Document:

ex_4-1.htm

     

    Exhibit 4.1

    
 

    

      81⁄4%
Senior Notes due 2015

    

     

    __________________

     

     

    SIXTH
SUPPLEMENTAL INDENTURE

     

    Dated
as of July 10, 2008

     

    AMONG

     

    QUICKSILVER
RESOURCES INC.,

     

    THE
SUBSIDIARY GUARANTORS PARTIES HERETO

     

    AND

     

    THE
BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

    as
TRUSTEE

     

     

    TO

     

     

    INDENTURE

     

    Dated
as of December 22, 2005

     

    AMONG

     

    QUICKSILVER
RESOURCES, INC.

     

    AND

     

    THE
BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

    as
TRUSTEE

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        This
SIXTH SUPPLEMENTAL INDENTURE, dated as of July 10, 2008 (this “Supplemental
Indenture”), is made by and among QUICKSILVER RESOURCES INC., a Delaware
corporation (the “Company”), the Subsidiary Guarantors (as defined in the
Indenture referred to herein) and THE BANK OF NEW YORK MELLON TRUST COMPANY,
N.A. (formerly named The Bank of New York Trust Company, N.A.), a national
banking association duly organized and existing under the laws of the United
States of America (as successor in interest to JPMorgan Chase Bank, National
Association (the “Initial Trustee”)), as trustee
(the “Trustee”).

         

        W I T N E
S S E T H

         

        WHEREAS,
the Company and the Initial Trustee executed and delivered an Indenture (the
“Original Indenture”), dated as of December 22, 2005, as supplemented by a Fifth
Supplemental Indenture dated as of June 27, 2008, among the Company, the
Subsidiary Guarantors party thereto and the Trustee (the “Fifth Supplemental
Indenture” and, together with the Original Indenture, the “Indenture”), pursuant
to which the Company has issued $475,000,000 aggregate principal amount of 73⁄4%
Senior Notes due 2015 (the “Notes”);

         

        WHEREAS,
Section 5.01(a) of the Fifth Supplemental Indenture provides that the provisions
of Section 10.01 of the Original Indenture apply to the Notes;

         

        WHEREAS,
Section 10.01(h) of the Original Indenture provides that, without the consent of
or notice to any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
supplemental indentures to cure any ambiguity, to correct or supplement any
provision which may be defective or inconsistent with any other provision, or to
make any other provisions with respect to matters or questions arising under the
Indenture, provided that such action will not adversely affect the interests of
the Holders of Securities of any series in any material respect;
and

         

        WHEREAS,
the Board has approved an increase in the interest rate on the Notes from 73⁄4% to
81⁄4%, such increase to be effective as of June 27, 2008;

         

        NOW
THEREFORE, in consideration of the foregoing, the Company, the Subsidiary
Guarantors and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:

         

        ARTICLE
I

         

        Section
1.01    Effect.  This
Supplemental Indenture is supplemental to the Indenture and does and shall be
deemed to form a part of, and shall be construed in connection with and as part
of, the Indenture for any and all purposes.

         

        Section
1.02    Effective
Time.  This Supplemental Indenture shall become effective
immediately upon its execution and delivery by the Company, the Subsidiary
Guarantors and the Trustee.

         

        ARTICLE
II

         

        Section
2.01    Amendment to Cover
Page.  The reference to “73⁄4%” contained on the cover page of
the Fifth Supplemental Indenture is hereby amended to read “81⁄4%”.

         

        Section
2.02    Amendment to Table of
Contents.  The reference to  “ARTICLE
I  73⁄4% SENIOR NOTES DUE 2015” contained in the table of contents of
the Fifth Supplemental Indenture is hereby amended to read “ARTICLE
I  81⁄4% SENIOR NOTES DUE 2015”.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Section
2.03    Amendments to Article
I.

         

        (a)    The
heading to Article I of the Fifth Supplemental Indenture is hereby amended to
read in its entirety as follows:

         

        ARTICLE
I

        81⁄4%
SENIOR NOTES DUE 2015

        

        (b)    The first
sentence of the first paragraph of Section 1.01 of the Fifth Supplemental
Indenture is hereby amended to read in its entirety as follows:

         

        “There is
hereby established a new series of senior notes to be issued under the
Indenture, to be designated as the Company’s 81⁄4% Senior Notes due 2015
(the “Notes”).”

         

        (c)    The
second sentence of the first paragraph of Section 1.03 of the Fifth Supplemental
Indenture is hereby amended to read in its entirety as follows:

         

        “The
unpaid principal amount of the Notes shall bear interest at the rate of 81⁄4% per
year until paid or duly provided for, such interest to accrue from June 27,
2008 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for.”

         

        Section
2.04    Amendments to Exhibit
A.  Exhibit A to the Fifth Supplemental Indenture is hereby
amended to read in its entirety as set forth in Exhibit A to this
Supplemental Indenture.  Notwithstanding Section 1.05 of the Fifth
Supplemental Indenture or any other provision of the Indenture, a new Global
Note in substantially the form set forth in Exhibit A to this
Supplemental Indenture may be exchanged for the Global Note of the Company dated
June 27, 2008.

         

        Section
2.05    Amendments to Exhibit
B.  All references to “73⁄4%” contained in Exhibit B, Form of
Supplemental Indenture to be Delivered by Subsequent Guarantors, to the Fifth
Supplemental Indenture are hereby amended to read “81⁄4%”.

         

        ARTICLE
III

         

        Section
3.01    Ratification of
Indenture.  Except as specifically modified herein, the
Indenture and the Notes are in all respects ratified and confirmed (mutatis
mutandis) and shall remain in full force and effect in accordance with their
terms.

         

        Section
3.02    Defined
Terms.  All capitalized terms used but not defined herein shall
have the same respective meanings ascribed to them in the
Indenture.

         

        Section
3.03    Trustee.  Except
as otherwise expressly provided herein, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed, by the Trustee by
reason of this Supplemental Indenture.  This Supplemental Indenture is
executed and accepted by the Trustee subject to all of the terms and conditions
set forth in the Indenture with the same force and effect as if those terms and
conditions were repeated at length herein and made applicable to the Trustee
with respect hereto.

         

        Section
3.04    Governing
Law.  THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         

        Section
3.05    Counterparts.  The
parties may sign any number of copies of this Supplemental
Indenture.  Each signed copy shall be an original, but all of them
together represent the same agreement.

         

        Section
3.06    Headings.  The
headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Supplemental Indenture.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        Section
3.07    Recitals by the
Company.  The recitals hereto are statements only of the
Company and shall not be considered statements of or attributable to the
Trustee.

         

        

        

        [Signature
Page Follows]

         

        
          
             

          

          
            3

            
              

            

          

          
             

          

        

      

    

    IN
WITNESS WHEREOF, each party hereto has caused this instrument to be signed in
its name and behalf by its duly authorized officers, all as of the day and year
first above written.

     

    
      
        	Attest:	 	QUICKSILVER
      RESOURCES INC.	 
	 	 	 	 	 
