Document:

Exhibit 10.25

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT is made effective as of November     , 2008 (“Agreement”) by and between HANGER PROSTHETICS & ORTHOTICS, INC., a Delaware corporation (the “Company”), and VINIT ASAR (the “Executive”).  The Company and Executive agree as follows:

 

NOW, THEREFORE, in consideration of the promises and mutual agreements set forth below, both parties agree as follows:

 

1.             Employment; Termination Date.

 

1.1           Employment.  The Company agrees to employ Executive and Executive accepts such employment by the Company upon the terms and conditions set forth in this Agreement, for the period beginning on December 29, 2008 (the “Commencement Date”) and ending upon termination pursuant to Section 4 or Section 5 (the “Employment Period”).  Executive represents and warrants that Executive is not subject to any restrictive covenants (including, without limitation, covenants not to compete and covenants not to solicit) that would prevent Executive from entering into this Agreement or providing services on the Company’s behalf. Executive agrees not to use or disclose in the course of Executive’s employment with the Company any confidential information or trade secrets of any other Person.

 

1.2           Termination Date.  For purposes of this Agreement, the term “Termination Date” shall mean (i) if the Executive’s employment is terminated by the Company for any reason whatsoever, other than death or Disability, the Executive’s last day of work; (ii) if the Executive’s employment is terminated by reason of death or Disability, the date of death of the Executive or the effective date of the Disability, as the case may be; and (iii) if the Executive’s employment is terminated by the Executive, the expiration date of the applicable notice period that is required pursuant to this Agreement.  Notwithstanding the foregoing, no Termination Date shall be earlier than the date as of which the Executive has incurred a “separation from service” within the meaning of Internal Revenue Code (“Code”) Section 409A, as determined by applying the default rules thereof.

 

2.             Services.

 

During the Employment Period, Executive agrees (i) to devote Executive’s best efforts and substantially all of Executive’s business time and attention to the business affairs of the Company (except for reasonable vacation periods subject to the reasonable approval of the Company or reasonable periods of illness or other incapacity); (ii) to serve Hanger Orthopedic Group, Inc. (“Hanger”) as an Executive Vice President and its Chief Growth Officer and to render such services as the Company or Hanger may from time to time direct; provided, however, that Executive recognizes and agrees that Hanger or the Company may change Executive’s job description as set forth in this Section 2 as a result of a good faith restructuring of the Company’s or Hanger’s operations; (iii) that Executive will not, except with the prior written consent of the Company, become engaged in or render services for any business other than the business of the Company; and (iv) that Executive will follow the policies and

 

 

procedures of the Company, as set forth by the Company from time to time, as well as all applicable federal and state healthcare laws, rules and regulations.

 

3.             Salary, Incentive Bonus, Stock Options, Other Benefits.

 

In consideration for the valuable services to be rendered by Executive and for Executive’s agreement not to disclose or use Confidential Information of the Company as described in Section 6 and not to compete against the Company as described in Section 7, the Company hereby agrees as follows:

 

3.1           Salary.  During the first year of the Employment Period during which this Agreement is executed, the Company will pay Executive a bi-weekly gross salary at the annual rate of $340,000.00, less all applicable payroll taxes and other normal deductions (the “Base Salary”), payable at the bi-weekly gross rate of $13,076.92.  Executive’s Base Salary may, but is not required to, be increased annually in January of each year (but cannot be decreased) based on an annual performance salary review as determined in the reasonable discretion of the Company.

 

3.2           Bonus.

 

(a)           In addition to the Base Salary, the Executive shall participate in Hanger’s current bonus plan for senior corporate officers (the “Bonus Plan”), as approved by the Compensation Committee of the Board of Directors of Hanger (“Board of Directors”) in each calendar year during the term of this Agreement commencing with the 2009 calendar year.  The Executive’s target bonus is fifty percent (50%) of the Base Salary (the “Target Bonus”) and is contingent on the Executive meeting certain performance criteria and Hanger achieving certain year-end financial criteria, and up to one hundred percent (100%) of the Base Salary (the “Maximum Bonus”) if the Executive exceeds certain performance criteria and Hanger exceeds certain year-end financial criteria all as determined in the reasonable discretion of the Board of Directors and its Compensation Committee.  The Executive shall be entitled to such increases in the “Target Bonus” and the “Maximum Bonus” during the term hereof as shall be determined and approved by the Compensation Committee of the Board of Directors in its sole discretion, taking account of the performance of Hanger, the Company and the Executive, and other factors generally considered relevant to the salaries of executives holding similar positions with enterprises comparable to the Company.  Notwithstanding the foregoing, in the event that the Executive, Hanger or the Company fail to attain their minimum respective criteria in any given year, the Board of Directors and its Compensation Committee may, in their reasonable discretion, decline to award any bonus to the Executive.

 

(b)           The bonus described in Section 3.2(a) shall be payable between January 1 and March 15 (inclusive) of the calendar year following the calendar year for which the bonus is determined in accordance with the Company’s normal practices.  In the event that the Executive is employed for less than the full calendar year in the year in which his Termination Date occurs (“Termination Year”), the bonus payable to the Executive shall be subject to Sections 4 and 5 of this Agreement and calculated based on the Executive meeting certain performance criteria and Hanger achieving certain year-end financial criteria, all as determined by the Compensation Committee of the Board of Directors, in its sole discretion.

 

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Such bonus shall be pro-rated for the portion of the Termination Year during which the Executive was employed by the Company.  With respect to the bonus for the Termination Year, any bonus payable pursuant to this Section 3.2(b) shall be payable to the Executive between January 1 and March 15 (inclusive) of the calendar year following the calendar year for which the bonus is determined in accordance with the Company’s normal practices.

 

(c)           In addition to the bonus set forth in Section 3.2(a) of this Agreement, so long as Executive shall remain employed, without interruption, by the Company, within forty-five (45) days after providing the Company with a fully-executed original of this Agreement, but in no event later than March 15, 2009, the Company will pay Executive a one-time bonus in the form of a lump sum cash payment of Fifty Thousand Dollars ($50,000.00), less all applicable payroll taxes and other normal deductions (“Sign-On Bonus”), upon the terms and conditions set forth in the Promissory Note to be executed by Executive as maker and in favor of the Company as holder, pursuant to which Executive shall be obligated to repay the Sign-On Bonus to the Company immediately upon the termination of Executive’s employment pursuant to Section 4.3 or Section 4.5 of this Agreement prior to the one (1) year anniversary date of the Commencement Date, all among such other terms and conditions as may be included in such Promissory Note.

 

3.3           Stock Options & Restricted Stock.

 

(a)           In addition to the compensation described in Section 3.1 and Section 3.2 of this Agreement, Executive may have the opportunity to receive options to purchase stock or restricted shares of stock of Hanger in a manner consistent with any stock option or restricted share plan adopted by Hanger. The determination as to the amount of stock, if any, to be purchased under such stock option or restricted share plan shall be subject to the sole discretion of the Board of Directors of Hanger or a committee thereof.

 

(b)           As an incentive for Executive’s future performance in improving shareholder value, Executive will be entitled to receive a special, time-based grant of twenty thousand (20,000) restricted shares of Hanger stock (“Special Grant”).  The grant date of the Special Grant shall be no later than fourteen (14) days after the Commencement Date.  The vesting schedule for the Special Grant shall conform to the vesting schedule described in Section 3.3(c) of this Agreement and the Stock Agreement (as hereinafter defined).

 

(c)           In addition to the Special Grant, the Company shall, no later than fourteen (14) days after the Commencement Date, grant to the Executive a minimum of twenty thousand (20,000) restricted shares of Hanger stock (“2008 Grant”), with thirteen thousand four hundred (13,400) of those shares being  performance-based restricted shares and six thousand six hundred (6,600) of those shares being time-based restricted shares.  The Executive shall also be entitled to receive a grant of no fewer than twenty thousand (20,000) additional restricted shares of Hanger stock (“Additional Grant”) on or before March 31, 2010.  The 2008 Grant and Additional Grant shall be subject to such other terms and conditions as reasonably determined by Hanger’s Board of Directors or a committee thereof, consistent with the terms and conditions of the applicable stock incentive plan and restricted share grant agreement(s).

 

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(d)           The options or restricted shares provided in Section 3.3(a) and Section 3.3(b) shall be evidenced by one or more stock option agreements or restricted share grant agreements (each, a “Stock Agreement”) between the Executive and Hanger, which Stock Agreement(s) shall provide for a vesting schedule of four (4) years, in equal parts, of the options or restricted shares granted thereunder.  Notwithstanding any provisions now or hereafter existing under any stock incentive plan of Hanger, all options or restricted shares granted to the Executive shall vest in full immediately upon the Termination Date except for termination of employment pursuant to Section 4.3 or Section 4.5 hereof, and the Executive (or his estate or legal representative, if applicable) shall thereafter have twelve (12) months from such Termination Date to exercise such options, if applicable.

 

(e)           Notwithstanding any provisions now or hereafter existing under any stock option plan or restricted share plan of Hanger, in the event of a Change in Control (as hereinafter defined), all options or restricted shares provided to the Executive pursuant to Section 3.3(a), Section 3.3(b) and Section 3.3(c) of this Agreement or any Stock Agreement shall be granted and shall immediately fully vest as of the date of such Change in Control with such options or restricted shares being valued at the closing price of Hanger’s common stock on the day prior to the day of the Change in Control.

 

(f)            For purposes of this Agreement, a “Change in Control” shall be deemed to exist if:

 

(i)            a person, as defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (other than the Executive or a group including the Executive), either (A) acquires twenty percent (20%) or more of the combined voting power of the outstanding securities of Hanger having the right to vote in elections of directors and such acquisition shall not have been approved within sixty (60) days following such acquisition by a majority of the Continuing Directors (as hereinafter defined) then in office, or (B) acquires fifty percent (50%) or more of the combined voting power of the outstanding securities of Hanger having a right to vote in elections of directors; or

 

(ii)           Continuing Directors shall for any reason cease to constitute a majority of the Board of Directors; or

 

(iii)          Hanger disposes of all or substantially all of the business of Hanger to a party or parties other than a subsidiary or other affiliate of Hanger pursuant to a partial or complete liquidation of Hanger, sale of assets (including stock of a subsidiary of Hanger) or otherwise; or

 

(iv)          the Board of Directors approves Hanger’s consolidation or merger with or into any other Person (other than a wholly-owned subsidiary of Hanger), or any other Person’s consolidation or merger with or into Hanger, which results in all or part of the outstanding shares of Stock being changed in any way or converted into or exchanged for stock or other securities or cash or any other property.

 

(g)           For purposes of this Agreement, the term “Continuing Director” shall mean a member of the Board of Directors who either was a member of the Board of

 

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Directors on the date hereof or who subsequently became a Director of Hanger and whose election, or nomination for election, was approved by a vote of at least two-thirds (2/3) of the Continuing Directors then in office.

 

3.4           Relocation.

 

(a)           Relocation Support.  Executive shall receive the relocation benefits set forth in the Company’s Executive Relocation Program, a copy of which is attached hereto as Exhibit A, consistent with the relocation policies and procedures of the Company for executives, as previously disclosed by the Company to Executive.

 

(b)           Housing Allowance. Provided that Executive (i) remains continuously employed, without interruption, with the Company and (ii) has relocated Executive’s principal place of residence to a location within fifty (50) miles of the Company’s offices at Two Bethesda Metro Center, Suite 1200, Bethesda, Maryland 20814 (the “Office”), in each case as of the date on which each of the payments described in this Section 3.4(b) would otherwise be made to Executive, Executive shall receive a housing allowance in an amount equal to Fifty Thousand Dollars ($50,000.00), less all applicable payroll taxes and other normal deductions, within thirty (30) days after each of the first annual anniversary date following the Commencement Date and the second annual anniversary date following the Commencement Date. Notwithstanding anything in this Agreement to the contrary, in the event Executive’s employment with the Company is terminated for any reason whatsoever prior to Executive’s receipt of any payment described in this Section 3.4(b), including, without limitation, with or without Due Cause (as defined in Section 4.3) or by Executive, then Executive shall not be entitled to any payment described in this Section 3.4(b) that Executive has not already received (regardless of whether Executive’s right to receive such payment has accrued). In no event shall Executive be entitled to receive payments in excess of an aggregate of One Hundred Thousand Dollars ($100,000.00), less all applicable payroll taxes and other normal deductions, pursuant to this Section 3.4(b).

