Document:

<PAGE>

                                                                   Exhibit 10.12

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, UNLESS THE COMPANY HAS RECEIVED THE WRITTEN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT OR TRANSFER
DOES NOT INVOLVE A TRANSACTION REQUIRING REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.

                             CONVERTIBLE DEMAND NOTE

                                  May 10, 2004

         For value received, GIGABEAM CORPORATION, a Delaware corporation (the
"Company"), hereby unconditionally promises to pay to the order of AMERISTOCK
CORP. or its registered assigns (the "Payee"), ON DEMAND, the principal sum of
Two Hundred Thousand Dollars ($200,000.00), together with interest thereon, and
premium, if any, all as hereinafter provided, if not earlier converted pursuant
to the Agreement (as hereinafter defined). Such principal sum, together with all
interest incurred thereon, premium (if any), and all other fees and costs, shall
be due and payable ON DEMAND and, except as provided herein, the Payee's right
to make demand is unconditional and unlimited; notwithstanding the foregoing,
prior to the one year anniversary of the date of issuance of this Note (the
"Maturity Date"), the Payee may only make demand (if not earlier converted as
provided in the Agreement): (i) following the occurrence and continuance of an
Event of Default (as such term is defined in the Agreement) or (ii) immediately
prior to the closing of a Change of Control (as such term is defined in the
Agreement), which shall permit the acceleration and demand of this Note.

         The Company agrees that the Payee, in the exercise of the Payee's sole
discretion, may make demand at any time after the Maturity Date whether or not
any Event of Default or Change of Control has occurred and is continuing, and
may make demand at any time either before or after the Maturity Date in the
event of either of the occurrences described in items (i) and (ii) of the
immediately preceding paragraph of this Note. The Company agrees that, in
exercising its discretion, the Payee may make demand for any reasons which it
deems appropriate, and such reasons may be related or unrelated to the Company,
its business or financial condition or prospects. The Payee's right to make
demand is a continuing right, and acceptance by the Payee of any payment after
demand shall not be deemed a waiver of such right to make demand on any other
occasion.

         Prior to the date upon which the balance of this Note becomes due and
payable as described herein, whether by demand or otherwise (the "Payment Due
Date") and after the Payment Due Date, the unpaid principal balance outstanding
on all advances, from time to time, hereunder shall accrue interest at a rate
equal to ten percent (10%) per annum. Interest shall be compounded annually and
shall be computed on the basis of a 360-day year and a 30-day month.
Notwithstanding any other provision of this Note, the Payee does not intend to
charge and the Company shall not be required to pay any interest or other fees
or charges in excess of the maximum permitted by applicable law; any payments in
excess of such maximum shall be refunded to the Company or credited to reduce
principal hereunder. All payments received by the Payee hereunder will be
applied first to costs of collection and fees, if any, then to interest, then to
principal and the balance to premium (if any).

<PAGE>

         All principal plus accrued and unpaid interest on the Note and premium
(if any) shall be immediately due and payable upon notice in writing from Payee
to the Company, without presentment, demand, protest, or notice, upon the
occurrence of an Event of Default of the type specified in Section 4.1 of the
Agreement, after taking account of all applicable grace and cure periods
thereunder. All accrued and unpaid interest on the Note and premium (if any)
shall be paid upon payment of the principal of the Note, whether by demand, or
upon acceleration as provided herein, or otherwise. At the time that the payment
of the balance of this Note becomes due, the Payee may proceed with every remedy
available at law or in equity.

         This Note is issued pursuant to and is entitled to the benefits of a
certain Note and Warrant Purchase Agreement, dated as of April 19, 2004, by and
among the Company and the purchaser named therein (the "Agreement"), the terms
of which are incorporated herein, and each holder of this Note, by his, her or
its acceptance hereof, agrees to be bound by the provisions of the Agreement,
including, without limitation, the representations contained in Section 1.9
thereof. Without limiting the foregoing, the holder of this Note is subject to
the mandatory equity conversion provisions as set forth in Section 1.10 of the
Agreement.

         Principal and interest shall be payable in lawful money of the United
States of America, at the address of the Payee set forth in the Agreement or at
such other address as the Payee or any subsequent holder may designate from time
to time to the Company in writing. If any day on which a payment is due pursuant
to the terms of this Note is not a Business Day (as such term is defined in the
Agreement), such payment shall be due on the next Business Day following.

         Upon surrender of this Note for transfer or exchange, a new note or new
notes of the same tenor dated the date to which interest has been paid on the
surrendered Note and in an aggregate principal amount equal to the unpaid
principal amount of the Note so surrendered will be issued to, and registered in
the name of, the transferor or transferees. The Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes.

         In the event any one or more of the provisions of this Note shall for
any reason be held to be invalid, illegal or unenforceable, in whole or in part
or in any respect, or in the event that any one or more of the provisions of
this Note operate or would prospectively operate to invalidate this Note, then
and in any such event, such provision(s) only shall be deemed null and void and
shall not affect any other provision of this Note and the remaining provisions
of this Note shall remain operative and in full force and effect and in no way
shall be affected, prejudiced, or disturbed thereby.

         In case any payment herein provided for shall not be paid when due, the
Company promises to pay all costs of collection or enforcement of this Note,
including, without limitation, court costs and all reasonable attorney's fees
and expenses incurred or paid by the Payee in enforcing the obligations of the
Company.

                                       2
<PAGE>

         This Note may be not be prepaid without the prior written consent of
the Payee.

         All notices to the Company and the Payee required or permitted
hereunder shall be made in accordance with the Agreement.

         This Note shall be governed by, and construed in accordance with, the
laws of the State of Delaware.

         Whenever used herein, the terms "Company" and "Payee" shall be deemed
to include, to the extent applicable, the successors and assigns of such
parties; provided, however, that the obligations of the Company under this Note
may not be assigned without the express written consent of the Payee or any
holder hereof, which consent may be withheld in the sole and absolute discretion
of such Payee or holder.

         The Company and all endorsers of this Note herein waive presentment,
notice of nonpayment, protest and all other demand and notices in connection
with the delivery, acceptance, performance or enforcement of this Note.

         If any part of this Note shall be adjudged invalid, illegal, or
unenforceable, then such partial invalidity, illegality, or unenforceability
shall not cause the remainder of this Note to be or to become invalid, illegal,
or unenforceable. If a provision hereof is held invalid, illegal or
unenforceable in one or more of its applications, the parties hereto agree that
the other provisions shall remain in effect in all valid, legal and enforceable
applications that are severable from the invalid, illegal or unenforceable
application or applications.

         The validity, meaning, enforceability and effect of this Note, and the
rights and liabilities of the parties, shall be determined in accordance with
the laws of the State of Delaware.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       3
<PAGE>

         IN WITNESS WHEREOF, the Company has executed this Note as of the date
and year first written above.

                                          GIGABEAM CORPORATION

                                          By:/s/ Louis Slaughter
                                             -----------------------------
                                          Name:    Louis Slaughter
                                          Title:   Chief Executive Officer

                                       4Exhibit 10.2
------------

                            ASSET PURCHASE AGREEMENT
                            ------------------------

THIS AGREEMENT made this 25th day of May, 2004.
--------------

B E T W E E N:
--------------

                            SWEET VALLEY FOODS INC.,
                            ------------------------
   a Corporation incorporated pursuant to the laws of the Province of Ontario

                           (hereinafter the "Seller")

                                      -and-

                                MG HOLDINGS INC.,
                                -----------------
   a Corporation incorporated pursuant to the laws of the Province of Ontario

                            (hereinafter the "Buyer")

                                      -and-

                               MONACO GROUP INC.,
                               ------------------
    a Corporation incorporated pursuant to the laws of the State of Delaware

                           (hereinafter the "Parent")

     WHEREAS  the Seller  carries  on,  among  other  things,  the  business  of
     -------
importing, manufacturing and the sale of sugar;

     AND  WHEREAS  the  Seller has agreed to sell to the Buyer and the Buyer has
     ------------
agreed to purchase from the Seller  substantially  all the assets,  property and
undertaking of and pertaining to the Business (as hereinafter defined), upon and
subject to the terms and conditions hereof;

     AND WHEREAS the Buyer is a wholly owned  subsidiary of the Parent which has
     -----------
agreed to cause the Buyer to perform its obligations hereunder;

     THIS  AGREEMENT   WITNESSES  THAT  in   consideration   of  the  respective
     ---------------------------------
conditions, covenants, agreements,  representations,  warranties and indemnities
herein contained and for other good and valuable  consideration (the receipt and
sufficiency of which are  acknowledged by each party),  the parties covenant and
agree as follows:

                                    ARTICLE I
                                    ---------
                  DEFINITIONS AND PRINCIPLES OF INTERPRETATION
                  --------------------------------------------

1.01  Definitions
-----------------

      Whenever used in this Agreement,  unless there is something in the subject
matter or context  inconsistent  therewith,  the following words and terms shall
have the respective meanings ascribed to them as follows:

<PAGE>

      (a)   "Agreement" means this Asset Purchase  Agreement and all instruments
            supplemental   hereto  or  in  amendment  or  confirmation   hereof;
            "hereof",  "hereto" and "hereunder" and similar expressions mean and
            refer  to  this  Agreement  and  not to any  particular  article  or
            section;  "Article" or "Section"  means and refers to the  specified
            article or section of this Agreement;

      (b)   "Assumed Liabilities" means:

            (i)   the   Assumption   Agreement  and  Indemnity   respecting  all
                  liabilities  and  obligations  of the  Seller  under the small
                  business  loan  in  the   approximate   principal   amount  of
                  $135,300.00   as  at  December  31,  2003   accruing  and  due
                  subsequent  to the Closing as more  particularly  set forth in
                  Schedule A and referred to in Section 7.04 (a);

           (ii)   the Leases set forth in Schedule B and  referred to in Section
                  1.1 (o);

          (iii)   the  Equipment  Contracts set forth in Schedule C and referred
                  to in Section 1.1 (k);

           (iv)   the Employee Contracts set forth in Schedule D and referred to
                  in Section 1.1 (j); and

            (v)   The Indemnity of Couprie, Fenton Inc. for liability respecting
                  its lease at 4055  Sladeview  Crescent,  Unit 4,  Mississauga,
                  Ontario,  as set  forth in  Schedule  "J" and  referred  to in
                  Section 7.04 (b).

      (c)   "Business" means the manufacturing, processing and the sale of sugar
            carried  on  by  the  Seller,  including  all  assets,  tangible  or
            intangible,  leases, contracts, and rights which in combination make
            up and comprise the business operations of the Seller;

      (d)   "Business Day" means a day other than a Saturday,  Sunday or any day
            on which the principal commercial banks located at Toronto,  Ontario
            are not open for business during normal banking hours;

      (e)   "Buyer" means MG Holdings Inc., a corporation organized and existing
            under the laws of the Province of Ontario;

      (f)   "Closing"  means  the  completion  of the sale and  purchase  of the
            Purchased  Assets under this  Agreement by the transfer and delivery
            of documents of title thereto and the payment of the Purchase  Price
            therefore;

      (g)   "Closing Date". The date on which the Closing actually occurs, which
            shall be no later than June 30, 2004, unless otherwise agreed by the
            parties,  but  shall not in any  event be prior to  satisfaction  or
            waiver of the  conditions to Closing  specified in Article V of this
            Agreement;

                                                                               2
<PAGE>

      (h)   "Contracts" means the contracts, agreements and other obligations of
            the  Seller   relating  to  the  Business,   including  the  Assumed
            Liabilities  as referred to and  defined in this  Article,  and such
            other contracts and obligations entered into by the Seller;

      (i)   "Convertible  Shares" means the defined number of Series A Preferred
            Stock  of the  Parent  to be  issued  to the  Seller  subsequent  to
            approval  from the  majority of Parent's  shareholders  necessary to
            amend Parent's  certificate of  incorporation to allow for preferred
            stock and, subsequently,  approval of Parent's board of directors of
            the   voting   powers,   rights,   designations,   preferences   and
            qualifications  of such  Series  A  Preferred  Stock,  as set out in
            Sections 2.01(b) of the Agreement;

      (j)   "Employee  Contracts" means the employee contracts,  whether written
            or  verbal,  to which the  Seller  is a party  with  respect  to its
            Business as set forth in Schedule D hereto;

      (k)   "Equipment Contracts" means the equipment leases,  conditional sales
            contracts,  title retention  agreements and other agreements between
            the Seller  and third  Persons  relating  to  equipment  used by the
            Seller in  connection  with the  Business as set forth in Schedule C
            hereto;

      (l)   "Excluded Assets" means:

            (i)   all cash,  bank  balances,  moneys in  possession of banks and
                  other  depositories,  term or time  deposits  and similar cash
                  items of, owned or held by or for the account of the Seller;

           (ii)   the  accounts  receivables  of the Seller with  respect to the
                  Business up to the Closing;

          (iii)   the  corporate,  financial,  taxation and other records of the
                  Seller not pertaining exclusively to the Business; and

           (iv)   all other  assets of the  Business  of any nature or kind that
                  are not identified as Purchased Assets in article 1.01 (t).

      (m)   "Excluded  Liabilities"  means  all  liabilities  contracts,  debts,
            obligations of the Seller not assumed herein as Assumed Liabilities.

