Document:

Stock Option Plan

QMI SEISMIC INC.

STOCK OPTION PLAN

PART 1

INTERPRETATION

1.01

Definitions.  In this Plan the following words and phrases shall have the following meanings, namely:

(a)

"Associate" means, where used to indicate a relationship with any person:

(i)

a partner, other than a limited partner, of that person;

(ii)

a trust or estate in which that person has a substantial beneficial interest or for which that person serves as trustee or in a similar capacity;

(iii)

a company in respect of which that person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the company; or

(iv)

a relative, including the spouse or child, of that person or a relative of that person’s spouse, where the relative has the same home as that person;

and for the purpose of this definition, "spouse" includes an individual who is living with another individual in a marriage-like relationship.

(b)

"Board" means the Board of Directors of the Company.

(c)

"Committee" means a committee of the Board appointed in accordance with this Plan or, if no such committee is appointed, the Board itself.

(d)

"Company" means QMI Seismic Inc., and any successor company thereto as provided in this Plan.

(e)

"Consultant" means, in relation to the Company, an individual (or a company wholly-owned by an individual) who:

(i)

provides ongoing consulting services to the Company or an affiliate of the Company under a written contract;

(ii)

possesses technical, business or management expertise of value to the Company or an affiliate of the Company;

(iii)

spends a significant amount of time and attention on the business and affairs of the Company or an affiliate of the Company; and

(iv)

has a relationship with the Company or an affiliate of the Company that enables the individual to be knowledgeable about the business and affairs of the Company.

(f)

"Director" means any director of the Company or of any of its subsidiaries.

(g)

"Discounted Market Price" means the Market Price less the discount set forth below, subject to a minimum price of $0.10:

Closing Price

Discount

up to $0.50

    25%

$0.51 to $2.00

    20%

above $2.00

    15%

(h)

"Disinterested Shareholder Approval" means that the proposal must be approved by a majority of the votes cast at the shareholders’ meeting other than votes attaching to securities beneficially owned by Insiders and their Associates to whom shares may be issued pursuant to this Plan and, for purposes of this Plan, holders of non-voting and subordinate voting securities (if any) will be given full voting rights on a resolution which requires disinterested shareholder approval.

(i)

"Employee" means:

(i)

an individual who is considered an employee of the Company or any of its subsidiaries under the Income Tax Act (i.e. for whom deductions (income tax, UIC and CPP) must be made at source);

(ii)

an individual who is a full-time (i.e. 35 - 40 hours per week) dependent contractor, that is one who works full-time for the Company or any of its subsidiaries providing services normally provided by an employee and is subject to the same control and direction by the Company or its subsidiary over the detail and methods of work as an employee of the Company or its subsidiary, but for whom income tax deductions are not made at source; or

(iii)

a part-time dependent contractor, that is an individual who works for the Company or any of its subsidiaries on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and is subject to the same control and direction by the Company or its subsidiary over the details and methods of work as an employee of the Company or its subsidiary, but for whom income tax deductions are not made at source;

and includes Management Company Employees and Consultants.

(j)

"Exchange" means the Canadian Trading and Quotation System Inc., or such other Canadian stock exchange on which the Shares are listed for trading.

(k)

"Insider" means:

(i)

a director or senior officer of the Company;

(ii)

a director or senior officer of a person that is itself an insider or subsidiary of the Company; or

(iii)

a person that beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the Company; or

(iv)

the Company itself if it holds any of its own securities.

(l )

"Management Company Employee" means an individual employed by a person  providing management services to the Company, which are required for the ongoing successful operation of the business enterprise of the Company, but excluding a person engaged in investor relations activities.

(m)

"Market Price" means, subject to the exceptions prescribed by the Exchange from time to time, the last closing price of the Company’s shares before the issuance of the required news release  disclosing the grant of options (but, if the policies of the Exchange provide an exception to such news release, then the last closing price of the Company’s shares before the grant of options).

(n)

"Officer" means any senior officer of the Company or of any of its subsidiaries as defined in the Securities Act (British Columbia).

(o)

"Plan" means this stock option plan as from time to time amended.

(p)

"Shares" means common shares without par value in the capital of the Company.

1.02

Gender.  Throughout this Plan, words importing the masculine gender shall be interpreted as including the female gender.

PART 2

PURPOSE OF PLAN

i.i.1

Purpose.  The purpose of this Plan is to provide incentive to Employees, Officers, Directors, Management Company Employee and Consultants who provide services to the Company and reduce the cash compensation the Company would otherwise have to pay.  

PART 3

GRANTING OF OPTIONS

3.01

Administration.  This Plan shall be administered by the Board or, if the Board so elects, by a committee (consisting of not less than two (2) of its members) appointed by the Board. Any Committee shall administer the Plan on behalf of the Board in accordance with such terms and conditions as the Board may prescribe, consistent with this Plan.  Once appointed, the Committee shall continue to serve until otherwise directed by the Board.  From time to time, the Board may increase the size of the Committee and appoint additional members, remove members (with or without cause) and either appoint new members in their place or decrease the size of the Committee, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer the Plan.  A majority of the members of the Committee shall constitute a quorum, and, subject to the limitations in this Part 3, all actions of the Committee shall require the affirmative vote of members who constitute a majority of such quorum.  Members of the Committee may vote on any matters affecting the administration of the Plan or the grant of options pursuant to the Plan, except that no such member shall act upon the granting of an option to himself (but any such member may be counted in determining the existence of a quorum at any meeting of the Committee during which action is taken with respect to granting options to him).

3.02

Committee's Recommendations.  The Board may accept all or any part of the recommendations of the Committee or may refer all or any part thereof back to the Committee for further consideration and recommendation.  Such recommendations may include, but not be limited to, the following:

(a)

resolution of questions arising in respect of the administration, interpretation and application of the Plan;

(b)

reconciliation of any inconsistency or defect in the Plan in such manner and to such extent as shall reasonably be deemed necessary or advisable to carry out the purpose of the Plan;

(c)

determination of the Employees, Officers and Directors (or their wholly-owned corporations) to whom, and when, options should be granted, as well as the number of Shares subject to each option;

(d)

determination of the terms and conditions of the option agreement to be entered into with any optionee, consistent with this Plan; and

(e)

determination of the duration and purpose of leaves of absence from employment which may be granted to optionees without constituting a termination of employment for purposes of the Plan.

3.03

Grant by Resolution.  The Board, on its own initiative or, if a Committee of the Board shall have been appointed for the purpose of administering this Plan, upon the recommendation of such Committee, may by resolution designate those Employees, Consultants, Officers and  Directors to whom options should be granted.

3.04

Terms of Options.  The resolution of the Board shall specify the number of Shares that should be placed under option to each optionee, the price per Share to be paid upon exercise of the options, and the period during which such options may be exercised. The terms of an option may not be amended once issued under Exchange requirements. If an option is cancelled prior to the Expiry date, the Company shall not grant new options to the same individual within 30 days from the date of cancellation.

3.05

Written Agreements.  Every option granted under this Plan shall be evidenced by a written agreement between the Company and the optionee and, where not expressly set out in the agreement, the provisions of such agreement shall conform to and be governed by this Plan.  In the event of any inconsistency between the terms of the agreement and this Plan, the terms of this Plan shall govern.  

3.06

Regulatory Approvals.  The Board shall obtain all necessary regulatory approvals, which may be required under applicable securities laws or the rules or policies of the Exchange.  The Board shall also take reasonable steps to ensure that no options granted under the Plan, or the exercise thereof, shall violate the securities laws of the jurisdiction in which any optionee resides.

PART 4

CONDITIONS GOVERNING THE GRANTING AND EXERCISING OF OPTIONS

4.01

Exercise Price.  The exercise price of an option granted under this Plan is determined by the Board of Directors provided that it is not less than the price permitted by the Exchange. 

4.02

Expiry Date.  Each option shall, unless sooner terminated, expire on a date to be determined by the Board which will not be later than 5 years from the day the option is granted.

4.03

Different Exercise Periods, Prices and Number. The Board may, in its absolute  discretion, upon granting options under this Plan, specify different time periods following the dates of granting the options during which the optionees may exercise their options to purchase Shares and may designate different exercise prices and numbers of Shares in respect of which each optionee may exercise his option during each respective time period.

4.04

Number of Shares.  The number of Shares reserved for issuance to any one person pursuant to options granted under this Plan, together with any Shares reserved for issuance pursuant to options granted to that person during the previous 12 months, shall not exceed 5% of the issued and outstanding Shares at the time of granting of the options, provided that the aggregate number of options granted to each of the following categories of optionee:

(a)

Consultants; and

(b)

persons employed in investor relations activities on behalf of the Company;

must not exceed 2% of the outstanding Shares at the time of grant unless the Exchange permits otherwise.

4.05

Death of Optionee.  If an optionee dies prior to the expiry of his option, his legal representatives may, by the earlier of:

(a)

one year from the date of the optionee’s death (or such lesser period as may be specified by the Board at the time of granting the option); and

(b)

the expiry date of the option;

exercise any portion of such option.

a.vi

Expiry on Termination or Cessation.  If an optionee ceases to be a director, officer, consultant, employee of the Corporation or its subsidiaries, or a Management Company Employee for any reason (other than death), he may exercise his option to the extent that he was entitled to exercise it at the date of such cessation, but only within 90 days after his ceasing to be a director, officer, consultant, employee or a Management Company Employee, unless such optionee was engaged in investor relations activities in which case, only within 30 days after the cessation of his services to the Corporation.

If an optionee ceases to be a director, officer, consultant, employee of the Corporation or its subsidiaries, or a Management Company Employee on account of cause, or terminated by regulatory sanction or by reason of judicial order, the options terminate immediately.

Nothing contained in the Plan, nor in any option granted pursuant to the Plan, shall as such confer upon any optionee any right with respect to continuance as a director, officer, consultant, employee or Management Company Employee of the Corporation or of any of its subsidiaries or affiliates.

4.07

Leave of Absence.  Employment shall be deemed to continue intact during any sick leave or other bona fide leave of absence if the period of such leave does not exceed 90 days or, if longer, for so long as the optionee’s right to reemployment is guaranteed either by statute or by contract.  If the period of such leave exceeds 90 days and the optionee’s reemployment is not so guaranteed, then his employment shall be deemed to have terminated on the ninety-first day of such leave.

4.08

Assignment.  No option granted under this Plan or any right thereunder or in respect thereof shall be transferable or assignable otherwise than by will or pursuant to the laws of succession except that, if permitted by the rules and policies of the Exchange, an optionee shall have the right to assign any option granted to him hereunder to a trust or similar legal entity established by such optionee.

4.09

Notice.  Options shall be exercised only in accordance with the terms and conditions of the agreements under which they are respectively granted and shall be exercisable only by notice in writing to the Company at its principal place of business.

4.10

Payment.  Subject to any vesting requirements described in each individual option agreement, options may be exercised in whole or in part at any time prior to their lapse or termination.  Shares purchased by an optionee on exercise of an option shall be paid for in full at the time of their purchase (i.e. concurrently with the giving of the requisite notice).

a.11

 Share Certificate.  As soon as practicable after due exercise of an option, the Company shall issue a share certificate evidencing the Shares with respect to which the option has been exercised.  Until the issuance of such share certificate, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to such Shares, notwithstanding the exercise of the option.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the share certificate is issued, except as provided in Part 6 hereof.

4.12

Vesting.  Vesting, if any, and other terms and conditions relating to such options shall be determined by the Board or the Committee in accordance with Exchange requirements. 

4.13

Bona Fide Optionee.

Each individual option agreement providing for the grant of options under this Plan to an Employee, Consultant or Management Company Employee will contain a representation by the Company that the optionee is a bona fide Employee, Consultant or Management Company Employee, as the case may be, of the Company or of a subsidiary of the Company.

PART 5

RESERVE OF SHARES FOR OPTIONS

5.01

Maximum Number of Shares Reserved Under Plan.  The aggregate number of Shares which may be subject to issuance pursuant to options granted under this Plan shall not exceed 10% of the issued and outstanding shares of the Company from time to time at the date of grant (including all options granted by the Company prior to the adoption of the Plan).  This number is subject to adjustment in accordance with Part 6 hereof.  In addition, all options granted outside of this Plan, which are in existence on the effective date of this Plan, shall be counted as if granted under this Plan.  The terms of this Plan shall govern such pre-existing options.

If any option granted under this Plan is exercised or expires or otherwise terminates for any reason, the number of Shares in respect of which the option is exercised or expired or terminated shall again be available for the purposes of the Plan.

5.02

Sufficient Authorized Shares to be Reserved.  Whenever the Memorandum or Articles of the Company limit the number of authorized Shares, a sufficient number of Shares shall be reserved by the Board to satisfy the exercise of options granted under this Plan or otherwise.  Shares that were the subject of options that have lapsed or terminated without having been exercised shall thereupon no longer be in reserve and may once again be subject to an option granted under this Plan.

5.03

Disinterested Shareholder Approval.  Unless Disinterested Shareholder Approval is obtained, under no circumstances shall this Plan, together with all of the Company’s other previously established or proposed stock options, stock option plans, employee stock purchase plans or any other compensation or incentive mechanisms involving the issuance or potential issuance of Shares, result in or allow at any time:

(a)

the number of Shares reserved for issuance pursuant to options granted to Insiders exceeding 10% of the outstanding Shares at the time of granting the options;

(b)

the issuance to Insiders, within a one year period, of a number of Shares exceeding 10% of the outstanding Shares at the time of granting the options; or

(a)

the issuance to any one Insider and such Insider’s Associates, within a one year period, of a number of Shares exceeding 5% of the outstanding Shares at the time of granting the options; or

(d)

any reduction in the exercise price of options granted to any person who is an  Insider at the time of the proposed reduction. 

PART 6

CHANGES IN SHARES

6.01

Share Consolidation or Subdivision.  In the event that the Shares are at any time subdivided or consolidated, the number of Shares reserved for option and the price payable for any Shares that are then subject to option shall be adjusted accordingly.

6.02

Stock Dividend.  In the event that the Shares are at any time changed as a result of the declaration of a stock dividend thereon, the number of Shares reserved for option and the price payable for any Shares that are then subject to option may be adjusted by the Board to such extent as they deem proper in their absolute discretion.

6.03

Reorganization.  Subject to any required action by its shareholders, if the Company shall be a party to an reorganization, merger, dissolution or sale or lease of all or substantially all of its assets, whether or not the Company is the surviving entity, the option shall be adjusted so as to apply to the securities to which the holder of the number of shares of capital stock of the Company subject to the option would have been entitled by reason of such reorganization, merger or sale or lease of all or substantially all of its assets, provided however that the Company may satisfy any obligations to an optionee hereunder by paying to the said optionee in cash the difference between the exercise price of all unexercised options granted hereunder and the fair market value of the securities to which the optionee would be entitled upon exercise of all unexercised options, regardless of whether all conditions of exercise relating to continuous employment have been satisfied.  Adjustments under this paragraph or any determinations as to the fair market value of any securities shall be made by the Board, or any committee thereof specifically designated by the Board to be responsible therefor, and any reasonable determination made by the said Board or committee thereof shall be binding and conclusive.

6.04

Rights Offering.  If at any time the Company grants to the holders of its capital stock rights to subscribe for and purchase pro rata additional securities of the Company or of any other corporation or entity, there shall be no adjustments made to the number of shares or other securities subject to the option in consequence thereof and the said stock option of the optionee shall remain unaffected.

PART 7

EXCHANGE RULES AND POLICIES APPLY

7.01

Exchange Rules and Policies Apply.  This Plan and the granting and exercise of any options hereunder are also subject to such other terms and conditions as are set out from time to time in the rules and policies on stock options of the Exchange and any securities commission having jurisdiction and such rules and policies shall be deemed to be incorporated into and become a part of this Plan. In the event of an inconsistency between the provisions of such rules and policies and of this Plan, the provisions of such rules and policies shall govern.

PART 8

AMENDMENT OF PLAN

8.01

Board May Amend.  Subject to the requirements for shareholder approval pursuant Section 5.03, the Board may, by resolution, amend or terminate this Plan, but no such amendment or termination shall, except with the written consent of the optionees concerned, affect the terms and conditions of options previously granted under this Plan which have not then been exercised or terminated.