	
                /s/
      John C. Cirone

              	 	By:	
                /s/
      Philip Cook

              	 
	
                John
      C. Cirone

              	 	 	
                Philip
      Cook

              	 
	
                Secretary

              	 	 	
                Senior
      Vice President - Chief Financial Officer

              	 

      

      
        	 	 	 	 	 
	 	 	COWTOWN
      PIPELINE FUNDING, INC.,	 
	Attest:	 	as
      Subsidiary Guarantor	 

      

      
      

    

    
      
        	 	 	 	 	 
	
                /s/
      John C. Cirone

              	 	By:	
                /s/
      Philip Cook

              	 
	
                John
      C. Cirone

              	 	 	
                Philip
      Cook

              	 
	
                Secretary

              	 	 	
                Senior
      Vice President - Chief Financial Officer

              	 

      

    

    
      
        	
              	 	 	 	 
	 	 	COWTOWN
      PIPELINE MANAGEMENT, INC.,	 
	Attest:	 	as
      Subsidiary Guarantor	 

      

      
      

      
        
          	 	 	 	 	 
	
                  /s/
      John C. Cirone

                	 	By:	
                  /s/
      Philip Cook

                	 
	
                  John
      C. Cirone

                	 	 	
                  Philip
      Cook

                	 
	
                  Secretary

                	 	 	
                  Senior
      Vice President - Chief Financial Officer

                	 

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	 	 	COWTOWN
      PIPELINE L.P.,	 
	 	 	as
      Subsidiary Guarantor	 
	 	 	 	 	 

      

      
      

      
        
          	 	 	By:	COWTOWN
      PIPELINE MANAGEMENT, INC.,	 
	 Attest:	 	 	its
      general partner	 
	 	 	 	 	 
	
                  /s/
      John C. Cirone

                	 	By:	
                  /s/
      Philip Cook

                	 
	
                  John
      C. Cirone

                	 	 	
                  Philip
      Cook

                	 
	
                  Secretary

                	 	 	
                  Senior
      Vice President - Chief Financial Officer

                	 

        

      

    

    
      
        	
              	 	 	 	 
	 	 	COWTOWN
      GAS PROCESSING L.P.,	 
	 	 	as
      Subsidiary Guarantor	 
	 	 	 	 	 
	 	 	By:	COWTOWN
      PIPELINE MANAGEMENT, INC.,	 
	Attest:	 	 	its
      general partner	 

      

      
      

      
        
          	 	 	 	 	 
	
                  /s/
      John C. Cirone

                	 	By:	
                  /s/
      Philip Cook

                	 
	
                  John
      C. Cirone

                	 	 	
                  Philip
      Cook

                	 
	
                  Secretary

                	 	 	
                  Senior
      Vice President - Chief Financial Officer

                	 

          	
                	 	 	 	 
	 	 	 	 	 
	 	 	 	THE
      BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee	 
	Attest:	 	 	 	 

          
          

          
            
              	 	 	 	 	 
	
                      /s/
      Mauri J. Cowen

                    	 	By:	
                      /s/
      Brian Echausse

                    	 
	
                      Name: 
      Mauri J. Cowen

                    	 	 	
                      Name: 
      Brian Echausse

                    	 
	
                      Title: 
      Vice President

                    	 	 	
                      Title: 
      Assistant Treasurer

                    	 

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

     

    
      Form
of 81⁄4% Senior Note due 2015

       

      UNLESS
THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO QUICKSILVER RESOURCES INC. OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

       

      THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE THEREOF. THIS
SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES
REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, AND
NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED UPON
REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS SECURITY
WILL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.

       

    

    
      
        A-1

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CUSIP No.
74837RAE4

    ISIN No.
US74837RAE45

     

    [Face of
Note]

     

    
      81⁄4%
Senior Notes due 2015

    

     

    Principal
amount at Maturity $475,000,000

     

    

     

    QUICKSILVER
RESOURCES INC.

     

    Quicksilver
Resources Inc., a Delaware corporation (the “Company”) promises to pay to
______________, or registered assigns, the principal sum of 475,000,000 Dollars on August 1,
2015 or such greater or lesser amount as may be indicated on Schedule A
hereto.

     

    
      
        	
                Interest
      Payment Dates:

              	
                February
      1 and August 1, commencing February 1, 2009

              
	 	 
	
                Regular
      Record Dates:

              	
                January
      15 and July 15

              

      

    

     

    Additional
provisions of this Note are set forth on the other side of this
Note.

     

    
      
        	Dated:	 	 
	 	 	 
	 	QUICKSILVER
      RESOURCES INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	Name: 	 
	 	 	Title: 	 
	 	 	 	 

      

    

     

    
      	Attest:	 	 
	 	 	 
	 By:	
               

            	 
	 	 	 

    

     

    TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

     

    This is
one of the Global Notes referred to in the
within-mentioned Indenture:

     

    THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.

        as
Trustee

     

    
      
        	 By:	
                 

              	 
	 	
                Authorized
      Signatory

              	 

      

    

     

    
      
        A-2

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [FORM OF
REVERSE OF NOTE]

     

    81⁄4%
Senior Notes due 2015

     

    Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.

     

    (1)    Interest.  Quicksilver
Resources Inc., a Delaware corporation (together with its permitted successors,
the “Company”), promises to pay interest on the principal amount of this Note at
81⁄4% per annum from June 27, 2008 until the principal hereof is paid or made
available for payment.  The Company shall pay interest, if any,
semi-annually in arrears on February 1 and August 1 of each such year,
commencing February 1, 2009 or if any such day is not a Business Day, on
the next succeeding Business Day (each an “Interest Payment Date”). Interest on
the Notes shall accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from the date of issuance[; provided that if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be the first of February 1 or August 1 to occur after the
date of issuance, unless such February 1 or August 1 occurs within one calendar month of
such date of issuance, in which case the first Interest Payment Date shall be
the second of February 1 or August 1 to occur after the date of
issuance]1.  Interest
shall be computed on the basis of a 360-day year of twelve 30-day
months.

     

    (2)    Method of
Payment.  The Company shall pay interest on the Notes (except
defaulted interest) to the Person in whose name(s) this Note is registered at
the close of business on the January 15 or July 15 next preceding the
Interest Payment Date (each, a “Regular Record Date”); provided that interest
payable at the Stated Maturity or on a Redemption Date as provided in the
Indenture will be paid to the Person to whom principal is payable. The Notes
shall be payable as to principal of or premium, if any, or interest at the
office or agency of the Company maintained for such purpose within or without
the City and State of New York, or, at the option of the Company, payment of
interest may be made by check mailed to the Holders at their addresses set forth
in the Security Register or by wire transfer at such place and to such account
at a banking institution in the United States as may be designated in writing to
the Trustee at least 15 days prior to the date for payment by the Person
entitled thereto. Such payment shall be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.

     

    (3)    Paying Agent and
Registrar.  Initially, The Bank of New York Mellon Trust
Company, N.A., the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

     

    (4)    Indenture.  The
Company issued the Notes under an Indenture, dated as of December 22, 2005 (the
“Original Indenture”), between
the Company and the Trustee, as supplemented by the Fifth Supplemental
Indenture, dated as of June 27, 2008, among the Company, the Subsidiary
Guarantors (as defined therein) parties thereto and the Trustee (the “Fifth
Supplemental Indenture”), and the Sixth Supplemental Indenture, dated as of July
10, 2008, among the Company, the Subsidiary Guarantors parties thereto and the
Trustee (the “Sixth Supplemental Indenture” and, together with the Original
Indenture and the Fifth Supplemental Indenture, the “Indenture”).  The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are senior obligations of the Company initially in the
aggregate principal amount of

     

    
      

    

    
      
        1           Insert
if Notes are Additional Notes.

         

        
          
            A-3

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    
      $475,000,000.  Subject
to compliance with Section 1.10 of the Fifth Supplemental Indenture, the Company
is permitted to issue Additional Notes under the Indenture in an unlimited
principal amount.  Any such Additional Notes that are actually issued
shall be treated as issued and outstanding Notes for all purposes of the
Indenture, unless the context clearly indicates otherwise.

    

     

    (5)    Guarantees.  This
Note is guaranteed by the Persons, if any, specified as Subsidiary Guarantors in
the Indenture to the extent provided in the Indenture.  The Subsidiary
Guarantees are equal in rank to the Senior Indebtedness of the applicable
Subsidiary Guarantor in the manner and to the extent provided in the
Indenture.

     

    (6)    Optional
Redemption.