      (n)   "Inventory  Payment"  shall  have the  meaning  assigned  thereto in
            Section 2.01(c) hereof;

      (o)   "Leases"  means the leases and subleases of real property  listed in
            Schedule B hereto;

      (p)   "Material  Contract"  means any contract,  agreement,  real property
            lease,  obligation  or  commitment of the Seller with respect to the

                                                                               3
<PAGE>

            Business  having a value in  excess  of  $5,000.00  and which is not
            terminable upon 30 days written notice;

      (q)   "Parent"  means  Monaco  Group Inc.,  a  corporation  organized  and
            existing  under the laws of the  State of  Delaware,  in the  United
            States of America, which wholly owns the Buyer;

      (r)   "Parties" means the Seller, the Buyer and the Parent,  collectively,
            and "Party" means any one of them;

      (s)   "Person" means any individual, corporation,  partnership, trustee or
            trust or  unincorporated  association  and pronouns have a similarly
            extended meaning;

      (t)   "Permitted  Encumbrances" means any pledge,  lien, charge,  security
            interest,  mortgage,   encumbrance  or  adverse  claim  against  the
            Purchased Assets set forth in Sections 3.02 (a) and 7.04 (a) hereto;

      (u)   "Purchase Price" means the purchase price to be paid by the Buyer to
            the Seller for the  Purchased  Assets as  provided  in Section  2.01
            hereof, subject to adjustment as provided in Section 2.02 hereof;

      (v)   "Purchased   Assets"   means  all  of  the  assets,   property   and
            undertaking, and those assets owned and used by Seller or held by it
            for use  in,  or in  respect  of the  operation  of,  the  Business,
            including, without limitation, the following:

            (i)   Leases-All right,  title and interest of the Seller in, to and
                  under  the  Leases  and  the  premises  subject  thereto,  all
                  leasehold improvements pertaining to such Leases and leasehold
                  premises,  all fixtures located in, on or about such leasehold
                  premises, and all appurtenance thereto;

           (ii)   Inventories-All      inventories     of     raw     materials,
                  work-in-progress,   finished  goods,  operating  supplies  and
                  packaging materials of or pertaining to the Business;

          (iii)   Confidential  Information-All confidential information used in
                  and related to the  Business,  including,  but not limited to,
                  customer lists, supplier lists and customer contracts.

           (iv)   Contracts-All  right,  title and interest of the Seller in, to
                  and under the  Contracts  and the full  benefit of all service
                  contracts  relating to any  equipment or other assets  covered
                  thereby  and  all  options,  including,   without  limitation,
                  options to purchase, thereunder;

            (v)   Fixed Assets, etc-All fixed assets,  machines,  manufacturing,
                  equipment,   fixtures,   furniture,   furnishings,   vehicles,
                  materials, handling equipment, implements, parts, tools discs,
                  and other similar items used in the Business  owned or held by
                  the Seller,  including,  without limitation,  any which are in
                  storage,  and other tangible  property and facilities  used in

                                                                               4
<PAGE>

                  the  Business  whether  located in or on the  premises  of the
                  Seller or elsewhere, as set out in Schedule E hereto;

           (vi)   Intellectual  Property-the intellectual property rights of the
                  Seller,  including all trade mark  registrations,  trade names
                  and   registered   user  and  other   trade  mark  rights  all
                  copyrights,    copyright    registrations   and   applications
                  therefore,  and all renewals,  modifications and extensions of
                  any of the aforesaid  items;  all patents and applications for
                  patents, all reissues, divisions, continuations and extensions
                  thereof,  and all  licences  and  other  relating  to  patent,
                  inventions and  discoveries  owned or held by the Seller;  and
                  all patterns, plans, designs, research data, trade secrets and
                  other proprietary know-how, processes,  drawings,  technology,
                  unpatented blue prints, flow sheets, equipment and parts lists
                  and  descriptions  and related  instructions,  manuals,  data,
                  records  and  procedures  and  any and  all  data  used in the
                  Business.  Such Intellectual Property rights of the Seller are
                  set out in Schedule F, which is attached hereto.

          (vii)   Goodwill of Business-The goodwill of the Business,  including,
                  without limitation, the right to the Buyer represent itself as
                  carrying on the Business in  succession  to the Seller and all
                  right,  title and interest of the Seller in, to and in respect
                  of the name "Sweet Valley Foods" and variations  thereof,  the
                  Seller's  telephone  number,  customer and supplier lists, and
                  other items identifiable with the Business of the Seller

         (viii)   Deposits-  All  deposits  and   prepayments   of  the  Seller,
                  including  but  not  restricted  to  rent,  public  utilities,
                  telephone,  prepaid  expenses  and  equipment  leases or other
                  leases;

           (ix)   Warranty   Rights-The  full  benefit  of  all  warranties  and
                  warranty  rights  (implied,   express  or  otherwise)  against
                  manufacturers  or Seller's which apply to any of the Purchased
                  Assets  and  the  net  realizable  value  of  warranty  claims
                  outstanding at the Closing;

            (x)   General-All  other rights,  properties  and assets (other than
                  any  Excluded  Assets)  of the  Seller  used or  useful in the
                  Business, of whatever nature or kind and wherever situated.

      (w)   "Securities Act" means the U.S. Securities Act of 1933, as amended;

      (x)   "Seller" means Sweet Valley Foods Inc., a corporation  organized and
            existing under the laws of the Province of Ontario; and

      (y)   "Series A Preferred  Stock"  means the  proposed  Series A Preferred
            Stock of the Parent that does not exist as of the date  hereof,  but
            the Parent shall  obtain,  on or before  Closing,  approval from the
            majority of its  shareholders  necessary to amend its certificate of
            incorporation  to  allow  for  preferred  stock  and,  subsequently,
            approval of its board of  directors  of the voting  powers,  rights,
            designations,  preferences  and  qualifications  of  such  Series  A
            Preferred  Stock  along  with the  provisions  setout in  Schedule H
            attached hereto.

                                                                               5
<PAGE>

1.02  Gender and Number
-----------------------

      Words  importing the singular shall be construed to include the plural and
vice versa; and words importing gender shall include all genders.

1.03  Entire Agreement
----------------------

      (a)   This  Agreement,  including the  following  Schedules A to M hereto,
            together  with the  agreements  and other  documents to be delivered
            pursuant hereto, constitute the entire agreement between the Parties
            pertaining  to the subject  matter  hereof and  supersede  all prior
            agreements,  understanding,  negotiations and  discussions,  whether
            oral  or  written,  of the  Parties  and  there  are no  warranties,
            representations   or  other   agreements   between  the  Parties  in
            connection with the subject matter hereof except as specifically set
            forth herein and therein.  No supplement,  modification or waiver or
            termination  of this Agreement  shall be binding unless  executed in
            writing  by the Party to be bound  thereby.  No waiver of any of the
            provisions of this Agreement  shall be deemed or shall  constitute a
            waiver of any other  provisions  (whether or not  similar) nor shall
            such  waiver  constitute  a  continuing  waiver  unless  other  wise
            expressly provided.

      (b)   The following  attached  schedules are hereby  incorporated  in this
            Agreement by reference:

            Schedule  "A"--Assumption  Agreement  and  Indemnity  for CIBC Small
            Business Loan

            Schedule "B"--Leases

            Schedule "C"--Equipment Contracts

            Schedule "D"--Employee Contracts

            Schedule "E"--Fixed Assets

            Schedule "F"--Intellectual Property

            Schedule "G"--Permitted Encumbrances

            Schedule  "H"  -  Proposed  voting  powers,  rights,   designations,
            preferences and qualifications of Series A Preferred Stock

            Schedule "I" - Assumption Agreement

            Schedule "J" - Indemnity of Couprie Fenton for Lease

            Schedule "K" - Guarantee re: Line of Credit

            Schedule "L" - Allocation of the Purchase Price

                                                                               6
<PAGE>

            Schedule "M" - List of Customer Contracts

1.04  Index and Headings
------------------------

      The Index to this Agreement, Article and Section headings contained herein
are  included  solely for  convenience,  are not intended to be full or accurate
description  of the  content  thereof and shall not be  considered  part of this
Agreement

1.05  Applicable Law
--------------------

      This  Agreement  shall be  construed  in  accordance  with the laws of the
Province  of  Ontario  and the laws of Canada  applicable  therein  and shall be
treated,  in all respects,  as an Ontario contract.  The Parties shall attorn to
the jurisdiction of the courts in Province of Ontario.

1.06  Currency
--------------

      Unless  otherwise  indicated,  all  dollar  amounts  referred  to in  this
Agreement are in Canadian funds.

                                   ARTICLE II
                                   ----------
                                 PURCHASE PRICE
                                 --------------

2.01  Purchase Price
--------------------

      Subject  to  the  terms  and  conditions  of  this  Agreement  and  to any
adjustments provided for, the Purchase Price payable by the Buyer and the Parent
hereunder for the Purchased Assets shall be payable as follows:

      (a)   By delivery of a certified  cheque for Eighty Thousand  Dollars (CAN
            $80,000.00) on the Closing Date,  payable  according to the Seller's
            direction;

      (b)   Seven  Hundred  and Fifty  Thousand  (750,000)  Convertible  Shares,
            issued in accordance with the Seller's direction;

      (c)   Cash  for   Inventories   (the  "Inventory   Payment"),   valued  by
            independent  accountants on the Closing Date at the lower of cost or
            net  realizable  value  (calculated  in  accordance  with  generally
            acceptance   accounting   principals  as  defined  by  the  Canadian
            Institute of Chartered Accountants).

2.02  Adjustments to Purchase Price
-----------------------------------

      The Purchase Price shall be adjusted as at the Closing for:

      (a)   all  amounts  paid or payable  to or by the Seller  under the Leases
            including rental (including base, additional and percentage rental),
            taxes  (including  contributions  by lessees to real estate  taxes),

                                                                               7
<PAGE>

            common area maintenance charges,  utilities charges, business taxes,
            advertising fees and occupancy costs;

      (b)   Adjustments Under the Contracts.  All amounts paid or payable by, or
            in the case of amounts such as rebates or royalties, payable to, the
            Seller;

      (c)   Employee  Remuneration and Benefits.  Wages,  bonuses,  commissions,
            sick pay,  vacation pay, earned  vacation,  flex days,  holiday pay,
            contributions  to Benefit Plans and other  remuneration  and health,
            welfare or other benefits paid or payable by the Seller;

      (d)   Fuel, Utilities,  etc. All fuel, telephone and other utility charges
            paid or payable by the Seller;

      (e)   All deposits and prepayments,  including but not restricted to rent,
            public  utilities,  prepaid  expenses and equipment or other leases;
            and

      (f)   all  other  usual   adjustments   in  a  transaction   of  the  type
            contemplated by this Agreement.

2.03  Allocation of Purchase Price
----------------------------------

      The Purchase Price shall be allocated in accordance with the provisions of
Schedule  "L" hereto  provided  that if the  Purchase  Price  shall be  adjusted
pursuant to Section  2.02 hereof,  the amount of  adjustment  required  shall be
allocated on a pro rata basis among the various categories of assets. The Seller
and the Buyer  agree to  cooperate  in the  filing of such  elections  under the
Income Tax Act  (Canada)  and other  taxation  statutes as may be  necessary  or
desirable to give effect to such allocation for tax purposes.

2.04  Taxes, Duties And Other Charges
-------------------------------------

      (a)   The Purchase Price shall include all G.S.T., where applicable;

      (b)   The Buyer shall be liable for and shall pay all land transfer taxes,
            federal and  provincial  sales taxes and all other taxes,  duties or
            other like charges  properly  payable on and in connection  with the
            conveyance and transfer of the Purchased Assets by the Seller to the
            Buyer;

      (c)   The  Seller  and the  Buyer  agree to  co-operate  in the  filing of
            elections under the Income Tax Act, R.S.C.  1952, c. 148, the Excise
            Tax Act R.S.C. l985, as amended,  and all other taxation statutes as
            may be necessary or desirable to give effect to the  allocation  for
            tax purposes.

                                   ARTICLE III
                                   -----------
                                PURCHASE AND SALE
                                -----------------

3.01  Action by Seller and Buyer
--------------------------------

      At the Closing:

                                                                               8
<PAGE>

      (a)   Purchase and Sale of the Purchased  Assets-The Seller shall sell and
            the Buyer shall purchase the Purchased Assets for the Purchase Price
            payable as hereinafter provided;

      (b)   Assumption of Assumed Liabilities-The Buyer shall assume the Assumed
            Liabilities;

      (c)   Payment of the Purchase Price-Subject to the adjustments pursuant to
            section  2.02,  the Buyer shall pay to the order of the  Seller,  by
            certified  cheque or bank  draft  made  payable  in lawful  money of
            Canada, the sum of $ 80,000.00,  the Inventory Payment and the Buyer
            shall  transfer to the Seven  Hundred and Fifty  Thousand  (750,000)
            Convertible Shares; and

      (d)   Transfer and Delivery of Purchased  Assets-The  Seller shall execute
            and  deliver  to the  Buyer  all such  bills  of sale,  assignments,
            instruments of transfer, assurances, consents and other documents as
            shall be necessary effectively to transfer to Buyer all the Seller's
            right,  title and interest  in, to and under,  or in respect of, the
            Purchased  Assets,  and shall deliver up to the Buyer  possession of
            the  Purchased  Assets,  free and  clear  of any  liens  charges  or
            encumbrances  or rights of third  Persons;  and  shall  effect  such
            registrations  recordings and filings with public authorities as may
            be required in  connection  with the  transfer of  ownership  to the
            Buyer of the Purchased Assets.

3.02  Action by the Parent
--------------------------

      (a)   Line of Credit
            --------------

            On or  before  Closing,  the  Parent or the  Buyer  shall  obtain an
            operating line of credit,  for the Business to be owned by the Buyer
            on  Closing,  in the  minimum  amount of one  million  dollars  (CAN
            $1,000,000.00),  as is more  particularly  set out in  Schedule  "K"
            hereto;

      (b)   Series A Preferred Stock
            ------------------------

            On or before Closing, the Parent shall obtain, on or before Closing,
            approval  from the majority of its  shareholders  necessary to amend
            its certificate of  incorporation  to allow for preferred stock and,
            subsequently,  approval  of its  board of  directors  of the  voting
            powers, rights, designations, preferences and qualifications of such
            Series A Preferred  along with the  provisions  setout in Schedule H
            attached hereto;

      (c)   The Parent shall take all such other  actions as may be necessary to
            cause the Buyer to perform its  obligations  under the provisions of
            Section 3.01 hereof at the Closing,  but such covenant by the Parent
            and  agreement  shall not affect the  liability of the Buyer for any

                                                                               9
<PAGE>

            non-performance  on its  part  of  such  obligations  hereunder,  or
            otherwise  excuse  any  such  non-performance,  nor  shall  such the
            non-performance increase the liability of the Buyer hereunder; and

      (d)   The board of  directors of the Parent shall be composed of a minimum
            of four (4)  members,  at least one of whom shall be Leo  Couprie or
            his nominee  until such time the  majority of the Series A Preferred
            Stock issued herein are converted into common shares.