PART 9

MISCELLANEOUS PROVISIONS

9.01

Effective Date of Plan.  This Plan was adopted by the Board of Directors and became effective on November 4, 2009.

9.03

Use of Proceeds.  Proceeds from the sale of Shares pursuant to the options granted and exercised under the Plan shall constitute general funds of the Company and shall be used for general corporate purposes.

9.04

Headings.  The headings used in this Plan are for convenience of reference only and shall not in any way affect or be used in interpreting any of the provisions of this Plan.

9.05

No Obligation to Exercise.  Optionees shall be under no obligation to exercise options granted under this Plan.CO-OWNERS_ AGREEMENT [FP 250]

SHARE ACQUISITION AGREEMENT

THIS AGREEMENT made as of the 28th day of July, 2010  

BETWEEN:

QMI MANUFACTURING INC. (Incorporation No.: BC0734167) a company duly incorporated under the laws of the Province of British Columbia, with its registered and records office situated at #202 – 2963 Glen Drive, Coquitlam, B.C., V3B 2P7

(hereinafter called “QMAN”)

AND:

QMI TECHNOLOGIES INC., (Incorporation No.: BC0854286)  a company duly incorporated under the laws of the Province of British Columbia, with its registered and records office situated at #202 – 2963 Glen Drive, Coquitlam, B.C., V3B 2P7

(hereinafter called “QTECH”)

AND:

QMI SEISMIC INC., a public company duly incorporated under the laws of the Province of British Columbia, with its registered and records office situated at 1250 West Hastings Street, Vancouver, B.C. V6E 2M4

(hereinafter called “QSeismic”)

AND:

RAYMOND WOOD an individual residing at #202 – 2963 Glen Drive, Coquitlam, B.C.  V3B 2P7

(hereinafter the “Covenantor”)

WHEREAS:

A.

QSeismic is a publicly listed company with shares trading on the CNSX.  All information regarding QSeismic is available at www.sedar.com.  

B.

QMAN is a private company and QTECH is its wholly owned subsidiary;

C.

On July 1, 2010, the Covenantor, the beneficial owner of certain patented sensor and detection technology (as set out in Schedule A hereto) transferred all such patents to QTech in exchange for certain consideration set out in an Asset Purchase Agreement dated July 1, 2010 (the “Asset Purchase Agreement”) which Asset Purchase Agreement is set out as Schedule E attached hereto;

D.

On July 1, 2010, QMAN, transferred substantially all of its Assets to QTECH in exchange for 20,400,001 Common Shares of QTECH, being all of the issued and outstanding shares of QTECH, all pursuant to the Asset Purchase Agreement;

Exhibit 4.6 – Page 1

E.

QSeismic wishes to purchase all of the issued and outstanding shares of QTECH from QMAN in exchange for the consideration set out in Section 2 of this Agreement.

WITNESSES that in consideration of the covenants and agreements set forth, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties covenant and agree as follows:

1.

INTERPRETATION

1.1

Defined Terms

In this Agreement and in the Schedules attached hereto, unless there is something in the subject matter or context inconsistent therewith, the following words and terms will have the indicated meanings and grammatical variations of such words and terms will have corresponding meanings:

(a)

“Assets” means collectively all the tangible personal property of QMAN, including but not limited to the furniture, fixtures, machinery, equipment and tools of QMAN as set out in Schedule B attached hereto; inventory as set out in Schedule C attached hereto; all right title and interest of QMAN under any leases of personal property and equipment; all contracts QMAN has an interest in, as set out in Schedule D attached hereto (the “Contracts”), including without limitation the agreement between QMAN and Draka Elevator Products Inc. (“Draka”) whereby Draka has exclusive marketing rights for QMAN’s Seismic Product 2500 and the agreement between QMAN and QMI Seismic Inc. whereby QMAN has granted to QMI Seismic Ltd., a licence to market and distribute certain products developed using the Intellectual Property in India; the Premises Lease; the QMAN Intellectual Property; telephone numbers and listing insurance policies, trade accounts receivable (“Accounts”), promissory notes arising from Accounts; all causes of actions related to the Assets; customer lists, goodwill and other intangible property related to QMAN’s business but excluding (i) cash on hand; (ii) any accounting related books and records whether written or electronically recorded; (iii) causes of action not related to the Assets; (iv) contingent and unliquidated claims of every nature including tax refunds; (v) deposits; (vi) any personal property subject to any security interest of a third party.

(b)

“Business Day” means any day other than a day that is a Saturday, Sunday or statutory holiday in British Columbia;

(c)

“Contracts” means all contracts QMAN has an interest in, as set out in Schedule D attached hereto, including without limitation the agreement between QMAN and Draka Elevator Products Inc. (“Draka”) whereby Draka has exclusive marketing rights for QMAN’s Seismic Product 2500 and the agreement between QMAN and QMI Seismic Inc. whereby QMAN has granted to QMI Seismic Ltd., a licence to market and distribute certain products developed using the Intellectual Property in India;

(d)

 “Governmental Body” means any domestic or foreign arbitrator, court, administrative or regulatory agency, commission, department, board or bureau or body or other government or authority or instrumentality or any entity or person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government;

(e)

“Innovations” means any and all trade-marks, trade names, logos, industrial designs, trade secrets, processes, formulae, data, specialized know-how, improvements, innovations (whether patented or not) and specialized techniques developed or produced by the QMAN 

Exhibit 4.6 – Page 2

and or Wood that are derived in part or whole from the Intellectual Property and the QMAN Intellectual Property;

(f)

“Intellectual Property” means certain sensor detection technology which has been patented or for which there are pending patents all of which are set out in Schedule “A” attached hereto; 

(g)

“Intellectual Property Rights” means all right, title and interest of Wood in and to all rights or protections existing from time to time in a specific jurisdiction, whether registered or not, under any patent law or other invention or discovery law, copyright law, publicity, performance or moral rights law, trade-secret law, confidential information law, integrated circuit topography law, semi-conductor chip protection law, industrial design law, trade-mark law, unfair competition or trade practices law, or other similar laws and includes legislation by competent governmental authorities and judicial decisions under common law or equity as used in or relating to the Intellectual Property and all applications derived therefrom, including all Patent Rights, Trade-marks and Technical Information and including all prototypes; 

(h)

“Licence” means the exclusive licence granted by Wood to QMAN to use the Patents, a copy of which is attached hereto as Schedule “J”;   

(i)

 “Patent Rights” means all patents and inventions relating to the Intellectual Property and attached hereto as Schedule A and all applications and innovations derived therefrom, and pending applications thereon, and patents which may be issued out of pending applications (including divisions, reissues, renewals, re-examinations, continuations, continuations-in-part, patent term restoration and extensions), which may be applied for or registered in any jurisdiction, or licensed to Wood; 

(j)

 “QMAN Intellectual Property” means all rights of QMAN under the Licence, and without limitation, all trademarks, tradenames, licence and service marks as well as all approvals, certification and comments from Canadian Standards Association, Underwriters Laboratories of Canada and United States Consumer Products Safety Commission, set out attached hereto Schedule J, and any and all Innovations; 

(k)

“QMAN Intellectual Property Rights” means all right, title and interest of QMAN in and to all rights or protections existing from time to time in a specific jurisdiction, whether registered or not, under any patent law or other invention or discovery law, copyright law, publicity, performance or moral rights law, trade-secret law, confidential information law, integrated circuit topography law, semi-conductor chip protection law, industrial design law, trade-mark law, unfair competition or trade practices law, or other similar laws and includes legislation by competent governmental authorities and judicial decisions under common law or equity as used in or relating to the Intellectual Property and all applications derived therefrom, including all patent rights, Trade-marks and Technical Information and including all prototypes;

(l)

“Technical Information” means all know-how and related technical knowledge proprietary to or licensed to Wood and/or QMAN relating to the Intellectual Property  and the QMAN Intellectual Property, respectively, as the case may be, and any applications derived therefrom, including, without limitation:

(i)

all trade secrets, confidential information and information with respect to inventions;

Exhibit 4.6 – Page 3

(ii)

all information of a scientific, technical or business nature, regardless of its form;

(iii)

all documentation with respect to research, development, demonstration or engineering work;

(iv)

all information that can be or is used to define a design or process, or to procure, produce, support or operate materials or equipment;

(v)

all information regarding methods of production; and 

(vi)

all other drawings, blueprints, patterns, plans, flow charts, equipment parts lists, computer software and procedures, source and object code, specifications, formulas, designs, technical data, descriptions, related instruction manuals, records and procedures; and without limitation all documentation with respect to the design, fabrication, modification, operation, sale and support of the Intellectual Property to customers;

(m)

“Trade-marks” means the trade-marks, trade names, designs, logos and other commercial symbols, whether registered or not, which are owned by Wood and/or QMAN relating to the Intellectual Property and the QMAN Intellectual Property, respectively, as the case may be, and all applications derived therefrom, including, without limitation, all common law rights thereto and the goodwill of Wood and/or QMAN as case may be, as symbolized by the trade-marks, trade names, designs, logos and other commercial symbols.

1.2

Schedules

The following Schedules to this Agreement are incorporated herein and form part of this Agreement:

A.

Patents

B.

Tangible Assets

C.

Inventory

D.

Contracts

E.

Asset Purchase Agreement

F.

Financial Statement (prepared for audit)

G.

Proforma

H.

Key Staff Employee Summary

I.

QMAN Intellectual Property (including certifications)

J.

Licence

2.

Purchase of Shares of QMI Technologies Inc.

2.1

Purchase and Sale.  Subject to the terms and conditions of this Agreement, QSeismic agrees to purchase and QMAN agrees to sell 20,400,001 common shares of QTECH (the “Common Shares”);

2.2

Consideration.  In consideration for the sale of the Common Shares from QMAN to QSeismic, QSeismic shall issue to QMAN 20,400,001 Common Shares of QSeismic from treasury.  All such shares of QSeismic when issued shall be fully paid and non-assessable.

Exhibit 4.6 – Page 4

2.3

Resale Restrictions.  QMAN and QSeismic wish to impose certain resale restrictions on the Common Shares as provided herein.

2.3.1

QMAN shall not sell, contract to sell, grant any option to purchase, transfer any economic interest in, or legal or equity title to, pledge,, encumber, hypothecate, or otherwise transfer or dispose of all or any portion of the Common Shares until the Common Shares have been released from the Resale Restrictions.

2.3.2

The Resale Restrictions in respect of the Common Shares shall lapse and such shares shall become free of the restrictions imposed by this Agreement in accordance with the schedule set forth and enforced by a legend placed upon any certificate(s) evidencing ownership of such Common Shares:

Shares

Release Date from date of Closing

2,040,000

7 months + 1 day 

2,040,000

10 months + 1 day

2,040,000

13 months + 1 day

14,280,001

16 months + 1 day 

2.4

Board and Regulatory Approval.  The purchase and sale of the Common Shares by QSeismic and the issuance of 20,400,001 Common Shares of QSeismic is conditional on and subject to the approval of the Canadian National Stock Exchange (“CNSX”), the Board of Directors of QSeismic and any applicable securities regulatory authority.

2.5

Consideration Common Shares to be delivered in stages.  Until such time as counsel for QSeismic receives satisfactory due diligence searches from Canada Revenue Agency, in respect of there being no Goods and Services Tax, withholding tax or any income taxes owing by QMAN, QSeismic shall be entitled to withhold 15% of the 20,400,001 Common Shares in escrow being 3,060,000 Common Shares (the “Escrowed Shares”).

2.5.1

If satisfactory due diligence searches are not received, and there are outstanding liabilities to Canada Revenue Agency, QSeismic may liquidate the Escrowed Shares to the extent necessary to satisfy the outstanding Canada Revenue Agency liabilities.

3.

Representations and Warranties

3.1

Representations and Warranties. QMAN hereby represents and warrants as follows:

(a)

QMAN has full right, power and authority to enter into and carry out this Agreement and has been and is on the date of this Agreement duly authorized by all necessary and appropriate corporate or other action to execute this Agreement;

(b)

QMAN has no prior commitment; arrangements or agreements with any other person which might interfere with or preclude the carrying out of its obligations under this agreement save and except the India License and Draka License, as set out in definition of Assets herein; 

(c)

QTECH was incorporated on  June 12, 2009 is a validly subsisting Company, and is in good standing with respect to the filing all annual reports;

(d)

QMAN is the legal and beneficial owner of the Common Shares and has good and marketable title to the Common Shares free and clear of all mortgages, liens, pledges, security interests, encumbrances or other loans whatsoever;

Exhibit 4.6 – Page 5

(e)

No other Purchase Agreements.  No person has any agreement, option, understanding or commitment, or any right or privilege (whether by law, pre-emptive or contracted) capable of being an agreement, option or commitment for the purchase or other acquisition of the Commons Shares, or any right or interest therein;

(f)

Corporate Authority and Binding Obligation.  QMAN is a corporation duly incorporated and validly subsisting under the laws of the Province of British Columbia.  QMAN has good right and full corporate power and capacity to enter into this Agreement and to perform its obligations under this Agreement.  The board of directors of QMAN has taken all necessary actions, steps and corporate and other proceedings to approve or authorize, validly and effectively, the entering into of, and the execution, delivery and performance of, this Agreement by QMAN.  

(g)

This Agreement is a legal, valid and binding obligation of QMAN, enforceable against it in accordance with its terms subject to: (i) bankruptcy, insolvency, moratorium, reorganization and other laws relating to or affecting the enforcement of creditors' rights generally; (ii) the fact that equitable remedies, including the remedies of specific performance and injunctive relief, may only be granted in the discretion of a court; and (iii) the fact that rights to indemnity may be limited under applicable law.  QMAN has taken all necessary or desirable actions and steps to approve or authorize, validly and effectively, the entering into, and the execution, delivery and performance of, this Agreement and the sale and transfer of the Common Shares to QSeismic.  

(h)

Compliance with Constating Documents, Agreements and Laws.  The execution, delivery and performance of this Agreement and each of the other agreements contemplated or referred to herein by QMAN, and the completion of the transactions contemplated hereby, will not constitute or result in a violation or breach of or default under:

(i)

any term or provision of any of the articles, by-laws or other constating documents of QMAN; or

(ii)

the terms of any indenture, agreement (written or oral), instrument or understanding or other obligation or restriction to which QMAN is a party or by which it is bound.

(i)

Contractual and Regulatory Approvals.  QMAN is not under any obligation, contractual or otherwise, to request or obtain the consent of any person, and no permits, licenses, certifications, authorizations or approvals of, or notifications to, any Government Body are required to be obtained by QMAN in connection with the execution, delivery or performance of this Agreement or the completion of any of the transactions contemplated herein.

(j)

Compliance with Agreements and Laws.  The execution, delivery and performance of this Agreement by QMAN, and the completion of any transactions contemplated hereby, will not constitute or result in a violation, breach or default, conflict with or cause the acceleration of any obligations of QMAN under:

(i)

any writ, order, judgment, injunction, decree, determination or award of any court, Governmental Body or arbitrator(s) affecting or binding upon QMAN;

(ii)

any law, statute, ordinance, rule or regulation of Canada or any Province of  Canada, or of any applicable foreign jurisdiction;

Exhibit 4.6 – Page 6

(k)

Liabilities.  There are no liabilities (contingent or otherwise) of QMAN of any kind whatsoever of which QMAN is aware in respect of which QSeismic may become liable on or after the completion of the transactions contemplated by this Agreement.

(l)

Partnerships or Joint Ventures.  Other than with respect to the Licence, QMAN is not a partner or participant in any partnership, joint venture, profit-sharing arrangement or other association of any kind and are not party to any agreement under which QMAN agrees to assign, transfer or sell any rights or interest in the Common Shares, except as set forth in this Agreement.