 

3.5           Benefits.  Executive also shall be entitled to (i) an automobile allowance in the amount of One Thousand Dollars ($1,000.00) per month and the provision of, or reimbursement for, parking of such automobile at the Office, (ii) four (4) weeks of vacation per year, and (iii) sick leave, medical and other benefits, including, without limitation, participation in the Company’s Supplemental Executive Retirement Program (“SERP”) and appropriate directors and officers liability insurance (to the extent commercially reasonable for the Company to obtain such insurance), all of which are consistent with those received by other similarly-situated senior executives of Hanger and its subsidiaries as determined in the sole discretion of the Compensation Committee of the Board of Directors. With regard to the Company’s SERP, Executive’s level of benefit shall be sixty-five percent (65%) of Executive’s average base salary, as defined by the SERP plan.  Executive shall receive life insurance in an amount equal to one (1) times Executive’s Base Salary (in addition to the life insurance in an amount equal to one (1) times Executive’s Base Salary provided by the Company as part of Executive’s base benefit program), with the premiums for such policy to be paid by the Company, and Executive shall also receive the option to participate in the Company’s supplemental life and accidental death and dismemberment policies, with the premiums for such policies to be paid by Executive, all in accordance with the terms and conditions of such policies as generally applied by the Company.

 

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3.6           Parachute Penalties.  For all payments made or required to be made pursuant to the terms of this Agreement, including any payments made with respect to the Executive’s termination of employment for any reason, the Company shall determine and pay the Executive, as soon as practicable, an amount sufficient to cover the gross-up of any excise, income and other taxes resulting from the imposition of the parachute penalties of the Code or applicable state tax laws.  Such determination and payment by the Company shall be made six (6) months and one (1) day after the Executive’s Termination Date or, if later, before the end of the calendar year following the calendar year in which the Executive paid any such excise tax.

 

3.7           Reimbursement for COBRA.  Upon the provision by Executive of evidence of such expenses and the payment thereof, the Company will reimburse Executive for up to one (1) month of Executive’s COBRA expenses under the medical plan in which Executive participates immediately prior to and as of the date of this Agreement.

 

4.             Termination of Employment.

 

4.1           Death. The Executive’s employment shall be terminated by the Executive’s death.  In the event of the death of the Executive, the Company shall pay to the estate or other legal representative of the Executive the Base Salary and vacation as accrued through the Termination Date (at the annual rate then in effect) and the bonus provided for in Section 3.2 for the Termination Year (as well as any then earned but unpaid bonus for the year preceding the Termination Year, if applicable).

 

4.2           Disability.

 

(a)           “Disability” means, for purposes of this Agreement, that the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.

 

(b)           If the Executive shall incur a Disability, the employment of the Executive shall be terminated.  In the event of such termination, the Company shall pay to the Executive the Base Salary and vacation accrued through the Termination Date (at the annual rate then in effect) and the bonus provided for in Section 3.2 for the Termination Year (as well as any then earned but unpaid bonus for the year preceding the Termination Year, if applicable).

 

4.3           Due Cause.  The employment of Executive hereunder may be terminated by the Company at any time for Due Cause (as hereinafter defined).  In the event of such termination, the Company shall pay to the Executive the Base Salary (at the annual rate then in effect) and vacation accrued through the Termination Date and not theretofore paid to the Executive.  Rights and benefits of the Executive or his transferee under the benefit plans and programs of the Company shall be determined in accordance with the provisions of such plans and programs.  For purposes hereof, “Due Cause” shall mean (i) the repeated failure or refusal of the Executive to follow the lawful directives of the Company (except due to sickness, injury or disabilities), (ii) gross inattention to duty or any other willful, reckless or grossly negligent act (or omission to act) by the Executive, which, in the good faith judgment of the Company, materially injures the Company, including the repeated failure to follow the policies and

 

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procedures of the Company, (iii) a material breach of this Agreement by the Executive or (iv) the commission by the Executive of a felony or other crime involving moral turpitude or an act of financial dishonesty against the Company.

 

4.4           Termination by the Company Without Cause.

 

(a)           The Company may terminate the Executive’s employment at any time, for whatever reason it deems appropriate or without reason; provided, however, that in the event that such termination is not pursuant to Section 4.1 (Death); 4.2 (Disability); 4.3 (Due Cause); 4.5 (Voluntary Termination); or 4.6 (Retirement), the Company shall pay to the Executive the Base Salary and vacation accrued through the Termination Date (at the annual rate then in effect) and the bonus provided for in Section 3.2 for the Termination Year (as well as any then earned but unpaid bonus for the year preceding the Termination Year, if applicable).

 

(b)           In addition to the payments described in Section 4.4(a), the Company shall pay to the Executive, within forty-five (45) days following the Termination Date, a severance payment in an amount equal to eighteen (18) months of the Base Salary (at the annual rate in effect immediately prior to termination) and an additional bonus payment (“Additional Bonus Payment”) equal to one and one-half (1.5) times the Target Bonus for the Termination Year. Any portion of this severance benefit that is in excess of the lesser of two (2) times (i) the Executive’s annualized rate of compensation for the preceding taxable year (adjusted for certain increases that would have been received in the normal course of employment) or (ii) the Code Section 401(a)(17) compensation limit for qualified plan purposes as in effect for the year in which the Termination Date occurs, shall not be paid as a severance benefit but shall be paid to the Executive in a single lump sum six (6) months and one day after the Termination Date.  For eighteen (18) months following termination pursuant to Section 4.4(a), the Company shall (i) reimburse the Executive for his reasonable costs of medical and dental coverage as provided under COBRA, (ii) reimburse the Executive for his reasonable costs incurred in maintaining his life and disability coverage, and (iii) reimburse the Executive for similar, applicable benefits granted to the Executive in Section 3.5 and Section 3.6, each at levels substantially equivalent to those provided by the Company to the Executive immediately prior to the termination of his employment (including such other benefits as shall be provided to senior corporate officers of the Company in lieu of such benefits from time to time during the eighteen (18) month payment period), on the same basis, including the Company’s payment of premiums and contributions, as such benefits are provided to other senior corporate officers of the Company or were provided to the Executive prior to the termination. Reimbursements of expenses which provide for nonqualified deferred compensation under Code Section 409A, if any, shall not be paid before six (6) months and one day after the Executive’s Termination Date.  The amount of expenses eligible for reimbursement, or in-kind benefits provided, during a taxable year of the Executive may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided in any other taxable year.  Reimbursements shall be paid on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.  The right to reimbursement hereunder is not subject to liquidation or exchange for another benefit.

 

In addition, for a period of eighteen (18) months immediately following the Executive’s Termination Date, the Executive will be provided with outplacement services commensurate

 

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with those provided to other senior corporate officers of the Company through a vendor selected by the Company. Rights and benefits of the Executive or transferee under the benefit plans and programs of Hanger shall be determined in accordance with the provisions of such plans and programs.

 

(c)           Notwithstanding the foregoing, in the event that Hanger is no longer a publicly-traded entity as of the Termination Date, or ceases to be a publicly-traded entity within the six (6) month period immediately following the Termination Date, then the Company shall pay to Executive the payments set forth in Section 4.4(b), or any unpaid portion thereof, as applicable, within forty-five (45) days from the later of (i) the Termination Date or (ii) the date Hanger ceased to be a publicly-traded entity.  Notwithstanding the foregoing, in the event that the death of the Executive occurs within six (6) months following the Termination Date, the Company shall pay to the Executive’s estate any unpaid portion of the amounts due to be paid to the Executive pursuant to Section 4.4(b) within forty-five (45) days following receipt by the Company of notice of Executive’s death.

 

(d)           Notwithstanding anything in this Agreement to the contrary, Executive shall not be entitled to any payments under Section 4.4(b) unless Executive has first duly executed a form of agreement and general release acceptable to the Company releasing the Company from certain claims Executive may have in connection with Executive’s employment with the Company and the termination thereof, to the extent permitted by law.

 

4.5           Voluntary Termination.  Executive may terminate his employment with the Company at any time and the Company shall pay to the Executive the Base Salary and vacation accrued through the Termination Date (at the annual rate then in effect) and the bonus provided for in Section 3.2 for the Termination Year (as well as any then earned but unpaid bonus for the year preceding the Termination Year, if applicable).  In the event Executive terminates Executive’s employment under this Section 4.5, written notice of at least thirty (30) days shall be provided to the Company in accordance with the provisions of Section 9. Except as otherwise provided in this Agreement, rights and benefits of the Executive or his transferee under the benefit plans and programs of Hanger shall be determined in accordance with provisions of such plans and programs.

 

4.6           Retirement.

 

(a)           In the event of the Executive’s Retirement (as defined in Section 4.6(b)), the Company shall pay to the Executive the Base Salary and vacation accrued through the date of Retirement (at the annual rate then in effect) and the bonus provided for in Section 3.2 for the Termination Year (as well as any then earned but unpaid bonus for the year preceding the Termination Year, if applicable).  Except as otherwise provided in this Agreement, rights and benefits of the Executive or his transferee under the benefit plans and programs of the Company shall be determined in accordance with provisions of such plans and programs.

 

(b)           “Retirement” shall mean the Executive’s voluntary termination of employment at or after age sixty-five (65), provided the Executive has given the Company written notice of the Executive’s intent to retire no less than one (1) year prior to the scheduled Termination Date and the Executive has, as of the scheduled Termination Date, been 

 

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continuously employed with Hanger, including any of its direct or indirect subsidiaries, for a period of no less than ten (10) years.

 

5.             Change In Control and Termination Provisions.

 

If within a two (2) year period following any Change in Control there occurs:

 

(a)           any termination of the Executive (other than as set forth in Section 4.1 (Death), 4.2 (Disability), 4.3 (Due Cause), 4.5 (Voluntary Termination) or 4.6 (Retirement) of this Agreement);

 

(b)           a material diminution of the Executive’s responsibilities, as compared to the Executive’s responsibilities immediately prior to the Change in Control;

 

(c)           any reduction in the Base Salary or Bonus Plan targets (as distinguished from the payments received thereunder), as compared to such Base Salary or such targets as of the date immediately prior to the Change in Control;

 

(d)           any failure to provide the Executive with benefits: (1) at least as favorable as those enjoyed by similarly-situated senior corporate officers of the Company under the Company’s pension, life insurance, medical, health and accident, disability or other written employee plans under which the form and/or amounts of benefits are prescribed in applicable documents or (2) granted to the Executive by this Agreement;

 

(e)           any relocation of the Executive’s principal site of employment to a location more than fifty (50) miles from the Executive’s principal place of employment as of the date immediately prior to the Change in Control; or

 

(f)            any material breach of this Agreement by the Company;

 

then, at the option of the Executive, exercisable by the Executive within ninety (90) days after the occurrence of any of the foregoing events, the Executive may resign his employment with the Company (or, if involuntarily terminated, give notice of his intention to collect benefits under this Agreement) by delivering a notice in writing (the “Notice of Termination”) to the Company, and the Executive shall be entitled to receive the Base Salary and vacation accrued to the Termination Date (at the annual rate then in effect) and the bonus provided for in Section 3.2 for the Termination Year (as well as any then earned but unpaid bonus for the year preceding the Termination Year, if applicable).  In addition, the Company shall pay to the Executive six (6) months and one day after the Termination Date an amount equal to eighteen (18) months of the Base Salary (at the annual rate in effect immediately prior to termination) and the Additional Bonus Payment.  In addition, the Company shall, for eighteen (18) months following the Termination Date, (i) reimburse the Executive for his reasonable costs of medical and dental coverage as provided under COBRA, (ii) reimburse the Executive for his reasonable costs incurred in maintaining his life and disability coverage, and (iii) reimburse the Executive for similar, applicable benefits granted to the Executive in Section 3.5 and Section 3.6, each at levels substantially equivalent to those provided by the Company to the Executive immediately prior to the termination of his employment (including such other benefits as shall be provided to senior corporate officers of the Company in lieu of such benefits from time to time during the eighteen 

 

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(18) month payment period), on the same basis, including the Company’s payment of premiums and contributions, as such benefits are provided to other senior corporate officers of the Company or were provided to the Executive prior to the termination.  Reimbursements of expenses which provide for nonqualified deferred compensation under Code Section 409A, if any, shall not be paid before six (6) months and one day after the Executive’s Termination Date.  The amount of expenses eligible for reimbursement, or in-kind benefits provided, during a taxable year of the Executive may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided in any other taxable year.  Reimbursements shall be paid on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.  The right to reimbursement hereunder is not subject to liquidation or exchange for another benefit.

 

In addition, for a period of eighteen (18) months immediately following the Executive’s Termination Date, the Executive will be provided with outplacement services commensurate with those provided to other senior corporate officers of the Company through a vendor selected by the Company. Rights and benefits of the Executive or transferee under the benefit plans and programs of Hanger shall be determined in accordance with the provisions of such plans and programs.