     

    (a)    Except as
set forth in Section 1.08 of the Fifth Supplemental Indenture and clauses (b)
and (c) of this Paragraph 6, the Notes are not redeemable until August 1,
2012.  On and after August 1, 2012, the Company may redeem all
or, from time to time, a part of the Notes upon not less than 30 nor more than
60 days’ notice, at the following redemption prices (expressed as a percentage
of principal amount) plus accrued and unpaid interest on the Notes (the
“Redemption Price”), if any, to the applicable redemption date (subject to the
right of Holders of record on the Regular Record Date to receive interest due on
the relevant Interest Payment Date) (a “Redemption Date”), if redeemed during
the twelve-month period beginning on August 1 of the years indicated
below:

     

    
      	
              YEAR

            	
              Percentage

            
	 
      	 
      
	
              2012

            	
              103.875%

            
	
              2013

            	
              101.938%

            
	
              2014
      and thereafter

            	
              100.000%

            

    

    

    (b)    Notwithstanding
the provisions of clause (a) of this Paragraph 6, prior to August 1, 2011,
the Company may on any one or more occasions redeem up to 35% of the original
principal amount of the Notes issued under the Indenture at a redemption price
equal to 107.75% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date to receive interest due on the
relevant Interest Payment Date), with the Net Cash Proceeds of one or more
equity offerings; provided that (1) at
least 65% of the aggregate principal amount of Notes (including any Additional
Notes) issued under the Indenture remains Outstanding immediately after the
occurrence of such redemption; and (2) that such redemption shall occur within
90 days of the date of the closing of such equity offering.

     

    (c)    In
addition, at any time prior to August 1, 2012, the Company may redeem the
Notes, in whole but not in part, at a Redemption Price equal to 100% of the
principal amount thereof plus the Applicable Premium plus accrued and unpaid
interest, if any, to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date to receive interest due on the
relevant Interest Payment Date).

     

    (7)    Offer to Repurchase Upon
Change of Control. Upon the occurrence of a Change of Control, the
Company will be required to offer to repurchase from each Holder all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder’s Notes
pursuant to the offer described below (the “Change of Control Offer”) at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, thereon to the date of purchase (the
“Change of Control Payment”). Within 30 days following any Change of Control,
the Company shall mail a notice to each Holder setting forth the procedures
governing the Change of Control Offer as required by the Indenture.

     

    (8)    Notice of Redemption.
Notice of redemption shall be mailed at least 30 days but not more than 60 days
before the redemption date to each Holder whose Notes are to be redeemed at its
address appearing in the Securities Register.  The Company shall
notify the Trustee of the Redemption Price with respect to the redemption
promptly after the calculation thereof.  The Trustee shall not be
responsible for calculating the Redemption Price.

     

    
      
        A-4

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (9)    Denominations, Transfer,
Exchange.  The Notes are in registered form without coupons in
minimum denominations of $1,000 and integral multiples of $1,000 in excess
thereof. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture.  Every Note presented or surrendered for
registration of transfer or exchange will (if so required by the Company or the
Trustee) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer, in form reasonably satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.  The Company need not exchange or register the
transfer of any Notes for a period of 15 days before the mailing of the notice
of redemption or any Note so selected for redemption in whole or in part, except
in the case of Notes to be redeemed in part, the portion thereof not being
redeemed.  No service charge will be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.

     

    (10)    Persons Deemed
Owners.  The registered Holder of a Note may be treated as its
owner for all purposes.

     

    (11)    Amendment, Supplement and
Waiver.  Subject to certain exceptions, the Indenture, the
Subsidiary Guarantees or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the Notes,
and any existing default or compliance with any provision of the Indenture, the
Subsidiary Guarantees or the Notes (other than a Default or Event of Default in
the payment of the principal of or premium, if any, or interest on the Notes) or
compliance with any provision of the Indenture, the Subsidiary Guarantee or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the Notes.  Without the consent of any Holder of a Note, the
Indenture, the Subsidiary Guarantee or the Notes may be amended or supplemented
to (a) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company under the
Indenture and in the Notes, all to the extent otherwise permitted under the
Indenture; (b) to add to the covenants of the Company for the benefit of the
Holders of all or any of the Notes or to surrender any right or power herein
conferred upon the Company; (c) to add any additional Events of Default; (d) to
add to or change any of the provisions of the Indenture to such extent as may be
necessary to permit or facilitate the issuance of Notes in bearer form,
registrable or not registrable as to principal, and with or without interest
coupons, or to permit or facilitate the issuance of Notes in uncertificated
form; (e) to add to, change, or eliminate any of the provisions of the Indenture
in respect of the Notes, provided that any
such addition, change, or elimination (i) will not apply to any of the
Notes created prior to the execution of such supplemental indenture and entitled
to the benefit of such provision, or (ii) will become effective only when
there are no Notes Outstanding (as defined in the Original Indenture); (f) to
establish the terms or form of Securities of any series as permitted by Sections
2.01 and 2.02 of the Original Indenture; (g) to evidence and provide for the
acceptance of appointment under the Indenture by a successor Trustee with
respect to the Notes and to add to or change any of the provisions of the
Indenture as may be necessary to provide for or facilitate the administration of
the trusts under the Indenture by more than one Trustee, pursuant to the
requirements of Section 9.10 of the Original Indenture; or (h) to cure any
ambiguity, to correct or supplement any provision of the Indenture which may be
defective or inconsistent with any other provision of the Indenture, or to make
any other provisions with respect to matters or questions arising under the
Indenture, provided that such
action pursuant to this clause (h) will not adversely affect the interests
of the Holders of the Notes in any material respect.

     

    (12)    Events of
Default.  Events of Default include (1) failure to pay
principal of or premium, if any, on any Note when due at its Stated Maturity;
(2) failure to pay any interest on any Note when due, which failure continues
for 30 calendar days; (3) failure by the Company or any Subsidiary Guarantor to
comply with its obligations under Section 3.11 of the Fifth Supplemental
Indenture; (4) failure by the Company to comply with any of its obligations
under Article III of the Fifth Supplemental Indenture (in each case, other than
a failure to purchase Notes which will constitute an Event of Default under
clause (5) of this Paragraph 12 and other than a failure to comply with Section
3.11 of the Fifth Supplemental Indenture which is covered by clause (3) of this
Paragraph 12), which failure or breach continues for 30 calendar days after
written notice thereof has been given to the Company as provided in the
Indenture; (5) failure to redeem or repurchase any Note when required to do so
under the terms thereof; (6) failure to perform, or breach of, any other
covenant of the Company in the Indenture (other than a covenant
included

     

    
      
        A-5

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    in the
Indenture solely for the benefit of a series of debt securities other than the
Notes), which failure or breach continues for 60 calendar days after written
notice thereof has been given to the Company as provided in the Indenture; (7)
any nonpayment at maturity or other default (beyond any applicable grace period)
under any agreement or instrument relating to any other Indebtedness of the
Company or a Significant Subsidiary, the unpaid principal amount of which is not
less than $15 million, which default results in the acceleration of the maturity
of the Indebtedness prior to its stated maturity or occurs at the final maturity
thereof; (8) specified events of bankruptcy, insolvency, or reorganization
involving the Company or a Significant Subsidiary; (9) failure by the Company or
any Significant Subsidiary or group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary to pay final judgments aggregating in excess of $15 million (net of
any amounts that a reputable and creditworthy insurance company has acknowledged
liability for in writing), which judgments are not paid, discharged or stayed
for a period of 60 days; or (10) any Subsidiary Guarantee of a Significant
Subsidiary or group of Subsidiary Guarantors that taken together as of the
latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries would constitute a Significant Subsidiary ceases to be
in full force and effect (except as contemplated by the terms of the Indenture)
or is declared null and void in a judicial proceeding or any Subsidiary
Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors
that taken together as of the latest audited consolidated financial statements
of the Company and its Restricted Subsidiaries would constitute a Significant
Subsidiary denies or disaffirms its obligations under the Indenture or its
Subsidiary Guarantee.  If any Event of Default (other than an Event of
Default specified in clause (8) of this Paragraph) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare the principal amount of all the Notes to be due
and payable immediately. Notwithstanding the foregoing, in the case of an Event
of Default specified in clause (8) of this Paragraph 12, all outstanding Notes
shall become due and payable immediately without any declaration or other act on
the part of the Trustee or any Holder.  However, at any time after a
declaration of acceleration with respect to the Notes has been made, but before
a judgment or decree based on such acceleration has been obtained, the holders
of a majority in principal amount of the Notes may, under specified
circumstances, rescind and annul such acceleration.