(m)

Litigation.  There are no material actions, suits or proceedings, judicial or administrative (whether or not purportedly on behalf of QMAN) pending or, to the best of the knowledge of QMAN, threatened, by or against or affecting QMAN that relate to the Common Shares, at law or in equity, or before or by any court or any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign;

(n)

Financial and Taxes.  There are no liabilities, contingent or otherwise, of QTECH and there are no liabilities, contingent or otherwise, of QMAN that creates or could under any circumstances create any lien, charge or encumbrance of any kind on or over the Common Shares other than as set out in the Asset Purchase Agreement; QTECH has not guaranteed, or agreed to guarantee, any debt, liability or other obligation of any person, firm or corporation. There are no liabilities of any other party capable of creating a lien, claim, encumbrance or charge on the Common Shares or any other of the assets of QTECH;

(o)

Other than as set out in the Asset Purchase Agreement, QTECH is not indebted to the QMAN or any affiliate, director, officer or employee of QMAN;

(p)

QMAN is not indebted or under obligation to QTECH on any account;

(q)

All material transactions of QTECH have been promptly and properly recorded or filed in its books and records. The minute book of QTECH contains records of all the meetings and proceedings of shareholders and directors of QTECH;

(r)

All tax returns and reports of QTECH required by law to be filed before the date of this Agreement have been filed and are true, complete and correct. All taxes and other government charges have been paid or accrued and there will be no unpaid taxes or government charges in respect of the period ending on the Closing Date;

(s)

QTECH has been assessed for Federal and Provincial taxes for all years to and including the fiscal year ending and has been assessed with respect to its return for the tax year;

(t)

Adequate provision has been made for taxes payable for each current period for which tax returns are not yet required to be filed, and there are no waivers or other arrangements providing for an extension of time for the filing of any tax return, or payment of any tax, government charge or deficiency, by QTECH.

(u)

Under the Income Tax Act of Canada and the Income Tax Act of British Columbia, QTECH has been since incorporation and is now a Canadian-controlled private corporation.

Exhibit 4.6 – Page 7

(v)

QTECH has paid all taxes, (including all federal, provincial and local taxes, assessments or other imposts in respect of its income or business) and all interest and penalties thereon with respect to the Company, for all previous years and all required quarterly installments due for the current fiscal year have been paid.

(w)

HST—With respect to the harmonized sales tax under the Excise Tax Act (“HST”): 

(i)

QTECH is in the process of registering for an HST number and prior to July 1, 2010, QTECH was a dormant company with no business activity.

4.

Representations and Warranties of Assets of QTECH.  QMAN and the Covenantors jointly and severally represent and warrant that:

(a)

QTECH has all right, title and interest in and to the Intellectual Property. Intellectual Property Rights, and Assets, including but not limited to the Intellectual Property, Intellectual Property Rights, QMAN Intellectual Property and QMAN Intellectual Property Rights free and clear of all mortgages, lien, pledges, security interest, encumbrances or other loans whatsoever.

5.

Representations and Warranties of Assets of QTECH.  QTECH represents and warrants that:

(a)

Corporate Authority and Binding Obligation.  QTECH is a corporation duly incorporated and validly subsisting under the laws of the Province of British Columbia.  QTECH has good right and full corporate power and capacity to enter into this Agreement and to perform its obligations under this Agreement.  The board of directors of QTECH has taken all necessary actions, steps and corporate and other proceedings to approve or authorize, validly and effectively, the entering into of, and the execution, delivery and performance of, this Agreement by QTECH.  

(b)

This Agreement is a legal, valid and binding obligation of QTECH, enforceable against it in accordance with its terms subject to: (i) bankruptcy, insolvency, moratorium, reorganization and other laws relating to or affecting the enforcement of creditors' rights generally; (ii) the fact that equitable remedies, including the remedies of specific performance and injunctive relief, may only be granted in the discretion of a court; and (iii) the fact that rights to indemnity may be limited under applicable law.  QTECH has taken all necessary or desirable actions and steps to approve or authorize, validly and effectively, the entering into, and the execution, delivery and performance of, this Agreement and the sale and transfer of the Common Shares to QSeismic.  

6.

Survival of Warranties of QMAN and Covenantors 

The representations and warranties made by QMAN and Covenantors and contained in this Agreement, or contained in any document or certificate given in order to carry out the transactions contemplated hereby, will survive the completion of the sale of the Common Shares  provided for herein and, notwithstanding such completion or any investigation made by or on behalf of QSeismic or any other person or any knowledge of QSeismic or any other person, will continue in full force and effect for the benefit of QSeismic indefinitely.

Exhibit 4.6 – Page 8

7.

Indemnification by QMAN and the Covenantors

QMAN and the Covenantors shall indemnify and save harmless QSeismic from and against any claims, demands, actions, causes of action, judgments, damages, losses (which shall include any diminution in value), liabilities, costs or expenses (including, without limitation, interest, penalties and legal fees on a solicitor and own client basis and disbursements) (collectively, the "Losses") which may be made against QSeismic or which QSeismic may suffer or incur as a result of, arising out of or relating to any violation, contravention or breach of any covenant, representation, warranty, agreement or obligation of QMAN and/or the Covenantors  under or pursuant to this Agreement.   

8.

Issuance of Purchase Shares and Private Placements. 

8.1 

QSeismic will deliver to QMAN 20,400,001 Common Shares from capital treasury.  These Shares will be conditional to regulatory body approval and may be restricted from resale for a period of time by the CNSX or BC Securities Commission. The regulatory bodies will require an audit to issue shares for the valuation based on Sales Contracts and other agreements that will support the pro forma.

8.2

Immediately prior to Closing, there will no more than 20,583,372 million Common Shares outstanding in QSeismic.  Currently there are approximately 19,500,000 of Common Shares outstanding. There are 2,000,000 warrants outstanding at $0.07 to expire in 2012.  Before Closing, QSeismic will arrange for an additional CDN$50,000 private placement for 1,000,000 shares and 1,000,000 warrants. 

8.3

After Closing, QSeismic will use commercially reasonable efforts arrange for additional debt or equity financing to support the business development of QTECH .

9.

Closing.  

9.1

In the event that the regulatory approval is granted, the consummation of the purchase and sale of the QTECH (the “Closing”) shall be held at 4:00 p.m. on July 31, 2010 or sooner by agreement of the parties, at such place as all parties may agree.

9.2

QMAN shall provide Financial Statements prepared for audit acceptable to the CNSX; BC Securities Commission; and Securities and Exchange Commission before closing.   These Financial Statements are attached as a Schedule F, hereto.

10. 

Directors, Management, Employees

10.1

After Closing, the Board of Directors of QSeismic shall be nominated to be the following individuals: 

Navchand Jagpal

Parmjit Johal

Raymond Wood  

 

These Directors shall remain until the next Annual General Meeting.  The nomination for the new Board will be a consensus of the existing Board of Directors.

Exhibit 4.6 – Page 9

10.2

Day to Day Management of QTECH shall remain under the guidance of Mr. Raymond Wood. Attached, as Schedule G, is a one year Pro forma of QSeismic after Closing.  It will be the responsibility of the management to meet the criteria of the Pro forma. Projected Pro forma achievements with all cash flow statements shall be issued to all directors. 

10.3 

Existing Key Staff shall receive management and employment contracts.  Attached is a Schedule describing the individuals, positions, and salaries (Schedule H).  

11.

Non-Competition

11.1 

Non-Competition.  The Covenantor and QMAN acknowledge that they have become familiar with the proprietary aspects of the Intellectual Property and the QMAN Intellectual Property, respectively, including certain of the confidential information and trade secrets related to the Intellectual Property and QMAN Intellectual Property.  The Covenantor and QMAN agree and covenant as follows:

(a)

they shall not compete with QTECH by developing any like technology similar to the Intellectual Property or the QMAN Intellectual Property, the purpose of which is sensor detection technology to actuate motorized gas and water valves and power shut-offs and neither the Covenantor or QMAN shall not accept employment with or directly or indirectly organize or participate in the organization of any firm, partnership, corporation, joint venture, sole proprietorship or other business entity if such firm, partnership, corporation, joint venture, sole proprietorship or entity is engaged or to be engaged in any business, conduct or activity in competition with the sensor detection technology that the Intellectual Property and QMAN Intellectual Property comprises and the applications that are derived from same.

(b)

the Covenantor and QMAN shall not, directly or indirectly, either individually or as a consultant, employee, partner, owner, officer or stockholder, or in any other capacity whatsoever with respect to any person, firm, partnership, corporation, joint venture, sole proprietorship or other business entity except as a shareholder for investment purposes holding less than a [2%] interest in a corporation whose shares are traded on a securities exchange or on an over-the-counter market, engage in or aid, assist or abet others in engaging in any business, conduct or activity in competition with the sensor detection technology that the Intellectual Property and QMAN Intellectual Property comprises and the applications that are derived from same.  

12.

Miscellaneous

12.1

Notices.  All notices, demands, approvals, consents, or requests provided for in this Agreement will be in writing and will be delivered or telecopied to the applicable address for each of the Party set forth at the commencement of this agreement.  Any notice, demand, approval, consent, or request so delivered will be deemed to have been given and received on the next following business day after the date of delivery or transmission.

12.2

Obligations as Covenants. Each obligation of each party in this Agreement, even though not expressed as a covenant, is considered for all purposes to be a covenant.

12.3

Invalidity. If any covenant, obligation or agreement or part thereof or the application thereof to any Person or circumstance is held to be invalid or unenforceable, the remainder of this Agreement or 

Exhibit 4.6 – Page 10

the application of such covenant, obligation or agreement or part thereof to any Person or circumstance other than those to which it is held invalid or unenforceable will not be affected. Each covenant, obligation and agreement in this Agreement will be separately valid and enforceable to the fullest extent permitted by law.

12.4

Amendment of Agreement. No supplement, modification, waiver or termination of this Agreement will be binding unless executed in writing by either Party to be bound thereby.

12.5

Successors and Assigns. All of this Agreement will be binding upon the Parties and their respective successors and assigns and will enure to the benefit of and be enforceable by the Parties and the successors and assigns of any Party only to the extent that they are permitted successors and assigns under this Agreement.

12.6

Time. Time will be of the essence of this Agreement, except as specifically provided otherwise in this Agreement.

12.7

Non-Waiver. No consent or waiver of any breach or default by any Party in the performance of its obligations under this Agreement will be deemed to be construed to be a consent to or waiver of any other breach or default in the performance by that Party of the same or any other obligations of that Party under this Agreement. Failure by any Party to complain of any act or failure to act of any other Party or to declare any other Party in default, irrespective of how long such failure continues, will not constitute a waiver by that Party of its rights under this Agreement.

12.8

Further Assurances. The parties will execute all such further documentation and take all such further action as may be necessary or desirable to give full effect to this Agreement. 

12.11

Governing Law. This Agreement and all matters arising under it will be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada and, except as otherwise provided, all disputes and claims arising out of this Agreement will be referred to the courts of the Province of British Columbia.

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.

QMI MANUFACTURING INC.      

by its authorized signatory 

/s/ Raymond Wood

per: Raymond Wood

QMI TECHNOLOGIES INC.      

by its authorized signatory 

/s/ Raymond Wood

per: Raymond Wood

Exhibit 4.6 – Page 11

QMI SEISMIC INC. 

by its authorized signatory 

/s/ Navchand Jagpal

per:  Navchand Jagpal

			
	SIGNED, SEALED AND DELIVERED by RAYMOND WOOD in the presence of:

Gurdeep Johal

	)

)

)

)

)

	

/s/ Raymond Wood

	

Name

14852 73B Avenue

	

)

)

	

RAYMOND WOOD

	

Address

Surrey, BC

	

)

)

	

	

Consultant

	

)

)

	

	Occupation

	)

)

	 

Exhibit 4.6 – Page 12

Schedule A

TECHNOLOGY

This is a complete list of patents owned by Mrs. Lynn Wood and or QMAN. 

Patent numbers for gas, fire and earthquake detection:

Patent Canadian - 2170561

US - 08-811059

European - 97913052.3

Canadian patent for excess gas flow, earthquake, gas and smoke detection and shut off valve – 2308938

Gas - There are four gas product models available. Here is a brief description of one of them:

The 2000 Series Gas and Carbon Monoxide detector sends out a wireless RF signal to the valve if an alarm occurs. This signal format for the wireless valve is standardized with the Gas GuardianTM Gas Leak Protection System, which means that any sensor that works with the Gas GuardianTM Gas Leak Protection System is fully compatible with this wireless valve and can be easily added to the system.  The wireless valve is powered by an internal battery which will last more than 5-years under normal operating conditions.

Seismic -  There are three seismic products available. Here is brief description of one of them:

QMI reduces the concern with the RF QuakeTM wireless system, designed to shut-off your gas in the event of an earthquake. Linked to a wireless gas valve, your gas system is automatically turned off when a dangerous earthquake is detected.

The RF QuakeTM system is a very low powered device, powered by a 9-volt wall adapter with internal battery backup, which insures that the RF QuakeTM will remain on guard of you even if the power goes off.  When a dangerous earthquake is detected, the RF QuakeTM sends a wireless RF signal to the valve, causing it to shutoff, preventing potential fires or explosions that could result from burst or damaged gas lines in the building.  This signal format for the wireless valve is standardized with the Gas GuardianTM Gas Leak Protection System, which means that any sensor that works with the Gas GuardianTM Gas Leak Protection System is fully compatible with this wireless valve and can be easily added to the system.  The wireless valve is powered by an internal battery which will last more than 5-years under normal operating conditions.

Exhibit 4.6 – Page 13

Schedule “B”

Tangible Assets

Exhibit 4.6 – Page 14

QMI Manufacturing

Equipment 

							
	 
	Item

	Mfg

	Model

	SN

	Year

	Est. Value

	1

	Chipshooter

	Panasonic FA

	NM 2550

	11000453

	1991

	15,000

	2

	Pick & Place

	Panasonic FA

	NM 2545

	7YM01556

	1991

	7,500

	3

	Pick & Place

	Panasonic FA

	NM 2529T

	30100156

	1997

	25,000

	4

	Reflow Oven

	Conceptronic

	Discovery Mark IV

	D59122

	1991

	10,000

	5

	Paste Printer

	Dek 265

	265G5X

	217287

	1997

	25,000

	6

	Feeders

	Panasonic

	For MV/MPA

	250 pieces

	 
	37,500

	7

	Conveyors

	Panasonic

	6 pieces

	 
	 
	6,000

	 
	 
	 
	Total estimated value US$

	 
	126,000

Exhibit 4.6 – Page 15

QMI Manufacturing

Warehouse

						
	 
	Item

	Quantity

	Description

	SN

	Price

	1

	Shrink Wrap Machine

	1

	Danmark

	 
	6,321

	2

	Lab Computer

	1

	Top Tech

	 
	1,160

	3

	Reflow System

	1

	Zephronics

	 
	5,234

	4

	Racks – Heavy Metal

	1

	10’ x 12’

	 
	100

	5

	Racks – Heavy Metal

	1

	20’ x 24’

	 
	700

	6

	Signal Generator

	8

	Valutronics Inv 1667

	 
	1,650

	7

	Spectrum Analyser

	1

	Valutronics Inv 46030

	 
	5,750

	8

	Partitions

	 
	multiple

	 
	1,284

	 
	Total

	 
	 
	 
	22,199

Exhibit 4.6 – Page 16

QMI Manufacturing

Office

						
	 
	Item

	Quantity

	Description

	SN

	Price

	1

	Desks & Hutch

	4

	Wood

	 
	4,950

	2

	2 DFC

	1

	Wood

	 
	266

	3

	Arm Chairs

	2

	Leather

	 
	321

	4

	Swivel Chair

	1

	Wood

	 
	214

	5

	Arm Chairs

	6

	Metal

	 
	295

	6

	Swivel Chair

	5

	Leather

	 
	428

	7

	Keyboard tray

	4

	Metal

	 
	466

	7

	Table – large

	1

	Wood & leather

	 
	466

	8

	Work Stations

	4

	Laminate

	 
	1,000

	9

	FC – Office

	2

	Metal

	 
	500

	10

	Recep Station

	1

	Laminate

	 
	500

	12

	Recep Seats

	3

	Blue

	 
	144

	15

	3 D cabinet

	1

	Wood

	 
	40

	16

	Comp – Ray

	1

	Mac

	 
	1,845

	17

	Comp – Mike

	1

	PC

	 
	871

	18

	Comp – Nicola

	1

	Mac

	 
	1,845

	20

	Comp – Recep

	1

	PC

	 
	918

	21

	Printer

	1

	Toshiba Tec B-SxS

	 
	1,706

	25

	Network

	1

	File Room

	 
	1,751

	26

	Tel System

	1

	File Room

	 
	3,941

	27

	Patch Panel

	1

	File Room

	 
	200

	28

	Paging System

	4

	File/warehouse

	 
	350

	 
	Total

	 
	 