 

(g)           Notwithstanding the foregoing, in the event that Hanger is no longer a publicly-traded entity as of the Termination Date, or ceases to be a publicly-traded entity within the six (6) month period immediately following the Termination Date, then the Company shall pay to Executive the payments set forth in this Section 5, or any unpaid portion thereof, as applicable, within forty-five (45) days from the later of (i) the Termination Date or (ii) the date Hanger ceased to be a publicly-traded entity.  Notwithstanding the foregoing, in the event that the death of the Executive occurs within six (6) months following the Termination Date, the Company shall pay to the Executive’s estate any unpaid portion of the amounts due to be paid to the Executive pursuant to this Section 5 within forty-five (45) days following receipt by the Company of notice of Executive’s death.

 

(h)           Notwithstanding anything contained in this Agreement to the contrary, Executive shall not be entitled to any payments under this Section 5 unless Executive has first duly executed a form of agreement and general release acceptable to the Company releasing the Company from certain claims Executive may have in connection with Executive’s employment with the Company and the termination thereof, to the extent permitted by law..

 

6.             Confidential Information.

 

6.1           Unless the Executive secures the Company’s written consent, the Executive will not, for a period of eighteen (18) months after the Termination Date, disclose, use, disseminate, lecture upon, or publish Confidential Information, whether or not such Confidential Information was developed by him.

 

6.2           “Confidential Information” means information disclosed to the Executive or known by him as a result of his employment with the Company, not generally known in the industry, about the Company’s and/or Hanger’s (including any direct or indirect subsidiary of Hanger) services, products, or customers, including, but not limited to, clinical 

 

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programs, procedures and protocols, research, operating manuals, business methods, financial strategic planning, client retention, customer and supplier lists, data processing, insurance plans, risk management, marketing, contracting, selling and employees.

 

7.             Non-Compete.

 

7.1           In the event the Employment Period is terminated under Sections 4.3, 4.5, 4.6 or 5, then this Section 7 will apply to Executive. In the event the Employment Period is otherwise terminated, such as pursuant to Section 4.4, then no part of this Section 7 will apply to Executive.

 

7.2           Executive will not, during the Executive’s term of employment and for a period of eighteen (18) months after the Termination Date, directly or indirectly (i) engage, whether as principal, agent, investor, representative, stockholder (other than as the holder of not more than five percent (5%) of the stock or equity of any corporation the capital stock of which is publicly traded), employee, consultant, volunteer or otherwise, with or without pay, in any activity or business venture anywhere within the continental United States that is competitive with the business of the Company and/or Hanger (including any direct or indirect subsidiary of Hanger) on the Termination Date, (ii) solicit or entice or endeavor to solicit or entice away from the Company and/or Hanger (including any direct or indirect subsidiary of Hanger) any director, officer, employee, agent or consultant of the Company and/or Hanger (including any direct or indirect subsidiary of Hanger), either on his own account or for any Person, firm, corporation or other organization, regardless of whether the Person solicited would commit any breach of such Person’s contract of employment by reason of leaving the Company’s service; (iii) solicit or entice or endeavor to solicit or entice away any of the clients or customers of the Company and/or Hanger (including any direct or indirect subsidiary of Hanger) as of the Termination Date for the purpose of competing with the business of the Company and/or Hanger (including any direct or indirect subsidiary of Hanger), either on his own account or for any other Person, firm, corporation or organization; (iv) employ or otherwise utilize (whether as a consultant, advisor or otherwise) any Person who was a director, officer, or employee of the Company and/or Hanger (including any direct or indirect subsidiary of Hanger) at any time during the two (2) years preceding the Termination Date, unless such Person’s employment was terminated by the Company and/or Hanger (including any direct or indirect subsidiary of Hanger); or (v) employ or otherwise utilize (whether as a consultant, advisor or otherwise) any Person who is or may be likely to be in possession of any Confidential Information.  The parties hereto agree that if, in any proceeding, the Court or other authority shall refuse to enforce covenants set forth in this Section 7, because such covenants cover too extensive a geographic area or too long a period of time, any such covenant shall be deemed appropriately amended and modified in keeping with the intention of the parties to the maximum extent permitted by law.

 

7.3           Since a material purpose of this Agreement is to protect the Company’s investment in Executive and to secure the benefits of Executive’s background and general experience in the industry, the parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of Section 6 or this Section 7 and that any such breach will cause the Company irreparable harm.  Therefore, in the event of a breach by Executive of any of the provisions of Section 6 or this Section 7, the Company or its successors or assigns may, in addition to other rights and remedies existing in its favor, apply to 

 

11

 

any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions of this Agreement.

 

7.4           Executive specifically authorizes and permits the Company to provide any Person with which Executive serves (or may serve) as an employee, director, owner, stockholder, consultant, partner (limited or general) or otherwise with a copy of this Agreement or a general description of some or all of the terms of this Agreement.

 

8.             Miscellaneous.

 

Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law.  The parties agree that (i) the provisions of this Agreement shall be severable in the event that any of the provisions hereof are for any reason whatsoever invalid, void or otherwise unenforceable, (ii) such invalid, void or otherwise unenforceable provisions shall be automatically replaced by other provisions which are as similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and enforceable and (iii) the remaining provisions shall remain enforceable to the fullest extent permitted by law. This Agreement embodies the complete agreement and understanding among the parties and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors and assigns. Executive may not assign Executive’s rights or delegate Executive’s obligations hereunder without the prior written consent of the Company. The Company may assign its rights and delegate its duties hereunder without the consent of Executive to Permitted Transferees. All questions concerning the construction, validity and interpretation of the Agreement will be governed by the internal law, and not the law of conflicts, of the State of Maryland.  All disputes under this Agreement shall be submitted to and governed by binding arbitration with an arbitrator from the American Arbitration Association; except only that the Company may seek relief in a court of competent jurisdiction in the event of a claimed violation of Section 6 or Section 7 of this Agreement. Executive hereby agrees that any action or proceeding regarding or relating to this Agreement that is properly submitted to a court of competent jurisdiction as described in the preceding sentence shall be subject to the exclusive jurisdiction of the courts of the State of Maryland, County of Montgomery, or, if it has or can acquire jurisdiction, in the United States District Court for the District of Maryland (Southern Division), and each of the parties hereto consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein.  Process in any action or proceeding referred to in the preceding sentence may be served on any party hereto anywhere in the world. Any provision of this Agreement may be amended or waived only with the prior written consent of the Company and Executive.  Notwithstanding anything in this Agreement to the contrary, the Company shall unilaterally have the right to amend this Agreement to comply with Section 409A of the Code.  This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  The parties further agree that facsimile signatures or signatures scanned into .pdf (or similar) format and sent by e-mail shall be deemed original signatures.

 

12

 

9.             Notices.

 

Any notice to be given hereunder shall be in writing and delivered personally or sent by certified mail, postage prepaid, return receipt requested, addressed to the party concerned at the address indicated below or at such other address as such party may subsequently be designated by like notice:

 

If to the Company:

 

c/o Hanger Orthopedic Group, Inc.
 2 Bethesda Metro Center, Suite 1200
 Bethesda, MD 20814
 Attention: Vice President, Human Resources

 

If to the Executive:

 

Vinit Asar

18960 Seabiscuit Run

Yorba Linda, California 92886

 

10.          Withholding.

 

Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder to the Executive or his beneficiaries, including his estate, shall be subject to withholding of such amounts relating to taxes as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation.  In lieu of withholding such amounts, in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes as permitted by law, provided it is satisfied in its sole discretion that all requirements of law affecting its responsibilities to withhold such taxes have been satisfied.

 

11.          Survivorship.

 

The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.

 

12.          Definitions.

 

12.1         “Permitted Transferee” shall mean (a) any successor by merger or consolidation to Hanger or the Company or any Permitted Transferee; (b) any purchaser of all or substantially all of Hanger’s or the Company’s or any Permitted Transferee’s assets; (c) any parent or subsidiary corporation of Hanger or the Company; and (d) any lender to (i) Hanger or the Company, (ii) any Permitted Transferee and/or (iii) any affiliate of Hanger or the Company or of any Permitted Transferee.

 

13

 

12.2         “Person” shall mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a governmental entity or any department or agency thereof.

 

[The next page is the signature page.]

 

14

 

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

 

	
 
    	
HANGER   PROSTHETICS & ORTHOTICS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian Wheeler
    
	
 
    	
 
    	
Brian   Wheeler, Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Vinit Asar
    
	
 
    	
 
    	
Vinit   Asar
    

 

15Voice Mobility International, Inc.: Exhibit 10.1 - Filed by newsfilecorp.com

ASSET PURCHASE AGREEMENT

THIS AGREEMENT made as of the 16th day of February,
2011.

AMONG:

VOICE MOBILITY INTERNATIONAL, INC.,
a company 
incorporated under the laws of the State of Nevada with its
principal 
business office located at 107 – 645 Fort Street, Victoria,
British C
olumbia V8W 1G2; and

(the "Parent")

VOICE MOBILITY, INC., a company
incorporated under the laws of 
Canada with its principal business office
located at 107 – 645 Fort Street, 
Victoria, British Columbia V8W 1G2

(the "Purchaser")

AND

TAGLINE COMMUNICATIONS INC., a
company incorporated 
under the laws of the Province of British Columbia with
its principal 
business office located at 1600 – 609 Granville Street, P.O.
Box 10068, 
Pacific Centre, Vancouver, British Columbia V7Y 1C3

(the "Vendor")

AND

THE EMPRISE SPECIAL OPPORTUNITIES
FUND, LIMITED 
PARTNERSHIP, a limited partnership formed under the laws
of British 
Columbia with its principal office at 1620 – 609 Granville
Street, 
Vancouver, British Columbia V7Y 1C3

(the "Shareholder")

BACKGROUND:

A.               
The Vendor is the legal and beneficial owner of all of the Assets (defined
below), consisting of all of the property, assets and undertaking of the
Vendor's Business (defined below).

B.               
The Vendor wishes to sell, and the Purchaser wishes to purchase, subject to any
exceptions set out in this Agreement, all of the Assets upon the terms and
subject to the conditions contained in this Agreement.

C.               
The Shareholder is the legal and beneficial owner of all of the issued and
outstanding shares of the Vendor, and is a party to this Agreement solely for
the purpose of covenanting with the Vendor to indemnify the Purchaser in the
manner provided in this Agreement.

D.               
The Purchaser is a wholly owned subsidiary of the Parent.

- 2 –

                    NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements herein contained, and other good and valuable
consideration, receipt of which is hereby acknowledged, it is agreed among the
parties hereto as follows:

ARTICLE 1 
INTERPRETATION

1.1               
Defined Terms

                     In
this Agreement, including the schedules hereto, unless there is something in the
subject matter or context inconsistent therewith, the following terms and
expressions will have the following meanings:

	 	(a) 	
      “Accounts Receivable” shall mean all accounts
      receivable, trade accounts, notes receivable, book debts and other debts
      due or accruing due from the Customers with respect to any services
      provided by the Vendor at or prior to the Closing Date.

	 	 	 
	 	(b) 	
      "Adjustment Date" has the meaning ascribed to it
      in section 3.3.

	 	 	 
	 	(c) 	
      "Assets" means all rights, title and interest of
      the Vendor, whether direct, indirect, beneficial, contingent, or
      otherwise, in all of the property and assets of every kind and description
      (except as provided in section 2.1(b)), wherever situate of the Vendor's
      Business and undertaking, as listed in Schedule "A" of this
    Agreement.

	 	 	 
	 	(d) 	
      "Assumed Obligations" has the meaning ascribed to
      it in section 2.3.

	 	 	 
	 	(e) 	
      “Books and Records” shall mean all books, records,
      files and documentation (in whatever medium and wherever situated) of the
      Vendor which pertain to the Assets, and for greater certainty, the phrase
      “Books and Records” shall include, without limitation, all approvals,
      authorizations, written Contracts, evidence or indication of ownership of
      the Vendor in and to any Asset. In the event any of the above books and
      records pertain to both the Business and the Assets or if the Vendor is
      required by law to keep originals of any such books and records, the
      phrase “Books and Records” shall mean copies thereof.

	 	 	 
	 	(f) 	
      “Business” shall mean the business now and
      heretofore conducted by the Vendor consisting of the hosted communications
      service provided by the Vendor to the Customers under the "Tagline" brand
      name, and all operations, activities and functions necessary or incidental
      to the above.

	 	 	 
	 	(g) 	
      "Business Day" means any day other than a day
      which is a Saturday, a Sunday or a statutory holiday in Vancouver, British
      Columbia.