     

    Subject
to the duty of the Trustee to act with the required standard of care during an
Event of Default, the Trustee will have no obligation to exercise any of its
rights or powers under the Indenture at the request or direction of the Holders
of the Notes, unless holders of the Notes shall have furnished to the Trustee
reasonable security or indemnity.  Subject to the provisions of the
Indenture, including those requiring security or indemnification of the Trustee,
the Holders of a majority in principal amount of the Notes will have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Notes.  Pursuant to the Trust Indenture
Act, the Trustee is required, within 90 calendar days after the occurrence of a
Default in respect of the Notes, to give to the Holders of the Notes notice of
all uncured Defaults known to it, except that (other than in the case of a
Default of the character contemplated in clause (1) or (2) of this Paragraph 12)
the Trustee may withhold notice if and so long as it in good faith determines
that the withholding of notice is in the interests of the Holders of the
Notes.

     

    No Holder
of a Note will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless:  (a) the Holder has
previously given to the Trustee written notice of a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of the outstanding
Notes have requested the Trustee to institute a proceeding in respect of the
Event of Default; (c) the Holder or Holders have furnished reasonable indemnity
to the Trustee to institute the proceeding as Trustee; (d) the Trustee has not
received from the Holders of a majority in principal amount of the outstanding
Notes a direction inconsistent with the request; and (e) the Trustee has failed
to institute the proceeding within 60 calendar days. However, the limitations
described above do not apply to a suit instituted by a Holder of a Note for
enforcement of payment of the principal of and interest on or after the
applicable due dates for the payment of such principal and
interest.

     

    (13)    Trustee Dealings with
Company.  The Trustee, in its individual or any other capacity,
may become the owner or pledgee of Notes and, subject to the terms of the
Indenture, may otherwise deal with the Company with the same rights it would
have if it were not Trustee.

     

    
      
        A-6

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (14)    No Recourse Against
Others.  No director, officer, employee, incorporator,
Affiliate or stockholder of the Company or any of the Subsidiary Guarantors, as
such, will have any liability for any obligations of the Company or such
Subsidiary Guarantor under the Notes, the Indenture, the Subsidiary Guarantee or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes by accepting a Note waives and releases all
such liability.  The waiver and release are part of the consideration
for the issuance of the Notes.

     

    (15)    Authentication.  This
Note shall not be valid until authenticated by the manual signature of the
Trustee or an Authenticating Agent.

     

    (16)    Abbreviations.  Customary
abbreviations may be used in the name of a Holder or an assignee, such as: TEN
COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with rights of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

     

    (17)    CUSIP, ISIN or Other Similar
Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP, ISIN
or other similar numbers to be printed on the Notes and the Trustee may use
CUSIP, ISIN or other similar numbers in notices of redemption as a convenience
to Holders. No representation is made as to the accuracy of such numbers either
as printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed
thereon.

     

    (18)    Governing
Law.  This Note shall be governed by and construed in
accordance with the laws of the State of New York.

     

    (19)    Senior
Indebtedness.  The Company and each Subsidiary Guarantor hereby
designate the obligations with respect to the Notes and Subsidiary Guarantees as
Senior Indebtedness which is senior in right of payment in full to any
Subordinated Obligation of the Company or any Subsidiary
Guarantor.  The Company and each Subsidiary Guarantor further
designate the obligations with respect to the Notes and the Subsidiary
Guarantees as “Designated Senior Indebtedness” (as defined by the (i) 1.875%
Convertible Subordinated Debentures Indenture and (ii) the 71⁄8% Senior
Subordinated Notes Indenture) for all purposes under the (x) 1.875% Convertible
Subordinated Debentures Indenture and (y) 71⁄8% Senior Subordinated Notes
Indenture, with respect the Notes and the Subsidiary Guarantees,
respectively.

     

    
      
        A-7

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT
FORM

     

    
      	
              To assign this Note,
      fill in the form below and have your signature guaranteed:  (I) or
      (we) assign and transfer this Note to

            
	 
	 
	
               (Insert
      assignee's soc. sec. or tax I.D. no.)

            
	 
	 
	 
	 
	 
	 
	 
	
               (Print or type
      assignee's name, address and zip code)

            
	 
	and irrevocably
      appoint                             
      agent to transfer this Note on the books of the Company.  The agent
      may substitute another to act for him.
	 
	 
	 

    

     

    
      
        	
                Date:

              	 
      	 
      	
                Your
      Name:

              	 
      
	 
      	 
      	 
      	 
      	
                (Print
      your name exactly as it appears on the face of this
  Note)

              
	 
      	 
      	 
      	
                Your
      Signature:

              	 
      
	 
      	 
      	 
      	 
      	
                (Sign
      exactly as your name appears on the face of this Note)

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                Signature
      Guarantee*:

              

      

      

    

      
      *           Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

    

     

    
      
        A-8

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

     

    The
following exchanges of a part of this Global Note for an interest in another
Global Note, or exchanges of a part of another Global Note for an interest in
this Global Note, have been made:

     

    
      	
              Date
      of Exchange

            	
              Amount
      of decrease in Principal Amount of this Global Note

            	
              Amount
      of increase in Principal Amount of this Global Note

            	
              Principal
      Amount of this Global Note following such decrease (or
      increase)

            	
              Signature
      of authorized officer of Trustee or Note
      Custodian

            
	 
      	 
      	 
      	 
      	 
      

    

     

    A-9Filed by sedaredgar.com - Mabcure Inc - Exhibit 10.1

SMARTEC HOLDINGS INC. 
3702 South Virginia Street,
Suite #G12 - 401 
Reno, Nevada 89502 
USA 

January 10, 2008 

 

INDIGOLEAF ASSOCIATES LTD. 
c/o Dr. Eli Orr 
23 Greenhill
Road 
Leicester LE2 3DN 
England 

DR. AMNON GONENNE 
c/o Dror Zichroni 
14 Metsada Street

Tel Aviv 64582 
Israel 

Dear Sirs: 

RE:    
 Intellectual Property Sale and Issuance of Shares

This letter sets out the agreement (this "Agreement")
reached among Smartec Holdings Inc. ("Pubco"), a company traded on the
NASDAQ Over-the-Counter Market (the "Market"), Indigoleaf Associates Ltd.
(the "Vendor") and Dr. Amnon Gonenne (the "Executive"), regarding
the transfer and sale by the Vendor of all of its interest and rights to a
proprietary technology (the "Technology") for the rapid and efficient
generation of monoclonal antibodies (the "Mabs") against desired
antigens, such as cancer markers, including, but not limited to, the know-how,
secrets, inventions, practices, methods, knowledge and data owned by the Vendor
and related thereto, as described on Schedule "A" hereto (the
"Intellectual Property Assets") to Pubco, upon the terms and conditions
set forth herein.

Part 1: Acquisition

	1. 	
      The Vendor agrees to sell and transfer to Pubco at the
      Closing (as defined below) all the Intellectual Property Assets free and
      clear of all liens, charges, claims or other encumbrances, on the terms
      and subject to the conditions set out in this Agreement (the "Sale
      Transactions").