	 
	23,017

Exhibit 4.6 – Page 17

Exhibit 4.6 – Page 18

Schedule “C”

Inventory

Exhibit 4.6 – Page 19

				
	Inventory list 

	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	Valve Controllers

	68

	$0.000

	$0.00

	Solenoids

	 
	$4.000

	$0.00

	3 way valve

	69

	$40.000

	$2,760.00

	2" solenoid valve

	90

	$45.000

	$4,050.00

	Model 8000D

	46

	$47.000

	$2,162.00

	2" valve

	115

	$35.000

	$4,025.00

	Probe

	2000

	$1.000

	$2,000.00

	Small sensor box

	1000

	$0.380

	$380.00

	Controller box

	2611

	$0.680

	$1,775.48

	Co/Gas box

	1001

	$0.680

	$680.68

	Radio controller box

	1009

	$0.550

	$554.95

	1" valve

	490

	$35.000

	$17,150.00

	3/4" valve

	644

	$35.000

	$22,540.00

	Metal valve controller box

	 
	 
	 

	UK adaptor

	1571

	$2.650

	$4,163.15

	RF Quake packaging

	2995

	$0.550

	$1,647.25

	Water Guardian packaging

	426

	$0.550

	$234.30

	Washing Machine packaging

	1930

	$0.550

	$1,061.50

	Gas Guardian packaging

	1829

	$0.550

	$1,005.95

	Gas/CO Guardian packaging

	1118

	$0.550

	$614.90

	Gas/CO packaging

	2380

	$0.500

	$1,190.00

	RF Gas Clamshell

	720

	$0.340

	$244.80

	RF Washing Machine clamshell

	720

	$0.380

	$273.60

	Gas Guardian clamshell

	1020

	$0.650

	$663.00

	Co/Gas 2 part clamshell

	1280

	$0.380

	$486.40

	RF Co/Gas packaging

	3049

	$0.550

	$1,676.95

	Watchdog

	22

	$24.000

	$528.00

	RF Gas Sensor packaged

	37

	$19.000

	$703.00

	Probe packaged

	151

	$3.200

	$483.20

	Co/Gas Detector

	15

	$35.000

	$525.00

	Co Module

	360

	$2.000

	$720.00

	RF Water Sensor

	28

	$10.000

	$280.00

	Model 8000D less  3 parts

	48

	$43.000

	$2,064.00

	CO/Gas Detector less co mod/micrel

	63

	$30.000

	$1,890.00

	Buzzer for Watchdog

	566

	$0.080

	$45.28

	Buzzer (Challenge)

	595

	$0.941

	$559.90

	PIC16F628A

	691

	$1.870

	$1,292.17

	RX3400CF

	1990

	$0.850

	$1,691.50

	Crystal 6.7458

	2660

	$0.090

	$239.40

	Antenna

	197

	$0.000

	$0.00

	Terminal block for 8000D

	1237

	$0.300

	$371.10

	3 Digit Display for CO/Gas

	475

	$2.250

	$1,068.75

	PCB RF Gas Sensor

	1008

	$0.310

	$312.48

	PCB Gas Controller

	1750

	$0.960

	$1,680.00

	PCB Micrel 

	1425

	$0.150

	$213.75

	PCB Sezi Watchdog

	391

	$2.180

	$852.38

	PCB Water main control unit

	1010

	$0.960

	$969.60

	PCB RF water sensor

	2520

	$0.750

	$1,890.00

	PCB Watchdog earthquake board

	8200

	$0.150

	$1,230.00

	PCB RF Quake

	1002

	$1.270

	$1,272.54

	PCB Receiver module

	5020

	$0.100

	$502.00

	PCB RCV

	1004

	$0.560

	$562.24

	PCB Fire dept.

	53

	$1.810

	$95.93

	Membrane - water controller

	1000

	$0.920

	$920.00

	Overlay - water sensor

	2000

	$0.065

	$130.00

	PCB Draka main

	96

	$2.180

	$209.28

	PCB connector

	80

	$2.570

	$205.60

	PCB interface

	72

	$2.180

	$156.96

	PCB mounting plate

	96

	$2.250

	$216.00

	Pro+ transformer

	1700

	$0.350

	$595.00

	Power Cords for Pro+

	98

	$2.880

	$282.26

	211300207

	980

	$0.390

	$382.20

	210834110

	267

	$0.100

	$26.70

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	TOTAL

	$96,506.12

Exhibit 4.6 – Page 20

Schedule D

Contracts

Exhibit 4.6 – Page 21

Exhibit 4.6 – Page 22

Exhibit 4.6 – Page 23

Printed 

Name:

/s/ Sterret Lloyd

Title:

COO, Managing Director

Date:

9/12/07

9

Exhibit 4.6 – Page 24

APPENDIX A

Patent Rights

U.S. Patent Number 6,661,346, titled “Gas, fire and earthquake detector”

Canadian Patent Number 2,170,561 titled “Gas, fire and earthquake detector”

Field-Of-Use

The vertical transportation industry, including, without limitation, elevators, escalators, moving walks, dumbwaiters and residential elevators.

10

Exhibit 4.6 – Page 25

Exhibit 4.6 – Page 26

Exhibit 4.6 – Page 27

Exhibit 4.6 – Page 28

Exhibit 4.6 – Page 29

Appendix A – Products for Distribution

1.

Seismic Sensor 2700

Sale to Market:

$400

Cost to Arris:

$200

Number of Units (year 1):

1,000

Number of Units (year 2):

2,000

Number of Units (year 3):

3,000

2.

RF Quake

Sale to Market:

$210

Cost to Arris:

$105

Number of Units (year 1):

1,000

Number of Units (year 2):

2,000

Number of Units (year 3):

3,000

3.

Watch Dog

Sale to Market:

$90

Cost to Arris:

$45

Number of Units (year 1):

1,000

Number of Units (year 2):

2,000

Number of Units (year 3):

3,000

Senior Service Agreements:  Training for Arris and on call rates.

Exhibit 4.6 – Page 30

QMI MARKETING LTD.

March 25, 2009

ARRIS RESOURCES INC.

ARRIS OIL & GAS INC.

1250 West Hastings Street

Vancouver, BC  V6E 2V4

Phone  604-687-0879

Fax:  604-408-9301

To Whom it May Concern:

RE:  AUTHORIZATION OF USING THE NAME QMI MARKETING, QMI MARKETING LTD.

I hereby authorize Arris Resources Inc. and Arris Oil and Gas Inc. of using the name of my company:  “QMI Marketing Ltd.”, or part of it sname.

Sincerely,

QMI MARKETING LTD.

/s/ Raymond Wood

Raymond Wood

President

Exhibit 4.6 – Page 31

SCHEDULE E

ASSET PURCHASE AGREEMENT

Exhibit 4.6 – Page 32

ASSET PURCHASE AGREEMENT

THIS AGREEMENT is made as of the 1st day of July, 2010;

BETWEEN:

QMI TECHNOLOGY INC., a body corporate, incorporated under the laws of the Province of British Columbia and having an office at #202 – 11 Burbidge Street, Coquitlam, B.C.  V3K 7B2

(hereinafter referred to as the "QTECH")

AND:

RAYMOND WOOD, an individual residing at #202 – 2963, Glen Drive, Coquitlam, B.C.   V3B 2P7

(hereinafter referred to as the "Wood")

AND:

QMI MANUFACTURING INC., a body corporate, incorporated under the laws of the Province of British Columbia and having an office at #202 – 11 Burbidge Street, Coquitlam, B.C.  V3K 7B2

(hereinafter referred to as the “QMI”)

AND:

LYNN WOOD, an individual residing at #202 – 2963, Glen Drive, Coquitlam, B.C.   V3B 2P7

(hereinafter referred to as the "Covenantor")

RECITALS

WHEREAS:

A.

QMI is a Canadian controlled Private Corporation;

B.

QTECH is a wholly owned subsidiary of QMI;

C.

Wood holds the legal and beneficial right title and interest in and to certain sensor detection technology and products which have been patented and/or have pending patents (collectively the “Intellectual Property”) as more succinctly defined hereinafter, and whereas the Covenantor has contractually transferred the Intellectual Property to Wood but the same is still in the process of being registered with the applicable patent registry;

D.

QMI has an exclusive licence to use the Patents (as hereinafter defined) which comprise the Intellectual Property, and QMI has developed certain products which rely on the Patents (the “Products” as more succinctly defined hereinafter);

E.

QMI wishes to sell all of its assets (the “Assets” as more succinctly defined hereinafter) to QTECH and QTECH wishes to purchase all of the Assets, subject to the terms and conditions in this Agreement;

F.

Wood wishes to sell all of the interest in the Intellectual Property to QTECH and QTECH wishes to purchase the Intellectual Property, subject to the terms and conditions in the Agreement.

NOW THEREFORE in consideration of the premises and the mutual agreements and covenants herein contained and other good and valuable consideration (the sufficiency and adequacy of which is herein acknowledged), the parties hereto hereby covenant and agree as follows:

ARTICLE 1 

INTERPRETATION

1.1

Defined Terms

In this Agreement and in the Schedules attached hereto, unless there is something in the subject matter or context inconsistent therewith, the following words and terms will have the indicated meanings and grammatical variations of such words and terms will have corresponding meanings:

(a)

“Affiliate” will have the meaning ascribed thereto in the Business Corporations Act (British Columbia);

(b)

“Application(s)” means commercial or other uses or products derived from the Intellectual Property, or the QMI Intellectual Property, as the case may be;

(c)

 “Assets” means collectively all the tangible personal property of QMI, including but not limited to the furniture, fixtures, machinery, equipment and tools of QMI as set out in Schedule B attached hereto; inventory as set out in Schedule C attached hereto; all right title and interest of QMI under any leases of personal property and equipment; all contracts QMI has an interest in, as set out in Schedule F attached hereto (the “Contracts”), including without limitation the agreement between QMI and Draka Elevator Products (“Draka”) whereby Draka has exclusive marketing rights for QMI’s Seismic Product 2500 and the agreement between QMI and QMI Seismic Inc. Whereby QMI has granted to QMI Seismic Ltd., a licence to market and distribute certain products developed using the Intellectual Property in India; the Premises Lease; the QMI Intellectual Property; telephone numbers and listing insurance policies, trade accounts receivable (“Accounts”), promissory notes arising from Accounts; all causes of actions related to the Assets; customer lists, goodwill and other intangible property related to QMI’s business but excluding (i) cash on hand; (ii) any accounting related books and records whether written or electronically recorded; (iii) causes of action not related to the Assets; (iv) contingent and unliquidated claims of every nature including tax refunds; (v) deposits; (vi) any personal property subject to any security interest of a third party.

(d)

“Business Day” means any day other than a day that is a Saturday, Sunday or statutory holiday in Surrey, British Columbia;

(e)

“Confidential Information” means any and all information which is of a confidential or secret nature relating to the business of any party and in the case of QMI and Wood relating to the Intellectual Property and QMI Intellectual Property, respectively, as the case may be, as hereinafter defined, or to its development and manufacturing.  Such confidential information includes but is not limited to all information disclosed by either party to the other party or of which either party becomes aware during the term of this Agreement whether disclosed orally, in writing, electronically or by other means.  In addition, such confidential information includes but is not limited to QMI and Wood’s existing and prospective business opportunities, with respect to Intellectual Property and QMI Intellectual Property, respectively, as the case may be, customer information, customer names, addresses, contacts, and details of supply contracts, information regarding the compensation of persons employed by any parties, financial information, including the business plans, financial statements, and accounting records of any party, information relating to any party's operations, methods of doing business, research and development, and trade secrets, patents, software, computer programs, algorithms, and other information of a confidential or secret nature.  Confidential information does not include:

i)

information that is within the public domain at the date of its disclosure by either party to the other party, or which thereafter enters the public domain through no fault of either party (but only after it becomes part of the public domain);

ii)

information which either party can establish was already known to that party at the date of its disclosure to that party and is not then subject to any third party confidentiality restrictions; and

iii)

information which, following disclosure by either party to the other party, is received by the receiving party from a third party who is not a consultant or employee of the disclosing party and who the receiving party had no reason to believe had obtained that information unlawfully or from the disclosing party;

(a)

“Governmental Body” means any domestic or foreign arbitrator, court, administrative or regulatory agency, commission, department, board or bureau or body or other government or authority or instrumentality or any entity or person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government;

(b)

“Innovations” means any and all trade marks, trade names, logos, industrial designs, trade secrets, processes, formulae, data, specialized know-how, improvements, innovations (whether patented or not) and specialized techniques developed or produced by the QMI and or Wood that are derived in part or whole from the Intellectual Property and the QMI Intellectual Property;

(c)

“Intellectual Property” means certain sensor detection technology which has been patented or for which there are pending patents all of which are set out in Schedule A attached hereto; 

(d)

“Intellectual Property Rights” means all right, title and interest of Wood in and to all rights or protections existing from time to time in a specific jurisdiction, whether registered or not, under any patent law or other invention or discovery law, copyright law, publicity, performance or moral rights law, trade-secret law, confidential information law, integrated circuit topography law, semi-conductor chip protection law, industrial design law, trade-mark law, unfair competition or trade practices law, or other similar laws and includes legislation by competent governmental authorities and judicial decisions under common law or equity as used in or relating to the Intellectual Property and all applications derived therefrom, including all Patent Rights, Trade-marks and Technical Information and including all prototypes;   

(e)

“Licence” means the exclusive licence granted by Wood to QMI to use the Patents, a copy of which is attached hereto as Schedule D;

(f)

“Patent Rights” means all patents and inventions relating to the Intellectual Property and attached hereto as Schedule A and all applications and innovations derived therefrom, and pending applications thereon, and patents which may be issued out of pending applications (including divisions, reissues, renewals, re-examinations, continuations, continuations-in-part, patent term restoration and extensions), which may be applied for or registered in any jurisdiction, or licensed to Wood; 

(g)

“Premises Lease” means the lease agreement a copy of which is attached hereto as Schedule E;

(h)

“Products” means any and all products developed by QMI which rely on the Patents and any derivative technology or Innovations;

(i)

“QMI Intellectual Property” means all rights of QMI under the Licence, and without limitation, all trademarks, tradenames, licence and service marks as well as all approvals, certification and comments from Canadian Standards Association, Underwriters Laboratories of Canada and United States Consumer Products Safety Commission all of which certifications are attached hereto as Schedule B, and any and all Innovations; and

(j)

“QMI Intellectual Property Rights” means all right, title and interest of QMI in and to all rights or protections existing from time to time in a specific jurisdiction, whether registered or not, under any patent law or other invention or discovery law, copyright law, publicity, performance or moral rights law, trade-secret law, confidential information law, integrated circuit topography law, semi-conductor chip protection law, industrial design law, trade-mark law, unfair competition or trade practices law, or other similar laws and includes legislation by competent governmental authorities and judicial decisions under common law or equity as used in or relating to the Intellectual Property and all applications derived therefrom, including all patent rights, Trade-marks and Technical Information and including all prototypes;

(k)

“Technical Information” means all know-how and related technical knowledge proprietary to or licensed to Wood and/or QMI relating to the Intellectual Property  and the QMI Intellectual Property, respectively, as the case may be, and any applications derived therefrom, including, without limitation:

(i)

all trade secrets, confidential information and information with respect to inventions;

(ii)

all information of a scientific, technical or business nature, regardless of its form;

(iii)

all documentation with respect to research, development, demonstration or engineering work;

(iv)

all information that can be or is used to define a design or process, or to procure, produce, support or operate materials or equipment;

(v)

all information regarding methods of production; and 

(vi)

all other drawings, blueprints, patterns, plans, flow charts, equipment parts lists, computer software and procedures, source and object code, specifications, formulas, designs, technical data, descriptions, related instruction manuals, records and procedures; and without limitation all documentation with respect to the design, fabrication, modification, operation, sale and support of the Intellectual Property to customers;

(l)

“Trade-marks” means the trade-marks, trade names, designs, logos and other commercial symbols, whether registered or not, which are owned by Wood and/or QMI relating to the Intellectual Property and the QMI Intellectual Property, respectively, as the case may be, and all applications derived therefrom, including, without limitation, all common law rights thereto and the goodwill of Wood and/or QMI as case may be, as symbolized by the trade-marks, trade names, designs, logos and other commercial symbols.

a.1

Currency

Unless otherwise indicated, all dollar amounts referred to in this Agreement are stated in lawful money of Canada.

a.2

Choice of Law and Disputes

This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein and without regard to the conflict of law rules applicable therein.  Should any dispute arise between the parties concerning this Agreement, the parties agree to first attempt to resolve the dispute in good faith.  Both parties further agree to attorn to the jurisdiction of the courts in the Province of British Columbia, Canada in the event that a dispute cannot be resolved.

a.3

Interpretation Not Affected by Headings 

The division of this Agreement into articles, sections, paragraphs, subparagraphs and clauses and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.  The terms "this Agreement", "hereof", "herein", "hereunder" and similar expressions refer to this Agreement and the schedules hereto and not to any particular article, section, paragraph, subparagraph, clause or other portion hereof and include any agreement or instrument supplementary or ancillary hereto.  

a.4

Number and Gender

In this Agreement, unless there is something in the subject matter or context inconsistent therewith words in the singular number include the plural and such words will be construed as if the plural had been used, words in the plural include the singular and such words will be construed as if the singular had been used, and words importing the use of any gender include all genders where the context or party referred to so requires, and the rest of the affected sentence will be construed as if the necessary grammatical and terminological changes had been made.

a.5

Accounting Principles

In this Agreement, wherever reference is made to Generally Accepted Accounting Principles or GAAP, such reference shall be deemed to be Generally Accepted Accounting Principles from time to time approved by the Canadian Institute of Chartered Accountants applicable as at the date on which the relevant calculation has been made, is made or is required to be made in accordance with Generally Accepted Accounting Principles.

a.6

Time of Essence

Time shall be of the essence of this Agreement.

a.7

Schedule

The following Schedules to this Agreement are incorporated herein and form part of this Agreement:

A.

