantities together with supplements, or even foods increases significantly the absorption of nutrients while reducing absorption of toxins.  It therefore, allows the body to utilize supplements efficiently, reduce the quantities of consumed food and supplements and alleviate the load from the liver, kidneys, and immune system.

We are currently the process of writing the patent disclosure for the Delivery system.

Inventors: Dr. Aharon Friedman, Michelle LeSueur.

Owner: Netrix

Green MiracleTM

Green MiracleTM is a natural cream that is very useful and safe to put on eczemas, minor burns, and minor wounds.  When used in the right application, its effect can be seen in very little time. An active ingredient is the silt from millennia old volcanic ash.

VivaTRU Essential formulas

VivaTRU owns the forumulas for all of it’s Essential lines of whole food supplements. Multi-Viva, multi vitamin, VivaOmega, Omega-3 supplement, VivaCal and calcium supplement.

VivaTouchTM

The VivaTouch is a tool unlike any other in any consumer or network marketing driven market. A person places their hand on a hand cradle and the VivaTouch can tell them their food triggers (foods that cause them to gain weight) and what nutritional products their body is asking for to provide proper balance and health. The tool also utilizes an innovative marketing interface which leads the client and the affiliate through the assessment process. 

We finished our VivaTouch pilot with 200 units (leases) in the field at the end of February. Affiliates who were in the pilot phase had order sizes that were on average 330% larger than the rest of the field. We have rolled out an aggressive training schedule starting in March and June we are moving to a virtual training module and fully expect to have over 4,000 units in the field by the end of 2006. With the sales numbers that a VivaTouch affiliate can achieve we expect product sales to exponentially increase with each new VivaTRU affiliate who becomes a VivaTouch Specialist.

VivaTRU has world-wide, exclusive rights to market and distribute the VivaTouch unit through direct all sales/network marketing avenues.

Owner: Zyto Corporation

Netrix has a perpetual license exclusive for non medical use for the VivaTouch

Energy/ Sport Drink

A unique Energy / Sport drinks that is design to increase the metabolic rate of the body, control blood sugar levels, and reduce and prevent inflammation

Owner: Glenkirk International

Netrix has an exclusive perpetual agreement with the owner of the IP.

URLs

·

Vivatru.com

·

Vivatru.net

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Mis.com

·

Mis.net

·

Multipleincomesolutions.com

·

Vivatruclaendar.net

·

Drsns.com

·

Naturamedicalinc.com

·

Numerous additional URLs

Corporate Names

·

Netrix, Inc.

·

MIS Corporation

·

VivaTRU

·

VivaTRU, Japan

1

SCHEDULE C

SCHEDULE C

MATERIAL CONTRACTS

1.

Netrix – Zyto OEM supply agreement – July 2006

2.

Glenkirk International – Royalty agreement for Viva Slim, Viva Slim Chocolate, Sweetener, and Energy/Sport Drink – May 2006

3.

Netrix – CSI Assets Purchase Letter of Intent – February, 2006

4.

International Quest Japan – Japanese marketing agreement and master distributorship agreement – February, 2006

5.

Pike Telemarketing Agreement– 1/30/06

6.

Kaiora International Limited – 1/1/06

7.

Affiliate Fuel Insertion Order – 1/19/06

8.

Echo – 11/29/04

9.

License – Toxic Free – 2/12/05

10.

Certification – Toxic Free – 2/12/05

11.

VivaTRU – Emerald Forest – 10/31/05

12.

Joint Venture – OPI – 2/14/05

13.

Non Disclosure Agreement – Simply Lite – 9/2/05

14.

Software Systems Private Limited – 11/9/05

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SCHEDULE D

SCHEDULE D

PERMITS

·

Occupational License – City of Vero Beach

·

Foreign company permission to do business – State of Florida

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SCHEDULE E

SCHEDULE E

PERMITTED ENCUMBRANCES

Nil

1

SCHEDULE F

SCHEDULE F

FIXED PLANT AND EQUIPMENT

Will be provided at the conclusion of a certified audit of 2005, prior to closing.