	 	 
	2. 	
      At the Closing, in full and final consideration of the
      transfer of the Intellectual Property Assets to Pubco, Pubco shall issue
      to the Vendor 25,638,400 common shares in the

- 2 -

		
      capital of Pubco (the "Vendor Shares"), which
      shares shall be issued as fully-paid and non-assessable.

	 	 
	3. 	
      At the Closing, in consideration of the services (the
      "Executive Services") to be provided by the Executive, to Pubco
      after the Closing (as provided in the employment agreement (the "CEO
      Employment Agreement") to be entered into by Pubco and the Executive),
      Pubco shall issue to the Executive 6,409,600 common shares in the capital
      of Pubco (the "Executive Shares"; the Executive Shares and the
      Vendor Shares collectively, the "Transaction Shares"), which shares
      when issued shall be issued as fully-paid and non- assessable.
      Notwithstanding the foregoing, the Executive agrees and acknowledges that
      its entitlement and title to 75% of the Executive Shares (i.e. 4,807,200
      shares; the "Vesting Shares"), which shares shall be held in escrow
      by the Escrow Agent (as defined below), shall be earned in three 6-month
      intervals (each an "Interval") from the Closing (i.e. 1,602,400
      shares at the end of each Interval) and the Executive shall only be
      entitled to the aggregate amount of the Vesting Shares if he continues to
      be retained by Pubco to provide the Executive Services for a continuous
      period of 18 months from the Closing (the "Employment Term"). For
      further certainty, and without limiting the generality of the foregoing,
      if the CEO Employment Agreement is terminated before the end of the
      Employment Term, then the number of Vesting Shares that the Executive
      shall be entitled to, shall be a pro rata amount, calculated as a
      percentage of the completed amount of the Employment Term from the Closing
      to the end of the most recently completed Interval. Notwithstanding the
      foregoing, the Executive hereby acknowledges and agrees that, in the event
      that any of the Vesting Shares shall not be vested to the Executive
      pursuant to the terms hereof, the Escrow Agent is hereby authorized and
      directed to deliver such shares to the registrar and transfer agent of
      Pubco for cancellation and return to treasury. 

      Notwithstanding the
        foregoing, if, prior to the 18-month anniversary of the Closing: (a) Pubco
        terminates the services of the Executive without "cause" (defined as: (i)
        the continued failure by the Executive to substantially perform his duties
        according to the terms of the CEO Employment Agreement (other than any
        such failure resulting from the disability (as defined below) of the
        Executive) after Pubco shall have given the Executive reasonable notice in
        writing of such failure and a reasonable opportunity, of not less than 30
        days, to correct same, (ii) the conviction of the Executive for
        embezzlement, theft, fraud or other criminal offence, (iii) the breach by
        the Executive of a fiduciary duty owed to Pubco, or (iv) the breach by the
        Executive of any confidentiality or non-competition agreement of
        undertaking of the Executive; or (b) in the event of a "change of control"
        of Pubco (defined as the amalgamation, arrangement, merger, consolidation
        or other combination of Pubco with another entity pursuant to which the
        shareholders of Pubco immediately before such amalgamation, agreement,
        merger, consolidation or other combination do not own securities of the
        successor or continuing entity which would entitle them to cast more than
        50% of the votes attaching to all common shares in the capital of the
        successor or continuing entity immediately thereafter), then all the
        Vesting Shares not yet vested shall vest immediately. Furthermore, and
        notwithstanding the foregoing, if, prior to the 18-month anniversary of
        the Closing, the Executive is unable to provide the Executive Services, by
        reason of his death or "disability" (defined as the inability of the
        Executive to perform the material and substantial duties in respect of the
        Executive Services on a full-time basis for a period of four consecutive
    weeks during the

- 3 -

Employment Term), then the number of
Vesting Shares that would have vested at the next proceeding Interval shall vest
immediately. 

Part 2: Share Capital

	4. 	
      The Transaction Shares shall in aggregate represent 54%
      of the fully diluted capital stock of Pubco immediately following the
      Closing, (but expressly excluding the common shares issuable upon the
      exercise of the warrants to be issued in connection with the Financing (as
      defined below).

	 	 
	5. 	
      Prior to the Closing, Pubco shall effect a 20-for-1
      forward split of its authorized and issued and outstanding common shares
      (the "Forward Split"), such that the fully diluted capitalization
      of Pubco after: (a) the Forward Split; (b) issuance of the Transaction
      Shares; and (b) the issuance of units (consisting of one common share in
      the capital of Pubco and two warrants, each exercisable for one common
      share in the capital of Pubco) in connection with the Financing shall be
      as follows:

	Shareholder 	No.
      of Shares 
	Vendor 	25,638,400 
	Executive 	6,409,600 
	Investors
      Financing - Shares 	1,300,000 
	Investors
      Financing - Warrants 	2,600,000 
	Existing
      Shareholders 	27,000,000 
	Total Fully
      Diluted 	62,948,000 

	6. 	
      Each of the Vendor and the Executive acknowledges that
      the Transaction Shares shall be restricted as to sale under United States
      securities laws and rules, and shall carry a restrictive legend indicating
      such restrictions. Additionally, each of the Vendor and the Executive
      agrees not to sell, pledge or option any Transaction Shares for a period
      of two years from the Closing; provided, however, that this limitation
      shall expire upon and shall not apply to, an event of a "change of
      control" of Pubco (as defined above) (the "No Sale
    Limitation").

	 	 
	7. 	
      All share certificates for the Vendor Shares shall be
      issued in the name of Vendor and all share certificates for the Executive
      Shares shall be issued in the name of the Executive. Notwithstanding any
      other provision hereof, share certificates representing the aggregate
      amount of both the Vendor Shares and the Executive Shares shall be held in
      escrow pursuant to the provisions of Part 3 hereof by a mutually agreed
      third party escrow agent (the "Escrow
Agent").

Part 3: Escrow

	8. 	
      To ensure compliance with the No Sale Limitation and the
      vesting requirements under Section 3 hereof, all of the Transaction Shares
      shall be held in escrow by the Escrow Agent pursuant to the terms hereof
      for a period of two years from the Closing (the "No Sale Escrow
      Period"), and may not be sold, pledged or optioned during that period.
      Subject to Section 9 hereof, upon the expiration of the No Sale Escrow
      Period, the Escrow Agreement shall release the share certificates
      representing all the Executive

- 4 -

		
      Shares (then in escrow and vested) to the Executive and
      30% of the Vendor Shares to the Vendor without the need for Pubco’s prior
      consent.

	 	 	 
	9. 	
      Notwithstanding any other provision hereof, with respect
      to the Vendor Shares, to secure the IP Representations (as defined below)
      of the Vendor, 70% of the Vendor Shares (the "IP Escrow Shares")
      shall be held in escrow by the Escrow Agent pursuant to the terms hereof
      for a period of three years from the Closing (the "IP Escrow
      Period"). For further clarity, upon the second anniversary of the
      Closing, subject to Section 3 hereof, all the Executive Shares and 30% of
      the Vendor Shares shall be released by the Escrow Agent to the Executive
      and the Vendor, respectively, regardless of any claim on the IP
      Representations, and the remaining Vendor Shares shall be released in
      accordance with the escrow provisions set out below.

	 	 	 
	10. 	
      Each of Pubco and the Vendor agrees and acknowledges that
      the IP Escrow Shares held by the Escrow Agent may not be sold, pledged or
      optioned during the IP Escrow Period and are to be held in escrow for the
      sole and exclusive security of Pubco in respect of any breach of the IP
      Representations. For further certainty, each of Pubco and the Vendor
      agrees and acknowledges that other than a claim in respect of the IP
      Escrow Shares as set out below, Pubco shall have no demand, right, cause
      of action or remedy against the Vendor or its permitted transferees,
      including its shareholders, beneficial owners, directors or other
      affiliates or their assets for the breach of any of the Vendor's
      representations or warranties contained herein Agreement or in any of the
      closing documents delivered by the Vendor in respect of the Sale
      Transactions.