Patents

B.

Equipment and Machinery

C.

Inventory

D.

Licence

E.

Premises Lease

F.

Contracts

G.

Certifications

H.

TNB Loan Agreement

ARTICLE 1 

PURCHASE AND TRANSFER OF INTELLECTUAL PROPERTY

1.1

Purchased Assets

2.1.1

On the terms set out herein and in consideration for the consideration set out in Article 3.1 hereof, Wood hereby agrees to sell, assign, transfer and convey to QTECH, and QTECH hereby agrees to purchase and accept from Wood all rights and interest in the Intellectual Property, any applications derived there from, and all Intellectual Property Rights pertaining thereto.

2.1.2

On the terms set out herein and in consideration for the consideration set out in Article 3.2 hereof, QMI agrees to sell, assign, transfer and convey to QTECH all rights and interest in the Assets, including but not limited to the QMI Intellectual Property, an application derived therefrom, including the Products and all QMI Intellectual Property Rights pertaining thereto.

1.2

Retained Liabilities and Indemnity

2.2.1

Other than as set out in Section 2.2.2 herein, QTECH will not assume or be liable for any obligations, commitments, liabilities and claims (whether absolute, accrued or contingent) relating to the Intellectual Property and QMI Intellectual Property and any applications derived therefrom.  Without limiting the generality of the foregoing, it is agreed that QTECH will have no liability for any of the following obligations or liabilities:

(a)

all liabilities in respect of all indebtedness of Wood, the Covenantor or QMI to any persons;

(b)

all liabilities for all taxes, duties, levies, assessments and other such charges, including any penalties, interests and fines with respect thereto, payable by Wood, the Covenantor or QMI to any federal, state, provincial, municipal or other government or governmental agency, authority, board, bureau or commission, domestic or foreign;

(c)

all liabilities relating to products manufactured or sold by Wood, the Covenantor or QMI in connection with the Intellectual Property and QMI Intellectual Property up to the date of this Agreement, including all product liability claims and written contractual and/or statutory claims brought by customers under any product warranties;

(d)

any liability that either QMI, Wood or the Covenantor has for any income or other taxes including excise or sales taxes, whether due to any federal or provincial authority as a result of the sale and transfer of the Assets, QMI Intellectual Property and Intellectual Property.

2.2.2

QTECH shall assume the following liabilities:

(a)

an outstanding loan in the amount of $200,000.00 due to TNB Enterprises Ltd. (which is evidenced by a loan agreement, attached hereto as Schedule H);

(b)

an outstanding loan to Mr. Raymond Wood of $80,000.00 loaned to QMI for working capital.

ARTICLE 2 

PURCHASE PRICE

2.1

QTECH’s Instalment Purchase of the Intellectual Property and Intellectual Property Rights from Wood.

3.1.1

In consideration of the sale of the Intellectual Property and Intellectual Property Rights from Wood to QTECH, QTECH agrees to pay to Wood instalments as a royalty from the income generated by the Intellectual Property at a rate of ten (10%) percent of the net income generated from the sale of products produced and sold using the Patents comprising the Intellectual Property, per annum to a maximum of $1.3 million ($1,300,000.00) dollars in total.  Notwithstanding the foregoing, the obligation to pay such royalties shall be limited to the life of the Patents, and shall terminate on the expiry of the Patents.  After the final instalment payment, the patent transfer agreement shall be filed with the applicable patent registry.

3.1.2

Upon closing of the purchase of the Intellectual Property from Wood to QTECH, Wood shall provide a blank dated patent transfer agreement, in a form approved by QTECH’s counsel, to QTECH to be held in escrow until such time as the final instalment payment described in Section 3.1.1 above is made.

ARTICLE 3 

INNOVATIONS PROPERTY OF PURCHASER

3.1

Wood and QMI acknowledge and agree that all Innovations, with respect to the Intellectual Property or QMI Intellectual Property, as the case may be, shall be the sole property of QTECH or any other entity designated by QTECH.  QTECH, or any other entity designated by QTECH shall be the sole owner of all domestic and foreign rights pertaining to Innovations.  Wood and/or QMI as the case may be, shall cooperate and assist QTECH, at QTECH’s sole cost and expense, to obtain and maintain for QTECH’s benefit, patents or other forms of intellectual property protection in any an all countries selected by QTECH, all of which intellectual property rights shall belong to QTECH.  

ARTICLE 4 

REPRESENTATIONS AND WARRANTIES

4.1

Representations and Warranties by Wood and the Convenantor

Wood and the Covenantor, jointly and severally, hereby represent and warrant to QTECH as follows, and acknowledge and confirm that QTECH is relying upon the accuracy of each of such representations and warranties in connection with the purchase of the rights to the Intellectual Property and all applications derived therefrom. 

(a)

Authority and Binding Obligation.  Wood has good right, full power and capacity to enter into this Agreement and to sell, assign, transfer and convey the Intellectual Property and Intellectual Property Rights and any and all Applications to be sold by her hereunder to QTECH in the manner contemplated herein and to perform all of their obligations under this Agreement.  Wood has taken all necessary or desirable actions and steps to approve or authorize, validly and effectively, the entering into, and the execution, delivery and performance of, this Agreement and the sale and transfer of all rights to the Intellectual Property and Intellectual Property Rights therefrom to QTECH.  This Agreement is a legal, valid and binding obligation of Wood, enforceable against her in accordance with its terms.

(b)

No Other Purchase Agreements.  Other than the Licence, no person has any agreement, option, understanding or commitment, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment, for the purchase or other acquisition of the Intellectual Property, or any right or interest therein.

(c)

Contractual and Regulatory Approvals.  Wood and the Covenantor are not under any obligation, contractual or otherwise, to request or obtain the consent of any person, and no permits, licenses, certifications, authorizations or approvals of, or notifications to, any Government Body are required to be obtained by Wood or the Covenantor in connection with the execution, delivery or performance of this Agreement or the completion of any of the transactions contemplated herein.

(d)

Compliance with Agreements and Laws.  The execution, delivery and performance of this Agreement by Wood or the Covenantor, and the completion of any transactions contemplated hereby, will not constitute or result in a violation, breach or default, conflict with or cause the acceleration of any obligations of Wood or the Covenantor under:

(i)

any writ, order, judgment, injunction, decree, determination or award of any court, Governmental Body or arbitrator(s) affecting or binding upon Wood;

(ii)

any law, statute, ordinance, rule or regulation of Canada or any Province of  Canada, or of any applicable foreign jurisdiction;

(iii)

any license, permit, approval, consent or authorization held by Wood or the Covenantor or necessary to the production or use of the Intellectual Property or any applications derived therefrom.

(e)

Liabilities.  Other than as set out in 2.2.2, and agreed to therein, there are no liabilities (contingent or otherwise) of Wood of any kind whatsoever of which Wood is aware in respect of which QTECH may become liable on or after the completion of the transactions contemplated by this Agreement.

(f)

Partnerships or Joint Ventures.  Wood or the Covenantor are not partners or participants in any partnership, joint venture, profit-sharing arrangement or other association of any kind and are not party to any agreement under which Wood or the Covenantor has agreed to assign, transfer or sell any rights or interest in the Intellectual Property or any applications derived therefrom by which Wood or Covenantor has agreed to share any revenue or profit of the Intellectual Property or any applications derived therefrom, except as set forth in this Agreement.

(g)

Litigation.  There are no material actions, suits or proceedings, judicial or administrative (whether or not purportedly on behalf of Wood) pending or, to the best of the knowledge of Wood or the Covenantor, threatened, by or against or affecting Wood or the Covenantor that relate to the Intellectual Property or any applications derived therefrom, at law or in equity, or before or by any court or any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign.

(h)

Title to the Intellectual Property.  Wood is the sole legal and beneficial owner of and has the absolute right, title, and authority to sell, transfer, assign and deliver all right, title and interest in the Intellectual Property and Intellectual Property Rights to QTECH in the manner contemplated herein and to enter into and perform this Agreement.  Except for as set out in this Agreement with respect to the Licence, no person other than QTECH has any written or oral agreement, option, understanding or commitment, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment, for the purchase or other acquisition from Wood of any right or interest in the Intellectual Property.

(i)

Technology.  

(i)

Wood has all right, title and interest in and to the Intellectual Property Rights and to the Technical Information and all such Intellectual Property Rights and Technical Information are owned by, or are proprietary to, Wood.

(ii)

Wood is the sole legal and beneficial owner of the Intellectual Property Rights and sole persons possessing the Technical Information and is entitled to use the Intellectual Property Rights and the Technical Information without the payment of any royalty or other fees to any person or entity.

(iii)

All of Wood’s Intellectual Property Rights and the Technical Information were created by Wood, and/or the Covenantor.  

(iv)

Wood has the right to assign its right, title and interest in and to the Intellectual Property Rights and to the Technical Information to QTECH and have not assigned, licensed, transferred possession or otherwise conveyed any rights to the Intellectual Property Rights or to the Technical Information to any person or entity.

(v)

The Intellectual Property Rights and the Technical Information are in full force and effect and Wood has taken reasonable measures to prevent misappropriation or misuse of, and to protect, Intellectual Property Rights and the Technical Information, including ensuring that the Technical Information is not disclosed to other persons or entities and that the Trade-marks have been used or enforced, and there has been no failure to use enforce, in a manner which would result in the abandonment, cancellation or unenforceability of any such Trade-marks.   

(vi)

The Intellectual Property Rights and the Technical Information transferred to QTECH hereunder constitute the entire know-how, intellectual property and registrations required and/or used in the production and manufacturing of the Intellectual Property or any applications derived therefrom.  No person, except as contemplated by this Agreement, has been authorized to make use of any of the Intellectual Property Rights and the Technical Information transferred to QTECH hereunder.

(vii)

No part of the Intellectual Property Rights and Technical Information infringes on or violates any rights or protections in any jurisdiction, whether registered or not, under any patent law or other invention or discovery law, copyright law, publicity, performance or moral rights law, trade-secret law, confidential information law, integrated circuit topography law, semi-conductor chip protection law, industrial design law, trade-mark law, unfair competition or trade practices law, or other similar laws, including legislation by competent governmental authorities and judicial decisions under common law or equity, of or owned by, any other person or entity, and the use and commercial exploitation by QTECH of the Intellectual Property Rights or the Technical Information will not infringe upon or violate any such rights or protections, of or owned by, any other person or entity.

(viii)

No part of the Intellectual Property Rights and Technical Information contains any confidential information or trade secret of another person or entity.

(ix)

There is and has been no infringement or misappropriation or claim of infringement or misappropriation of any rights of third parties in or by the use of such Intellectual Property Rights and Technical Information. 

(x)

There does not exist any facts or circumstances which cause any of Wood’s Intellectual Property Rights and Technical Information to be unenforceable or unprotectable or which limit or restrict their scope or the exploitation or protection thereof.

(xi)

No legal, administrative or regulatory proceedings have been instituted or threatened that challenge the right of Wood to own, use, or license others to use any of the Intellectual Property Rights or Technical Information.   There is no claim of adverse ownership, invalidity, lack of distinctiveness, confusing similarity or other opposition to or conflict with any Intellectual Property Rights or Technical Information, nor any pending or threatened suit, proceeding, claim, demand, action or investigation of any nature or kind against Wood relating to the Intellectual Property Rights or Technical Information.

(xii)

There is no patent, patent application nor investigation by any person or entity that would have a materially adverse effect on any part of the Intellectual Property Rights or Technical Information.

(xiii)

No other person is using any Trade-marks or trade names which are the same as or similar to or likely to be confusing with or infringe upon Wood’s rights in and to the Trade-marks.

(xiv)

Wood does not have any pending or any potential proceeding, claim, demand, or allegation charging any person or entity with a violation or misappropriation of Wood’s Intellectual Property Rights or Technical Information.

(j)

The Contracts are all valid and subsisting, are in good standing and are assignable by QMI to QTECH.

4.2

Representations and Warranties by QMI

QMI hereby represents and warrants to QTECH as follows, and acknowledges and confirms that QTECH is relying upon the accuracy of each of such representations and warranties in connection with the purchase of the Assets. 

(a)

Corporate Authority and Binding Obligation.  QMI is a corporation duly incorporated and validly subsisting under the laws of the Province of British Columbia.  QMI has good right and full corporate power and capacity to enter into this Agreement and to perform its obligations under this Agreement.  The board of directors of QMI has taken all necessary actions, steps and corporate and other proceedings to approve or authorize, validly and effectively, the entering into of, and the execution, delivery and performance of, this Agreement by QMI.  

(b)

This Agreement is a legal, valid and binding obligation of QMI, enforceable against it in accordance with its terms subject to: (i) bankruptcy, insolvency, moratorium, reorganization and other laws relating to or affecting the enforcement of creditors' rights generally; (ii) the fact that equitable remedies, including the remedies of specific performance and injunctive relief, may only be granted in the discretion of a court; and (iii) the fact that rights to indemnity may be limited under applicable law.  QMI has taken all necessary or desirable actions and steps to approve or authorize, validly and effectively, the entering into, and the execution, delivery and performance of, this Agreement and the sale and transfer the Assets (including the QMI Intellectual Property and QMI Intellectual Property Rights) to QTECH.  

(c)

Compliance with Constating Documents, Agreements and Laws.  The execution, delivery and performance of this Agreement and each of the other agreements contemplated or referred to herein by QMI, and the completion of the transactions contemplated hereby, will not constitute or result in a violation or breach of or default under:

(i)

any term or provision of any of the articles, by-laws or other constating documents of QMI; or

(ii)

the terms of any indenture, agreement (written or oral), instrument or understanding or other obligation or restriction to which QMI is a party or by which it is bound.

(d)

Free and Clear of Liens or Encumbrances.  QMI is the legal and beneficial owner of the Assets and his good and marketable title to the Assets free and clear of all mortgages, liens, charges, pledges, security interest, encumbrances or other claims whatsoever.

(e)

No Other Purchase Agreements.  No person has any agreement, option, understanding or commitment, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment, for the purchase or other acquisition of the Assets, or any right or interest therein.