3.03  Place of Closing
----------------------

      The Closing shall take place at the offices of Himelfarb,  Proszanski  LLP
located at 401-250 Dundas Street West,  Toronto,  Ontario or at such other place
as may be agreed upon by the Seller and the Buyer.

3.04  Tender
------------

      Any tender of documents or money hereunder may be made upon the Parties or
their respective  counsel and money may be tendered by official bank draft drawn
upon a Canadian chartered bank of by negotiable cheque payable in Canadian funds
and certified by a Canadian chartered bank or trust company.

3.05  Greater Certainty
-----------------------

      For greater  certainty the Parties  hereby  declare  that,  except for the
Assumed  Liabilities  expressly  assumed by the Buyer  hereunder  as provided in
Section 3.01 (b) hereof,  the Buyer is not assuming and shall not be responsible
for any of the liabilities,  debts or obligations of the Seller, whether present
or future and whether or not  relating  to the  Business,  and the Seller  shall
indemnify  and save  harmless  the Buyer from and against all such  liabilities,
debts and obligations.

                                   ARTICLE IV
                                   ----------
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

4.01  Representations and Warranties of the Seller
--------------------------------------------------

      The Seller  hereby  represents  and  warrants  to the Buyer and the Parent
that:

      (a)   Organization  and Good  Standing-The  Seller is a  corporation  duly
            incorporated  or continued,  organized and validly  existing in good
            standing under the laws of its jurisdiction of incorporation;

      (b)   Seller's Capacity to Carry on Business-The  Seller has all necessary
            corporate  power,  authority  and  capacity to own its  property and
            assets and to carry on the Business as presently conducted.  Neither
            the nature of the  Business  nor the  location or  character  of the
            property owned or leased by the Seller requires it to be registered,
            licensed or otherwise  qualified as an  extra-provincial  or foreign

                                                                              10
<PAGE>

            corporation or to be in good standing in any jurisdiction other than
            in the Provinces of Ontario and licensed or otherwise  qualified and
            in good standing for such purpose;

      (c)   Due Authorization,  etc-The Seller has all necessary corporate power
            and  authority  to enter  into this  Agreement  and to carry out its
            obligations hereunder;  the execution and delivery of this agreement
            and the consummation of the transactions contemplated hereunder have
            been duly authorized by all necessary  corporate  action on the part
            of the Seller;

      (d)   Absence of  Conflicting  Agreements-Except  for Leases and Equipment
            Contracts  and the small  business  loan referred to in Section 1.01
            (b)(i),  the  consent to the  assignment  or  transfer of which from
            landlords,  lessors,  or financial  institutions  thereunder  may be
            required  in  connection  with the  completion  of the  transactions
            contemplated hereby, the Seller is not a Party to, bound or affected
            by  or  subject  to  any  indenture,   mortgage,  lease,  agreement,
            instrument,   charter  or  by-law  provision,  statute,  regulation,
            judgment,  decree  or law  which  would  be  violated,  contravened,
            breached by, or under which  default would occur as a result of, the
            execution and delivery of this Agreement or the  consummation  of an
            of the transaction provided for herein;

      (e)   Right to Sell-The  Seller is the  absolute  beneficial  owner of the
            Purchased Assets,  with good and marketable title thereto,  free and
            clear of any liens, charges,  encumbrances or rights of others (save
            and except, in the case of Leases and Equipment  Contracts,  for the
            proprietary or other rights of landlords or lessors thereunder,  and
            the small  business  loan referred to in Section 1.01 (b)(i)) and is
            exclusively  entitled to possess  and  dispose of the same  (subject
            only to the necessity for obtaining  landlords' or lessors' consents
            to transfer in the case of Leases and  Equipment  Contracts)  and in
            particular,  without limiting the generality of the foregoing, there
            has been no  assignment,  subletting  or granting of any licence (of
            occupation  or  otherwise)  of or in respect of any of the Leases or
            Equipment Contracts;

      (f)   Litigation-There  is  no  suit,  action,   litigation,   arbitration
            proceeding  or  governmental   proceeding,   including  appeals  and
            applications for review, in progress, pending or, to the best of the
            knowledge,  information and belief (after due enquiry) of the senior
            officer of the Seller,  threatened against or relating to the Seller
            or affecting  its  properties  or the Business  which if  determined
            adversely to the Seller might  materially  and adversely  affect the
            properties, Business, future prospects or financial condition of the
            Seller;  and,  except  as  shown  in the  Schedule  G,  there is not
            presently  outstanding  against the  Seller,  any  judgment,  or any
            proceeding  that has the likelihood of becoming a judgment,  decree,
            injunction,  rule or order of any  court,  governmental  department,
            commission, agency, instrumentality or arbitrator;

      (g)   Enforceability of Obligations-This Agreement constitutes a valid and
            binding  obligation  of  the  Seller   enforceable   against  it  in
            accordance with the terms hereof,  subject,  however, to limitations

                                                                              11
<PAGE>

            with  respect  to  enforcement  imposed  by law in  connection  with
            bankruptcy or similar  proceedings  and to the extent that equitable
            remedies  such as specific  performance  and  injunction  are in the
            discretion of the court from which they are sought;

      (h)   Absence of Changes- Since December 31, 2003, there has not been:

            (i)   any  material  change in the  condition or  operations  of the
                  Business,  assets or  financial  condition of the Seller other
                  than changes in the  ordinary  and normal  course of Business,
                  none of which has been materially adverse; or

           (ii)   any  damage,  destruction  or loss,  labour  trouble  or other
                  event,  development or condition of any character  (whether or
                  not covered by insurance)  materially and adversely  affecting
                  the Business,  assets,  properties or future  prospects of the
                  Seller or the Business;

      (i)   Absence of Unusual Transactions-Since  December 31, 2003, the Seller
            has not:

            (i)   transferred,  assigned,  sold or otherwise  disposed of any of
                  the assets shown in the balance  sheet or cancelled  any debts
                  or claims except in each case in the ordinary and usual course
                  of Business;

           (ii)   discharged or satisfied any lien or  encumbrance,  or paid any
                  obligation  or  liability  (fixed or  contingent)  other  than
                  liabilities included in the said balance sheet and liabilities
                  incurred  since the date  thereof in the  ordinary  and normal
                  course of Business;

          (iii)   suffered  an  operating  loss or any  extraordinary  loss,  or
                  waived any rights of  substantial  value,  or entered into any
                  commitment or transaction not in the ordinary and usual course
                  of   Business   where  such  loss,   rights,   commitment   or
                  transactions or would be material in relation to the Seller or
                  its Business as the case may be;

           (iv)   mortgaged,  pledged,  subjected  to lien,  granted a  security
                  interest  in or  otherwise  encumbered  any of its  assets  or
                  property, whether tangible or intangible; or

            (v)   authorized or agreed or otherwise  become  committed to do any
                  of the foregoing.

      (j)   Leases of Real Property-The Seller is not a Party to or bound by any
            leases  of real  property  other  than  the  Leases  referred  to in
            Schedule  B hereto  and all  interests  held by the Seller as lessee
            under the Leases  are free and clear of any and all  liens,  charges
            and encumbrances of any nature and kind  whatsoever.  All rental and
            other  payments  required  to be paid by the Seller  pursuant to the
            Leases  have  been  duly paid and the  Seller  is not  otherwise  in
            default in meeting its obligations under any such Lease;

                                                                              12
<PAGE>

      (k)   Real  Property-The  Seller does not own any real property or, except
            for the Leases, any interests in real property;

      (l)   Condition of Assets-All  material tangible assets of the Seller used
            in or in connection with the Business are in good condition,  repair
            and (where applicable) in proper working order, having regard to the
            use and age thereof;

      (m)   Material  Contracts-Except  for the  Equipment  Contracts  listed in
            Schedule  C,  Employee  Contracts  listed in  Schedule D, the Leases
            listed in Schedule B, and the small business loan listed in Schedule
            A there are no Material Contracts  undisclosed to the Buyer, nor are
            there any  current  or  pending  negotiations  with  respect  to the
            renewal, termination or amendment of any such Material Contracts;

      (n)   Customer  Contracts-All  existing  and  pending  customer  contracts
            entered into by the Seller in the course of carrying on the Business
            are in good standing and all quotations,  orders or tenders for such
            contracts  remain open for acceptance.  The Seller has the capacity,
            including  the  necessary  personnel,  equipment  and  supplies,  to
            perform all its obligations under customer contracts thereunder. The
            Seller  shall  provide  to the Buyer a list of the top ten  customer
            contracts of the Seller,  to be determined by gross revenue obtained
            over the two years prior to Closing,  and shall  attach such list as
            Schedule M to this Agreement;

      (o)   Pension  Plans-Seller  has not registered or established any pension
            plans for its employees;

      (p)   Residence of the  Seller-The  Seller is a resident of Canada for the
            purposes of the Income Tax Act (Canada);

      (q)   Insurance -The Seller  maintains such policies of insurance,  issued
            by  responsible  insurers,  as  are  appropriate  to  its  Business,
            property  and assets,  in such amounts and against such risks as are
            customarily  carried  and  insured  against by owners of  comparable
            businesses,  properties  and assets;  all such policies of insurance
            are in full  force and  effect  and the  Seller  is not in  default,
            whether as to the payment of premium or  otherwise,  under the terms
            of any such policy;

      (r)   Copies of Agreements,  etc.-True, correct and complete copies of all
            Equipment  Contracts,  Leases,  Employee  Contracts,  and the  small
            business listed in Schedules C, B, D, and A respectively  hereto and
            of the  policies of  insurance  referred to in Section 4.01 (q) have
            been delivered to the Buyer;

      (s)   Worker's   Compensation-There   are  no   notices   of   assessment,
            provisional  assessment,  reassessment,   supplementary  assessment,
            penalty   assessment   or   increased   assessment    (collectively,
            "assessments") or any other communications related thereto which the

                                                                              13
<PAGE>

            Seller has  received  from any  workers'  compensation  or workplace
            safety and insurance  board or similar  authorities and there are no
            assessments  which are  unpaid on the date  hereof or which  will be
            unpaid at the Closing and there are no facts or circumstances  which
            may  result in a  material  increase  in  liability  to the Buyer in
            respect  of  the  operation  of the  Business  from  any  applicable
            workers' compensation or workplace safety and insurance legislation,
            regulations  or rules after the  Closing.  To the  knowledge  of the
            Seller,  the Business is such that there are no material  pending or
            possible  assessments  and there are no claims or  potential  claims
            which may  materially  adversely  affect the Buyer.  The Seller will
            obtain,  and provide to the Buyer at, or as soon as  possible  after
            Closing,  a Purchase  Certificate or Clearance  Certificate from any
            workers'  compensation  or workplace  safety and insurance  board or
            similar authority with respect to the Business;

      (t)   Occupation  Health and  Safety-There  are no outstanding  inspection
            orders nor any pending  charges made under any  Occupational  Health
            and Safety Acts  relating to the  Business,  nor have there been any
            fatal or critical accidents within the last year which might lead to
            charges under Occupational  Health and Safety Acts in respect of the
            Business.  The Seller has complied in all material respects with any
            orders issued under  Occupational  Health and Safety Acts and, there
            are no appeals of any Orders  under  Occupational  Health and Safety
            Acts relating to the Business which are currently outstanding;

      (u)   Employee Contracts-The Seller has no written contracts of employment
            with any of its  employees  other than as  described  in  Schedule D
            hereto  and all such  contracts  remain in full force and effect and
            are in good standing. The Seller is not aware, and has no knowledge,
            of any claims or demands,  including any statutory claims, affecting
            those employees listed in Schedule D hereto;

      (v)   Intellectual  Property-The  Seller has ownership of the Intellectual
            Property as defined in Section 1.01(v)(vi), and all right, title and
            interest in and to the  Intellectual  Property free and clear of any
            encumbrances.  The Intellectual  Property owned by the Seller are in
            full force and effect,  are valid and  enforceable and have not been
            used or  enforced  or failed to be used or enforced in a manner that
            would result in the abandonment, cancellation or unenforceability of
            any  rights  of  the  Seller  to  the  Intellectual   Property.  All
            registrations  and filings  necessary  to preserve the rights of the
            Seller in and to the Intellectual Property have been made;

      (w)   No  Indebtedness-Except  as otherwise referred to herein, the Seller
            has no indebtedness to any person, firm, corporation,  government or
            agency  thereof  which might by operation of law or otherwise now or
            hereafter  constitute a lien,  charge or  encumbrance  on any of the
            Purchased Assets;

      (x)   Environmental  Matters-The Seller is now in material compliance with
            all federal and provincial  environmental  laws and to its knowledge
            the Seller possesses all material  environmental  permits  necessary

                                                                              14
<PAGE>

            for it to  carry on the  Business.  The  Seller  has not  caused  or
            permitted  nor does it have  knowledge of any release,  discharge or
            disposal  of any  hazardous  substance  on,  from,  to or under  the
            premises on which the Business is conducted in excess of  acceptable
            criteria as set out by the relevant  legislation.  The Seller has no
            knowledge of any storage  tanks  located on or under the premises on
            which the  Business is  conducted.  The Seller has not  received any
            written notice nor does the Seller have any knowledge of any claims,
            actions,  charges,  suits,  permit  revocations,  remedial orders or
            other proceedings  ("Environmental  Claims") relating to breaches of
            environmental   laws  asserted  by  third  parties  or  governmental
            authorities  involving  the Seller  and the  Purchased  Assets.  The
            Seller has not received any written  notice nor does the Seller have
            any  knowledge  of any  pending  Environmental  Claims  relating  to
            environmental  matters and to the Business.  The Seller has not been
            charged with or convicted of an offence for  non-compliance  with or
            breach of any  environmental  law relating to the Business,  and the
            Seller has no knowledge of any facts or circumstances  that would be
            reasonably likely to give rise to an Environmental Claim;

      (y)   Licenses and Permits-The  Seller owns, holds,  possesses or lawfully
            uses all licenses, permits,  certificates,  approvals,  consents and
            other authorizations which are necessary in order to conduct, in all
            material  respects,  the Business and to operate the Purchase Assets
            as now operated by the Seller;