	 	 	 
	11. 	
      While held in escrow, the Vendor and the Executive shall
      have voting rights for their Transaction Shares (but expressly including
      the Vesting Shares, even if not yet vested), and distributions of stock of
      Pubco made in respect to their respective Transaction Shares shall be
      distributed to the Escrow Agent to be held pursuant to the same terms and
      conditions the Escrow Agent holds the Transaction Shares on account of the
      Vendor and the Executive, respectively. All other distributions made in
      respect to Transaction Shares shall be distributed directly to the Vendor
      and the Executive, for their own account.

	 	 	 
	12. 	
      During the IP Escrow Period, if any third party files a
      claim against Pubco, or threatens in writing to sue Pubco (a "Third
      Party Claim"), alleging facts that evidence a breach of the IP
      Representations of the Vendor, Pubco shall be entitled to make a claim
      against the IP Escrow Shares, and recover damages from such Shares, as
      follows:

	 	 	 
		(a) 	
      Promptly after becoming aware of a Third Party Claim, and
      prior to expiration of the IP Escrow Period, Pubco shall notify the Vendor
      and/or Vendor shall notify Pubco and the Escrow Agent, in writing (an
      "Escrow Claim Notice"), specifying in reasonable detail the alleged
      breach of the IP Representations and the anticipated amount of damages
      resulting from such alleged breach plus anticipated reasonable costs of
      defence of such claim (the "Claimed Amount");

	 	 	 
		(b) 	
      If the Vendor does not, within 20 business days after
      receipt of an Escrow Claim Notice (the "Contest Period") contest
      such Escrow Claim Notice by notice in writing (the "Contention") to
      the Escrow Agent with a copy to Pubco, then within five business days
      thereafter, the Escrow Agent shall transfer to Pubco such number of IP
      Escrow Shares EQUAL TO: TWICE the Claimed
Amount

- 5 -

	 		
      DIVIDED by the average closing share price of the common
      shares of Pubco, as quoted on the Market or other exchange on which such
      shares are traded during the period of consecutive 21 trading days
      preceding the day of the delivery of the Escrow Notice (the "Average
      Price");

	 	 	 
	 	(c) 	
      If the Vendor delivers to the Escrow Agent the Contention
      within the Contest Period, the Escrow Agent shall hold such number of IP
      Escrow Shares EQUAL TO: the Claimed Amount DIVIDED by the Average Price,
      and shall release such number of IP Escrow Shares (to the Vendor or Pubco,
      as applicable) only pursuant to either: (i) a written notice signed by
      both Pubco and the Vendor (the "Resolution Notice"); or (ii) a
      final arbitration award, issued in accordance with the arbitration
      provisions below and instructing the Escrow Agent how to release such
      shares (an "Award Notice"). Within five business days after receipt
      of such Resolution Notice or Award Notice, as applicable, the Escrow Agent
      shall release to Pubco and/or Vendor the IP Escrow Shares held back by the
      Escrow Agent, as instructed;

	 	 	 
	 	(d) 	
      Within three business days after the expiration of the IP
      Escrow Period, the Escrow Agent shall release to the Vendor all IP Escrow
      Shares then held by the Escrow Agent. Notwithstanding the foregoing, in
      the event that certain IP Escrow Shares are subject at such time to a
      pending but unresolved IP Escrow Notice, as set forth in Section 12(c)
      hereof, and the Claimed Amount is quantified (as a specified dollar
      amount), then such number IP Escrow Shares as EQUALS twice the number that
      would result from the calculation as set out in Section 12(b) hereof
      (provided, however, that the determination of the average trading price
      shall commence at least three days after disclosure to the public of the
      pending claim) shall continue to be held in escrow until receipt by the
      Escrow Agent of a Resolution Notice or an Award Notice with respect
      thereto, as detailed in Section 12(c) hereof. If the Claimed Amount is not
      quantified, then all the IP Escrow Shares shall continue to be held in
      escrow until resolution as set forth in Section 12(c) hereof;

	 	 	 
	 	(e) 	
      Notwithstanding anything to the contrary herein: (i) no
      Escrow Claim Notice shall be given if the Claimed Amount (in aggregate
      with previous claims) does not exceed $20,000; and (ii) the recourse of
      Pubco to the IP Escrow Shares shall be its sole and exclusive remedy
      against the Vendor or the Executive in connection with this Agreement;
      and

	 	 	 
	 	(f) 	
      Further, Pubco shall allow Vendor to conduct and control
      the defence of any Third Party Claim, including the disposition of such
      Claim (including all decisions relative to litigation, appeal, and
      settlement), with attorneys of Vendor's choice. Pubco shall cooperate
      fully with the Vendor in such defence, and shall not admit any fact or
      liability, discuss or reach a settlement, or take any other action
      affecting the defence of such Third Party Claim in the absence of Vendor's
      prior written consent.

Part 4: Financing

	13. 	
      Pubco shall arrange a private placement with certain
      investors (the "Financiers") in the

- 6 -

		
      amount of $1,300,000 (the "Financing") of units
      (at the price of $1.00 per unit) consisting of one common share of Pubco
      (the "Financing Shares") and two whole warrants (with one warrant
      entitling the holder to purchase one common share of Pubco at $1.25 per
      share for a period of one year from the Closing and one warrant entitling
      the holder to purchase one common share of Pubco at $1.25 per share for a
      period of two years from the Closing) (the "Financing
      Warrants").

	 	 
	14. 	
      The Financing funds shall be used for working capital,
      product development and sales of the antibody markers.

	 	 
	15. 	
      All Financing Warrants (i.e. 2,600,000 warrants) and
      one-third of the aggregate number of Financing Shares (i.e. 433,333 common
      shares) shall be issued to and held in escrow by the Escrow Agent pursuant
      to the provisions of this Part 4, and released to the Financiers or to
      Pubco, as applicable, based on the provisions hereof (the "Securities
      Escrow").

	 	 
	16. 	
      Within eight months from the date on which the Company
      moves into its research facility after the Closing (the
      "Deadline"), Pubco shall use reasonable efforts to raise an
      additional amount of $950,000, to be used for development of the
      Intellectual Property Assets, either through the exercise of the Financing
      warrants or through an additional financing (the "Additional
      Financing").

	 	 
	17. 	
      Notwithstanding anything to the contrary herein, the
      Securities Escrow shall be subject to, and the Financing Warrants shall
      contain, the following terms:

	 	(a) 	
      The Financing Shares shall be restricted as to sale under
      United States securities laws and rules, and shall carry a restrictive
      legend indicating such restrictions.

	 	 	 
	 	(b) 	
      If Pubco achieves one of the Milestones (as defined
      below) prior to the Deadline, then the Financiers, on a pro rata basis,
      shall exercise warrants for at least $950,000 (i.e., at least 760,000
      warrants at $1.25 per common share) within 30 days after receipt of
      Pubco's written notice that it achieved such a Milestone (but not earlier
      than 90 days after the Closing). Provided that if the share price of the
      common shares of Pubco, as quoted on the Market (or other exchange on
      which the shares are traded) on the date Pubco achieves a Milestone, is
      less than $1.25 per share, then the directors of Pubco may, in their sole
      discretion, allow the Financiers to purchase, on a pro rata basis, common
      shares in the capital of Pubco at the then market price, in the aggregate
      amount of $950,000 without penalty as provided by Section 17(c) hereof.
      Each of the following shall be deemed a
  "Milestone":

	 	(i) 	
      sequencing of the variable region of the novel melanoma
      Mab and filing a patent for that Mab;

	 	 	 
	 	(ii) 	
      creating novel Mabs against breast cancer which react
      with at least three different breast cancer specimen (tissue or sera) and
      do not cross react with a negative control (e.g. normal tissue or serum);
      or

	 	 	 
	 	(iii) 	
      creating novel Mabs against colorectal cancer which react
      with at least three different colorectal cancer specimen (tissue or sera)
      and do not cross react with a negative control (e.g. normal tissue or
      serum).