(f)

Contractual and Regulatory Approvals.  QMI is not under any obligation, contractual or otherwise, to request or obtain the consent of any person, and no permits, licenses, certifications, authorizations or approvals of, or notifications to, any Government Body are required to be obtained by QMI in connection with the execution, delivery or performance of this Agreement or the completion of any of the transactions contemplated herein.

(g)

Compliance with Agreements and Laws.  The execution, delivery and performance of this Agreement by QMI, and the completion of any transactions contemplated hereby, will not constitute or result in a violation, breach or default, conflict with or cause the acceleration of any obligations of QMI under:

(i)

any writ, order, judgment, injunction, decree, determination or award of any court, Governmental Body or arbitrator(s) affecting or binding upon QMI;

(ii)

any law, statute, ordinance, rule or regulation of Canada or any Province of  Canada, or of any applicable foreign jurisdiction;

(iii)

any license, permit, approval, consent or authorization held by QMI or necessary to the production or use of the Assets (including the QMI Intellectual Property or QMI Intellectual Property Rights).

(h)

Liabilities.  There are no liabilities (contingent or otherwise) of QMI of any kind whatsoever of which QMI is aware in respect of which QTECH may become liable on or after the completion of the transactions contemplated by this Agreement.

(i)

Partnerships or Joint Ventures.  Other than with respect to the Licence, QMI is not a partner or participant in any partnership, joint venture, profit-sharing arrangement or other association of any kind and are not party to any agreement under which QMI agrees to assign, transfer or sell any rights or interest in the Assets, except as set forth in this Agreement.

(j)

Litigation.  There are no material actions, suits or proceedings, judicial or administrative (whether or not purportedly on behalf of QMI) pending or, to the best of the knowledge of QMI, threatened, by or against or affecting QMI that relate to the Assets and specifically to QMI Intellectual Property or any applications derived therefrom, at law or in equity, or before or by any court or any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign.

(k)

Title to the Intellectual Property.  QMI is the sole legal and beneficial owner of and has the absolute right, title, and authority to sell, transfer, assign and deliver all right, title and interest in the Assets, including without limitation, the QMI Intellectual Property and QMI Intellectual Property Rights to QTECH in the manner contemplated herein and to enter into and perform this Agreement.  No person other than QTECH has any written or oral agreement, option, understanding or commitment, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment, for the purchase or other acquisition from QMI of any right or interest in the Assets including without limitation the QMI Intellectual Property.

(l)

Technology.  

(i)

QMI has all right, title and interest in and to the QMI Intellectual Property Rights and to the Technical Information and all such QMI Intellectual Property Rights and Technical Information are owned by, or are proprietary to, QMI.

(ii)

QMI is the sole legal and beneficial owner of the QMI Intellectual Property Rights and sole persons possessing the Technical Information and is entitled to use the QMI Intellectual Property Rights and the Technical Information without the payment of any royalty or other fees to any person or entity.

(iii)

All the QMI Intellectual Property Rights and the Technical Information were created by QMI.  

(iv)

QMI has the right to assign its right, title and interest in and to the QMI Intellectual Property Rights and to the Technical Information to QTECH and have not assigned, licensed, transferred possession or otherwise conveyed any rights to the QMI Intellectual Property Rights or to the Technical Information to any person or entity.

(v)

The QMI Intellectual Property Rights and the Technical Information are in full force and effect and QMI has taken reasonable measures to prevent misappropriation or misuse of, and to protect, QMI Intellectual Property Rights and the Technical Information, including ensuring that the Technical Information is not disclosed to other persons or entities and that the Trade-marks have been used or enforced, and there has been no failure to use enforce, in a manner which would result in the abandonment, cancellation or unenforceability of any such Trade-marks.   

(vi)

The QMI Intellectual Property Rights and the Technical Information transferred to QTECH hereunder constitute the entire know-how, intellectual property and registrations required and/or used in the production and manufacturing of the QMI Intellectual Property or any applications derived therefrom.  No person, except as contemplated by this Agreement, has been authorized to make use of any of the QMI Intellectual Property Rights and the Technical Information transferred to QTECH hereunder.

(vii)

No part of the QMI Intellectual Property Rights and Technical Information infringes on or violates any rights or protections in any jurisdiction, whether registered or not, under any patent law or other invention or discovery law, copyright law, publicity, performance or moral rights law, trade-secret law, confidential information law, integrated circuit topography law, semi-conductor chip protection law, industrial design law, trade-mark law, unfair competition or trade practices law, or other similar laws, including legislation by competent governmental authorities and judicial decisions under common law or equity, of or owned by, any other person or entity, and the use and commercial exploitation by QTECH of the QMI Intellectual Property Rights or the Technical Information will not infringe upon or violate any such rights or protections, of or owned by, any other person or entity.

(viii)

No part of the QMI Intellectual Property Rights and Technical Information contains any confidential information or trade secret of another person or entity.

(ix)

There is and has been no infringement or misappropriation or claim of infringement or misappropriation of any rights of third parties in or by the use of such QMI Property Rights and Technical Information. 

(x)

There does not exist any facts or circumstances which cause any of the QMI Intellectual Property Rights and Technical Information to be unenforceable or unprotectable or which limit or restrict their scope or the exploitation or protection thereof.

(xi)

No legal, administrative or regulatory proceedings have been instituted or threatened that challenge the right of QMI to own, use, or license others to use any of the QMI Intellectual Property Rights or Technical Information.   There is no claim of adverse ownership, invalidity, lack of distinctiveness, confusing similarity or other opposition to or conflict with any QMI Intellectual Property Rights or Technical Information, nor any pending or threatened suit, proceeding, claim, demand, action or investigation of any nature or kind against QMI relating to the QMI Intellectual Property Rights or Technical Information.

(xii)

There is no patent, patent application nor investigation by any person or entity that would have a materially adverse effect on any part of the QMI Intellectual Property Rights or Technical Information.

(xiii)

No other person is using any Trade-marks or trade names which are the same as or similar to or likely to be confusing with or infringe upon QMI’s rights in and to the Trade-marks.

(xiv)

QMI does not have any pending or any potential proceeding, claim, demand, or allegation charging any person or entity with a violation or misappropriation of the QMI Intellectual Property Rights or Technical Information.

4.3

Representations and Warranties by QTECH

QTECH hereby represents and warrants to Wood and QMI as follows, and acknowledges and confirms that Wood and QMI are relying upon the accuracy of each of such representations and warranties in connection with the sale of all rights and interest in the Intellectual Property and any applications derived therefrom and the completion of any other transactions contemplated by this Agreement.

(a)

Corporate Authority and Binding Obligation.  QTECH is a corporation duly incorporated and validly subsisting under the laws of the Province of British Columbia.  QTECH has good right and full corporate power and capacity to enter into this Agreement and to perform its obligations under this Agreement.  The board of directors of QTECH has taken all necessary actions, steps and corporate and other proceedings to approve or authorize, validly and effectively, the entering into of, and the execution, delivery and performance of, this Agreement by QTECH.  This Agreement is a legal, valid and binding obligation of QTECH, enforceable against it in accordance with its terms subject to: (i) bankruptcy, insolvency, moratorium, reorganization and other laws relating to or affecting the enforcement of creditors' rights generally; (ii) the fact that equitable remedies, including the remedies of specific performance and injunctive relief, may only be granted in the discretion of a court; and (iii) the fact that rights to indemnity may be limited under applicable law.

(b)

Compliance with Constating Documents, Agreements and Laws.  The execution, delivery and performance of this Agreement and each of the other agreements contemplated or referred to herein by QTECH, and the completion of the transactions contemplated hereby, will not constitute or result in a violation or breach of or default under:

(i)

any term or provision of any of the articles, by-laws or other constating documents of QTECH; or

(ii)

the terms of any indenture, agreement (written or oral), instrument or understanding or other obligation or restriction to which QTECH is a party or by which it is bound.

ARTICLE 5 

SURVIVAL AND LIMITATIONS OF REPRESENTATIONS AND WARRANTIES

5.1

Survival of Warranties Wood and QMI

The representations and warranties made by Wood, the Covenantor and QMI and contained in this Agreement, or contained in any document or certificate given in order to carry out the transactions contemplated hereby, will survive the completion of the sale of all rights and interest in the Intellectual Property, and Assets (including the QMI Intellectual Property and QMI Intellectual Property Rights)  and any applications derived therefrom provided for herein and, notwithstanding such completion or any investigation made by or on behalf of QTECH or any other person or any knowledge of QTECH or any other person, will continue in full force and effect for the benefit of QTECH indefinitely.

ARTICLE 6 

INDEMNIFICATION

6.1

Indemnification by Wood and QMI

Wood, the Covenantor and QMI shall, jointly and severally, indemnify and save harmless QTECH from and against any claims, demands, actions, causes of action, judgments, damages, losses (which shall include any diminution in value), liabilities, costs or expenses (including, without limitation, interest, penalties and legal fees on a solicitor and own client basis and disbursements) (collectively, the "Losses") which may be made against QTECH or which QTECH may suffer or incur as a result of, arising out of or relating to any violation, contravention or breach of any covenant, representation, warranty, agreement or obligation of Wood, the Covenantor and/or QMI under or pursuant to this Agreement.  

6.2

Notification

In the event that Wood, the Covenantor and QMI shall become aware of any claim, proceeding or other matter in respect of which Wood, the Covenantor and QMI agreed to indemnify QTECH pursuant to this Agreement, Wood and/or QMI shall promptly give written notice thereof to QTECH.  Such notice shall set out in reasonable detail (to the extent that the information is available) the factual basis for the claim and the amount of the claim (if known).

ARTICLE 7 

NON-COMPETITION

7.1

Non-Competition

Wood, the Covenantor and QMI acknowledge that they have become familiar with the proprietary aspects of the Intellectual Property and QMI Intellectual Property, respectively, including certain of the confidential information and trade secrets related to the Intellectual Property and QMI Intellectual Property.  Wood, QMI and the Covenantor, agree and covenant as follows:

(a)

they shall not compete with QTECH by developing any technology, the purpose of which is sensor detection technology to actuate motorized gas and water valves and power shut-offs and neither the Covenantor, nor Wood shall not accept employment with or directly or indirectly organize of participate in the organization of any firm, partnership, corporation, joint venture, sole proprietorship or other business entity if such firm, partnership, corporation, joint venture, sole proprietorship or entity is engaged or to be engaged in any business, conduct or activity in competition with the sensor detection Technology that the Intellectual Property and QMI Intellectual Property comprises and the applications that are derived from same.

(b)

QMI, the Covenantor and Wood shall not, directly or indirectly, either individually or as a consultant, employee, partner, owner, officer or stockholder, or in any other capacity whatsoever with respect to any person, firm, partnership, corporation, joint venture, sole proprietorship or other business entity except as a shareholder for investment purposes holding less than a [2%] interest in a corporation whose shares are traded on a securities exchange or on an over-the-counter market, engage in or aid, assist or abet others in engaging in any business, conduct or activity in competition with the sensor detection Technology that the Intellectual Property and QMI Intellectual Property comprises and the applications that are derived from same.  

7.2

Equitable Remedies

In the event of Wood’s, QMI’s or the Covenantor’s breach, or threatened breach, of any term or provision contained in this Agreement, Wood, QMI and the Covenantor agree that QTECH shall be entitled to both temporary and permanent injunctive relief.  The right of QTECH to such relief shall not be construed to prevent QTECH from pursuing, either consecutively or concurrently, any and all other legal or equitable remedies available to it for such breach or threatened breach, specifically including without limitation the recovery of monetary damages.

ARTICLE 8 

GENERAL PROVISIONS

8.1

Further Assurances

Each of Wood, QMI and QTECH hereby covenants and agrees that, at any time and from time to time after the execution and delivery of this Agreement, it will, upon the request of any of the others, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, assignments, transfers, conveyances and assurances as may be required or desirable for the better carrying out and performance of all the terms of this Agreement.

8.2

Remedies Cumulative

The rights and remedies of the parties under this Agreement are cumulative and in addition to and not in substitution for any rights or remedies provided by law.  Any single or partial exercise by any party hereto of any right or remedy for default or breach of any term, covenant or condition of this Agreement does not waive, alter, affect or prejudice any other right or remedy to which such party may be lawfully entitled for the same default or breach.

8.3

Notices

(a)

Any notice, designation, communication, request, demand or other document, required or permitted to be given or sent or delivered hereunder to any party hereto shall be in writing and shall be sufficiently given or sent or delivered if it is:

(i)

delivered personally to an officer or director of such party;

(ii)

sent to the party entitled to receive it by registered mail, postage prepaid; or

(iii)

sent by facsimile.

(b)

Notices shall be sent to the following addresses or telecopy numbers:

(i)

in the case of QTECH:

#202 – 11 Burbidge Street

Coquitlam, B.C.   V3K 7B2

(ii)

in the case of Wood:

#202 – 2963 Glen Drive

Coquitlam, B.C.  V3B 2P7

(iii)

in the case of QMI:

#202 – 11 Burbidge Street

Coquitlam, B.C.   V3K 7B2

(iv)

in the case of the Covenantor

#202 – 2963 Glen Drive

Coquitlam, B.C.  V3B 2P7

or to such other address or facsimile number as the party entitled to or receiving such notice, designation, communication, request, demand or other document shall, by a notice given in accordance with this section, have communicated to the party giving or sending or delivering such notice, designation, communication, request, demand or other document.

Any notice, designation, communication, request, demand or other document given or sent or delivered as aforesaid will:

(v)

if delivered as aforesaid, be deemed to have been given, sent, delivered and received on the date of delivery;

(vi)

if sent by mail as aforesaid, be deemed to have been given, sent, delivered and received (but not actually received) on the fourth Business Day following the date of mailing, unless at any time between the date of mailing and the fifteenth (15) Business Day thereafter there is a discontinuance or interruption of regular postal service, whether due to strike or lockout or work slowdown, affecting postal service at the point of dispatch or delivery or any intermediate point, in which case the same shall be deemed to have been given, sent, delivered and received in the ordinary course of the mails, allowing for such discontinuance or interruption of regular postal service; and

(vii)

if sent by facsimile, be deemed to have been given, sent, delivered and received on the date the sender receives the facsimile answer back confirming receipt by the recipient.

8.4

Severability

If any provision of this Agreement is wholly or partially unenforceable for any reason, such unenforceability shall not affect the enforceability of the balance of this Agreement, and all provisions of this Agreement shall, if alternative interpretations are applicable, be construed as to preserve the enforceability hereof.

8.5

Counterparts

This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when so executed (as evidenced by an original or facsimile signature), shall be deemed to be an original and all of which, when taken together, shall constitute one and the same agreement.

8.6

Expenses of Parties

Each of the parties hereto shall bear all expenses incurred by it in connection with this Agreement including, without limitation, the charges of their respective counsel, accountants, financial advisors and finders.

8.7

Assignment

The rights of Wood and QMI hereunder shall not be assignable without the written consent of QTECH.  The rights of QTECH hereunder shall be assignable without the written consent of the Vendor to an Affiliate and to any other person with the written consent of the Vendor, such consent not to be unreasonably withheld.

8.8

Successors and Assigns

This Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective heirs, executors, legal personal representatives, successors and permitted assigns, as the case may be.  Nothing herein, express or implied, is intended to confer upon any person, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

8.9

Entire Agreement

This Agreement dated 

July 1, 2010 between QTECH and the Vendor constitutes the entire agreement between the parties hereto and supersede all prior agreements, representations, warranties, statements, promises, information, arrangements and understandings, whether oral or written, express or implied, with respect to the subject matter hereof.  None of the parties hereto shall be bound or charged with any oral or written agreements, representations, warranties, statements, promises, information, arrangements or understandings not specifically set forth in this Agreement or in any schedules attached hereto.

8.10

Waiver

Any party hereto which is entitled to the benefits of this Agreement may, and has the right to, waive any term or condition hereof at any time; provided, however, that such waiver shall be evidenced by written instrument duly executed on behalf of such party.

8.11

Amendments

No modification or amendment to this Agreement may be made unless agreed to by the parties hereto in writing.

IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as of the 1st day of July, 2010.