      (z)   Compliance  with  Laws-The  Seller has  complied  with and is not in
            violation of any applicable laws;

     (aa)   Information   Pertaining  to  the  Convertible   Shares-The   Seller
            represents  and warrants that it has received or has had full access
            to all the information it considers necessary or appropriate to make
            an informed  decision with respect to the  Convertible  Shares to be
            received  under  this  Agreement.  The  Seller  further  has  had an
            opportunity  to ask  questions  and receive  answers from the Parent
            regarding the Parent's business and to obtain additional information
            (to the  extent  the  Parent  possesses  such  information  or could
            acquire it without  unreasonable  effort or  expense)  necessary  to
            verify  any  information  furnished  to the  Seller  or to which the
            Seller had access;

     (bb)   Acquisition  of the  Convertible  Shares-The  Seller  represents and
            warrants that it fully acknowledges and accepts that the Convertible
            Shares to be  received  by Seller  hereunder  will be  acquired  for
            investment for Seller's own account,  not as a nominee or agent, and
            not with a view to the public resale or distribution  thereof within
            the  meaning  of  the  Securities  Act of  1933,  as  amended,  (the
            "Securities  Act"), and that the Seller has no present  intention of
            selling,  granting any participation  in, or otherwise  distributing
            the same. The Seller also represents that it has not been formed for
            the specific purpose of acquiring the Convertible Shares;

                                                                              15
<PAGE>

     (cc)   Convertible Shares are Restricted-The Seller represents and warrants
            that it understands  that the Convertible  Shares and the underlying
            common shares are characterized as "restricted securities" under the
            Securities  Act inasmuch as they are being  acquired from the Parent
            in a transaction  not involving a public offering and that under the
            Securities Act and  applicable  regulations  thereunder.  The Seller
            further  warrants that it  understands  that such  securities may be
            resold without registration under the Securities Act only in certain
            limited  circumstances.  In this connection,  the Seller  represents
            that  it is  familiar  with  Rule  144 of the  U.S.  Securities  and
            Exchange  Commission  as presently in effect,  and  understands  the
            resale  limitations  imposed  thereby and by the Securities Act. The
            Seller  understands  that  the  Parent  is under  no  obligation  to
            register any of the securities sold hereunder;

     (dd)   Legended  Security-The  Seller acknowledges and understands that the
            Convertible  Shares,  and if converted the underlying common shares,
            acquired by the Seller shall  contain the legend set forth below and
            shall only be removed by the Parent  upon  delivery to the Parent of
            an opinion by counsel, reasonably satisfactory to the Parent, that a
            registration  statement  under the Securities Act is at that time in
            effect with respect to the legended  security or that such  security
            can  be  freely   transferred  in  a  public  sale  without  such  a
            registration  statement  being in effect and that such transfer will
            not  jeopardize  the  exemption  or  exemptions  from   registration
            pursuant to which the Parent issued the Convertible Shares.

                  THE  SECURITIES  EVIDENCED BY THIS  CERTIFICATE  HAVE NOT BEEN
                  REGISTERED  PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED
                  ("SECURITIES  ACT"), AND,  ACCORDINGLY,  MAY NOT BE OFFERED OR
                  SOLD  WITHIN  THE UNITED  STATES OR TO, OR FOR THE  ACCOUNT OR
                  BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY HIS OR
                  HER ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS AND WARRANTS
                  THAT HE OR SHE IS NOT A U.S.  PERSON  AND IS  ACQUIRING  THOSE
                  SECURITIES IN AN OFFSHORE  TRANSACTION,  (2) AGREES THAT HE OR
                  SHE WILL NOT WITHIN ONE YEAR AFTER THE  ORIGINAL  ISSUANCE  OF
                  THOSE SECURITIES RESELL OR OTHERWISE TRANSFER THOSE SECURITIES
                  EXCEPT (A)  PURSUANT TO AN  EFFECTIVE  REGISTRATION  STATEMENT
                  PURSUANT TO THE SECURITIES  ACT, (B) OUTSIDE THE UNITED STATES
                  IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S, OR
                  (C) PURSUANT TO ANY OTHER EXEMPTION FROM REGISTRATION PURSUANT
                  TO THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT HE OR
                  SHE WILL GIVE TO EACH  PERSON  TO WHOM  THOSE  SECURITIES  ARE
                  TRANSFERRED  A  NOTICE  SUBSTANTIALLY  TO THE  EFFECT  OF THIS
                  LEGEND.  IN CONNECTION  WITH ANY TRANSFER OF THOSE  SECURITIES
                  WITHIN ONE YEAR AFTER ORIGINAL  ISSUANCE OF THOSE  SECURITIES,
                  THE  HOLDER  MUST,  PRIOR  TO SUCH  TRANSFER,  FURNISH  TO THE
                  COMPANY   SUCH   CERTIFICATIONS,   LEGAL   OPINIONS  OR  OTHER
                  INFORMATION AS IT MAY REASONABLY  REQUIRE TO CONFIRM THAT SUCH
                  TRANSFER IS BEING MADE  PURSUANT TO AN EXEMPTION  FROM OR IN A
                  TRANSACTION  NOT SUBJECT TO THE  REGISTRATION  REQUIREMENTS OF
                  THE  SECURITIES  ACT.  AS USED  HEREIN,  THE  TERMS  "OFFSHORE
                  TRANSACTION,"  "UNITED  STATES"  AND  "U.S.  PERSON"  HAVE THE
                  MEANINGS GIVEN TO THEM BY  REGULATIONS.  THOSE  SECURITIES MAY
                  NOT BE HEDGED (SOLD IN SHORT  SELLING  TRANSACTION)  EXCEPT IN
                  COMPLIANCE WITH THE PROVISIONS OF THE SECURITIES ACT.

                                                                              16
<PAGE>

     (ee)   Full Disclosure-None of the foregoing representations and statements
            of fact  contains any untrue  statement of material fact or omits to
            state any  material  fact  necessary  to make any such  statement or
            representation  no  misleading  to a  prospective  purchaser  of the
            Purchased Assets seeking full information as to the Business and its
            assets and properties.

     (ff)   No  investigation  or inquiry made by or on behalf of the  Purchaser
            shall have the effect of waiving or diminishing any of the foregoing
            representations and warranties.

     (gg)   Except for the  representations and warranties made by the Seller in
            this  Agreement,  the  Seller  makes no further  representations  or
            warranties  to the Buyer of any kind,  character or nature,  whether
            express or implied,  statutory  or  otherwise,  with  respect to the
            Purchased Assets or the Business including,  without limitation, any
            representations or warranties  regarding  merchantability or fitness
            for a particular purpose.

4.02  Representations and Warranties of the Buyer
-------------------------------------------------

      The Buyer represents and warrants to the Seller that:

      (a)   Organization  and  Good  Standing-The  Buyer is a  corporation  duly
            organized,  validly  existing and in good standing under the laws of
            the Province of Ontario;

      (b)   Due  Authorization-The  Buyer  has all  necessary  corporate  power,
            authority  and capacity to perform its  obligations  hereunder.  The
            execution and delivery of this Agreement and the consummation of the
            transactions contemplated hereunder have been duly authorized by all
            necessary corporate action on the part of the Buyer;

      (c)   Enforceability  of  Obligations-This  Agreement,  when  executed and
            delivered by the Buyer, constitutes or will constitute,  as the case
            may be, a valid and  binding  obligation  of the  Buyer  enforceable
            against it in accordance with the terms hereof,  subject however, to
            limitations with respect to enforcement imposed by law in connection
            with  bankruptcy  or  similar  proceedings  and to the  extent  that
            equitable  remedies such as specific  performance and injunction are
            in the discretion of the court from which they are sought;

      (d)   Absence of Conflicting Agreements-The Buyer is not a Party to, bound
            or  affected  by or  subject  to  any  indenture,  mortgage,  lease,
            agreement,   instrument,   charter  or  by-law  provision,  statute,
            regulation,  order, judgment, decree or law which would be violated,
            contravened  or breached by, or under which any default  would occur
            as a result of the execution and delivery by it of this Agreement or
            the performance by it of the terms hereof;

                                                                              17
<PAGE>

      (e)   There  is  no  suit,  action,  litigation,   investigation,   claim,
            complaint,   arbitration  proceeding  or  governmental   proceeding,
            including appeals and applications for review, in progress,  pending
            or, to the best of the  Buyer's  knowledge,  threatened  against  or
            relating to the Buyer or any judgment, decree,  injunction,  rule or
            order of any court,  governmental  department,  commission,  agency,
            instrumentality  or arbitrator  which, in any case,  might adversely
            affect the ability of the Buyer to enter into this  Agreement  or to
            consummate the transactions  contemplated in this Agreement, and the
            Buyer is not aware of any existing ground on which any action,  suit
            or proceeding  may be commenced  with any  reasonable  likelihood of
            success; and

      (f)   The Buyer has no knowledge that any  representation or warranty made
            by the  Seller  in this  Agreement  is  false or  inaccurate  in any
            material respect.

4.03  No Broker
---------------

      Each of the  Parties  represents  and  warrants  to the  others  that  all
negotiations relating to this Agreement and the transactions contemplated hereby
have been carried on between them directly and without the  intervention  of any
other Party in such manner as to give rise to any valid claim against any of the
Parties for a brokerage commission, finder's fee or other like payment.

4.04  Non-Waiver
----------------

      No  investigations  made by or on behalf of the Buyer or the Parent at any
time shall have the effect of  waiving,  diminishing  the scope of or  otherwise
affecting any  representation  or warranty made by the Seller herein or pursuant
hereto.  No  waiver by the Buyer of any  condition,  in whole or in part,  shall
operate as a waiver of any condition.

4.05  Nature and Survival of Representations and Warranties
-----------------------------------------------------------

      All statements  contained in any certificate or other instrument delivered
by or on behalf to the Party pursuant to or in connection with the  transactions
contemplated  by this  Agreement  shall  be  deemed  to be  made  by such  Party
hereunder.  All  representations,  warranties,  covenants and agreements  herein
contained  on the part of each of the Parties  shall  survive the  Closing,  the
execution  and  delivery  hereunder  of  any  bills  of  sale,   instruments  of
conveyance, assignments, or other instruments of transfer of title to any of the
Purchased Assets and the payment of the consideration  therefore,  provided that
such  representations and warranties,  shall only survive for a period of 2 year
from the Closing after which time, if no claim shall, prior to the expiry of the
said 2 year period, have been made hereunder against a Party hereto with respect
to any incorrectness in or breach of any  representation or warranty made herein
by such Party, such Party shall have no further liability hereunder with respect
to such representation or warranty.

                                    ARTICLE V
                                    ---------
          CONDITIONS PRECEDENT TO THE PERFORMANCE BY THE BUYER AND THE
          ------------------------------------------------------------
                SELLER OF THEIR OBLIGATIONS UNDER THIS AGREEMENT
                ------------------------------------------------

                                                                              18
<PAGE>

5.01  Buyer's Conditions
------------------------

      The  obligation  of the Buyer to complete  the  purchase of the  Purchased
Assets hereunder shall be subject to the satisfaction of, or compliance with, at
or before the Closing, each of the following conditions precedent (each of which
is hereby  acknowledged to be inserted or the exclusive benefit of the Buyer and
may be waived by it in whole or in part):

      (a)   Truth and Accuracy of  Representations  of the Seller at the Closing
            -All of the  representations and warranties of the Seller made in or
            pursuant  to this  Agreement,  including,  without  limitation,  the
            representations  and  warranties  made by the  Seller  set  forth in
            Section  4.01  hereof,  shall be true and  correct  in all  material
            respects  as at the  Closing  and with the same effect as if made at
            and as of the Closing (except as such representations and warranties
            may  be  affected  by  the  occurrence  of  events  or  transactions
            expressly  contemplated  and  permitted  hereby) and the Buyer shall
            have  received a  certificate  from the  President  or other  person
            exercising the functions of chief  executive  officer of the Seller,
            confirming,  to the best of this  knowledge,  information and belief
            (after  due  enquiry),  the truth and  correctness  in all  material
            respects of the representations and warranties of the Seller;

      (b)   Performance  of  Obligations-The  Seller  shall  have  performed  or
            complied with, in all respects,  all its obligations,  covenants and
            agreements hereunder;

      (c)   Receipt of Closing  Documentation-All  instruments of conveyance and
            other  documentation  relating  to  the  sale  and  purchase  of the
            Purchased  Assets  including,  without  limitation,  assignments  of
            Leases,  Contracts and Equipment  Contracts  (and consents  thereto,
            where  required),   bills  of  sale  and  trade  mark   assignments,
            documentation  relating to the due  authorization  and completion of
            such sale and purchase and all actions and  proceedings  taken on or
            prior to the  Closing  in  connection  with the  performance  by the
            Seller of its obligations under this Agreement shall be satisfactory
            to the Buyer and the Parent  and their  respective  counsel  and the
            Buyer shall have received copies of all such  documentation or other
            evidence  as it may  reasonable  request in order to  establish  the
            consummation of the transactions  contemplated hereby and the taking
            of all corporate  proceedings in connection  therewith in compliance
            with these  conditions,  in form (as to certification and otherwise)
            and  substance  satisfactory  to the  Buyer,  the  Parent  and their
            respective counsel;

      (d)   Retail  Sales  Tax-The  Seller  shall  deliver  to the  Buyer at the
            Closing a clearance  certificate under section 6 of the Retail Sales
            Tax Act (Ontario) and similar clearance certificates,  if available,
            from the retail sales tax authorities in the jurisdiction  where the
            Business  is carried on by the  Vendor or the  Purchased  Assets are
            located;

                                                                              19
<PAGE>

      (e)   WSIB  Certificate-At  Closing the Seller  shall  deliver a valid and
            current Workplace Safety and Insurance Board Purchase Certificate in
            respect of the Business;