	 	 	 
	 	(h) 	
      “Closing” shall mean the completion of the
      transaction of purchase and sale, assignment and transfer contemplated
      herein by the delivery to the Purchaser of instruments of conveyance for
      the Assets, in form and substance satisfactory to the Purchaser, acting
      reasonably.

	 	 	 
	 	(i) 	
      "Closing Date" means the date on or before March
      3rd, 2011 on which the Closing occurs.

- 3 –

	 	(j) 	
      "Consideration Shares" has the meaning ascribed to
      it in section 3.1.

	 	 	 	 
	 	(k) 	
      “Contracts” shall mean all written or oral
      contracts, agreements, indentures, instruments, commitments and orders
      made by or in favour of the Vendor in relation to the Business, and
      “Contract” shall mean any one of them.

	 	 	 	 
	 	(l) 	
      “Customers” shall mean all paying subscribers of
      the TagLine service provided by the Vendor, and “Customer” shall
      mean any one of them.

	 	 	 	 
	 	(m) 	
      "Encumbrances" means mortgages, charges, pledges,
      royalties, security interests, liens, encumbrances, actions, claims,
      demands and equities of any nature whatsoever or howsoever arising and any
      rights or privileges capable of becoming any of the foregoing.

	 	 	 	 
	 	(n) 	
      "Governmental Charges" means all taxes, customs,
      duties, rates, levies, assessments and other charges, together with
      penalties, interest and fines with respect thereto, payable to any
      federal, provincial, state, municipal, local or other governmental agency,
      authority, board, bureau or commission, domestic or foreign.

	 	 	 	 
	 	(o) 	
      "Material Adverse Effect" means any change,
      effect, event or occurrence that is, or could reasonably be expected to
      be, material and adverse to the value or condition of the
Assets.

	 	 	 	 
	 	(p) 	
      "NDA" means the Confidentiality Agreement dated
      July 15, 2010, between the Vendor and the Purchaser.

	 	 	 	 
	 	(q) 	
      "NEX" means the NEX Board of the TSXV.

	 	 	 	 
	 	(r) 	
      "NEX Approval" means the acceptance for filing of
      this Agreement by the NEX.

	 	 	 	 
	 	(s) 	
      "Parent" means Voice Mobility International,
      Inc.

	 	 	 	 
	 	(t) 	
      "Person" means and includes any individual,
      corporation, partnership, firm, joint venture, syndicate, association,
      trust, government, governmental agency or board or commission or
      authority, and any other form of entity or organization.

	 	 	 	 
	 	(u) 	
      "Purchase Price" means the obligation of the
      Purchaser to make the cash payment and issue the Consideration Shares, as
      further described in section 3.1.

	 	 	 	 
	 	(v) 	
      "Purchaser" means Voice Mobility, Inc

	 	 	 	 
	 	(w) 	
      "Retained Liabilities" has the meaning ascribed to
      it in section 2.4.

	 	 	 	 
	 	(x) 	
      "Shareholder" means The Emprise Special
      Opportunities Fund, Limited Partnership.

	 	 	 	 
	 	(y) 	
      "Transfer Documents" means:

	 	 	 	 
	 		(i) 	
      all conveyance documents required to transfer title to a
      100% interest in the Assets to the Purchaser, duly executed by the
      Vendor;

- 4 –

	 		(ii) 	
      all documents necessary to discharge any Encumbrance
      registered against the Assets; and

	 	 	 	 
	 		(iii) 	
      all other documents required or contemplated to be
      delivered to the Purchaser to transfer title to a 100% interest in the
      Assets to the Purchaser.

	 	 	 	 
	 	(z) 	
      "TSXV" means the TSX Venture Exchange.

	 	 	 	 
	 	(aa) 	
      "Vendor" means Tagline Communications
  Inc.

1.2               
Best of Knowledge

                    Any
reference herein to "the best of the knowledge" of the Vendor will mean the
actual knowledge of the president of the Vendor and the knowledge which he would
have if he had conducted a reasonably diligent inquiry into the relevant subject
matter.

1.3               
Schedules

            
        The schedules which are attached
to this Agreement are incorporated into this Agreement by reference and are
deemed to be part hereof.

1.4               
Currency

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

1.5               
Choice of Law and Attornment

                 
   This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia and the laws of
Canada applicable therein.

1.6               
Interpretation Not Affected by Headings or Party Drafting

                  
  The division of this Agreement into articles, sections, paragraphs,
subparagraphs and clauses and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement. The terms "this Agreement", "hereof", "herein", "hereunder" and
similar expressions refer to this Agreement and the schedules hereto and not to
any particular article, section, paragraph, subparagraph, clause or other
portion hereof and include any agreement or instrument supplementary or
ancillary hereto. Each party hereto acknowledges that it and its legal counsel
have reviewed and participated in settling the terms of this Agreement, and the
parties hereby agree that any rule of construction to the effect that any
ambiguity is to be resolved against the drafting party shall not be applicable
in the interpretation of this Agreement.

1.7               
Number and Gender

                
    In this Agreement, unless there is something in the
subject matter or context inconsistent therewith:

	 	(a) 	
      words in the singular number include the plural and such
      words shall be construed as if the plural had been used, and vice versa;
      and

- 5 –

	 	(b) 	
      any gender include all genders where the context or party
      referred to so requires, and the rest of the sentence shall be construed
      as if the necessary grammatical and terminological changes had been
      made.

1.8               
Time of Essence

                    
Time is of the essence of this Agreement.

ARTICLE 2 
PURCHASE AND SALE

2.1               
Purchase of Assets

	 	(a) 	
      On the terms and subject to the fulfillment of the
      conditions hereof, the Vendor hereby agrees to sell, transfer and assign
      to the Purchaser, and the Purchaser hereby agrees to purchase and acquire
      from the Vendor at the Closing and for the Purchase Price, all of the
      Vendor's interest in the Assets, as described in Schedule "A".

	 	 	 
	 	(b) 	
      Cash on hand or on deposit shall be specifically excluded
      from the purchase and sale of the Assets under this Agreement. To the
      extent that the Purchaser assumes any Contract which includes funds of the
      Vendor on deposit, such amount shall be added to the amount contemplated
      to be delivered to the Vendor pursuant to Article
3.

2.2               
Instruments of Conveyance

                   
 In order to effectuate more fully and completely the sale, assignment,
conveyance and transfer of the Assets pursuant to the terms and conditions
hereof, the Vendor shall deliver to the Purchaser such bills of sale,
assignments and instruments of conveyance as requested by the Purchaser, acting
reasonably, to permit the assignment, transfer and conveyance from the Vendor to
the Purchaser and the acquisition by the Purchaser from the Vendor of all right,
title and interest in, to and under the Assets, free and clear of all
Encumbrances, as of the Closing Date.

2.3               
Assumption of Obligations

                  
  The Purchaser hereby agrees with effect from the Closing Date, as
part of the consideration for the Assets, to assume, discharge, satisfy, perform
and fulfil in a timely manner, strictly in accordance with their terms, the
obligations of the Vendor existing on or arising after the Closing under the
Contracts (collectively, the “Assumed Obligations”).

2.4               
Retained Liabilities

                 
   Except for the Assumed Obligations, Purchaser is not assuming
and shall have no obligation to pay, perform or discharge any obligations or
liabilities of Vendor related to the Business or otherwise, of any kind or
nature, whether absolute, accrued, contingent or otherwise (collectively, the
“Retained Liabilities”) including, without limiting the generality of the
foregoing:

	 	(a) 	
      Liabilities incurred by Vendor in connection with this
      Agreement and the transactions contemplated by this Agreement, including,
      without limitation, counsel fees, and expenses pertaining to the
      performance by Vendor of its obligations under this
  Agreement;

- 6 –

	 	(b) 	
      Any taxes of the Vendor (whether relating to periods
      before or after the transactions contemplated in this Agreement or
      incurred by Vendor in connection with this Agreement and the transactions
      provided for in this Agreement);

	 	 	 
	 	(c) 	
      Liabilities in connection with or relating to any action,
      suit, claim, proceeding, demand, assessment or any judgment, cost, loss,
      liability, damage, deficiency or expense (whether or not arising out of
      third-party claims), including without limitation interest penalties,
      reasonable attorneys’ and accountants’ fees and all amounts paid in
      investigation, defence, or settlement of any of the foregoing;
  and

	 	 	 
	 	(d) 	
      Costs and expenses incurred subsequent to the
    Closing.

2.5               
Risk of Loss

                  
  From the date hereof up to the Closing Date, the Assets shall be and
shall remain at the risk of the Vendor. If, prior to the Closing Date, all or
any material portion of the Assets are lost, transferred, destroyed or damaged
by fire or other casualty or shall be appropriated, expropriated or seized by
any governmental body or creditor, or if the Vendor is the subject of any
bankruptcy proceeding or has a receiver or receiver-manager appointed in respect
of its assets or undertaking, then the Purchaser shall have the option on or
prior to the Closing Date to terminate this Agreement forthwith upon written
notice to the Vendor to such effect.

2.6               
Sale Subject to Financing

                 
   The Parties acknowledge and agree that the Closing of sale and
the payment of Purchase Price shall be subject to the Purchaser having received
financing in and amount at least equal to the cash portion of the Purchase Price
payable hereunder either in advance of or concurrent with the Closing
hereof.

ARTICLE 3
PAYMENT OF PURCHASE PRICE

3.1                Purchase
Price

                  
  As consideration for its purchase of the Assets, the Purchaser shall
assume the Assumed Obligations and shall pay the Purchase Price at the Closing
in the following manner:

	 	(a) 	
      Pay to the Vendor CDN $425,000 by certified cheque or
      bankers draft payable at par in Vancouver to the order of the Vendor;
      and

	 	 	 
	 	(b) 	
      Cause to be issued to the Vendor 1,000,000 common shares
      in the capital of the Parent at a deemed price of CDN $0.05 per share (the
      "Consideration Shares").

3.2               
Consideration Shares

                
    The Consideration Shares shall be issued as fully paid
and non-assessable, and shall be registered in the name of the Vendor or
pursuant to its written direction. The Vendor agrees and acknowledges that the
issuance of the Consideration Shares is subject to the approval of the NEX, and
shall be subject to a four month hold period, and the share certificates
representing the Consideration Shares shall bear the appropriate legends. The
Consideration Shares issuable to the Vendor shall be adjusted in the event of
share splits, consolidations or other similar events affecting the capital of
the Purchaser or in the event that the Purchaser is acquired
(whether through a takeover bid, amalgamation, plan of arrangement or
otherwise).

- 7 –

3.3               
  Post-Closing Adjustment

                     The
amount of the Purchase Price shall be adjusted on February 28, 2011 (the
"Adjustment Date") in the following manner:

	 	(a) 	
      Amounts received or paid by the Vendor under the
      Contracts prior to the Closing Date, including any Accounts Receivable,
      shall be adjusted pro rata for any portion of the payment earned or
      expense accrued under such Contract after the Closing Date, with the
      prorated amounts of such receipts and payments to be netted and the
      difference to be paid by the Vendor or the Purchaser to the other, as
      applicable, on the Adjustment Date;

	 	 	 
	 	(b) 	
      Amounts received or paid by the Purchaser under the
      Contracts after the Closing Date shall be adjusted pro rata for any
      portion of the payment earned or the expense incurred under such Contract
      before the Closing Date, with the prorated amounts of such receipts and
      payments to be netted and the difference to be paid by the Purchaser or
      the Vendor to the other, as applicable, on the Adjustment
  Date;

The amount of the Purchase Price shall be adjusted effective
the Closing Date of this transaction which adjustment shall be settled and
finalized on the Adjustment Date.

Any adjustment shall encompass all amounts paid by way of
deposit or encompassing either receivables or payables to the debit or credit of
either the Vendor or the Purchaser in relation to the said Assets and shall be
pro-rated, calculated and setoff effective the Closing Date; with the net
difference being payable at the Adjustment Date.

3.4               
Transfer Taxes

                 
   The Purchaser shall be liable and shall pay any sales taxes,
registration fees or other like charges properly payable upon and in connection
with the sale, assignment, conveyance and transfer of the Assets from the Vendor
to the Purchaser.

3.5               
Tax Elections

                    
The Vendor and the Purchaser shall jointly execute elections under s. 167 of the
Excise Tax Act (Canada) and under s. 22 of the Income Tax Act
(Canada) on the forms attached as Schedules "C" and "D" hereto, or otherwise
prescribed for such purposes along with any documentation necessary or desirable
in order to effect the transfer of the Assets by the Vendor without payment of
any Goods and Services Tax or Harmonized Sales Tax, if applicable.