		
	QMI TECHNOLOGY INC. 

by its authorized signatory

/s/ Larry Wood

Name:

Title:

	QMI MANUFACTURING INC.

by its authorized signatory

/s/ Larry Wood

Name:

Title:

 

			
	SIGNED, SEALED AND DELIVERED by LYNN WOOD in the presence of:

Navchand Jagpal

	)

)

)

)

)

	

/s/ Lynn Wood

	

Name

6038 131 Street

	

)

)

	

LYNN WOOD

	

Address

Surrey, BC

	

)

)

	

	

Accountant

	

)

)

	

	Occupation

	)

)

	 

			
	SIGNED, SEALED AND DELIVERED by RAYMOND WOOD in the presence of:

Gurdeep Johal

	)

)

)

)

)

	

/s/ Raymond Wood

	

Name

14852 73B Avenue

	

)

)

	

RAYMOND WOOD

	

Address

Surrey, BC

	

)

)

	

	

Consultant

	

)

)

	

	Occupation

	)

)

	 

Exhibit 4.6 – Page 33

Schedule A

TECHNOLOGY

See Exhibit 4.6 – Page 13 

Exhibit 4.6 – Page 34

Schedule “B”

Equipment and Machinery

See Exhibit 4.6 – Page 14 – Page 16

Exhibit 4.6 – Page 35

Schedule “C”

Inventory

See Exhibit 4.6 – Page 17 – Page 18

Exhibit 4.6 – Page 36

Schedule “D”

License

Exhibit 4.6 – Page 37

Exhibit 4.6 – Page 38

Exhibit 4.6 – Page 39

IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of the parties hereto as of the date first written above.

/s/ Lynn Wood

LYNN WOOD

QMI MANUFACTURING LTD.

By:

/s/ Raymond Wood

Name:

Raymond Wood

Title:

President

Exhibit 4.6 – Page 40

SCHEDULE A

LICENSED PATENT

				
	

Title

	Filing 

Date

	U.S. 

Patent #

	Issue 

Date

	Gas, fire and earthquake detector

	3/3/1997

	6,661,346

	12/9/2003

Exhibit 4.6 – Page 41

SCHEDULE E

PREMISES LEASE

Exhibit 4.6 – Page 42

Exhibit 4.6 – Page 43

Exhibit 4.6 – Page 44

Exhibit 4.6 – Page 45

Exhibit 4.6 – Page 46

Exhibit 4.6 – Page 47

Exhibit 4.6 – Page 48

SCHEDULE F

CONTRACTS

See Exhibit 4.6 – Page 20 – Page 42

Exhibit 4.6 – Page 49

SCHEDULE G

CERTIFICATIONS

See Exhibit 4.6 – Page 14 – Page 16

Exhibit 4.6 – Page 50

SCHEDULE H

TNB LOAN AGREEMENT

Exhibit 4.6 – Page 51

Exhibit 4.6 – Page 52

Exhibit 4.6 – Page 53

Exhibit 4.6 – Page 54

Exhibit 4.6 – Page 55

Exhibit 4.6 – Page 56

SCHEDULE F

FINANCIAL STATEMENTS

Exhibit 4.6 – Page 57

QMI Technologies Inc.

Balance Sheet

As at July 31, 2010 

								
	 
	 
	 
	 
	 
	 
	 
	Unaudited

July 2010

	 
	 
	 
	 
	 
	 
	 
	 

	 
	ASSETS

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	Current assets

	 
	 
	 
	 
	 
	 

	 
	Cash & equivalents

	 
	 
	 
	 
	$

	-

	 
	Accounts receivable

	 
	 
	 
	 
	 
	-

	 
	Inventory

	 
	 
	 
	 
	 
	83,074

	 
	Prepaid

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	83,074

	 
	 
	 
	 
	 
	 
	 

	Property, plant & equipment 

	 
	 
	 
	 
	 
	171,216

	Intangible assets

	 
	 
	 
	 
	 
	5,154,888

	 
	 
	 
	 
	 
	 
	 
	 

	Total Assets

	 
	 
	 
	 
	$

	5,409,178

	 
	 
	 
	 
	 
	 
	 
	 

	 
	LIABILITIES & SHAREHOLDERS EQUITY

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	Current Liabilities

	 
	 
	 
	 
	 
	 

	 
	Accounts payable & accrued liabilities

	 
	 
	 
	 
	$

	280,000

	 
	Legal claims

	 
	 
	 
	 
	 
	4,178

	 
	Deposits on sales contracts

	 
	 
	 
	 
	 
	25,000

	 
	 
	 
	 
	 
	 
	 
	309,178

	 
	 
	 
	 
	 
	 
	 

	Shareholder’ equity

	 
	 
	 
	 
	 
	 

	 
	Share capital

	 
	 
	 
	 
	 
	5,100,000

	 
	Warrants

	 
	 
	 
	 
	 
	-

	 
	Contributed surplus

	 
	 
	 
	 
	 
	-

	 
	Accumulated comprehensive income

	 
	 
	 
	 
	 
	-

	 
	Deficit

	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	5,100,000

	 
	 
	 
	 
	 
	 
	 
	 

	Total liabilities & equity

	 
	 
	 
	 
	$

	5,409,178

	 
	 
	 
	 
	 
	 
	 
	 

	Accompanying notes form part of these financial statements

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	_____________________

	 
	 
	________________

	 

	 
	Director:

	 
	 
	Director:

	 

Exhibit 4.6 – Page 58

QMI Technologies Inc.

Statement Profit and Loss

For the Period Ending July 31, 2010

								
	 
	 
	 
	 
	 
	 
	 
	Unaudited

July 2010

	Revenue

	 
	 
	 
	 
	 
	 

	 
	Equipment sales

	 
	 
	 
	 
	$

	Nil

	 
	Technical support

	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	 

	Cost of sales

	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	 

	Expenses

	 
	 
	 
	 
	 
	 

	 
	Marketing

	 
	 
	 
	 
	 
	-

	 
	Engineering & operations

	 
	 
	 
	 
	 
	-

	 
	General & administration

	 
	 
	 
	 
	 
	-

	 
	Research & development

	 
	 
	 
	 
	 
	-

	 
	Depreciation & amortization

	 
	 
	 
	 
	 
	-

	 
	Write down PP&E

	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	 

	Other income (expenses)

	 
	 
	 
	 
	 
	 

	 
	Foreign exchange gain (loss)

	 
	 
	 
	 
	 
	-

	 
	Interest income

	 
	 
	 
	 
	 
	-

	Net income (loss) before income taxes

	 
	 
	 
	 
	 
	-

	Income taxes

	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	 

	Net income (loss)

	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	 

	Comprehensive income

	 
	 
	 
	 
	 
	 

	 
	Accumulated comprehensive income

	 
	 
	 
	 
	 
	-

	 
	Other comprehensive income (loss)

	 
	 
	 
	 
	 
	-

	Total comprehensive income (loss)

	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	 

	Deficit, beginning of period

	 
	 
	 
	 
	 
	-

	Deficit, end of period

	 
	 
	 
	 
	$

	-

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

Exhibit 4.6 – Page 59

QMI Technologies Inc

Notes to the Financial Statements

For the Period Ending July 31, 2010

QMI Technologies Inc.

Statement of Cash 

For the Period Ending July 31, 2010

								
	 
	 
	 
	 
	 
	 
	 
	Unaudited

July 2010

	Cash generated from (used in):

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	Operations

	 
	 
	 
	 
	 
	 

	Net income (loss)

	 
	 
	 
	 
	$

	Nil

	Adjustments for:

	 
	 
	 
	 
	 
	 

	 
	Depreciation

	 
	 
	 
	 
	 
	-

	 
	Stock-based compensation

	 
	 
	 
	 
	 
	-

	 
	Loss on disposal of assets

	 
	 
	 
	 
	 
	-

	 
	Write down on PP&E

	 
	 
	 
	 
	 
	-

	 
	Unrealized foreign exchange

	 
	 
	 
	 
	 
	-

	 
	Other non-cash expenses

	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	 

	Change in non-cash working capital:

	 
	 
	 
	 
	 
	 

	 
	Accounts receivable

	 
	 
	 
	 
	 
	-

	 
	Inventory

	 
	 
	 
	 
	 
	(83,074)

	 
	Prepaid expenses

	 
	 
	 
	 
	 
	-

	 
	Accounts payable & accruals

	 
	 
	 
	 
	 
	280,000

	 
	Legal claims

	 
	 
	 
	 
	 
	4,178

	 
	Deposits on sales contracts

	 
	 
	 
	 
	 
	25,000

	 
	 
	 
	 
	 
	 
	 
	-

	Financing

	 
	 
	 
	 
	 
	 

	 
	Issuance of shares

	 
	 
	 
	 
	 
	5,100,000

	 
	Issuance of warrants

	 
	 
	 
	 
	 
	-

	 
	Issuance costs

	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	 

	Investments

	 
	 
	 
	 
	 
	 

	 
	Purchase property and equipment

	 
	 
	 
	 
	 
	(171,216)

	 
	Purchase intangible assets 

	 
	 
	 
	 
	 
	(5,154,888)

	 
	 
	 
	 
	 
	 
	 
	 

	Increase (decrease) cash & equivalents

	 
	 
	 
	 
	 
	-

	 
	 
	 
	 
	 
	 
	 
	 

	Cash & equivalents, beginning of period

	 
	 
	 
	 
	 
	-

	Cash & equivalents, end of period

	 
	 
	 
	 
	$

	Nil

Exhibit 4.6 – Page 60

QMI Technologies Inc

Notes to the Financial Statements

For the Period Ending July 31, 2010

1.    Nature and Continuance of Operations

QMI Technologies Inc. (the “Company”), was incorporated in June 16, 2009, under the laws of the Province of British Columbia. The Company’s head office is located at 202 – 11 Burbridge St., Coquitlam  BC.  The Company reports its financial results in Canadian dollars and under Canadian generally accepted accounting principles. 

During the month of July 2010, it entered into an Asset Purchase Agreement with its parent company QMI Manufacturing Inc and issued 20,400,000 shares having a value of $5,100,000 for the assets, which it received

2. Significant accounting policies

The consolidated financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles (GAAP).

(a) Basis of presentation

The financial statements include the accounts of QMI Technologies Inc. at the time of the Asset Purchase Agreement.  

(b) Use of estimates

The consolidated financial statements have been prepared in conformity with Canadian GAAP, which requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses, assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements. Accordingly, actual results could differ from these estimates.

(c) Revenue recognition

The Company generates revenue from equipment sales, and it is expected, technical support contracts. Revenue is only recognized when the product is shipped or when the service is complete, and collection is reasonably assured. Provisions for estimated losses on incomplete contracts are made in the period in which the losses are determined. 

(d) Cash and cash equivalents

Cash consists of cash and cash equivalents. The Company considers short term investments with original maturities of three months or less to be cash equivalents. Bank borrowings are considered to be financing activities.

Exhibit 4.6 – Page 61

QMI Technologies Inc

Notes to the Financial Statements

For the Period Ending July 31, 2010

(e) Inventory

Parts and work in progress inventories are carried at the lower of cost and net realizable value following the specific item method.

(f) Property and equipment

Property and equipment is stated at cost. Depreciation is calculated on a straight-line basis, over the term of the useful lives, as follows:

Computer and other equipment 3 years

(g) Intangible assets

Intangible assets are stated at cost. Amortization is calculated on a straight-line basis, over the term of the useful lives, as follows: 

Patents 7 years, Customer Contracts 1 to 3 years

Trade and Certification Marks 10 years, Customer Relationship 5 years

Technical Drawings, Trade Secrets 5 years

Proprietary software 5 years Employment Contracts 3 years

Other assets 5 years

(h) Goodwill

Goodwill is the residual amount that results when the purchase price of an acquired business exceeds the sum of the amounts allocated to the assets acquired based on their fair values. Goodwill is not amortized but is tested for impairment annually. Goodwill impairment is assessed based on comparison of the fair value of a reporting unit to the underlying carrying value of the reporting unit’s net assets, including goodwill.

When the carrying amount of the reporting unit exceeds its fair value, the fair value of the reporting unit’s goodwill is compared with its carrying amount to measure the amount of impairment loss, if any. Any permanent impairment is written off against earnings in the year that such a loss becomes evident.

No good will was generated during the recent Asset Purchase Agreement between QMI Manufacturing Inc. and QMI Technologies Inc. 

(i) Impairment of long-lived assets

Long-lived assets, which include equipment, patents, trademarks, licenses, customer contracts, customer relationship, and technical drawings, are reviewed for impairment whenever events or changes in circumstances indicate in management’s judgement, that the carrying amount of such assets may not be recoverable. When such a determination is made, recoverability is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Judgments and assumptions are inherent in management’s estimate of the undiscounted future cash flows used to determine recoverability of an asset and the estimate of an asset’s future value used to calculate the amount of any impairment.

Consolidated Financial Statements

Consolidated Financial Statements

(j) Research and development costs

Research costs are expensed as incurred. Expenditures related to specific products or processes that are proven to be technically and economically feasible are capitalized and amortized over the useful life of the product or process.  Government assistance received in the form of grants for research and development activities are applied as a reduction of the cost of the related property and equipment or as a reduction of the applicable research and development expenses when there is reasonable assurance of their ultimate realization.

No research or development costs were transferred during the recent Asset Purchase Agreement between QMI Manufacturing Inc. and QMI Technologies Inc. 

(k) Translation of foreign currencies

The Company follows the temporal method to translate foreign currency balances and transactions Under this method, monetary assets and liabilities are translated at the rates of exchange in effect at year-end and the other items in the balance sheet and statement of operations are translated at the exchange rates in effect at the date of the transaction. Exchange gains and losses are included in net earnings. Translation gains and losses relating to the self-sustaining operations are included as a separate component of shareholders’ equity in accumulated other comprehensive loss.

During the recent Asset Purchase agreement, foreign currency translation occurred between US$, UK £ and Turkish Liras with Canadian dollars, while valuing various industrial certifications.

(l) Financial Instruments

All financial assets are classified as held for trading or loans and receivables categories. Also, all financial liabilities are classified as other financial liabilities. On initial recognition, financial instruments are measured and recorded on the consolidated balance sheet at fair value. After initial recognition, the financial instruments are 

measured at amortized cost except for those held for trading which should be measured at fair value. 

The Company has classified its cash and cash equivalents as held for trading. All other financial assets are classified as loans and receivables and are accounted for at amortized cost. All financial liabilities are classified as other liabilities and are accounted for at amortized cost. Gains and losses on cash and cash equivalents are presented in financial expenses in the consolidated earnings.

The Asset Purchase Agreement did add to the financial liabilities classification.

(m) Forward exchange contracts

The Company enters into forward exchange contracts to manage portions of its currency risk exposure on an as needed basis. The Company does not account for these forward contracts using hedge accounting and forward exchange contracts are recorded at fair value. Gains or losses resulting from changes in fair values are included in the financial expenses, in consolidated earnings.

The Company has not entered into any forward exchange contracts during the Asset Purchase Agreement.

(n) Income taxes

The Company uses the asset and liability method of accounting for income taxes. Under this method, the Company recognizes future tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted, or substantively enacted, tax rates expected to apply to taxable income in the years in which the Company expects to recover or settle those temporary differences. The Company recognizes the effect on future tax assets and liabilities of a change in the tax rates in earnings in the period that includes the date of enactment or substantive enactment. Future income tax assets are limited to the amount that is more likely than not to be realized.

The Company has not recorded any tax  assets or liabilities. 

(o) Per share amounts

The Company computes basic per share amounts by dividing net earnings by the weighted average shares outstanding during the reporting period. The Company computes diluted per share amounts in the same manner as basic per share amounts, except that the weighted average shares outstanding are increased to include additional shares from the assumed exercise of stock options, if dilutive. The Company calculates the number of additional shares by assuming exercise of outstanding stock options and use of the proceeds from such exercises plus the unamortized stock-based compensation cost to acquire common shares at the average market price during the reporting period. No earnings have been recorded.