      (f)   Opinion of Counsel for Seller - At the Closing, the Buyer shall have
            received  an  opinion  dated  the  Closing,  in form  and  substance
            satisfactory to the Buyer, the Parent and their respective  counsel,
            from counsel for the Seller,  Mr.  Howard  Crosner,  confirming  the
            matters  warranted in subsections (a), (b), (c), (e), (f) and (g) of
            Section  4.01  hereof,   provided  that,  insofar  as  the  opinions
            expressed with respect to such matters are based on matters of fact,
            such  opinions  may be based  upon  certificates  of the  Seller and
            public  officials  and  such  other  evidence  as such  counsel  may
            reasonably  deem  appropriate.  Such  opinion  shall also cover such
            other matters as the Buyer may reasonably request;

      (g)   Consents   to   Assignment-All   consents  or   approvals   from  or
            notifications to any landlord, lessor or other third person required
            under  the  terms  of any  of the  Leases,  Equipment  Contracts  or
            Contracts  with  respect  to the  assignment  thereof  to the  Buyer
            hereunder,  or otherwise in connection with the  consummation of the
            transactions  contemplated  hereby, shall have been duly obtained or
            given, as the case may be, on or before the Closing;

      (h)   Consents,  Authorizations and Registrations-All consents, approvals,
            orders and authorizations of any Persons or governmental authorities
            in Canada or elsewhere (or registrations,  declarations,  filings or
            recordings   with  any   such   authorities),   including,   without
            limitation,  all  clearance  certificates  required  pursuant to any
            applicable retail sales tax legislation, required in connection with
            the  completion  of any of the  transactions  contemplated  by  this
            Agreement,  the  execution  of this  Agreement,  the  Closing or the
            performance  of any of the terms and  conditions  hereof  shall have
            been obtained on or before the Closing;

      (i)   Bulk Sales Act-The Seller shall have been furnished, at the Closing,
            with evidence  satisfactory  to it that the purchase and sale of the
            Purchased  Assets shall be in compliance  with the provisions of the
            Bulk Sales Act (Ontario) and any other applicable legislation;

      (j)   Non-Competition-There shall have been delivered to the Buyer written
            undertakings  from Leo Couprie,  Tyrone  Ganpaul,  Geordie Brown and
            Bill Fenton to the effect  that they will not,  for a period of five
            (5) years from the Closing either alone or in  conjunction  with any
            individual,  firm, corporation,  association or other entity (except
            for the Buyer), whether as principal,  agent,  shareholder or in any
            other capacity whatsoever, compete with the Business. If at any time
            after  two (2) years  from the  Closing  the per share  price of the
            common shares  underlying the Convertible  Shares is not equal to or
            greater  than US$1.00 (One US Dollar) at the end of each trading day
            for sixty consecutive trading days, then this non-competition clause
            shall  become void and they shall be free to compete  with the Buyer
            or the Parent from that time onwards; and

                                                                              20
<PAGE>

      (k)   Approval by Shareholders  and Board of Parent- The Parent shall have
            received  approval from the majority of its  shareholders  for it to
            amend its certificate of  incorporation to allow for preferred stock
            and, subsequently,  approval of its board of directors of the voting
            powers, rights, designations, preferences and qualifications of such
            Series A  Preferred  Stock,  along  with the  provisions  set out in
            Schedule H attached hereto.

5.02  Seller's Conditions
-------------------------

      The obligations of the Seller to complete the sale of the Purchased Assets
hereunder  shall be subject to the  satisfaction  of or  compliance  with, at or
before the Closing, each of the following conditions precedent (each of which is
hereby  acknowledged to be inserted for the exclusive  benefit of the Seller and
may be waived by it in whole or in part):

      (a)   Truth and Accuracy of Representations of the Buyer and the Parent at
            Closing-All of the  representations  and warranties of the Buyer and
            the Parent made in or pursuant to this Agreement,  including without
            limitation the  representations and warranties made by the Buyer and
            the Parent and set forth in Sections 4.02 hereof,  shall be true and
            correct in all material respects as at the Closing and with the same
            effect as if made at and as of the Closing and the Seller shall have
            received a  certificate  from a senior  officer of each of the Buyer
            and  the  Parent   confirming  to  the  best  of  their   knowledge,
            information   and  belief  (after  due   enquiry),   the  truth  and
            correctness  in all material  respects of such  representations  and
            warranties of the Buyer and the Parent;

      (b)   Performance  of  Agreement-The  Buyer  and  the  Parent  shall  have
            performed  or  complied  with,  in  all  respects,   all  its  other
            obligations, covenants and agreements hereunder;

      (c)   Opinion of Counsel for Buyer and the  Parent-The  Seller  shall have
            received   opinions  dated  the  Closing,   in  form  and  substance
            reasonably  satisfactory to the Seller,  from counsel for the Buyer,
            confirming  the matters  warranted  in  paragraphs  (a) to (d) (both
            inclusive)  of Section  4.02  hereof,  provided  that insofar as the
            opinions  expressed  with  respect  to such  matters  are based upon
            matters of fact, such opinion may be based upon  certificates of the
            Buyer,  the Parent,  or public  officials and such other evidence as
            such  counsel or counsels  may  reasonably  deem  appropriate.  Such
            opinion  shall  also  cover  such  other  matters  as the Seller may
            reasonably request;

      (d)   All consents, approvals, orders and authorizations of persons or any
            governmental  authorities in the United States,  Canada or any state
            or province (or registrations,  declarations,  filings or recordings
            with any of those  authorities) which are required to be obtained in
            connection   with  the   completion  of  any  of  the   transactions
            contemplated by this Agreement, the execution of this Agreement, the
            Closing or the performance of any of the terms and conditions (other
            than any which are the responsibility,  under applicable law, of the

                                                                              21
<PAGE>

            Seller to obtain) shall have been obtained by the Buyer on or before
            the Closing  Time,  including  the  approval of the  majority of the
            Parent's  shareholders  for the Parent to amend its  certificate  of
            incorporation  to  allow  for  preferred  stock  and,  subsequently,
            approval of its board of  directors  of the voting  powers,  rights,
            designations,  preferences  and  qualifications  of  such  Series  A
            Preferred  Stock  along  with the  provisions  setout in  Schedule H
            attached hereto; and

      (e)   Retail  sales tax - The Buyer shall have  delivered  to the Seller a
            provincial sale tax exemption  certificate and a certified cheque or
            bank draft in an amount  estimated to be equal to the G.S.T  payable
            in  accordance  with  section  2.04  arising  from  the  transaction
            contemplated by this Agreement.

                                   ARTICLE VI
                                   ----------
                            COVENANTS OF THE PARTIES
                            ------------------------

      The Seller Covenants with the Buyer and the Parent as follows:
      --------------------------------------------------------------

6.01  Conduct of Business Prior to Closing
------------------------------------------

      During the period  from the date of this  Agreement  to the  Closing,  the
Seller will do the following:

      (a)   Conduct  Business  in  the  Usual  and  Ordinary   Course-Except  as
            otherwise  contemplated or permitted by this Agreement,  conduct the
            Business in the ordinary and normal course thereof and not,  without
            the prior written  consent of the Buyer,  enter into any transaction
            which,  if  effected  before  the  date  of  this  Agreement,  would
            constitute a breach of the representations, warranties or agreements
            of the Seller contained herein;

      (b)   Continue  Insurance-Continue  in force  all  policies  of  insurance
            maintained by the Seller in respect of the Business;

      (c)   Perform Obligations- Comply with all laws affecting the operation of
            the Business; and

      (d)   Prevent Certain  Changes- Not,  without the prior written consent of
            the Buyer and the  Parent,  take any of the  actions,  do any of the
            things or perform any of the acts described in subparagraphs  (i) to
            (v) inclusive of paragraph 4.01 (i).

6.02  Seller's Covenants with Respect to the Convertible Shares
---------------------------------------------------------------

      The  Seller  covenants  with the  Buyer  and the  Parent  that it will not
dispose of the Convertible  Shares, the underlying common shares, or any portion
thereof, unless and until:

                                                                              22
<PAGE>

      (i)   there  is  then  in  effect  a  registration   statement  under  the
            Securities   Act  covering  such  proposed   disposition   and  such
            disposition is made in accordance with such registration  statement;
            or

     (ii)   the Seller  shall  furnish  the Parent  with an opinion of  counsel,
            reasonably  satisfactory to the Parent,  that such  disposition will
            not require  registration  of such  securities  under the Securities
            Act.

6.03  Access for Investigation
------------------------------

      The Seller shall permit the Buyer,  or its  designee,  and its  employees,
agents,  counsel  and  accountants  or other  representatives,  between the date
hereof and the Closing,  without  interference  to the  ordinary  conduct of the
Business of the  Seller,  to have free and  unrestricted  access  during  normal
business hours to the premises and to all the books, accounts, records and other
data of the Seller (including,  without limitation, all corporate and accounting
records of the Seller) and to the  properties  and assets of the Seller,  and to
furnish to the Buyer,  or its designee,  such  financial and operating  data and
other  information  with respect to the business,  properties  and assets of the
Seller as the Buyer, or its designee, shall from time to time reasonably request
to enable confirmation of the matters warranted in Section 4.01 hereof.  Without
limiting  the  generality  of the  foregoing,  it is agreed that the  accounting
representatives  of the Buyer shall be afforded ample opportunity to make a full
investigation of all aspects of the financial  affairs of the Seller.  Until the
Closing,  and  in the  event  of  the  termination  of  this  Agreement  without
consummation of the  transactions  contemplated  hereby,  the Buyer will use its
best efforts to keep confidential any information (unless readily available from
public or published  information or sources)  obtained from the Seller.  If this
Agreement is so terminated, promptly after such termination, all documents, work
papers and other written  material  obtained from one Person in connection  with
this Agreement and not theretofore  made public  (including all copies thereof),
shall be returned to the Person which provided such material.

6.04  Actions to Satisfy Closing Conditions
-------------------------------------------

      Each of the Parties  hereto  hereby agrees to take all such actions as are
within its power to control,  and to use its best efforts to cause other actions
to be  taken  which  are not  within  its  power  to  control,  so as to  ensure
compliance  with any  conditions set forth in Articles Five and Six hereof which
are for the benefit of any other Party hereto.

6.05  Change of Seller's Name
-----------------------------

      Forthwith  following  the  completion  of the  purchase  and  sale  of the
Purchased Assets hereunder, the Seller shall discontinue further use of the name
"Sweet Valley Foods Inc." except where  legally  required to identify the Seller
until its name has been  changed  to  another  name and,  not later than 10 days
thereafter,  file articles of amendments or otherwise take such corporate action
as may be necessary to change the  corporate  name of the Seller to another name
not including the words "Sweet  Valley" and otherwise  having no visual or audio
similarity to its present name.

      The Buyer Covenants with the Seller as follows:
      -----------------------------------------------

                                                                              23
<PAGE>

6.06  Offer of Employment, etc
------------------------------

      Prior to the Closing,  but conditional  upon the completion of the Closing
the Buyer  shall  offer  employment  to all  persons  employed  by the Seller in
connection  with the  Business to persons  referred to in Schedule D hereto,  on
terms and  conditions  which are at least  financially  equivalent to those upon
which such persons are  presently  employed by the Seller and in such event that
the Buyer shall, subsequent to the time when any such person becomes so employed
by the Buyer,  terminate the  employment of such person in  circumstances  where
such person shall have a claim or entitlement in respect of wrongful  dismissal,
severance pay or the receipt of reasonable prior notice,  that for such purposes
the prior  employment of such  employee  with the Seller as employment  with the
Buyer.

6.07  Transfer Taxes
--------------------

      The Buyer shall pay direct to the appropriate taxing authority, within the
time period  specified  therefore,  all provincial  sales taxes payable by it in
respect of the Purchased Assets sold to it hereunder.

                                   ARTICLE VII
                                   -----------
                                 INDEMNIFICATION
                                 ---------------

7.01  Mutual Indemnifications for Breaches of Warranty, etc
-----------------------------------------------------------

      Each of the Seller  hereby  covenants  and  agrees  with the Buyer and the
Parent,  and the Buyer and the Parent hereby jointly and severally  covenant and
agree with the Seller  (the Party or parties  so  covenanting  and  agreeing  to
indemnify  another Party being  hereinafter  in this Section 7.01 referred to as
the  "Indemnifying  Party" and the Party or Parties so to be  indemnified  being
hereinafter  called the "Indemnified  Party") to indemnify and save harmless the
Indemnified  Party,  effective  as and from the  Closing,  from and  against any
claims,  demands,  actions,  causes of action, damage, loss, costs, liability or
expense (hereinafter in this Article Seven called "Claims") which may be made or
brought against the  Indemnified  Party and/or which it may suffer or incur as a
result of, in respect of, or arising out of any  non-fulfillment of any covenant
or agreement on the part of the  Indemnifying  Party under this Agreement or any
incorrectness in or breach of any representation or warranty of the Indemnifying
Party contained herein or in any certificate or other document  furnished by the
Indemnifying Party pursuant hereto. The foregoing  obligation of indemnification
in respect of such Claims shall be:

      (i)   subject  to  the   limitation   mentioned  in  Section  4.05  hereof
            respecting the survival of the representations and warranties of the
            Parties;

     (ii)   subject to the  requirement  that the  Indemnifying  Party shall, in
            respect  of any  Claim  made by any  third  Party,  be  afforded  an
            opportunity at its sole expense to resist, defend and compromise the
            same; and

    (iii)   applicable  only to the extent that such Claims,  in the  aggregate,
            exceed five thousand dollars ($5,000.00).

                                                                              24
<PAGE>

7.02  Product Liability
-----------------------

      The Seller hereby  undertakes  and agrees to hold the Buyer  harmless from
and  indemnify  against  any and all claims  with  respect to product  liability
relating to the  products of the  Business  which are sold and  delivered by the
Seller on or before Closing.

7.03  Leased Premise
--------------------

      The Buyer hereby  undertakes and agrees to hold the Seller  harmless from,
and indemnify  against,  any and all claims arising after  Closing,  made by the
landlord  in respect  of the leased  premise  listed in  Schedule B hereto.  For
greater  clarity,  the Buyer shall not assume any  liability,  nor indemnify the
Seller,  for any  claims  made by the  landlord  which had  originated  prior to
Closing and for which the landlord had no knowledge until after Closing.