ARTICLE 4
 REPRESENTATIONS AND
WARRANTIES

4.1               
Representations and Warranties by the Vendor

                  
  The Vendor hereby represents and warrants to the Purchaser as
follows, with the intent that the Purchaser will rely on these representations
and warranties in entering into this Agreement, and in concluding the purchase
and sale contemplated by this Agreement:

- 8 –

	 	(a) 	
      Corporate Authority and Binding Obligation. The
      Vendor has full corporate power and authority to enter into this Agreement
      and to sell, assign and transfer all of its interest in the Assets to the
      Purchaser in the manner contemplated herein and to perform all of the
      Vendor's obligations under this Agreement. The Vendor has taken all
      necessary or desirable corporate action to approve or authorize, validly
      and effectively, the entering into, and the execution, delivery and
      performance of, this Agreement and the sale and transfer of the Assets to
      the Purchaser. This Agreement is a legal, valid and binding obligation of
      the Vendor, enforceable against it in accordance with its terms subject to
      (i) bankruptcy, insolvency, moratorium, reorganization and other laws
      relating to or affecting the enforcement of creditors' rights generally,
      and (ii) the fact that equitable remedies, including the remedies of
      specific performance and injunction, may only be granted in the discretion
      of a court.

	 	 	 	 
	 	(b) 	
      Contractual and Regulatory Approvals. The Vendor
      is not under any obligation, contractual or otherwise, to request or
      obtain the consent of any person, and no permits, licences,
      certifications, authorizations or approvals of, or notifications to, any
      federal, provincial, state, municipal or local government or governmental
      agency, board, commission or authority are required to be obtained by the
      Vendor in connection with the execution, delivery or performance by the
      Vendor of this Agreement or the completion of any of the transactions
      contemplated herein, other than with respect to certain Contracts as noted
      on Schedule "A" hereto.

	 	 	 	 
	 	(c) 	
      Status and Governmental Licences. The Vendor is a
      corporation duly incorporated and validly subsisting in all respects under
      the Business Corporations Act (British Columbia). The Vendor has
      all necessary corporate power to own the Assets and to carry on its
      business as it is now being conducted. To the best of its knowledge, the
      Vendor holds all valid permits, licences, registrations, consents,
      authorizations, approvals, privileges, waivers, exemptions, orders,
      certificates, rulings, agreements and other concessions from, of or with
      all applicable governmental authorities required to hold, operate and use
      the Assets as now being held, operated and used by the Vendor.

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

	 	 	 	 
	 		(i) 	
      any term or provision of any of the articles, by-laws or
      other constating documents of the Vendor;

	 	 	 	 
	 		(ii) 	
      the terms of any indenture, agreement (written or oral),
      instrument or understanding or other obligation or restriction to which
      the Vendor is a party or by which it is bound except to the extent that
      the consent of any third party is required to assign any of the Contracts;
      or

	 	 	 	 
	 		(iii) 	
      any term or provision of any licences, registrations, or
      qualifications of the Vendor or any order of any court, governmental
      authority or regulatory body or any applicable law or regulation of any
      jurisdiction.

- 9 –

	 	(e) 	
      Tax Matters. The Vendor has paid all Governmental
      Charges which are due and payable by it on or before the date hereof and
      will, on or before the Closing Date, pay all Governmental Charges which
      are due and payable by it to and including the Closing Date. Other than as
      set out below, there are no actions, suits, proceedings, investigations,
      enquiries or claims now pending or made or, to the best of the knowledge
      of the Vendor, threatened against the Vendor in respect of Governmental
      Charges. The Vendor is currently in discussions with the British Columbia
      Ministry of Finance with respect to a compliance review regarding certain
      P.S.T. issues.

	 	 	 
	 	(f) 	
      Litigation. There are no actions, suits or
      proceedings, judicial or administrative (whether or not purportedly on
      behalf of the Vendor) pending or, to the best of the knowledge of the
      Vendor, threatened in writing, by or against or affecting the Vendor which
      relate to any of the Assets, at law or in equity, or before or by any
      court or any federal, provincial, state, municipal or other governmental
      department, commission, board, bureau, agency or instrumentality, domestic
      or foreign which, in any case, could reasonably be expected to have a
      Material Adverse Effect on any of the Assets.

	 	 	 
	 	(g) 	
      Title to Assets. The Vendor is the recorded and
      beneficial owner of or has an exclusive title to all of the Assets, free
      and clear of any Encumbrances except those listed in Schedule "B" and
      those referenced in Schedule "A" in connection with the
  Contracts.

	 	 	 
	 	(h) 	
      Compliance with Laws. The Vendor is not in
      violation in any material respect of any federal, provincial, state or
      other law, regulation or order of any government or governmental or
      regulatory authority, domestic or foreign.

	 	 	 
	 	(i) 	
      Contracts. Except as otherwise expressly disclosed
      in this Agreement or in any schedule to this Agreement, there has not been
      any default in any obligation to be performed under any Contract, each of
      which is in good standing and in full force and effect, unamended, except
      as may be set forth in Schedule "A".

	 	 	 
	 	(j) 	
      Books and Records. The Books and Records of the
      Vendor fairly and correctly set out and disclose in all material respects,
      in accordance with generally accepted accounting principles in Canada, the
      financial position of the Vendor and all material financial transactions
      of the Vendor relating to the Assets and the Vendor's Business have been
      accurately recorded in those Books and Records.

	 	 	 
	 	(k) 	
      No Material Changes. Since the date of the most
      recent balance sheet delivered by the Vendor to the Purchaser, there has
      not been any material change in the financial condition of the Vendor's
      Business, its liabilities or the Assets, other than changes in the
      ordinary course of business, none of which has been materially
    adverse.

	 	 	 
	 	(l) 	
      Employees. The Vendor is not a party to any
      collective agreement relating to the Vendor's Business with any labour
      union or other association of employees, and no part of the Vendor's
      Business has been certified as a unit appropriate for collective
      bargaining. There are no labour disputes, grievances, strikes or lockouts
      currently in existence or threatened in connection with the
  Assets.

	 	 	 
	 	(m) 	
      Vendor's Residency. The Vendor is not a
      non-resident of Canada within the meaning of the Income Tax Act
      (Canada).

- 10 –

	 	(n) 	
      Shareholders Authority. The Shareholder has full
      power and authority under the terms of its limited partnership agreement
      to enter into this Agreement and commit to the indemnification
    herein.

	 	 	 	 
	 	(o) 	
      Securities Law. The Vendor hereby represents and
      warrants to and covenants with the Purchaser (which representations,
      warranties and covenants shall survive the Closing) that:

	 	 	 	 
	 		(i) 	
      none of the Consideration Shares have been or, except as
      contemplated herein, will be registered under the Securities Act of 1933,
      as amended (the “1933 Act”), or under any state securities or “blue sky”
      laws of any state of the United States, and, unless so registered, may not
      be offered or sold in the United States or, directly or indirectly, to
      U.S. Persons, as that term is defined in Regulation S under the 1933 Act
      (“Regulation S”), except in accordance with the provisions of Regulation
      S, pursuant to an effective registration statement under the 1933 Act, or
      pursuant to an exemption from, or in a transaction not subject to, the
      registration requirements of the 1933 Act and in each case only in
      accordance with applicable state and provincial securities laws;

	 	 	 	 
	 		(ii) 	
      the Vendor acknowledges that the Purchaser has not
      undertaken, and will have no obligation, to register any of the
      Consideration Shares under the 1933 Act or any other securities
      legislation;

	 	 	 	 
	 		(iii) 	
      the Vendor represents and warrants that the Vendor
      satisfies one of the categories of registration and prospectus exemptions
      provided in National Instrument 45- 106 (“NI 45-106”) adopted by the
      British Columbia Securities Commission (the “BCSC”) and other provincial
      securities commissions;

	 	 	 	 
	 		(iv) 	
      the decision to execute this Agreement and acquire the
      Consideration Shares has not been based upon any oral or written
      representation as to fact or otherwise made by or on behalf of the
      Purchaser and such decision is based entirely upon a review of any public
      information which has been filed by the Purchaser with the Securities and
      Exchange Commission (“SEC”) in compliance, or intended compliance, with
      applicable securities legislation;

	 	 	 	 
	 		(v) 	
      the Vendor and the Vendor’s advisor(s) have had a
      reasonable opportunity to ask questions of and receive answers from the
      Purchaser in connection with the distribution of the Consideration Shares
      hereunder, and to obtain additional information, to the extent possessed
      or obtainable without unreasonable effort or expense, necessary to verify
      the accuracy of the information about the Purchaser;

	 	 	 	 
	 		(vi) 	
      the books and records of the Purchaser were available
      upon reasonable notice for inspection, subject to certain confidentiality
      restrictions, by the Vendor during reasonable business hours at its
      principal place of business, and all documents, records and books in
      connection with the distribution of the Consideration Shares hereunder
      have been made available for inspection by the Vendor, the Vendor’s lawyer
      and/or advisor(s);

	 	 	 	 
	 		(vii) 	
      all of the information which the Vendor has provided to
      the Purchaser is correct and complete as of the date this Agreement is
      signed, and if there should be any change in such information prior to
      this Agreement being executed by the Purchaser, the Vendor will immediately provide the
  Purchaser with such information;

- 11 –

	 	(viii) 	
      the Purchaser is entitled to rely on the representations
      and warranties of the Vendor contained in this Agreement;

	 	 	 	 
	 	(ix) 	
      the Purchaser will refuse to register any transfer of the
      Consideration Shares not made in accordance with the provisions of
      Regulation S, pursuant to an effective registration statement under the
      1933 Act or pursuant to an available exemption from the registration
      requirements of the 1933 Act and in accordance with any other applicable
      securities laws;

	 	 	 	 
	 	(x) 	
      the Vendor has been advised to consult the Vendor’s own
      legal, tax and other advisors with respect to the merits and risks of an
      investment in the Consideration Shares and with respect to applicable
      resale restrictions, and it is solely responsible (and the Purchaser is
      not in any way responsible) for compliance with:

	 	 	 	 
	 		(A) 	
      any applicable laws of the jurisdiction in which the
      Vendor is resident in connection with the distribution of the
      Consideration Shares hereunder, and

	 	 	 	 
	 		(B) 	
      applicable resale restrictions;

	 	 	 	 
	 	(xi) 	
      in addition to resale restrictions imposed under U.S.
      securities laws, there are additional restrictions on the Vendor’s ability
      to resell any of the Consideration Shares in Canada under the Securities
      Act (British Columbia), and National Instrument 45-102 adopted by the
      BCSC;

	 	 	 	 
	 	(xii) 	
      the Vendor consents to the placement of a legend on any
      certificate or other document evidencing any of the Consideration Shares
      to the effect that such securities have not been registered under the 1933
      Act or any state securities or “blue sky” laws and setting forth or
      referring to the restrictions on transferability and sale thereof
      contained in this Agreement such legend to be substantially as
    follows:

	
      “THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN
      AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED
      HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF
      1933, AS AMENDED (THE “1933 ACT”). 

	 
      
	
      NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN
      REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND,
      UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY,
      IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN
      ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT,
      PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR
      PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
      TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
      ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN
ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES
      MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. “UNITED
      STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933
    ACT. 

- 12 –

	
      UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER
      OF THIS SECURITY MUST NOT TRADE THE SECURITIES BEFORE [DATE THAT IS FOUR
  MONTHS AND A DAY AFTER THE DISTRIBUTION DATE]”

	 	(xiii) 	
      the Purchaser has advised the Vendor that the Purchaser
      is relying on an exemption from the requirements to provide the Vendor
      with a prospectus to issue the Consideration Shares and, as a consequence
      of acquiring the Consideration Shares pursuant to such exemption certain
      protections, rights and remedies provided by the applicable securities
      legislation of British Columbia including statutory rights of rescission
      or damages, will not be available to the Vendor;

	 	 	 
	 	(xiv) 	
      the statutory and regulatory basis for the exemption
      claimed for the offer and sale of the Consideration Shares, although in
      technical compliance with Regulation S, would not be available if the
      offering is part of a plan or scheme to evade the registration provisions
      of the 1933 Act;

	 	 	 
	 	(xv) 	
      neither the SEC nor any other securities commission or
      similar regulatory authority has reviewed or passed on the merits of any
      of the Consideration Shares and no documents in connection with the sale
      of the Consideration Shares hereunder have been reviewed by the SEC or any
      state securities administrators; and

	 	 	 
	 	(xvi) 	
      there is no government or other insurance covering any of
      the Consideration Shares.