- 7 -

	 	(c) 	
      In the event that a Financier defaults on its commitment
      to exercise its portion of such warrants per Section 17(b) hereof, then,
      without limiting the remedies of Pubco for such breach, all of its
      Financing Warrants held in escrow per Section 15 hereof shall immediately
      expire, and its Financing Shares held in escrow per Section 15 hereof
      above shall be immediately transferred to Pubco. With respect to any
      Financier who exercised warrants as required hereunder, the Escrow Agent
      shall release to such Financier its shares then held in Escrow.

	 	 	 
	 	(d) 	
      In the event that Pubco achieves a Milestone as per
      Section 17(b) hereof but does not raise the additional $950,000 as per
      Section 16 hereof, then, in addition to the provisions above, Pubco shall
      issue an additional 5,000,000 common shares to the Vendor and the
      Executive in a ratio as determined by them, for no additional
      consideration, or pro-rata if a lesser amount is raised.

	 	 	 
	 	(e) 	
      While in escrow, the Financiers shall have voting rights
      for the Financing Shares in escrow, and distributions of stock of Pubco
      made in respect of such shares shall be distributed to the Escrow Agent to
      be held pursuant to the same terms and conditions the Escrow Agent held
      the Financiers' Financing Shares. All other distributions made in respect
      of such Financing Shares shall be distributed directly to the
      Financiers.

Part 4: Closing and Definitive Agreements

	18. 	
      Subject to the conditions set out in this Agreement, the
      closing of the transactions contemplated herein (the "Closing")
      shall occur on or before January 30, 2008 or on such other date as the
      parties may agree, to be held at the City of Vancouver, Canada, at such
      place and time as the parties may agree. If the Closing does not occur on
      or prior to such date, neither party shall have any claim against the
      other, Pubco shall not have an interest in the Intellectual Property
      Assets and the Vendor and the Executive shall not have a claim to the
      Transaction Shares.

	 	 
	19. 	
      The parties agree to instruct their attorneys to
      co-operate and complete comprehensive and definitive agreements for the
      Sale Transactions upon completion of the 15 day due diligence period set
      out below. The definitive agreements shall contain terms and
      representations customary for agreements governing the purchase and sale
      of intellectual property, and representations governing the sale of
      publicly traded shares from affiliates to third parties, as prepared by
      commercial legal counsel of good reputation. In the event that any matter
      is not agreed, this Agreement shall remain in effect and shall govern the
      terms of the Sale Transactions.

Part 5: Due Diligence

	20. 	
      Each of Pubco, the Vendor and the Executive shall each
      have the right to conduct due diligence on the other parties hereto in
      connection with the transactions contemplated hereunder. Each of Pubco,
      the Vendor and the Executive and their respective accountants, legal
      counsel and other representatives shall have full access during normal
      business hours to the management, properties, books, records, contracts,
      commitments and other documents of the other and their subsidiaries in
      connection with the transactions contemplated herein. The due diligence
      period shall terminate 15 days after

- 8 -

execution of this letter agreement,
provided all relevant documents and information are provided in a timely
manner.

Part 6: Closing Conditions

	21. 	
      This Agreement and the completion of the transaction
      contemplated hereby are subject to the following conditions,
  namely:

	 	 	 
		(a) 	
      The Financing being closed, or the funds for the
      Financing being held in escrow solely pending the Closing;

	 	 	 
		(b) 	
      The Executive being appointed as Pubco’s Chief Executive
      Officer, effective on the Closing, on a full time basis, and shall be
      entitled to an annual base salary in the amount of 120% of the salary of
      Dr. Eli Orr from time to time, plus such benefits and bonuses as may be
      set out in the CEO Employment Agreement;

	 	 	 
		(c) 	
      Dr. Eli Orr, being appointed as Pubco’s Chief Technology
      Officer, effective on the Closing, on a full time basis, with an annual
      base salary in the amount of $140,000, plus such benefits and bonuses as
      may be set out in an employment agreement between Pubco and Dr. Eli Orr
      (the "CTO Employment Agreement"); provided, however, that the
      directors of Pubco shall make the necessary adjustments to such base
      salary as may be necessary to compensate for increases in the cost of
      living in the jurisdiction where the Company's research facility shall be
      located;

	 	 	 
		(d) 	
      The directors of Pubco delivering to Vendor and Executive
      a certificate, confirming that all of its representations and warranties
      contained herein and to be contained in the definitive agreements
      described above shall be true and correct at the Closing;

	 	 	 
		(e) 	
      The Vendor delivering to Pubco a certificate, confirming
      that all of his representations and warranties contained herein and to be
      contained in the definitive agreements described above shall be true and
      correct at the Closing;

	 	 	 
		(f) 	
      Each of Pubco, the Vendor and the Executive having
      completed their due diligence review pursuant to Section 20 hereof, in its
      sole and absolute discretion;

	 	 	 
		(g) 	
      One nominee of each of the Vendor and the Executive being
      appointed, effective on the Closing, to the board of directors of Pubco,
      and such directors constituting a majority of the board of
    directors;

	 	 	 
		(h) 	
      Pubco having delivered to the Vendor and the Executive a
      legal opinion of its counsel, in a form acceptable to the Vendor and the
      Executive, as to, among other things, the valid issuance of the
      Transaction Shares;

	 	 	 
		(i) 	
      The Vendor having delivered to Pubco a legal opinion of
      its counsel, in form and substance acceptable to Pubco, as to, among other
      things: (i) the due incorporation and existence of the Vendor; and (ii)
      the due performance by the Vendor of all corporate action required by the
      Vendor to bind itself under the agreements contemplating the due and
      absolute transfer of the Intellectual Property from the Vendor to
      Pubco;

- 9 -

	 	(j) 	
      Pubco and the Executive having entered into the CEO
      Employment Agreement at or before the Closing;

	 	 	 
	 	(k) 	
      Pubco and Dr. Eli Orr having entered into the CTO
      Employment Agreement at or before the Closing;

	 	 	 
	 	(l) 	
      The Executive having delivered to Pubco a "medallion
      guaranteed" Stock Power of Attorney in respect of the Vesting Shares;
      and

	 	 	 
	 	(m) 	
      The parties hereto having received all consents,
      approvals and authorizations, and taken any and all corporate action,
      necessary to consummate the Sale Transactions.

Part 7: IP Representations of the Vendor

	22. 	
      The Vendor represents and warrants to Pubco the following
      (the "IP Representations"):

	 	 	 
		(a) 	
      The Vendor has or on the Closing shall have the full
      power and authority to transfer or cause to be transferred the
      Intellectual Property Assets to Pubco, free and clear of any material
      charges, encumbrances, liens or claims;

	 	 	 
		(b) 	
      The Vendor has all property rights and interest in the
      Intellectual Property Assets and holds all interests in all aspects of the
      Intellectual Property Assets and the intellectual property involved, and
      the Intellectual Property Assets do not infringe upon the intellectual
      rights of any other party in such manner as to materially and adversely
      affect the business of Pubco; and

	 	 	 
		(c) 	
      The Intellectual Property Assets are all the intellectual
      property held or owned or controlled by the Vendor relating to the
      Technology.