7.04  Assumed Liabilities
-------------------------

      (a)   Assumption Agreement and Indemnity re: Small Business Loan
            ----------------------------------------------------------

            On Closing,  the Buyer and Parent shall assume liability for payment
            of a Small  Business  Loan of the  Seller  and shall  indemnify  the
            shareholders of Sweet Valley Foods respecting liability for the said
            Small Business Loan in accordance with Schedule "A" hereto;

      (b)   Indemnity of Couprie Fenton re: Lease
            -------------------------------------

            The Buyer and  Parent  shall  indemnify  Couprie,  Fenton  Inc.  for
            liability  arising  after  Closing,  respecting  its  lease  at 4055
            Sladeview  Crescent,  Unit  4,  Mississauga,  Ontario,  as  is  more
            particularly  set out in Schedule "J" hereto.  For greater  clarity,
            the Buyer and the  Parent  shall not  assume  any  liabilities,  nor
            indemnify  Couprie,  Fenton Inc.,  from any and all events which had
            originated prior to Closing that cause actions or claims before,  on
            or after Closing.;

                                  ARTICLE VIII
                                  ------------
                                     GENERAL
                                     -------

8.01  Public Notices
--------------------

      All public notices to the Parties and all other  publicity  concerning the
transactions  contemplated  by this  Agreement  shall  be  jointly  planned  and
coordinated by the Seller and the Buyer and no Party shall act  unilaterally  in
this regard  without the prior approval of the Seller and the Buyer or the other
of them,  such approval not to be reasonably  withheld,  unless such  disclosure
shall be  required  to meet  timely  disclosure  obligations  of any Party under
applicable  securities laws or stock exchange rules in circumstances where prior
to consultation with the other of the Seller or Buyer is not practicable.

8.02  Expenses
--------------

                                                                              25
<PAGE>

      All  costs  and  expenses  (including,  without  limitation,  the fees and
disbursement  of legal counsel)  incurred in connection  with this Agreement and
the transactions  contemplated  hereby shall be paid by the Party incurring such
expenses.

8.03  Time
----------

      Time shall be of the essence hereof.

8.04  Notices
-------------

      Any notice or other writing required or permitted to be given hereunder or
for the purpose hereof  (hereinafter  in this Section 8.04 called a "Notice") to
any Party shall be  sufficiently  given if delivered  personally,  or if sent by
prepaid  registered  mail or if  transmitted  by telex or other form of recorded
communication tested prior to transmission to such Party:

      (a)   in the case of a notice to the Buyer or the Parent at:

                     20A Voyager Court South
                     Etobicoke, Ontario
                     Canada, M9W 5M7
                     Attention:  President
                     Fax:  416-213-9052

      (b)   in the case of notice to the Seller at:

                     2345 Stanfield Road
                     Mississauga, Ontario
                     Canada, L4Y 3Y3
                     Attention:  President
                     Fax:  905-361-0122

or at such other  address as the Party to whom such writing is to be given shall
have last  notified to the Party giving the same in the manner  provided in this
section.  Any  Notice  delivered  to  the  Party  to  whom  it is  addressed  as
hereinbefore provided shall be deemed to have been given and received on the day
it is so delivered at such address,  provided that if such day is not a Business
Day then the Notice  shall be deemed to have been given and  received on the 4th
Business Day next  following  such day. Any Notice mailed as aforesaid  shall be
deemed to have been given and received on the Business  Day next  following  the
date of its mailing.  Any Notice  transmitted by telex or other form of recorded
communication shall be deemed given and received on the first Business Day after
its transmission.

8.05  Assignment
----------------

      The  Seller  and the  Buyer may not  assign  this  Agreement,  or any part
hereof.

                                                                              26
<PAGE>

8.06  Further Assurances
------------------------

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

8.07  Counterparts
------------------

      This  Agreement  may be executed  by the Parties in separate  counterparts
each of which when so executed and delivered shall be an original,  but all such
counterparts shall together constitute one and the same instrument.

      IN WITNESS WHEREOF the Parties have hereunto duly executed this Agreement.
      ------------------

                                               SWEET VALLEY FOODS INC.
                                               -----------------------

                                               Per: /s/ Tyrone Ganpaul
                                                   -----------------------------
                                                        Tyrone Ganpaul

                                               Per: /s/ Leo Couprie
                                                   -----------------------------
                                                        Leo Couprie

                                               MG HOLDINGS INC.
                                               ----------------

                                               Per: /s/ Suzanne Lilly
                                                   -----------------------------
                                                        Suzanne Lilly

                                               MONACO GROUP INC.
                                               -----------------

                                               Per: /s/ Suzanne Lilly
                                                   -----------------------------
                                                        Suzanne Lilly

                                                                              27
<PAGE>

      Schedule  "A"--Assumption  Agreement and Indemnity for CIBC Small Business
      Loan

      Schedule "B"--Leases

      Schedule "C"--Equipment Contracts

      Schedule "D"--Employee Contracts

      Schedule "E"--Fixed Assets

      Schedule "F"--Intellectual Property

      Schedule "G"--Permitted Encumbrances

      Schedule "H" - Proposed voting powers, rights,  designations,  preferences
      and qualifications of Series A Preferred Stock

      Schedule "I" - Assumption Agreement

      Schedule "J" - Indemnity of Couprie Fenton for Lease

      Schedule "K" - Guarantee re: Line of Credit

            This  line of  credit  shall be used  for  general  working  capital
            purposes and fixed asset purchases.

      Schedule "L" - Allocation of the Purchase Price

      Schedule "M" - List of Customer Contracts

                                                                              28
<PAGE>

                                 SCHEDULE - "A"
                                 --------------

                               Small Business Loan
                               -------------------

     Under the terms of the agreement, Buyer agrees to assume liability for
                     Sweet Valley Foods Small Business Loan.

                  Balance as of December 31, 2003: $135,316.74
                                                   -----------
                          Reducing by 5,203.33 monthly

                   Statement as of January 16, 2004 attached.

<PAGE>

                             MISSISSAUGA CITY CENTRE                   MISSISAGA
CIBC                         SWEET VALLEY FOODS INC.

                                     LEDGER                     DATE 16 JAN 2004

                                                             ACCOUNT NUMBER 3022

DATE      DETAILS                        CAPITAL                   INTEREST
--------------------------------------------------------------------------------
DAY MTH                       TRANSACTIONS      BALANCE   TRANSACTIONS   BALANCE

31 07     BALANCE FORWARD                     161358.39                    548

15 08     AUTOMATIC PAYT.          5208.33    156150.06

15 08     CALC UPTO AUG 15                                      512.81    1060

19 08     AUTOMATIC PAYT.                                      1060.99       0

29 08     CALC UPTO AUG 31                                      530.48     530

03 09     CALC UPTO SEPT 3                                       99.47     629

15 09     AUTOMATIC PAYT.          5208.33    150941.73

15 09     CALC UPTO SEPT 15                                     383.96    1013

17 09     AUTOMATIC PAYT.                                      1013.91       0

30 09     CALC UPTO SEPT 30                                     465.23     465

15 10     AUTOMATIC PAYT.          5208.33    145733.40

15 10     CALC UPTO OCT 15                                      464.16     929

17 10     AUTOMATIC PAYT.                                       929.39       0

31 10     CALC UPTO OCT 31                                      479.12     479

17 11     AUTOMATIC PAYT.          5208.33    140525.07

14 11     CALC UPTO NOV 15                                      449.18     928

18 11     AUTOMATIC PAYT.                                       828.30       0

28 11     CALC UPTO NOV 30                                      434.20     434

15 12     AUTOMATIC PAYT.          5208.33    135316.74

15 12     CALC UP0TO DEC 15                                     432.06     866

17 12     AUTOMATIC PAYT.                                       866.26       0

31 12     CALC UPTO DEC 31                                      444.88     444

2004

15 01     AUTOMATIC PAYT.          5208.33    130108.41                    860

15 01     CALC UPTO JAN 15                                      416.00

                                 DUPLICATE COPY

<PAGE>

                                 SCHEDULE - "B"
                                 --------------

                                Lease of Premises

                                       For

                            4-4055 Sladeview Crescent
                          Mississauga, Ontario L5L 5Y1

                             Copy of Lease attached

<PAGE>

                       FOR USE IN THE PROVINCE OF ONTARIO

                                 OFFER TO LEASE
                                 --------------
                                      (ICI)
                                      -----

 Toronto
Real Estate
  Board

TO    THE ERIN MILLS DEVELOPMENT CORPORATION                   Lessor (Landlord)
  -------------------------------------------------------------
I       SWEET VALLEY SUGAR CO.                                   Lessee (Tenant)
 ----------------------------------------------------------------
having inspected the premises or plans, hereby offer to lease through
 CB RICHARD ELLIS LIMITED                                       (Listing Broker)
----------------------------------------------------------------
and      CB RICHARD ELLIS LIMITED                          (Co-operating Broker)
   --------------------------------------------------------
the premises known municipally as        4055 Sladeview Cr., Unit 4
                                 -----------------------------------------------
in the          City             of             Mississauga           comprising
      ---------------------------  -----------------------------------
  13,066         square feet, more or less, subject to measurement using current
-----------------
B.O.M.A. standards (and as outlined in the Schedules attached hereto) for a term
of     Five (5) Years    from July 15th,  2000     to   July 14th, 2005    at  a
       ------------------     ---------------------  --------------------
rental of $ (see  Schedule  "A") per annum payable $ (see Schedule "A") monthly,
in advance, on the First day of each month during the said term.
                   -----

Cheque in the  amount  of $ (see  Schedule  "A") as a  deposit,  payable  to the
                           ---------------------
Listing  Broker  in trust  for the  Lessor,  is  submitted  (within  48 hours of
                                                            --------------------
acceptance)  to  be  held  pending  completion  or  other  termination  of  this
-----------
Agreement, and is to be credited on account of (see Schedule "A").
                                               ------------------

The Lease shall be drawn by the Lessor and executed by the Lessee and the Lessor
in  conformity  with  the  terms  of  this  Offer  forthwith  subject  to  minor
adjustments as negotiated between the Lessor's and the Lessee's Solicitors, both
acting reasonably.

The  Premises  is  to  be  used  for  office  uses,  sales,  distribution,   and
--------------------------------------------------------------------------------
re-packaging  of sugars and other similar food  products.  It is understood  and
---------------------------------------------------------
agreed that the Tenant shall be  responsible  for any costs re pest control that
result from the Tenant's products.

IT IS UNDERSTOOD AND AGREED that

SCHEDULE "A",  "B1",  "B2",  "C" AND "D" ATTACHED  HERETO SHALL BE READ WITH AND
-------------------------------------------------
FORM A PART OF THIS OFFER TO LEASE.

THIS OFFER shall be  irrevocable by the Lessee until 5:00 (p.m.) on the 16th day
                                        ----------------------------------------
of June,  2000 after  which time if not  accepted,  this Offer shall be null and
--------------
void and all  deposit  monies  paid by the Lessee  hereunder  shall be  refunded
without any interest or deduction whatsoever.

<PAGE>

                                  SCHEDULE "A"
                                  ------------

To be read with and form a part of this Offer to Lease between
THE ERIN MILLS DEVELOPMENT CORPORATION                              (LESSOR) AND
--------------------------------------------------------------------
SWEET VALLEY SUGAR CO.                                                  (LESSEE)
------------------------------------------------------------------------
June 13th, 2000
--------------------------------------------------------------------------------
RE:    4055 SLADEVIEW CRESCENT, UNIT 4, MISSISSAUGA ON
--------------------------------------------------------------------------------

1.   NET RENT SCHEDULES
     ------------------

      Base Rent
      Year 1       $6.25     per square foot per annum plus applicable taxes
      Year 2       $6.35     per square foot per annum plus applicable taxes
      Year 3       $6.45     per square foot per annum plus applicable taxes
      Year 4       $6.55     per square foot per annum plus applicable taxes
      Year 5       $6.65     per square foot per annum plus applicable taxes

      Amortization of Dock Levellers in Addition to Base Rent
      Year 1       $191.22   per square foot per annum plus applicable taxes
      Year 2       $191.22   per square foot per annum plus applicable taxes
      Year 3       $191.22   per square foot per annum plus applicable taxes
      Year 4       $191.22   per square foot per annum plus applicable taxes
      Year 5       $191.22   per square foot per annum plus applicable taxes

2.   ADDITIONAL RENT (TMI)
     ---------------------

     Other than as contained herein the Lease shall be entirely net and carefree
     to the Landlord. Included in the amounts paid as Additional Rent the Tenant
     shall be responsible  for all realty taxes  (including  business taxes that
     are included in the realty taxes),  reasonable costs of building insurance,
     snow  removal,  landscape  maintenance,  and  maintenance  other  than  the
     maintenance  that is the  responsibility  of the Landlord as listed herein.
     The Tenant's portion of the items listed above is estimated to be $2.40 per
                                                                       ---------
     square foot for 2000 ("TMI") plus applicable taxes.
     ---------------------------------------------------

     In  addition  to TMI,  and  usually  billed  directly  to the Tenant by the
     applicable  authority,  the  Tenant  agrees to pay for all  other  costs of
     occupancy including,  but without limiting the generality of the foregoing,
     business taxes other than those included in the realty taxes,  insurance on
     contents, water, gas, hydro and heating, all as defined in the Lease.

     It is also  understood  and agreed that the Tenant will not be  responsible
     for the Landlord's capital taxes, income taxes, or mortgage payments.

<PAGE>

Page 2 of Schedule "A"
To be read with and form a part of this Offer to Lease between

THE ERIN MILLS DEVELOPMENT CORPORATION                              (LESSOR) AND
--------------------------------------------------------------------
SWEET VALLEY SUGAR CO.                                                  (LESSEE)
------------------------------------------------------------------------
June 13th, 2000
--------------------------------------------------------------------------------
RE:    4055 SLADEVIEW CRESCENT, UNIT 4, MISSISSAUGA ON
--------------------------------------------------------------------------------

3.   DEPOSIT (NON INTEREST BEARING ACCOUNT)
     --------------------------------------

     It is understood and agreed by the Landlord and the Tenant that the Deposit
     cheque  of  $20,621.41  will be  deposited  in CB  Richard  Ellis  Limited,
     Realtor's trust account within  forty-eight  (48) hours of receipt thereof.
     The  Deposit  shall be put toward the first and last  months'  Net Rent and
     Additional Rent, plus GST.