	 	(p) 	
      Acknowledgements. The Vendor hereby represents and
      warrants to and covenants with the Purchaser (which representations,
      warranties and covenants shall survive the Closing) that:

	 	 	 	 
	 		(i) 	
      the Vendor is not a U.S. Person, as defined by Regulation
      S, and the Vendor is not acquiring the Consideration Shares for the
      account or benefit of, directly or indirectly, any U.S. Person;

	 	 	 	 
	 		(ii) 	
      it has the legal capacity and competence to enter into
      and execute this Agreement and to take all actions required pursuant
      hereto and, if the Vendor is a corporate entity, it is duly incorporated
      and validly subsisting under the laws of its jurisdiction of incorporation
      and all necessary approvals have been obtained to authorize execution and
      performance of this Agreement on behalf of the Vendor;

	 	 	 	 
	 		(iii) 	
      the entering into of this Agreement and the transactions
      contemplated hereby do not result in the violation of any of the terms and
      provisions of any law applicable to, or, if the Vendor is a corporate
      entity, the constating documents of, the Vendor or of any agreement,
      written or oral, to which the Vendor may be a party or by which the Vendor
      is or may be bound;

- 13 –

	 	(iv) 	
      the Vendor has received and carefully read this
      Agreement;

	 	 	 
	 	(v) 	
      the Vendor is acquiring the Consideration Shares as
      principal for investment only and not with a view to resale or
      distribution;

	 	 	 
	 	(vi) 	
      the Vendor is aware that an investment in the Purchaser
      is speculative and involves certain risks, including the possible loss of
      the entire investment;

	 	 	 
	 	(vii) 	
      the Vendor has made an independent examination and
      investigation of an investment in the Consideration Shares and the
      Purchaser and has depended on the advice of its legal and financial
      advisors;

	 	 	 
	 	(viii) 	
      the Vendor (i) has adequate net worth and means of
      providing for its current financial needs and possible personal
      contingencies, (ii) has no need for liquidity in this investment, and
      (iii) is able to bear the economic risks of an investment in the
      Consideration Shares for an indefinite period of time;

	 	 	 
	 	(ix) 	
      the Vendor (i) is able to fend for itself; (ii) has such
      knowledge and experience in business matters as to be capable of
      evaluating the merits and risks of its prospective investment in the
      Consideration Shares; and (iii) can afford the complete loss of such
      investment;

	 	 	 
	 	(x) 	
      the Vendor is outside the United States when receiving
      and executing this Agreement;

	 	 	 
	 	(xi) 	
      the Vendor understands and agrees that offers and sales
      of any of the Consideration Shares prior to the expiration of the period
      specified in Regulation S (such period hereinafter referred to as the
      “Distribution Compliance Period”) shall only be made in compliance with
      the safe harbor provisions set forth in Regulation S, pursuant to the
      registration provisions of the 1933 Act or an exemption therefrom, and
      that all offers and sales after the Distribution Compliance Period shall
      be made only in compliance with the registration provisions of the 1933
      Act or an exemption therefrom and in each case only in accordance with
      applicable state and provincial securities laws;

	 	 	 
	 	(xii) 	
      the Vendor is not an underwriter of, or dealer in, the
      common shares of the Purchaser, nor is the Vendor participating, pursuant
      to a contractual agreement or otherwise, in the distribution of the
      Consideration Shares;

	 	 	 
	 	(xiii) 	
      the Vendor is not aware of any advertisement of any of
      the Consideration Shares and is not acquiring the Consideration Shares as
      a result of any form of general solicitation or general advertising
      including advertisements, articles, notices or other communications
      published in any newspaper, magazine or similar media or broadcast over
      radio or television, or any seminar or meeting whose attendees have been
      invited by general solicitation or general advertising;

	 	 	 
	 	(xiv) 	
      others will rely upon the truth and accuracy of the
      representations and warranties contained in this Agreement and agrees that
      if such representations and warranties are no longer accurate or have been
      breached, the Vendor shall immediately notify the
  Purchaser;

- 14 –

	 	(xv) 	
      no person has made to the Vendor any written or oral
      representations:

	 	 	 	 
	 		(A) 	
      that any person will resell or repurchase any of the
      Consideration Shares;

	 	 	 	 
	 		(B) 	
      that any person will refund the purchase price of any of
      the Consideration Shares;

	 	 	 	 
	 		(C) 	
      as to the future price or value of any of the
      Consideration Shares; or

	 	 	 	 
	 		(D) 	
      that any of the Consideration Shares will be listed and
      posted for trading on any stock exchange or automated dealer quotation
      system or that application has been made to list and post any of the
      Consideration Shares of the Purchaser on any stock exchange or automated
      dealer quotation system; and

	 	 	 	 
	 	(xvi) 	
      the Vendor has provided to the Purchaser, along with an
      executed copy of this Agreement:, and such other supporting documentation
      that the Purchaser or its legal counsel may request to establish the
      Vendor’s qualification as a qualified investor.

4.2               
Representations and Warranties by the Purchaser and the
Parent

                
    The Purchaser hereby represents and warrants to the
Vendor as follows, with the intent that the Vendor will rely on these
representations and warranties in entering into this Agreement, and in
concluding the purchase and sale contemplated by this Agreement:

	 	(a) 	
      Status, Corporate Authority and Binding
      Obligation. The Purchaser and the Parent are both corporations duly
      incorporated and validly subsisting and in good standing in all respects
      under the laws of the State of Nevada and the Laws of the Government of
      Canada. The Purchaser and the Parent have full corporate power and
      absolute authority to enter into this Agreement, to acquire the Assumed
      Obligations and to purchase the Assets from the Vendor in the manner
      contemplated herein and to perform all of the Purchaser's obligations
      under this Agreement. The Purchaser and the Parent have taken all
      necessary or desirable corporate actions to approve or authorize, validly
      and effectively, the entering into of, and the execution, delivery and
      performance of, this Agreement, the assumption of the Assumed Obligations
      and the purchase of the Assets by the Purchaser from the Vendor. This
      Agreement is a legal, valid and binding obligation of the Purchaser,
      enforceable against it in accordance with its terms subject to (i)
      bankruptcy, insolvency, moratorium, reorganization and other laws relating
      to or affecting the enforcement of creditors' rights generally and (ii)
      the fact that equitable remedies, including the remedies of specific
      performance and injunction, may only be granted in the discretion of a
      court.

	 	 	 
	 	(b) 	
      Contractual and Regulatory Approvals. Except for
      the NEX Approval, the Purchaser and the Parent are not under any
      obligation, contractual or otherwise, to request or obtain the consent of
      any person, and no permits, licences, certifications, authorizations or
      approvals of, or notifications to, any federal, provincial, state,
      municipal or local government or governmental agency, board, commission or
      authority are required to be obtained by the Purchaser or the Parent in
      connection with the execution, delivery or performance by the
      Purchaser or the Parent of this Agreement or the completion of any of the
  transactions contemplated herein.

- 15 –

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

	 	 	 	 
	 		(i) 	
      any term or provision of any of the articles, by-laws or
      other constating documents of the Purchaser;

	 	 	 	 
	 		(ii) 	
      the terms of any indenture, agreement (written or oral),
      instrument or understanding or other obligation or restriction to which
      the Purchaser and the Parent are a party or by which it is bound,
  or

	 	 	 	 
	 		(iii) 	
      any term or provision of any licences, registrations or
      qualification of the Purchaser or the Parent, or any order of any court,
      governmental authority or regulatory body or any applicable law or
      regulation of any jurisdiction.

	 	 	 	 
	 	(d) 	
      Authorized and Issued Capital. The Parent has
      received authorization for the issuance of the 1,000,000 common shares to
      the Vendor; and

	 	 	 	 
	 	(e) 	
      Investment Canada Act. The Purchaser is not a
      "non-Canadian" for purposes of and within the meaning of the Investment
      Canada Act (Canada).

ARTICLE 5
SURVIVAL OF AND LIMITATIONS ON
REPRESENTATIONS AND WARRANTIES

5.1               
Survival of Warranties by the Vendor and Shareholder

                
    The representations and warranties made by the Vendor
and the Shareholder contained in this Agreement, or contained in any document or
certificate given in order to carry out the transactions contemplated hereby,
shall survive for a period of 24 months following the transfer by the Vendor to
the Purchaser of the Vendor's interest in the Assets, provided for herein and,
notwithstanding such transfer or any investigation made by or on behalf of the
Purchaser or any other person or any knowledge of the Purchaser or any other
person, shall continue in full force and effect for the benefit of the Purchaser
for such period. Notwithstanding the foregoing, fundamental representations and
warranties made by the Vendor and Shareholder shall survive for the applicable
statutory period(s).

5.2               
Survival of Warranties by Purchaser

                
    The representations and warranties made by the Purchaser
and contained in this Agreement, or contained in any document or certificate
given in order to carry out the transactions contemplated hereby, shall survive
for a period of 24 months following the transfer by the Vendor to the Purchaser
of the Vendor's interest in the Assets, provided for herein and, notwithstanding
such closing or any investigation made by or on behalf of the Vendor or any
other person or any knowledge of the Vendor or any other person, shall continue
in full force and effect for the benefit of the Vendor for such period.
Notwithstanding the foregoing, fundamental representations and warranties made
by the Purchaser shall survive for the applicable statutory period(s).

- 16 –

5.3               
Limitations on Claims

	 	(a) 	
      Neither the Purchaser nor the Vendor shall be entitled to
      make a claim if the Purchaser or the Vendor, as applicable, has been
      advised in writing or otherwise has actual knowledge prior to the Closing
      Date of the inaccuracy, non-performance, non-fulfillment or breach which
      is the basis for such claim and the Purchaser or the Vendor, as
      applicable, completes the transactions hereunder notwithstanding such
      inaccuracy, non-performance, non-fulfillment or breach.

	 	 	 	 
	 	(b) 	
      The amount of any damages which may be claimed by the
      Purchaser or the Vendor, as applicable, pursuant to a claim shall be
      calculated to be the cost or loss to the Purchaser or the Vendor, as
      applicable, after giving effect to:

	 	 	 	 
	 		(i) 	
      any insurance proceeds available to the Purchaser or the
      Vendor, as applicable, in relation to the matter which is the subject of
      the claim, and

	 	 	 	 
	 		(ii) 	
      the value of any related, determinable tax benefits
      realized, or to be realized within a two year period following the date of
      incurring such cost or loss, by the Purchaser or the Vendor, as
      applicable, in relation to the matter which is the subject of the
      claim.

ARTICLE 6 
COVENANTS

6.1               
Covenants by the Vendor and Shareholder

                    
The Vendor covenants to the Purchaser that it will do or cause to be done the
following:

	 	(a) 	
      Investigation of Assets. Prior to the Closing
      Date, the Vendor will provide access to and will permit the Purchaser or
      its representatives to make such investigation of the Assets as the
      Purchaser deems reasonably necessary or advisable to familiarize itself
      with such matters, and the Vendor shall furnish to the Purchaser during
      that period all such information as the Purchaser, or its representatives
      may reasonably request.

	 	 	 
	 	(b) 	
      Transfer of the Assets. At or before the Closing
      Date, the Vendor will cause all necessary steps and corporate proceedings
      to be taken in order to permit the transfer of the Assets to the
      Purchaser.

	 	 	 
	 	(c) 	
      Confidentiality. Prior to the Closing Date and, if
      the transaction contemplated hereby is not completed, the Vendor will keep
      confidential all information obtained by it relating to the transactions
      contemplated herein, in accordance with the terms and conditions contained
      in the NDA (previously defined). The Vendor further agrees that the
      disclosure by it of such information to any of its employees and
      representatives shall also be governed by the NDA. Notwithstanding the
      foregoing, the obligation to maintain the confidentiality of such
      information will not apply to the extent that disclosure of such
      information is required in connection with NEX filings or filing with
      securities regulatory authorities or filings with governmental or other
      applicable regulatory bodies relating to the transactions hereunder. If
      the transactions contemplated hereby are not consummated for any reason,
      the Vendor will return forthwith, without retaining any copies thereof,
      all information and documents obtained from the
  Purchaser.

- 17 –

	 	(d) 	
      Representations and Warranties. The Vendor shall
      use all reasonable efforts to ensure that the representations and
      warranties by the Vendor and Shareholder in this Agreement are true and
      correct at the Closing and that the conditions to the obligations of the
      Purchaser in section 7.1 are fulfilled at the Closing, and will inform the
      Purchaser promptly of any state of facts which will result in any
      representation or warranty of the Vendor being untrue or incorrect or in
      any condition to the obligations of the Purchaser in section 7.1 being
      unfulfilled at the Closing.