Part 8: Representations of Pubco

	23. 	
      Pubco hereby represents and warrants to the Vendor and
      the Executive that, as of the date hereof and as of the Closing:

	 	 	 
		(a) 	
      Following the contemplated 20-for-1 forward split of its
      stock and the issuance of all units to the Financiers in connection with
      the Financing, Pubco’s fully diluted capital stock shall be as set forth
      in Section 5 hereof. Other than as set forth in Section 5 hereof, there
      are no outstanding options, warrants, rights or agreements, orally or in
      writing, to purchase or acquire from Pubco any capital stock, or any
      securities or rights convertible into or exchangeable for capital stock of
      Pubco;

	 	 	 
		(b) 	
      All common shares to be issued to the Vendor and the
      Executive shall, when issued in accordance with the provisions of this
      Agreement, be validly authorized, duly issued, fully paid and
      non-assessable;

	 	 	 
		(c) 	
      Pubco has timely filed all required forms, reports and
      documents with the Securities and Exchange Commission (the "SEC"),
      each of which has complied in all material respects with all applicable
      requirements of the Securities Act of 1933, as amended and the Securities
      Exchange Act of 1934, as amended and the rules and regulations promulgated
      thereunder. As of the time it was filed with the SEC and none of such
      documents and reports contained any untrue statement of
a

- 10 -

	 		
      material fact or omitted to state a material fact
      required to be stated therein or necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading. Pubco: (a) is compliant with all listing requirements of the
      Market; and (b) has received no communication from the SEC or the Market
      regarding their intention to suspend or de-list Pubco’s common shares from
      the Market; and Pubco is not aware of any events or circumstances that may
      bring to any of the events listed in (a) or (b) above;

	 	 	 
	 	(d) 	
      Pubco does not have any obligations or liabilities of any
      type or nature whatsoever, contingent or otherwise, known or unknown,
      except for professional fees incurred by Pubco in connection with the Sale
      Transactions, which fees shall not exceed $50,000; and

	 	 	 
	 	(e) 	
      Pubco has the absolute and unrestricted right, power and
      authority to enter into and perform its obligations under this Agreement
      and the execution, delivery and performance by Pubco of this Agreement
      have been duly authorized by all necessary action, corporate and
      otherwise, on the part of Pubco. This Agreement constitutes the legal,
      valid and binding obligation of Pubco, enforceable against it in
      accordance with its terms. No consent, approval, order or authorization
      of, or registration, qualification, designation, declaration or filing
      with, any governmental authority is required on the part of Pubco in
      connection with the Sale Transactions, except for filings pursuant to the
      Securities Act of 1933 (Unites States), as amended, and the rules and
      regulations promulgated thereunder, and applicable state securities laws,
      which have been made or shall be made prior to the
  Closing.

Part 9: Pre and Post Closing Covenants

	24. 	
      The parties hereby covenant as follows:

	 	 	 
		(a) 	
      Until the Closing, the Vendor shall conduct the business
      concerning the Intellectual Property Assets (the "Business") in the
      same manner such Business was conducted to date; and

	 	 	 
		(b) 	
      The Vendor acknowledges that Pubco shall be required to
      provide substantial disclosure about the Business and its management to
      the SEC, and it agrees to fully co-operate to provide in a timely manner
      such information and disclosure about the Intellectual Property Assets and
      Business as Pubco’s legal counsel and auditors may reasonably request in
      order to comply with such legal requirements.

Part 10: Binding Agreement

	25. 	
      Upon acceptance of the terms of this Agreement by all of
      the parties hereto, the terms of this Agreement shall be a legally valid
      and binding agreement. For further certainty, this Agreement sets out the
      entire agreement between the parties hereto with respect to the subject
      matter hereof and supersedes any previous or contemporaneous oral or
      written agreements and understandings regarding such subject
  matter.

	 	 
	26. 	
      Upon the execution of this Agreement by both the Vendor
      and the Executive, Pubco shall pay to the Executive the amount of $10,000,
      which shall be used by the Executive and the

- 11 -

Vendor primarily for the purpose of
exploring potential sites for the operation of Pubco's business after the
Closing. At the Closing, Pubco shall cover the reasonable out of pocket expenses
(but expressly excluding any personal or corporate income tax) incurred by the
Vendor and the Executive in connection with the Sale Transactions. 

Part 11: General

	27. 	
      This Agreement shall be governed by and construed in
      accordance with the laws of the State of New York.

	 	 
	28. 	
      Should there be a disagreement or a dispute between the
      parties hereto with respect to this Agreement or the interpretation
      thereof, the same shall be referred to a single arbitrator who is a member
      of the American Arbitration Association whose identity shall be acceptable
      to both parties, and the determination of such arbitrator shall be final
      and binding upon the parties. The Arbitration shall be conducted in
      compliance with the rules of the American Arbitration Association and
      shall take place in New York, New York.

	 	 
	29. 	
      All dollar references herein are to United States
      dollars.

	 	 
	30. 	
      Time shall be of the essence hereof.

	 	 
	31. 	
      This Agreement may be executed in several counterparts
      and by facsimile, each of which will be deemed to be an original and all
      of which will together constitute one and the same
  instrument.

[Intentionally left blank; Signature Page follows] 

- 12 -

If the foregoing correctly sets out the terms of our agreement,
please execute this letter in the space provided. 

 

SMARTEC HOLDINGS INC. 

 

Per: /s/ Yapp Moi Lee

        Authorized Signatory 

AGREED TO AND ACCEPTED THIS 10th DAY OF JANUARY, 2008. 

 

INDIGOLEAF ASSOCIATES LTD. 

 

Per: /s/ Elisha
Orr 
        Authorized
Signatory 

	SIGNED, SEALED and DELIVERED by 	) 	  
	DR. AMNON GONENNE in the presence 	) 	  
	of: 	) 	  
	  	) 	  
	/s/ Dr. Raphael Yahel 	) 	  
	Signature 	) 	/s/ Dr. Amnon Gonenne 
	Dr. Raphael Yahel 	) 	DR. AMNON GONENNE 
	Print Name 	) 	  
	50 Burla Str 	) 	  
	Address 	) 	  
	Tel-Aviv, Israel 	) 	  
	  	) 	  
	Scientist 	) 	  
	Occupation 	  	  

SCHEDULE "A" 

Intellectual Property Assets 

The Intellectual Property Assets sold and transferred to Pubco
  hereunder shall include:

	(1) 	
      All laboratory records relating to Intellectual Property
      Assets, from any person or persons, including, but not limited to,
      laboratory notebooks, supporting materials, all experiments including
      protocols and testing results, and all other scientific and related notes
      and records.

	 	 	 
	(2) 	
      All laboratory records as described in Item (1) above,
      data, descriptions and materials, whether in written, audio, audio visual,
      CD, or any other medium relating to Intellectual Property
Assets.

	 	 	 
	(3) 	
      All developed or otherwise derived antibodies, all
      relevant knowhow to create such antibodies, any hybridomas, any other
      derivations, in whatever format relating to Intellectual Property
      Assets.

	 	 	 
	(4) 	
      All storage and related equipment owned containing any
      items described in Item (3) above.

	 	 	 
	(5) 	
      A record, in whatever form, listing or describing, in
      detail, approximately 5,000 "hybridoma libraries", which produce
      antibodies to any and all cancers, or other disease states, human or
      animal, including but not limited to, melanoma, ovarian carcinoma and
      prostate carcinoma.

	 	 	 
	(6) 	
      Specific developments, documented or otherwise,
      pertaining to "cancer-specific Mabs" including:

	 	 	 
		(A) 	
      A hybridoma (Mel 260) producing specific anti-melanoma
      antibody that is universal to all melanomas tested to date.

	 	 	 
		(B) 	
      Two screened hybridomas producing antibodies specific to
      prostate carcinoma.

	 	 	 
		(C) 	
      Two screened hybridomas producing antibodies specific to
      ovarian carcinomas.

	 	 	 
	(7) 	
      Any and all test data, results, clinical outcomes,
      in-vitro or otherwise, resulting from data or results obtained in Item (6)
      above, or any other results obtained from Intellectual Property Assets.
      This, to specifically include results obtained from the use of the
      antibodies described above for screening (OVCA) and histopathology of
      clinical specimens (skin and ocular melanoma).

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