     Notwithstanding the foregoing,  it is understood and agreed by the Landlord
     and Tenant that the commissions in this transaction,  plus applicable taxes
     thereon, may be deducted from the Deposit monies by the Listing Broker upon
     the earlier of the Landlord and the Tenant  executing a Lease Agreement and
     the Tenant taking possession of the Premises.

4.   EARLY ACCESS PERIOD
     -------------------

     The Tenant shall be given a free early access  period for the south portion
     of the warehouse area (demised by block wall, and outlined in the Schedules
     that follow, with the Landlord  temporarily closing off the opening between
     the two  portions  of the unit)  from July 1st to July  15th,  2000 for the
     purposes  of  installing  their  packaging  equipment  and  other  required
     equipment.  The Tenant shall not pay any Net Rent, TMI or utilities  during
     this period, but shall ensure that insurance is in effect. It is understood
     that Landlord's work shall be continuing during this period.

5.   OPTION TO EXTEND
     ----------------

     The Tenant,  if not in default under the Lease either in payment of rent or
     observance  of the covenants  therein,  shall have the option to extend the
     Lease for two further  terms of five (5) years upon giving the  landlord at
     least three (3) months,  but not more than six (6) months written notice of
     the exercise of such right subject to substantially  the same provisions as
     are  contained in the Lease except that there shall be no further  right of
     extension  (other  than  those  contained  here-in),  no  additional  early
     occupancy, and no other Tenant inducements.  The rent for the extended term
     shall be at the then market rent for  renewals  (as opposed to the rate for
     new leases), shall not include any amounts for the dock levellers amortized
                  --------------------------------------------------------------
     over the initial term, as determined by agreement  between the Landlord and
     ---------------------
     the Tenant.

2
<PAGE>

Page 3 of Schedule "A"
To be read with and form a part of this Offer to Lease between

THE ERIN MILLS DEVELOPMENT CORPORATION                              (LESSOR) AND
--------------------------------------------------------------------
SWEET VALLEY SUGAR CO.                                                  (LESSEE)
------------------------------------------------------------------------
June 13th, 2000
--------------------------------------------------------------------------------
RE:    4055 SLADEVIEW CRESCENT, UNIT 4, MISSISSAUGA ON
--------------------------------------------------------------------------------

6.   CONDITIONAL CLAUSE CREDIT
     -------------------------

     This Offer is conditional for two (2) business days from acceptance of this
     offer  by  both  parties,  upon  the  Landlord  satisfying  itself  of  the
     creditworthiness  of the  Tenant.  Failure to notify the Tenant  within the
     prescribed  time  period  of the  non-fulfilment  of this  condition  shall
     constitute  a waiver  of this  condition  and this  Offer to Lease  and all
     agreements  arising  from its  acceptance  shall  remain in full  force and
     effect.

7.   LANDLORD'S WORK
     ---------------

     The Landlord shall complete the work outlined in Schedules that follow in a
     good and  workmanlike  fashion at the Landlord's  sole expense prior to the
     commencement  date, or as soon after the commencement date as is practical,
     working diligently.

8.   SIGNS
     -----

     The Tenant  shall be entitled  to erect signs upon the  Premises as per the
     Landlord's standard sign policies.

9.   AREA MEASUREMENT
     ----------------

     If  requested in writing by the Tenant,  the Rentable  Area of the Premises
     for the  purposes  of  calculating  the Net Rent  payable by the Tenant and
     calculation   of  the  Tenant's   proportionate   share  of  utilities  (if
     applicable),  operating costs (if applicable), and taxes as set out in this
     Offer to Lease, shall be verified using the most current S.I.O.R standards,
     by an architect, engineer, or professional space measuring company licensed
     to practice in  Ontario,  who shall  provide a  certificate  addressed  and
     delivered to the Tenant,  obtained at the Landlord's expense,  prior to the
     Commencement Date.

10.  RIGHT TO SUBLEASE
     -----------------

     The Tenant has the option to sublet the  demised  Premises  of a portion of
     the demised  Premises  with the prior  written  consent of the Landlord and
     such consent shall not be unreasonably or arbitrarily withheld or delayed.

3
<PAGE>

Page 4 of Schedule "A"
To be read with and form a part of this Offer to Lease between

THE ERIN MILLS DEVELOPMENT CORPORATION                              (LESSOR) AND
--------------------------------------------------------------------
SWEET VALLEY SUGAR CO.                                                  (LESSEE)
------------------------------------------------------------------------
June 13th, 2000
--------------------------------------------------------------------------------
RE:    4055 SLADEVIEW CRESCENT, UNIT 4, MISSISSAUGA ON
--------------------------------------------------------------------------------

11.  ALTERATIONS AND IMPROVEMENTS
     ----------------------------

     Any  alterations  or  modifications  to the Premises will require the prior
     written consent of the Landlord, which is not to unreasonably withheld, and
     said alterations or modifications must comply with the local building codes
     and by-laws.

12.  ENVIRONMENTAL
     -------------

     The  Lessee  covenants  not to  produce,  bring  upon or  dispose  from the
     Premises any toxic or hazardous substance or any pollutant or any substance
     which,  if it  were  to  remain  on  or  escape  from  the  Premises  would
     contaminate  the Premises or any other property in which it came in contact
     with,  other than  products  specifically  required as part of the Tenant's
     ongoing  business  use as  defined  in this  offer that may be deemed to be
     hazardous. The Lessee agrees to indemnify and hold the Lessor harmless from
     all  liability  of any  nature  whatsoever  arising  out of or  related  to
     pollution  caused  by  activities  of the  Lessee to or  escaping  from the
     Premises or the breach by the Lessee of the  covenants  and  agreements  in
     this Section.  The  indemnification  shall survive the  termination of this
     Lease.

     The Landlord  represents and warrants that there is no contamination or any
     other environmental  hazard or non-compliance  above M.O.E. current cleanup
     guidelines  on the lands  that  form the  Premises,  and that  there are no
     underground  tanks or piping on or under the  lands  outside  the  building
     (other than utility piping),  and agrees to indemnify and hold harmless the
     Tenant in regards to any and all  environmental  issues that  preceded  the
     Tenant's  occupancy  or  that  are not a  result  of the  Tenant's  acts or
     negligence.   These   representations  and  warranties  shall  survive  the
     termination of this Lease.

13.  FACSIMILE
     ---------

     This Offer to Lease may be delivered by facsimile  transmission  and signed
     on a facsimile  copy. Both parties accept the facsimile copy as a legal and
     binding  document.  The originals will be delivered to the Landlord and the
     Tenant once this Offer to Lease is fully executed.

4
<PAGE>

Page 5 of Schedule "A"
To be read with and form a part of this Offer to Lease between

THE ERIN MILLS DEVELOPMENT CORPORATION                              (LESSOR) AND
--------------------------------------------------------------------
SWEET VALLEY SUGAR CO.                                                  (LESSEE)
------------------------------------------------------------------------
June 13th, 2000
--------------------------------------------------------------------------------
RE:    4055 SLADEVIEW CRESCENT, UNIT 4, MISSISSAUGA ON
--------------------------------------------------------------------------------

14.  LEGAL ADVICE
     ------------

     The parties to this  agreement  acknowledge  that CB Richard Ellis Limited,
     Realtor has  recommended  that they obtain  advice from their legal counsel
     prior to signing this document.  The parties  further  acknowledge  that no
     information provided by CB Richard Ellis Limited,  Realtor or its employees
     is to be construed as expert legal or tax advice.

15.  TIME OF THE ESSENCE
     -------------------

     Time shall be of the essence in all respects.

16.  DUAL AGENCY
     -----------

     The parties to this transaction  hereby acknowledge that the Listing Broker
     and Co-operating Broker are the same Firm, such that there has been, and is
     dual agency,  the Landlord and Tenant  consenting  to such dual agency,  by
     their  signatures  hereto,  and waiving any conflict of interest or duty of
     confidentiality.

5

<PAGE>

                                  SCHEDULE "B1"
                                  -------------

To be read with and form a part of this Offer to Lease between

THE ERIN MILLS DEVELOPMENT CORPORATION                              (LESSOR) AND
--------------------------------------------------------------------
SWEET VALLEY SUGAR CO.                                                  (LESSEE)
------------------------------------------------------------------------
June 13th, 2000
--------------------------------------------------------------------------------
RE:    4055 SLADEVIEW CRESCENT, UNIT 4, MISSISSAUGA ON
--------------------------------------------------------------------------------

                                [MAP OF BUILDING]

<PAGE>

                                  SCHEDULE "B2"
                                  -------------

To be read with and form a part of this Offer to Lease between

THE ERIN MILLS DEVELOPMENT CORPORATION                              (LESSOR) AND
--------------------------------------------------------------------
SWEET VALLEY SUGAR CO.                                                  (LESSEE)
------------------------------------------------------------------------
June 13th, 2000
--------------------------------------------------------------------------------
RE:    4055 SLADEVIEW CRESCENT, UNIT 4, MISSISSAUGA ON
--------------------------------------------------------------------------------

                                [MAP OF UNIT #4]

<PAGE>

                                  SCHEDULE "C"
                                  ------------

To be read with and form a part of this Offer to Lease between

THE ERIN MILLS DEVELOPMENT CORPORATION                              (LESSOR) AND
--------------------------------------------------------------------
SWEET VALLEY SUGAR CO.                                                  (LESSEE)
------------------------------------------------------------------------
June 13th, 2000
--------------------------------------------------------------------------------
RE:    4055 SLADEVIEW CRESCENT, UNIT 4, MISSISSAUGA ON
--------------------------------------------------------------------------------

LANDLORD'S WORK
---------------

1.   Offices        o    Install a high quality  air-tight sliding window in the
                         existing  opening  between  the  office  and  vestibule
                         (immediately on left as entering).
                    o    Paint the office  area in up to 2 colors  chosen by the
                         Tenant from the Landlord's samples.
                    o    Replace  existing  vinyl tile and carpet  with  ceramic
                         tiles chosen by the Tenant from the Landlord's samples.

2.   Warehouse      o    Install two high quality mechanical dock levellers.
                    o    Clean the  entire  warehouse  area in order  that is it
                         suitable for food product use.

<PAGE>

                                  SCHEDULE "D"
                                  ------------

To be read with and form a part of this Offer to Lease between

THE ERIN MILLS DEVELOPMENT CORPORATION                              (LESSOR) AND
--------------------------------------------------------------------
SWEET VALLEY SUGAR CO.                                                  (LESSEE)
------------------------------------------------------------------------
June 13th, 2000
--------------------------------------------------------------------------------
RE:    4055 SLADEVIEW CRESCENT, UNIT 4, MISSISSAUGA ON
--------------------------------------------------------------------------------

TENANT'S WORK
-------------

1.   Signs                    A sign on the unit front of the  Demised  Premises
                              which   shall   conform  to  design   criteria  of
                              Landlord's standard sign specifications.

2.   Offices/Warehouse        All  partitions,  electrical  wiring  outlets  and
                              fixtures, plumbing lines and features in excess of
                              the existing,  will be constructed by the Landlord
                              and  charged  back  to the  Tenant  at a  cost  of
                              $35.00/sq.ft.   amortized   over  5  years  at  an
                              interest rate of 10%.

3.   Telephone Service        In order to  comply  with the City of  Mississauga
                              Heating   Inspection,   Tenant   agrees   to  have
                              installed, through either Bell Canada or a private
                              company, non-combustible wiring.

4.   Occupancy Permit         Upon  acceptance  of this  Offer,  Tenant  will be
                              required  to provide  to the  Landlord a cheque in
                              the  amount  of  $100.00,  payable  to the City of
                              Mississauga,  for the  application of an Occupancy
                              Permit.

5.   Floor Slabs              The Tenant acknowledges that floor slabs have been
     Design Loading           designed assuming a maximum 300 lb/sq.ft.  uniform
                              load and that any large  equipment  or  sources of
                              point  loading  in  excess of 100  lb/sq.ft.  will
                              require  an   independent   foundation   or  other
                              technique to distribute the loads.

6.   Utilities                The Tenant will be responsible for the application
                              for service from  Mississauga  Hydro and Consumers
                              Gas. The Tenant will also be  responsible  for the
                              installation and rental of a hot water tank.

7.   Approvals                The Tenant  acknowledges and agrees to comply with
                              any  requirements  made, as a direct result of the
                              Tenant's  use  of  the  Demised  Premises,  by any
                              Municipal,  Provincial  and Federal  office  based
                              upon  regulations and by-laws in place at the time
                              an application for  construction  and/or occupancy
                              is submitted.  The costs of such compliance  shall
                              be  the  sole  responsibility  of the  Tenant.

8.   Mezzanine                During the lease  term or any  renewal  term,  the
                              Tenant  shall not be permitted to install any form
                              or mezzanine in the Demised Premises.

<PAGE>

The heirs, executors, administrators,  successors and assigns of the undersigned
are bound by the terms hereof. This Agreement shall be read with such changes of
gender or number as may be required by the context.

DATED at Mississauga this 14th of June, 2000
--------------------------------------------

SIGNED, SEALED and DELIVERED   IN WITNESS whereof I have hereunto set my hand
in the presence of             and seal:
                               I have authority to bind the Company

                                                           (Affix
                                                            Seal)  JUNE 14, 2000
---------------------------    ----------------------------        -------------
Witness                        Sweet Valley Sugar Co.                   (Date)

                                                           (Affix
                                                            Seal)  JUNE 14, 2000
---------------------------    ----------------------------        -------------
Witness                        Sweet Valley Sugar Co.                   (Date)

When the lease or agreement to lease provides for any periods where no rent or a
reduced rent is payable, the commission payable hereunder shall be calculated on
the stated rate per annum as if there were no period of free or reduced rent.