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SCHEDULE G

SCHEDULE G

PERSONAL PROPERTY

Major Assets

Destiny PLUS

This is an extremely powerful tool that is used for an affiliate to build their business. In Network Marketing ‘repeatability’ is crucial to success. This tool guarantees that every single affiliate can have a truly professional edge. 

Destiny PLUS is an interactive multi-media presentation designer and presentation suite, which demonstrates the entire VivaTRU proposition. This is an application which affiliates can install to their desktop and it allows them to build their own presentations and deliver them. 

The affiliate can use this tool to demonstrate the business opportunity, any of the individual products, the compensation plan or any of the individual modules. This presentation can then be burnt to a DVD or a link can emailed to a hosted site where the prospect can view the interactive presentation.

This link will take you to a sample presentation:

http://www.emeraldforest.biz/vivatru/stw/index.php?PID=262

Development

	Creative Team  - Script and model

	320 Man Hours

	Software Development and customization

	440 Man Hours

	Filming and Post Production

	340 Man Hours

	Fixed Costs

	$95,000

Pricing Model: $49.95 upfront purchase, $9.95 per month subscription cost

VivaTouch

The VivaTouch is a tool unlike any other in any consumer or network marketing driven market. A person places their hand on a hand cradle and the VivaTouch can tell them their food triggers (foods that cause them to gain weight) and what nutritional products their body is asking for to provide proper balance and health. The tool also utilizes an innovative marketing interface which leads the client and the affiliate through the assessment process. 

We finished our VivaTouch pilot with 200 units (leases) in the field at the end of February. Affiliates who were in the pilot phase had order sizes that were on average 330% larger than the rest of the field. We have rolled out an aggressive training schedule starting in March and June we are moving to a virtual training module and fully expect to have over 4,000 units in the field by the end of 2006. With the sales numbers that a VivaTouch affiliate can achieve we expect product sales to exponentially increase with each new VivaTRU affiliate who becomes a VivaTouch Specialist.

VivaTRU has world-wide, exclusive rights to market and distribute the VivaTouch unit through direct all sales/network marketing avenues.

Model: Current: $350 upfront cost (includes training), $125/month lease cost (VivaTru gets 40% of lease revenue. 

Virtual Training Model: Estimated Cost to affiliate: $150

CAP (Customer Acquisition Program and web based technologies)

We acquire leads through infomercials, trade shows and internet marketing. These leads typically get a weeks supply of a product (most notable and recently VivaSlim Weight loss chocolate) and then are sold to the affiliates for $12-$18 each. Thus far we have sold almost $100k in leads and just rolled the system out in January. Our self-designed software is an ASP based software system that we have developed (and continue to develop) with an offshore partnership to manage our lead for our Customer acquisition program.

Technology Estimated Man hours to date: 750 total.

Viva Slim, Viva Slim Chocolate, Sweetener, Sport/ Energy Drink

Netrix has a perpetual, exclusive license agreement with Glenkirk International to manufacture and market the above products.

Product Inventory

Inventory changes from day to day and will be provided in a separate list on day of clothing.

VivaTRU uses ProStar a company based out of Utah for shipping. This is the same company that brought Xango through its first two years of explosive growth. Prostar is also uniquely suited to ship products to Asia with good international agreements with various brokers and freight companies. We are well poised to meet shipping obligations regardless of how fast we grow.

Raw Materials

37,698 kg of Fucoidan in New Zealand

$989,000 in processed material (whole sale, commercial value) – Distributor wholesale could be as high as $10,000,000 on this asset. (Used in Ziwi, PureRelief and an upcoming product that will be a pure fucoidan extract capsule). For more information on Fucoidan go to PubMed.org and search “Fucoidan” there are hundreds of clinical studies happening on this breakthrough  substance now.

1

SCHEDULE H

SCHEDULE H

[INTENTIONALLY DELETED]

1

SCHEDULE I

SCHEDULE I

CLAIMS AND PROCEEDINGS

Nil

1

SCHEDULE J

SCHEDULE J

PURCHASE PRICE ALLOCATION

Will be provided at the conclusion of a 2005 certified audit, prior to closing.

2

SCHEDULE G

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