	 	 	 
	 	(e) 	
      Conduct of the Business. Until Closing, the Vendor
      shall conduct the Vendor's Business in the ordinary course and will use
      its best efforts to preserve the Assets intact, to keep available to the
      Purchaser its present employees and to preserve for the Purchaser its
      relationship with its suppliers, customers and others having business
      relations with it.

	 	 	 
	 	(f) 	
      Transition Plan. During the period following the
      effective date of this Agreement, until the Closing Date, the Vendor shall
      cooperate with and assist the Purchaser in preparing a transition plan for
      the Vendor's Business following the sale of the Assets to the Purchaser,
      up until the Adjustment Date.

	 	 	 
	 	(g) 	
      Service Provider. The Vendor shall inform the
      primary service provider of its "Tagline" platform of the proposed sale of
      the Assets to the Purchaser, and shall use commercially reasonable efforts
      to obtain assurances from such service provider for its full cooperation
      during the period of transition prior to and after the Closing
  Date.

	 	 	 
	 	(h) 	
      Consents Procured. The Vendor shall diligently
      take all reasonable steps required to obtain, before Closing, all third
      party consents to the assignments of the Contracts and any other of the
      Assets for which a consent is required, or to replace non- transferable
      Contracts. If any Person whose consent is required does not consent to the
      sale, assignment, transfer and conveyance of any of the Contracts from the
      Vendor to the Purchaser or to the re-issuance of a new contract, then the
      Vendor shall, to the extent permitted by law, carry out and comply with
      the terms and provisions of any such Contracts as agent for the Purchaser
      at the Purchaser's expense and for the Purchaser's exclusive
    benefit.

	 	 	 
	 	(i) 	
      Termination of Employees. At Closing the Vendor
      shall terminate the employment of all employees, and the Vendor shall
      indemnify and save harmless the Purchaser from and against all claims by
      any employee of the Vendor for wages, salaries, bonuses, pension or other
      benefits, severance pay, notice or pay in lieu of notice and holiday pay
      in respect of any period before the Closing Date.

	 	 	 
	 	(j) 	
      Non Disclosure and Non-Competion. The Vendor and
      Shareholder recognize and confirm the importance to the Purchaser and
      necessity for confidentiality in relation to the Business and Assets sold
      hereunder and agree to maintain and not to disclose in any manner or form
      any confidential or proprietary information pertaining to the Business,
      except as provided for herein, and further that neither of them shall
      operate or compete, either directly or indirectly, or assist in any way,
      any other individual or entity, in any business or operation competitive
      to that being sold herein. Due to the nature and scope of the Business and
      Assets, it is understood and agreed that the restrictions herein shall not
      be confined to a specified area and shall be for a period of 3 years from the date hereof. This
      non-compete provision shall expire and be of no further force or effect if
      any such business or asset is acquired by the Vendor, the Shareholder, or
      any of their affiliates, from the Parent, the Purchaser or any of their
      affiliates, including any acquisition completed through the exercise of
  security over any of such assets or businesses.

- 18 –

	 	(k) 	
      Change of Name. The Vendor agrees to cause its
      name to be changed to something other than containing the name “Tagline”,
      which change shall be effective no later than one month following
      closing.

6.2               
Covenants by the Purchaser

                    
The Purchaser covenants to the Vendor that it will do or cause to be done the
following:

	 	(a) 	
      Application for NEX Approval. Immediately upon
      signing of this Agreement, the Purchaser shall cause to be made all such
      filings as may be necessary to obtain NEX Approval.

	 	 	 
	 	(b) 	
      Confidentiality. Prior to the Closing Date and, if
      the transaction contemplated hereby is not completed, the Purchaser will
      keep confidential all information obtained by it relating to the
      transactions contemplated herein, in accordance with the terms and
      conditions contained in the NDA (previously defined). The Purchaser
      further agrees that the disclosure by it of such information to any of its
      employees and representatives shall also be governed by the NDA.
      Notwithstanding the foregoing, the obligation to maintain the
      confidentiality of such information will not apply to the extent that
      disclosure of such information is required in connection with NEX filings
      or filing with securities regulatory authorities or filings with
      governmental or other applicable regulatory bodies relating to the
      transactions hereunder. If the transactions contemplated hereby are not
      consummated for any reason, the Purchaser will return forthwith, without
      retaining any copies thereof, all information and documents obtained from
      the Vendor.

	 	 	 
	 	(c) 	
      Taxes. The Purchaser will be liable for and shall
      pay all provincial sales taxes and registration charges and transfer fees
      properly payable upon and in connection with the sale and transfer of the
      Assets by the Vendor to the Purchaser. At Closing, each of the Purchaser
      and the Vendor shall make the elections provided for by s. 167 of the
      Excise Tax Act and s. 22 of the Income Tax Act,
      respectively, in the forms attached as Schedule "C", Election Form GST44,
      and Schedule "D", Accounts Receivable Election.

	 	 	 
	 	(d) 	
      Consents. The Purchaser shall at the request of
      the Vendor execute and deliver such applications for consent and such
      assumption agreements, and provide such information as may be necessary to
      obtain the consents referred to in section 6.1(h) and will assist and
      cooperate with the Vendor in obtaining the
consents.

- 19 –

ARTICLE 7 
CONDITIONS AND CLOSING

7.1               
Conditions to the Obligations of the Purchaser

               
     All obligations of the Purchaser under this
Agreement are subject to the fulfilment at or before the Closing Date of the
following conditions:

	 	(a) 	
      Accuracy of Representations and Warranties and
      Performance of Covenants. The representations and warranties of the
      Vendor and Shareholder contained in section 4.1 of this Agreement shall be
      true and accurate on the date hereof and at the Closing Date with the same
      force and effect as though such representations and warranties had been
      made as of such date (except to the extent such representations and
      warranties are by their express terms made as of the date of this
      Agreement or another specific date, in which case such representations and
      warranties shall be true and correct of such date). In addition, the
      Vendor shall have complied with all covenants and agreements herein agreed
      to be performed or caused to be performed by it at or prior to the Closing
      Date. In addition, the Vendor and Shareholder shall have delivered to the
      Purchaser a certificate confirming that the facts with respect to each of
      the above-noted representations and warranties of the Vendor and
      Shareholder are as set out herein at the Closing Date and that the Vendor
      has performed all covenants required to be performed by it
    hereunder.

	 	 	 
	 	(b) 	
      Material Adverse Changes. There will have been no
      change in the condition in any of the Assets, howsoever arising, except
      changes which have occurred in the ordinary course of business and which,
      individually or in the aggregate would not have a Material Adverse Effect.
      Without limiting the generality of the foregoing, no damage to or
      destruction of any material part of any of the Assets shall have occurred,
      whether or not covered by insurance.

	 	 	 
	 	(c) 	
      No Restraining Proceedings. No order, decision or
      ruling of any court, tribunal or regulatory authority having jurisdiction
      shall have been made, and no action or proceeding shall be pending or
      threatened which, in the opinion of counsel to the Purchaser, is likely to
      result in an order, decision or ruling:

	 	(i) 	
      to disallow, enjoin, prohibit or impose any limitations
      or conditions on the purchase and sale of the Assets contemplated hereby
      or the right of the Purchaser to own 100% interest in the Assets,
  or

	 	 	 
	 	(ii) 	
      to impose any limitations or conditions which may have a
      Material Adverse Effect on the Assets.

	 	(d) 	
      Contracts and Consents. All action required of the
      Vendor for the novation or assignment of each of the Contracts which are
      material to the Vendor's Business, and all consents required in connection
      therewith, shall have been completed and obtained, and all consents
      otherwise required to be obtained in order to carry out the transactions
      contemplated hereby in compliance with all laws and agreements binding
      upon the parties hereto shall have been obtained.

	 	 	 
	 	(e) 	
      NEX Approval. The Purchaser shall have obtained
      NEX Approval.

- 20 –

7.2               
Waiver or Termination by Purchaser

                
    The conditions contained in section 7.1 hereof are
inserted for the exclusive benefit of the Purchaser and may be waived in whole
or in part by the Purchaser at any time. The Vendor acknowledges that the waiver
by the Purchaser of any condition or any part of any condition shall constitute
a waiver only of such condition or such part of such condition, as the case may
be, and shall not constitute a waiver of any covenant, agreement, representation
or warranty made by the Vendor herein that corresponds or is related to such
condition or such part of such condition, as the case may be. If any of the
conditions contained in section 7.1 hereof are not fulfilled or complied with as
herein provided, the Purchaser may, at or prior to the Closing Date at its
option, rescind this Agreement by notice in writing to the Vendor and in such
event the Purchaser shall be released from all obligations hereunder and, unless
the condition or conditions which have not been fulfilled are reasonably capable
of being fulfilled or caused to be fulfilled by the Vendor, then the Vendor
shall also be released from all obligations hereunder.

7.3               
Conditions to the Obligations of the Vendor

                 
   All obligations of the Vendor under this Agreement are subject
to the fulfilment at or before the Closing Date of the following conditions.

	 	(a) 	
      Accuracy of Representations and Warranties and
      Performance of Covenants. The representations and warranties of the
      Purchaser contained in this Agreement or in any documents delivered in
      order to carry out the transactions contemplated hereby will be true and
      accurate on the date hereof and at the Closing Date with the same force
      and effect as though such representations and warranties had been made as
      of such date (except to the extent such representations and warranties are
      by their express terms made as of the date of this Agreement or another
      specific date, in which case such representations and warranties shall be
      true and correct of such date). In addition, the Purchaser shall have
      complied with all covenants and agreements herein agreed to be performed
      or caused to be performed by it at or prior to the Closing Date. In
      addition, the Purchaser shall have delivered to the Vendor a certificate
      confirming that the facts with respect to each of the representations and
      warranties of the Purchaser are as set out herein at the Closing Date and
      that the Purchaser has performed each of the covenants required to be
      performed by it hereunder.

	 	 	 
	 	(b) 	
      No Restraining Proceedings. No order, decision or
      ruling of any court, tribunal or regulatory authority having jurisdiction
      shall have been made, and no action or proceeding shall be pending or
      threatened which, in the opinion of counsel to the Vendor, is likely to
      result in an order, decision or ruling, to disallow, enjoin or prohibit
      the purchase and sale of the Assets contemplated
hereby.

7.4               
Waiver or Termination by Vendor

                   
 The conditions contained in section 7.3 hereof are inserted for the
exclusive benefit of the Vendor and may be waived in whole or in part by the
Vendor at any time. The Purchaser acknowledges that the waiver by the Vendor of
any condition or any part of any condition shall constitute a waiver only of
such condition or such part of such condition, as the case may be, and shall not
constitute a waiver of any covenant, agreement, representation or warranty made
by the Purchaser herein that corresponds or is related to such condition or such
part of such condition, as the case may be. If any of the conditions contained
in section 7.3 hereof are not fulfilled or complied with as herein provided, the
Vendor may, at or prior to the Closing Date at its option, rescind this
Agreement by notice in writing to the Purchaser and in such event the Vendor
shall be released from all obligations hereunder and, unless the condition or
conditions which have not been fulfilled are reasonably capable of being
fulfilled or caused to be fulfilled by the Purchaser, then the Purchaser shall
also be released from all obligations hereunder.

- 21 –

7.5               
Closing

	 	(a) 	
      At the Closing, the Vendor shall deliver to the
      Purchaser:

	 	 	 	 
	 		(i) 	
      all deeds of conveyance, bills of sale, transfer and
      assignments, in form and content satisfactory to the Purchaser's counsel,
      appropriate to effectively vest a good and marketable title to the Assets
      in the Purchaser to the extent contemplated by this Agreement, and
      immediately registrable in all places where registration of such
      instruments is required;

	 	 	 	 
	 		(ii) 	
      all consents or approvals obtained by the Vendor for the
      purpose of validly assigning the Contracts;

	 	 	 	 
	 		(iii) 	
      possession of the Assets;

	 	 	 	 
	 		(iv) 	
      the certificate of the Vendor to be given under section
      7.1(a);

	 	 	 	 
	 		(v) 	
      the elections under s. 167 of the Excise Tax Act
      and s. 22 of the Income Tax Act in the forms attached as the
      Schedule "C", Election Form GST44, and Schedule "D", Accounts Receivable
      Election, respectively;

	 	 	 	 
	 		(vi) 	
      duly executed releases of, or evidence to the reasonable
      satisfaction of the Purchaser as to the discharge of any and all
      liabilities which the Purchaser has not agreed to assume and which may be
      enforceable against any of the Assets being purchased under this
      Agreement;

	 	 	 	 
	 		(vii) 	
      certified copies of those resolutions of the
      shareholder(s) and directors of the Vendor required to be passed to
      authorize the execution, delivery and implementation of this Agreement and
      of all documents to be delivered by the Vendor under this
  Agreement;

	 	 	 	 
	 		(viii) 	
      a statement of the Assumed Obligations signed by the
      Vendor;

	 	 	 	 
	 		(ix) 	
      a non-competition agreement contemplated by section
      6.1(j); and

	 	 	 	 
	 		(x) 	
      an officers certificate from the General Partner of the
      Shareholder verifying the authority of the Shareholder to enter into this
      agreement and provide the indemnification set forth herein.