Any  deposit in respect of any  agreement  shall  first be applied to reduce the
commission  payable.  Should such  amounts paid to you from the deposit or by my
solicitor  not be  sufficient,  I shall be liable to pay to you, on demand,  any
deficiency in commission and taxes owing on such commission. All amounts set out
as commission are to be paid plus applicable  Goods and Services Tax (G.S.T.) on
such commission.

DATED at  MISSISSAUGA          this     14TH     day of     June         , 2000.
        -----------------------    --------------      ------------------

SIGNED, SEALED and DELIVERED   IN WITNESS whereof I have hereunto set my hand
in the presence of             and seal:
                               I have authority to bind the Company

                                                           (Affix
                                                            Seal)  JUNE 14, 2000
---------------------------    ----------------------------        -------------
Witness                        Lesssor                                  (Date)

                                                           (Affix
                                                            Seal)  JUNE 14, 2000
---------------------------    ----------------------------        -------------
Witness                        Lesssor                                  (Date)

================================================================================

<PAGE>

                                 SCHEDULE - "C"
                                 --------------

                               Equipment Contracts
                               -------------------

                        There are no equipment contracts

<PAGE>

                                 SCHEDULE - "D"
                                 --------------

                                Employee Listing
                                ----------------

                      Employee listing & Salaries attached

<PAGE>

                             Schedule "D" attachment
                             -----------------------

                               SALARIED EMPLOYEES

                      Names                   Annual Salary
               --------------------    ---------------------------
               Dino D'Amico                    $38,600
               Washington Chirimelo            $31,500
               Charanjit Singh                 $32,000
               Tho Huynh                       $19,200

<PAGE>

                                 SCHEDULE - "E"
                                 --------------

                                  Fixed Assets
                                  ------------

<PAGE>

                             Schedule "E" attachment

<TABLE>
<CAPTION>
                                 Equipment List
                                 --------------

          Description                                                  Model & Serial Numbers
--------  ----------------------------------------------------------   --------------------------
<S>       <C>                                                          <C>
One       30 foot Platform Mezzanine with adjacent staircase and
          two 1 ton stainless steel hoppers with valves

One       Gardner Denver 25 hp compressor with additional tank         Model: MODESBRFA
                                                                       Serial: M49121

One       Airtec Dryer 220 SCFM

One       Nissan 5000lbs. Electric Fork Lift with charger              Model: CYGM02L25AS
                                                                       Serial: CYGM02-001442

One       Clark 5000lbs. Electric Fork Lift with charger               Model: CGX17E
                                                                       Serial: GV127E0287

One       Smalley 10 foot stainless steel bucket elevator

Two       General conveyers complete with motors and variable speed drives
          1) 8 foot with dating encoder indexer 2) foot

One       36" transfer conveyer motorized and with variable speed
          drive and 10 foot rail conveyer

Four      1 ton food processing bins with stands

Two       Syntron vibratory feeders

One       5 foot stainless steel packing tubes

Two       Equipment stands 1) 15 foot high 2) 8 foot high

One       40 foot long by 16 feet high industrial racking section

One       Tool chest complete assorted tools: Power tools, drills,
          chopsaw, grinder, electrical meters

One       Volpac packaging system                                      Model: VE280
                                                                       Serial: 12031B/VE-280

One       Hapmann Conveyer - stainless steel & helix conveyer with
          bin

One       Automatic label applicator

One       Mac's welding - Overhead conveyer

One       GWE Industries - Dust Collector

One       Heat tunnel with 3 foot conveyor

One       25 foot screw conveyor

One       Samsung phone system

One       HP Pavilion computer system

One       Rama Computer system

One       Panasonic laser printer

One       Brother fax machine

One       General conveyors 5 sections of 10 foot 2-90 sections,
          foot stands, plastic conveyor chain (all above to be
          assembled)

          Miscellaneous Office Furniture
</TABLE>

<PAGE>

                                 SCHEDULE - "F"
                                 --------------

                          Intellecdtual Property Rights

                        Brand Names Owned by the company
                                 -> Sweet Valley

<PAGE>

                                   SCHEDULE - "G"
                                   --------------

                             Permitted Encumbrances

                          CIBC re: Small Business Loan
               Erin Mills Development Corp. re: Lease of premises

<PAGE>

                                 SCHEDULE - "H"
                                 --------------

                         Proposed Series A of Preferred
                                      Stock

<PAGE>

    Schedule "H" - Proposed voting powers, rights, designations, preferences
    ------------------------------------------------------------------------
                 and qualifications of Series A Preferred Stock
                 ----------------------------------------------

All dollar amounts referred to in this Schedule "H" are US Dollars.

The Parent shall obtain, on or before Closing, approval from the majority of its
shareholders necessary to amend Article FOURTH of its certificate of
incorporation to allow for preferred stock and, subsequently, approval of its
board of directors of the following voting powers, rights, designations,
preferences and qualifications of such Series A Preferred Stock:

      1.    Designation and Amount. There shall be a series of Preferred Stock
designated as "Series A Preferred Stock" and the number of shares constituting
such series of Preferred Stock shall be 750,000.

      2.    Par Value. The par value of each such share of Series A Preferred
Stock shall be $0.001.

      3.    Rank. All shares of Series A Preferred Stock shall rank prior, both
as to payment of dividends and as to distributions of assets upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
to all of the Corporation's now or hereafter issued common stock par value
$0.001 per share (the "Common Stock").

      4.    Dividends. The holders of Series A Preferred Stock shall be entitled
to receive, out of the net profits of the Corporation, dividends at the annual
rate of $0.04 per share per annum payable monthly by the 15th day of the
following month and accruing until paid starting and assessed beginning the
first full month following issuance. The amount of dividends payable shall be
computed on the basis of a 360 day year of twelve 30 day months. The Common
Stock is entitled to all remaining profits which the Board of Directors may
determine to distribute to the holders of Common Stock as dividends, subject to
any future designations regarding the remainder of the unissued Preferred Stock.

      No dividends or other distributions, other than dividends payable solely
in shares of Common Stock of the Corporation ranking junior as to dividends and
as to liquidation rights to the Series A Preferred Stock shall be declared, paid
or set apart for payment on any shares of Common Stock unless and until all
accrued and unpaid dividends of Series A Preferred Stock shall have been paid
and/or set apart for payment.

      Any reference to "distribution" contained in this Section 4 shall not be
deemed to include any distribution made in connection with any liquidation,
dissolution or winding up of the Corporation whether voluntary or involuntary.

      5.    Liquidation Preference. In the event of a liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, the holders
of Series A Preferred Stock shall be entitled to receive out of the assets of
the Corporation, whether such assets are stated capital or surplus of any
nature, an amount equal to the dividends accumulated thereon to the date of
final distribution to such holders which have not prior thereto been paid
without interest, and a sum equal to $1.25 per share, before any payment shall

<PAGE>

be made or any assets distributed to the holders of Common Stock, or any other
class or series of the Corporation's capital stock. All of the remaining net
assets shall belong to and be distributed among the holders of the Common Stock,
subject to any future designations regarding the remainder of the unissued
Preferred Stock. Neither a consolidation or merger of the Corporation with
another corporation nor a sale or transfer of all or part of the Corporation's
assets for cash, securities or other property will be considered a liquidation,
dissolution or winding up of The Corporation.

      6.    Redemption at Option of the Corporation. The Corporation may, at its
option, at any time redeem in whole, or from time to time in part, out of the
earned funds of the Corporation, the Series A Preferred Stock on any date set by
the Board of Directors, at $1.25 per share plus, in each case, an amount in cash
equal to all dividends on the Series A Preferred Stock accrued and unpaid
thereon, pro rata to the date fixed for redemption (such sum being hereinafter
referred to as the "Redemption Price").

      In case of the redemption of less than all of the then outstanding Series
A Preferred Stock, the Corporation shall designate by lot, or in such other
manner as the Board of Directors may determine, the shares to be redeemed or
shall effect such redemption pro rata. Notwithstanding the foregoing, the
Corporation shall not redeem less than all of the Series A Preferred Stock at
any time outstanding until all dividends accrued and in arrears upon all Series
A Preferred Stock then outstanding shall have been paid for all past dividend
periods.

      Not less than thirty (30) days prior to the redemption date notice by
first class mail, postage prepaid, shall be given to the holders of record of
the Series A of Preferred Stock to be redeemed, addressed to such stockholders
at their last addresses as shown on the books of the Corporation. Each such
notice of redemption shall specify the date fixed for redemption, the Redemption
Price, the place or places of payment, that payment will be made upon
presentation and surrender of the shares of the Series A Preferred Stock and
that on and after the redemption date, dividends will cease to accumu1ate on
such shares.

      Any notice which is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of the Series A
Preferred Stock receives such notice; and failure to give such notice by mail,
or any defect in such notice, to the holders of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any other shares of the Series A Preferred Stock. On or after the date fixed
for redemption as stated in such notice, each holder of the shares called for
redemption shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the Redemption Price. If less than all the shares
represented by any such surrendered certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares. If, on the date fixed for
redemption, funds necessary for the redemption shall be available therefor and
shall have been irrevocably deposited or set aside, then, notwithstanding that
the certificates evidencing any shares so called for redemption shall not have
been surrendered, the dividends with respect to the shares so called shall cease
to accrue after the date fixed for redemption, the shares shall no longer be
deemed outstanding, the holders thereof shall cease to be stockholders, and all
rights whatsoever with respect to the shares so called for redemption (except

<PAGE>

the right of the holders to receive the Redemption Price without interest upon
surrender of their certificates therefor) shall terminate.

      The shares of Series A Preferred Stock shall not be subject to the
operation of any purchase, retirement or sinking fund.

      7.    Conversion. Each share of Series A Preferred Stock shall be
convertible, at any time, at the option of the holder thereof into 2 common
shares. If the Corporation provides the holders of the Series A Preferred Stock
notice of its intention to redeem the shares of Series A Preferred Stock, these
holders shall have no more than fifteen (15) days to notify the Corporation with
written instruction to convert each of the shares of Series A Preferred Stock
into 2 common shares, otherwise such shares shall be redeemed by the Corporation
in accordance with Section 6.

      8.    Voting Rights.

      a.    General. The shares of Series A Preferred Stock shall not have any
voting rights regarding any corporation business except that solely and directly
affecting the existence and rights and obligations of such Series A Preferred
Stock.

      b.    Class Voting Rights. In addition to voting rights provided above, so
long as the Series A Preferred Stock is outstanding, the Corporation shall not,
without the affirmative vote or consent of the holders of at least one half
(1/2) of all outstanding Series A Preferred Stock voting separately as a class,
amend, alter or repeal (by merger or otherwise) any provision of the Certificate
of Incorporation or the By-Laws of the Corporation, as amended, so as adversely
to affect the relative rights, preferences, qualifications, limitations or
restrictions of the Series A Preferred Stock.

      9.    Outstanding Shares. All shares of the Series A Preferred Stock
issued shall be deemed outstanding except (i) from the date fixed for redemption
pursuant to Section 6 hereof, all shares of Series A Preferred Stock that have
been so called for redemption under Section 6 hereof; and (ii) from the date of
registration of transfer, all shares of the Series A Preferred Stock held of
record by the Corporation.

      10.   Partial Payments. Upon an optional redemption by the Corporation, if
at any time the Corporation does not pay amounts sufficient to redeem all Series
A Preferred Stock, then such funds which are paid shall be applied to redeem
such Series A Preferred Stock as the Corporation may designate by lot.

      11.   Preemptive Rights. The Series A Preferred Stock is not entitled to
any preemptive or subscription rights in respect of any securities of the
Corporation.

      12.   Severability of Provisions. Whenever possible, each provision hereof
shall be interpreted in a manner as to be effective and valid under applicable
law, but if any provision hereof is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof. If a court of competent jurisdiction should
determine that a provision hereof would be val1d or enforceable if a period of
time were extended or shortened or a particular percentage were increased or

<PAGE>

decreased, then such court may make such change as shall be necessary to render
the provision in question effective and valid under applicable law.

      13.   Future Preferred Stock Issues. The Corporation may issue one or more
additional Series of Preferred Stock without the consent of the holders of
Series A Preferred Stock, provided, however, that the rights and preferences of
such subsequent series of preferred stock as to liquidation, dividends, voting,
redemption, and registration rights shall not be superior (but may be pari
passu) to those of the Series A Preferred Stock.

<PAGE>

                                 SCHEDULE - "I"
                                 --------------

                              Assumption Agreement
                              --------------------

On Closing,  the Buyer and Parent shall assume  liability for payment of a Small
Business Loan of the Seller and shall indemnify the shareholders of Sweet Valley
Foods  respecting  liability for the said Small Business Loan in accordance with
Schedule A hereto;

<PAGE>

                                 SCHEDULE - "J"
                                 --------------

                         Indemnity of Couprie Fenton for
                         -------------------------------
                                      Lease
                                      -----

The Buyer agrees to indemnify  Couprie  Fenton Inc.  against any  liability  for
Lease  payments  on the  premises  at 4-4055  Sladeview  Crescent,  Mississauga,
Ontario.

<PAGE>

                                 SCHEDULE - "K"
                                 --------------

                          Guarantee re: Line of Credit
                          ----------------------------

On or before Closing,  the Parent or the Buyer shall obtain an operating line of
credit,  for the  Business to be owned by the Buyer on  Closing,  in the minimum
amount of one Million dollars (CAN $1,000,000.00).  This line of credit shall be
used for general working capital purposes and for fixed asset purchases.

<PAGE>

                                 SCHEDULE - "L"
                                 --------------

                        Allocation of the Purchase Price
                        --------------------------------

The purchase  price shall be adjusted  pursuant to Section  2.02,  the amount of
adjustment  required  shall be allocated  on a pro-rata  basis among the various
categories  of assets.  The Seller and Buyer agree to cooperate in the filing of
such elections under the Income Tax Act (Canada) and other taxation  statutes as
may be  necessary  or  desirable  to  give  effect  to such  allocation  for tax
purposes.

<PAGE>

                                 SCHEDULE - "M"
                                 --------------

                           List of Customer Contracts
                           --------------------------

           There are no signed Customer Contracts currently in place.

<PAGE>

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