Exhibit 4.6 – Page 62

QMI Technologies Inc

Notes to the Financial Statements

For the Period Ending July 31, 2010

(p) Stock-based compensation

The Company has no stock option 

3.   New accounting standards

(a) Goodwill and Intangible Assets

Effective January 1, 2009, the Company adopted the new accounting standards relating to goodwill and intangible assets issued by the Canadian Institute of Chartered Accountants (CICA). The new section establishes standards for the recognition, measurement, presentation and disclosure of goodwill and other intangible assets subsequent to initial recognition. The new section also provides guidance for the recognition of internally developed intangible assets, including assets developed from research and development activities, 

ensuring consistent treatment of all intangible assets, whether separately acquired or internally developed. The adoption of these standards did not have a significant impact on the Company’s financial statements.

(b) Financial Instrument Disclosure

Effective for the year ending December 31, 2009, the Company adopted the amended requirements of section 3862: Financial Instrument - Disclosure, in response to amendments issued by the International Accounting Standards Board (IASB). The Accounting Standard Board’s (AcSB) amendments are consistent with its strategy to adopt International Financial Reporting Standards (IFRS) and to ensure the existing disclosure requirements for financial instruments are converged to IFRSs to the extent possible. The new disclosure standards require additional disclosure of fair values based on a fair value hierarchy as well as enhanced discussion and quantitative disclosure related to liquidity risk. 

4.   Future accounting standards

(a) Business Combinations and Consolidated Financial Statements

The CICA issued three new accounting standards in January 2009: section 1582, “Business Combinations”, section 1601, “Consolidated Financial Statements”, and section 1602, Non-controlling interests. These new standards will be effective for fiscal years beginning on or after January 1, 2011. The Company is in the process of evaluating the requirements of the new standards.

Section 1582 replaces section 1581, and establishes standards for the accounting for a business combination. It provides the Canadian equivalent to International Financial Reporting Standard IFRS 3 – Business Combinations. The section applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2011. Sections 1601 and 1602 together replace 1600 – Consolidated Financial Statements.

Section 1601, establishes standards for the preparation of consolidated financial statements. Section 1601 applies to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011. 

Section 1602 establishes standards of accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination which is not applicable to the Company. It is equivalent to the corresponding provisions of International Financial Reporting Standard IAS 27 - Consolidated and Separate Financial Statements and applies to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011.

5.  Business combination

On July 28, 2010, the Company acquired all of the issued and outstanding shares of QMI Technologies Inc. (“Q - Tech”). The acquisition was settled for a total of 20,400,000 common shares.  Q-Tech is a specialist in seismic detection and applied technologies such as sonic warning, and emergency gas and water shut off. The acquisition has been accounted for using the purchase method of accounting with the purchase consideration allocated as follows:

				
	 
	Description

	 
	Amount

	 
	 
	 

	Cost of Acquisition:

	 
	 

	 
	Stock (20,400,000 @ $0.05)

	 
	$5,100,000

	 
	Cash

	 
	284,178

	 
	Total

	 
	5,384,178

	 
	 
	 
	 

	Fair value of net assets & liabilities acquired:

	 
	 

	 
	Fixed assets

	 
	171,216

	 
	Inventory

	 
	83,074

	 
	Intangible Assets

	 
	5,154,888

	 
	Liabilities (Deposit on Order)

	 
	(25,000)

	 
	Total

	 
	$5,384,178

6.  Property and equipment

				
	Fixed Asset

	Value

	Accum. Depreciation

	Net Book Value

	Production equipment

	126,000

	Nil

	126,000

	Warehouse equipment

	32,530

	Nil

	22,530

	Office 

	24,322

	Nil

	23,017

	Total

	182,852

	Nil

	182,852

Exhibit 4.6 – Page 63

QMI Technologies Inc

Notes to the Financial Statements

For the Period Ending July 31, 2010

7.  Inventory

		
	Category

	Value

	Parts

	60,930

	Finished

	12,323

	Packaging

	9,821

	Total

	83,074

No inventories were written down from their carrying value. No inventory is pledged as security for liabilities.

8. Intangible Assets

				
	Intangible Asset

	Value

	Accum. Depreciation

	Net Book Value

	Patents

	1,300,000

	Nil

	1,300,000

	Employment Contracts

	561,600

	Nil

	561,600

	Customer Contracts

	3,092,575

	Nil

	3,092,575

	Certifications

	119,110

	Nil

	119,110

	Proprietary Software

	7,500

	Nil

	7,500

	Trademarks

	7,251

	Nil

	7,251

	Technical Drawings

	7,500

	Nil

	7,500

	Trade secrets

	50,000

	Nil

	50,000

	Web site

	9,352

	Nil

	9,352

	Total

	 
	Nil

	 

QMI Technologies acquired the assets in an Asset Purchase Agreement in July 2010, as a consequence, no depreciation or amortization has been booked.

9. Impairment of long lived or intangible assets

There has been no impairment of long lived assets that the company is aware of.

10.  Loan

The company has acquired two loans during the Asset Purchase Agreement.

			
	Loan # 1

	80,000

	Current Inventory

	Loan # 2

	200,000

	2005 to 3rd party company

	Total

	$280,000

	 

11. Share capital

(a) Authorized

Unlimited number of voting common shares.

Exhibit 4.6 – Page 64

QMI Technologies Inc

Notes to the Financial Statements

For the Period Ending July 31, 2010

(b) Issued

			
	 
	Number of Shares

	Amount

	 
	 
	 

	 
	 
	 

	Asset Purchase Agreement July, 2010

	20,400,000

	5,100,000

	 
	 
	 

	Balance at July 31, 2010

	20,400,000

	$5,100,000

12.  Income taxes

The Company doesn’t have any tax assets or liabilities recorded.

13.  Capital management

The Company’s objectives in terms of capital management are to maintain a sound financial position and to ensure financial flexibility in order to maintain its capacity for growth. The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors both the demographic spread of shareholders, as well as the return on capital. 

The Company’s capital is composed of its shareholders’ equity and its primary uses are to finance acquisitions, increases in non-cash working capital and capital expenditures for capacity expansion and research and development. The Company believes that current cash balances and future funds generated through its operations will be sufficient to meet cash requirements currently and for the foreseeable future. If the Company were to experience a significant reduction in its cash flows from operations, it currently has a variety of options for raising capital for short-term cash needs, including the issuance of a private placement.

 There were no changes in the Company’s approach to capital management during the period ended July 31, 2010.

14. Financial instruments and risk management

Financial instruments

The Company has designated its cash and cash equivalents as held-for-trading, which are measured at fair value. Accounts receivable are classified as loans and receivables, which are measured at amortized cost. Accounts payable and accrued liabilities are classified as other financial liabilities, which are measured at amortized cost.

Risk Management

The Company's risk exposures and the impact on the Company's financial instruments are summarized below: This note presents information about the Company’s exposure to particular risks and the Company’s objectives, policies and processes for measuring and managing those risks. Further quantitative disclosures are included throughout these consolidated financial statements. The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. 

The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Management has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, where available, and in some cases bank references. The demographics of the Company’s customer base, including the default risk of the industry and country, in which customers operate, has less of an influence on credit risk. 

Approximately 90% percent of the Company’s revenue in the year is attributable to sales transactions with a single customer. In addition the Company has three other major customers The Company does not require collateral from its customers, in respect of trade and other receivables. 

At July 31, 2010, there were no past due receivables, in excess of 90 days. The Company has not as yet established an allowance for doubtful accounts. The Company has no significant concentration of credit risk arising from customers other than as noted above. 

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, to the extent possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. As of December 31, 2009, the Company had a cash balance of $00.00 to settle current liabilities of $.4,000. 

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on risk.

Interest rate risk

The Company's current policy is to invest excess cash in deposits at credit worthy banking institutions..

Currency risk

The consolidated Company's functional currency is the Canadian dollar and major purchases and sales are transacted in Canadian dollars, US dollars and Chinese RMB. The Company is exposed to currency risk on sales and purchases that are denominated in a currency other than the functional currency of the Company’s foreign and domestic operations. 

15.  Commitments

There are no current commitments

16. Segmented information

At the present time the Company does not segment revenue.

17. Related party transactions

The Company currently has no related party transactions

18. Subsequent Events

At the present date there are no subsequent events to report.

Exhibit 4.6 – Page 65

SCHEDULE G

PRO FORMA

Exhibit 4.6 – Page 66

Exhibit 4.6 – Page 67

SCHEDULE H

KEY STAFF EMPLOYEE SUMMARY

Exhibit 4.6 – Page 68

Employment Term Sheet

Raymond Wood

#202-2963 Glen Drive, Coquitlam, B.C. V3B 7B2           

				
	Position:

	 
	 
	President, reporting to the Board of Directors and providing services for QMI Technologies Inc. (`QTech`).

	Employer:

	 
	 
	QMI Technologies Inc. ('QTech`), 202-11 Burbidge Street, Coquitlam, B.C., Canada, V3K 7B2

	Base Salary:

	 
	 
	$ 72,000 per year in Canadian Funds.

	Payment Schedule

	 
	 
	$3000.00 CDN paid bi-weekly

	Payment Delivery:

	 
	 
	Hold for Pickup

	Employment Start

	 
	 
	July 1, 2010

	Term

	 
	 
	36 months

	Benefits:

	 
	 
	Extended Health and Dental to be paid by Employer

	Vacation:

	 
	 
	TBD

	Compensation Review

	 
	 
	A compensation committee, consisting of QTech Directors, will be established and will handle all compensation matters.

	Withholdings:

	 
	 
	All payments set forth herein which are subject to withholdings, shall be made less any required withholdings.

	Job Description:

	 
	 
	
n

Management of QMI operations, staff, production and sales

n

Achievement of sales objectives and targets

n

Board of Directors accountability

	Direct Reports:

	 
	 
	
n

ALL

Exhibit 4.6 – Page 69

Employment Term Sheet

Nicola Farrell of 

1431 Smith Avenue, Coquitlam, B.C. V3J 2Y1           

				
	Position:

	 
	 
	Director of Operations, reporting to the CEO and providing services for QMI Technologies Inc. (`QTech`).

	Employer:

	 
	 
	QMI Technologies Inc. ('QTech`), 202-11 Burbidge Street, Coquitlam, B.C., Canada, V3K 7B2

	Base Salary:

	 
	 
	$ 55,200 per year in Canadian Funds.

	Payment Schedule

	 
	 
	$2300.00 CDN paid bi-weekly

	Payment Delivery:

	 
	 
	Hold for Pickup

	Employment Start

	 
	 
	July 1, 2010

	Term

	 
	 
	36 months

	Benefits:

	 
	 
	Extended Health and Dental to be paid by Employer

	Vacation:

	 
	 
	6 weeks annual vacation

	Compensation Review

	 
	 
	A compensation committee, consisting of QTech Directors, will be established and will handle all compensation matters.

	Withholdings:

	 
	 
	All payments set forth herein which are subject to withholdings, shall be made less any required withholdings.

	Job Description:

	 
	 
	
n

Bookkeeping, A/R and A/P

n

Purchasing of electronic components

n

Customs clearance and preparation of international shipping documents

n

Payroll and extended benefits administration

n

Reporting of payroll and GST to CRA

n

Shipping/receiving

n

Billing

n

General day-to-day office duties.  Customer correspondence, data entry, filing.

	Direct Reports:

	 
	 
	
n

N/A

Exhibit 4.6 – Page 70

Employment Term Sheet

Michael Hanrahan of 

13-3476 Coast Meridian Road, Port Coquitlam, B.C. V3B 7H6           

				
	Position:

	 
	 
	Vice President of Technology, reporting to the CEO and providing services for QMI Technologies Inc. (`QTech`).

	Employer:

	 
	 
	QMI Technologies Inc. ('QTech`), 202-11 Burbidge Street, Coquitlam, B.C., Canada, V3K 7B2

	Base Salary:

	 
	 
	$ 60,000 per year in Canadian Funds.

	Payment Schedule

	 
	 
	$2500.00 CDN paid bi-weekly

	Payment Delivery:

	 
	 
	Hold for Pickup

	Employment Start

	 
	 
	July 1, 2010

	Term

	 
	 
	36 months

	Benefits:

	 
	 
	Extended Health and Dental to be paid by Employer

	Vacation:

	 
	 
	5 weeks annual vacation

	Compensation Review

	 
	 
	A compensation committee, consisting of QTech Directors, will be established and will handle all compensation matters.

	Withholdings:

	 
	 
	All payments set forth herein which are subject to withholdings, shall be made less any required withholdings.

	Job Description:

	 
	 
	
n

In charge of new product development and  ongoing review of existing products to improve  performance, efficiency, and reduce cost/time to manufacture

n

Provide feasibility feedback to marketing department regarding requests for new products or new features for existing products

n

Co-ordinate with marketing department and/or  customers to implement new features/products

n

Co-ordinate with independent contractors (programmers, board designers, etc.)

n

Review company technology and provide feedback regarding production equipment, test equipment, process and methodologies in an effort to keep up-to-date with current technology.

	Direct Reports:

	 
	 
	
n

Production Staff 

Exhibit 4.6 – Page 71

Schedule “I”

QMan Intellectual Property

			
	Certification

	Description

	Certified Products

	FCC

Federal Communications Commission

	Depending on the type of equipment that the manufacturers have, FCC certification might be required. The two most common FCC Certifications requirements are FCC Part 15 (electronic equipment) and FCC Part 68 (Telecommunications equipment). 

Manufactures must cover the FCC Certification for equipment before the equipment is offered for sale in the United States.

	Water Guardian

·

wireless sensor

·

controller

Gas Guardian

·

wireless sensor

·

controller

·

co/Gas detector

RF Quake

	UL

Underwriters Laboratories

	If a product carries this Mark, it means UL found that representative product samples met UL's safety requirements. These requirements are primarily based on UL's own published standards for safety.

The optional C-UL-US Mark indicates compliance with both Canadian and U.S. requirements. UL encourages those manufacturers with products certified for both countries to use this combined Mark, but they may continue using separate UL Marks for the United States and Canada.  

	Motorized gas valve

1⁄2”, 3⁄4”, 1” 

2500 Series

	WRAS

	The Water Regulations Advisory Scheme (WRAS) is the UK Water Industry's approval scheme. Products approved by the scheme have been shown to comply with the requirements of the Water Supply (Water Fittings) Regulations 1999 and amendments.  

	Motorized water valve

1⁄2”, 3⁄4”, 1” 

	IAPMO

International

Association

Of

Plumbing

&

Mechanical

Officials

	The International Association of Plumbing and Mechanical Officials has been protecting the public’s health and safety for more than eighty years by working in concert with government and industry to implement comprehensive plumbing and mechanical systems around the world.

As a membership-based association, IAPMO utilizes an open consensus process in the development of its flagship Uniform Plumbing Code® and Uniform Mechanical Code®. These codes are established through scientific research, debate, and analysis, strengthening its position at the forefront of the plumbing and mechanical industries.

	Motorized water valve

1⁄2”, 3⁄4”, 1” 

	ASME

American

Society of

Mechanical

Engineers

	ASME conformity assessment programs—programs under which a company or an individual is assessed and certified based on demonstrated ability to meet the requirements of an ASME standard—continue to provide a vital support to enhancement of public safety and facilitation of international commerce.

	2500 Series

2600 Series

	CSA

Canadian Standards Association

	CSA compliance covered by other listing agencies.

	Water Guardian Pro

2500 Series

2600 Series

Motorized gas valve

1⁄2”, 3⁄4”, 1” 

	Advantica

	Supplies local professional EC Type Examination and Production Surveillance services (CE mark) for gas appliances on behalf of Advantica (EU notified body no. 0087) in accordance with the GAD directive. 

Also supply local professional services for gas appliances CSA, AGA, GOST certification. 

Products to be tested and certified include: gas stoves, gas hobs, gas cookers, gas heaters, gas water heaters, gas boilers, gas ovens, automatic burner control system, gas valves and other controls, hoses, fittings.

	Motorized gas valve

1⁄4”, 3⁄4”, 1”, 1 1⁄2”

2” 

	Lab Test

	www.labtestcert.com

	Water Guardian Pro

2500 Series

	TSE

	Turkish Standards

	T2400

	ASCE

American Society of Civil Engineers

	Tested by CSA

	Earthquake Sensor

Exhibit 4.6 – Page 1

Schedule “J”

License

Exhibit 4.6 – Page 1

Exhibit 4.6 – Page 2

Exhibit 4.6 – Page 1

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