	 	 	 	 
	 	(b) 	
      On the Closing Date the Purchaser shall deliver to the
      Vendor:

	 	 	 	 
	 		(i) 	
      a certified cheque or bank draft in the amount of CDN
      $425,000 payable to the Vendor for the cash component of the Purchase
      Price;

	 	 	 	 
	 		(ii) 	
      a certificate representing the Consideration Shares
      registered as directed by the Vendor in
writing;

- 22 –

	 	(iii) 	
      the elections under s. 167 of the Excise Tax Act
      and s. 22 of the Income Tax Act in the forms attached as
      Schedule "C", Election Form GST44, and Schedule "D", Accounts Receivable
      Election, respectively; and

	 	 	 
	 	(iv) 	
      the certificate of the Purchaser to be given under
      section 7.3(a) hereof.

ARTICLE 8
 INDEMNIFICATION

8.1               
Indemnification

	 	(a) 	
      The Vendor and the Shareholder hereby agree to indemnify
      and save the Purchaser harmless from and against any claims, demands,
      actions, causes of action, damage, loss, deficiency, cost, liability and
      expense which may be made or brought against the Purchaser or which the
      Purchaser may suffer or incur in respect of:

	 	 	 	 
	 		(i) 	
      any non-performance or non-fulfillment of any covenant or
      agreement on the part of the Vendor contained in this Agreement or in any
      document given in order to carry out the transactions contemplated
      hereby;

	 	 	 	 
	 		(ii) 	
      any misrepresentation, inaccuracy, incorrectness or
      breach of any representation or warranty made by the Vendor contained in
      this Agreement or contained in any document or certificate given in order
      to carry out the transactions contemplated hereby;

	 	 	 	 
	 		(iii) 	
      any obligations or liabilities of Vendor related to the
      operation of the Business prior to the Closing, of any kind or nature,
      whether absolute, accrued, contingent or otherwise; or

	 	 	 	 
	 		(iv) 	
      all reasonable costs and expenses including, without
      limitation, reasonable legal fees on a solicitor and client basis,
      incidental to or in respect of the foregoing.

	 	 	 	 
	 	(b) 	
      The Purchaser hereby agrees to indemnify and save the
      Vendor harmless from and against any claims, demands, actions, causes of
      action, damage, loss, deficiency, cost, liability and expense which may be
      made or brought against the Vendor or which the Vendor may suffer or incur
      in respect of:

	 	 	 	 
	 		(i) 	
      any non-performance or non-fulfillment of any covenant or
      agreement on the part of the Purchaser contained in this Agreement or in
      any document given in order to carry out the transactions contemplated
      hereby;

	 	 	 	 
	 		(ii) 	
      any misrepresentation, inaccuracy, incorrectness or
      breach of any representation or warranty made by the Purchaser contained
      in this Agreement or contained in any document or certificate given in
      order to carry out the transactions contemplated hereby;

	 	 	 	 
	 		(iii) 	
      any obligations or liabilities related to the operation
      of the Business after the Closing, of any kind or nature, whether
      absolute, accrued, contingent or otherwise; or

- 23 –

	 		(iv) 	
      all reasonable costs and expenses including, without
      limitation, reasonable legal fees on a solicitor and client basis,
      incidental to or in respect of the foregoing.

	 	 	 	 
	 	(c) 	
      The obligations of indemnification by any party pursuant
      to paragraph (a) or (b) of this section will be subject to the limitations
      referred to in sections 5.3 and 8.2.

8.2               
Limitation on Indemnity

                    
No claim of indemnity by any party under section 8.1 shall be valid unless
written notice of the claim is given by the party claiming indemnity to the
indemnifying party or parties before the earlier of 24 months after the Closing
Date, or the expiration period of the representation or warranty in respect of
which the claim is made; and

8.3                Duration
of Indemnification Obligations

                  
  The indemnification obligations of the parties under this Article 8,
in respect of the representations and warranties made by such party, shall be
coterminous with the survival period in respect of the particular
representation, warranty, or both, relating to the indemnification
obligation.

ARTICLE 9 
GENERAL PROVISIONS

9.1               
Further Assurances

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

9.2               
Remedies Cumulative

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

9.3               
Notices

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

	 	 	 	 
	 		(i) 	
      delivered personally to an officer or director of such
      party;

	 	 	 	 
	 		(ii) 	
      sent to the party entitled to receive it by registered
      mail, postage prepaid, mailed in Canada, or

	 	 	 	 
	 		(iii) 	
      sent by telecopy machine.

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

- 24 –

	 	(i) 	in the case of the Vendor; 
	 	  	  	  
	 	  	Tagline Communications Inc. 
	 	  	1600 – 609 Granville Street 
	 	  	P.O. Box 10068, Pacific Centre 
	 	  	Vancouver, British Columbia V7Y 1C3
    
	 	  	Attention: 	Scott Ackerman, Director 
	 	  	  	  
	 	  	in the case of the Shareholder;

	 	  	  	  
	 	  	The Emprise Special Opportunities
      Fund, Limited Partnership 
	 	  	1620 – 609 Granville Street 
	 	  	P.O. Box 10068, Pacific Centre 
	 	  	Vancouver, British Columbia V7Y 1C3
    
	 	  	Attention: 	Jeff Durno, Chairman of Emprise Venture
      Opportunities 
	 	  	  	Management Inc., General Partner 
	 	  	  	  
	 	  	in the case of the Purchaser: 
	 	  	  	  
	 	  	Voice Mobility International, Inc.
  
	 	  	107 - 645 Fort Street 
	 	  	Victoria, British Columbia V8W 1G2
  
	 	  	Attention: 	James Hutton, Chair and CEO 
	 	  	  	  
			
      or to such other address or telecopier number as the
      party entitled to or receiving such notice, designation, communication,
      request, demand or other document shall, by a notice given in accordance
      with this section, have communicated to the party giving or sending or
      delivering such notice, designation, communication, request, demand or
      other document. 

	 	  	
       
	
       

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

	 	  	
       
	
       

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

	 	  	
       
	
       

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

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

- 25 –

9.4               
Counterparts

                
    This Agreement may be executed (by original or facsimile
or electronic transmission) in several counterparts, each of which so executed
shall be deemed to be an original, and such counterparts together shall
constitute but one and the same instrument.

9.5               
Expenses of Parties

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

9.6               
Brokerage and Finder's Fees

                   
 It is understood in the connection with the sale or purchase of the
Assets, that (i) the Vendor shall indemnify the Purchaser and hold it harmless
in respect of any claim for brokerage or other commissions relative to this
Agreement or the transactions contemplated hereby which is caused by actions of
the Vendor or any of its affiliates, and (ii) the Purchaser shall indemnify the
Vendor and hold it harmless in respect of any claim for brokerage or other
commissions relative to this Agreement or to the transactions contemplated
hereby which is caused by actions of the Purchaser or any of its affiliates.

9.7               
Announcements

                  
  No disclosure or announcement with respect to the transactions
contemplated by this Agreement will be made by either party hereto without the
prior written consent of the other party. The foregoing will not apply to any
announcement made prior to Closing by any party, if required in order to comply
with laws pertaining to timely disclosure, provided that such party consults
with the other parties before making any such announcement.

9.8               
Successors and Assigns

                  
  The rights of the Vendor hereunder shall not be assignable without
the written consent of the Purchaser. The rights of the Purchaser hereunder
shall not be assignable without the written consent of the Vendor. Subject to
the foregoing, this Agreement shall be binding upon and enure to the benefit of
the parties hereto and their respective successors and permitted assigns.

9.9               
Entire Agreement

                   
 This Agreement and the schedules referred to herein constitute the entire
agreement between the parties hereto and supersede all prior agreements,
representations, warranties, statements, promises, information, arrangements and
understandings, whether oral or written, express or implied, with respect to the
subject matter hereof. None of the parties hereto shall be bound or charged with
any oral or written agreements, representations, warranties, statements,
promises, information, arrangements or understandings not specifically set forth
in this Agreement or in the schedules, documents and instruments to be delivered
on or before the Closing Date pursuant to this Agreement. The parties hereto
further acknowledge and agree that, in entering into this Agreement and in
delivering the schedules, documents and instruments to be delivered on or before
the Closing Date, they have not in any way relied, and will not in any way rely,
upon any oral or written agreements, representations, warranties, statements,
promises, information, arrangements or understandings, express or implied, not
specifically set forth in this Agreement or in such schedules, documents or
instruments.

- 26 –

9.10               
Waiver

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

- 27 –

9.11               
Amendments

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

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

	 	VOICE MOBILITY INTERNATIONAL,
      INC. 
	 	  	  	  
	 	by: 	 /s/ James Hutton 
	 	  	Name: 	James Hutton 
	 	  	Title: 	Chairman and CEO 
	 	  	  	  
	 	  	  	  
	 	TAGLINE COMMUNICATIONS INC.
  
	 	  	  	  
	 	by: 	 /s/ Scott Ackerman 
	 	  	Name: 	Scott Ackerman 
	 	  	Title: 	Director 
	 	  	  	  
	 	  	  	  
	 	THE EMPRISE SPECIAL OPPORTUNITIES
      FUND, 
	 	LIMITED PARTNERSHIP 
	 	Per: 	     Emprise Venture
      Opportunities Management Inc., 
	 	  	     General Partner
    
	 	  	  	  
	 	by: 	 /s/ Jeff Durno 
	 	  	Name: 	Jeff Durno 
	 	  	Title: 	Chairman 

Schedule "A"

LIST AND DESCRIPTION OF THE PURCHASED ASSETS

List of Assets:

	 	(a) 	
      all right, title and interest of the Vendor in, to and
      under the Contracts, listed below, including without limitation, any
      Contract with a Customer;

	 	 	 
	 	(b) 	
      the Books and Records;

	 	 	 
	 	(c) 	
      all Customer lists, files, data and information relating
      to Customers in the possession of the Vendor, including all Customer
      registration information collected in the course of conducting the
      Business, including but not limited to e-mail addresses, passwords, user
      names, credit card authorizations and information, postal addresses and
      phone numbers;

	 	 	 
	 	(d) 	
      all right, title and interest of the Vendor in, to the
      web-site, email domain, domain names and other property associated with
      the uniform resource locator at “www.tagline.cc”;

	 	 	 
	 	(e) 	
      all right and interest of the Vendor to all registered
      and unregistered trademarks, trade or brand names, copyrights, designs,
      restrictive covenants and other industrial or intellectual property used
      in connection with the Vendor's Business (the "Intangible
    Property");

	 	 	 
	 	(f) 	
      the prepaid expenses;

	 	 	 
	 	(g) 	
      the goodwill of the Vendor's Business and the right of
      the Purchaser to represent itself as carrying on the Vendor's Business in
      continuation of and in succession to the Vendor and the right to use the
      name "Tagline" or any variation thereof as part of or in connection with
      the Vendor's Business (the "Goodwill"); and

	 	 	 
	 	(h) 	
      all other property, assets and rights, immoveable or
      real, moveable or personal, tangible or intangible, owned by the Vendor or
      to which it is entitled in connection with the
Assets.

List of Contracts:

	1. 	
      Subscriber Contracts:

		a. 	
      Detailed Customer Listing (To be attached at
    Closing)

	 	 	 
	2. 	
      Platform Supplier Contract:

		a. 	
      Parus Holdings Inc.

	 	 	 
	3. 	
      Credit Card Merchant and Gateway Services:

		a. 	
      Psi Gate

		b. 	
      Optimal Payments Corp.

		c. 	
      AMEX

	 	 	 
	4. 	
      Customer Support Contract:

		a. 	
      Tigertel Communications Inc.

	 	 	 
	5. 	
      Billing Services;

		a. 	
      TeleBill Inc.

	 	 	 
	6. 	
      Accounting Services Contract:

		a. 	
      Emprise Capital Corp.

	 	 	 
	7. 	
      Website/database hosting:

		a. 	
      Netkeepers, Integric Solutions Group
  Inc.

Schedule "B"

ENCUMBRANCES

NONE

Schedule "C"

ELECTION FORM GST44

Schedule "D"

ACCOUNTS RECEIVABLE ELECTION

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