Document:

United States Securities and Exchange Commission EDGAR Filing

EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

between

STRATUS ENTERTAINMENT, INC.

(a Nevada corporation)

and

THE LEAGUE PUBLISHING, INC., 

(a Nevada corporation) 

THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated August 14, 2007, between THE League Publishing, Inc. (formally known as Latin Television, Inc. )("Seller"  herein), a Nevada corporation and Stratus Entertainment, Inc., a Nevada corporation, (“Stratus” or the "Buyer"), is made with reference to the following provisions, and shall effective upon closing.  

RECITALS

A.    The Seller owns certain assets relating to the production and filming of television programming, including television cameras and television camera equipment, editing and processing equipment, distribution, satellite and antenna equipment, and computer interface equipment relating to the production of television programs (the “Studio Assets”).  The Seller also owns certain assets consisting of the exclusive right to air and distribute television programs not created or produced by the Seller (the “Television Rights Assets”).  Further, Seller owns and/or controls certain intellectual property including but not limited to trademarks, tradenames, logos and copyrights related to Latin Television. (the “Intellectual Property Assets”, collectively with the Studio Assets, and the Television Rights Assets,  the “Assets”).  The Studio Assets and the Television Rights Assets are more fully described in Exhibit A attached hereto (the Studio Assets) and in Exhibit B attached hereto (the Television Rights Assets).  

B.

The Seller, formally Latin Television Inc., is the surviving company of a merger between New LTV Acquisition, LLC. and Mega Mania Interactive, Inc. (“Mega Mania”), a Nevada corporation.  Mega Mania, through the above described merger acquired the Studio Assets, the Intellectual Property Assets and the Television Rights Assets.

C.

The Buyer desires to acquire the Assets and assume all of Seller’s right, title and interest in and to the Assets.

D. 

The Buyer and Seller agree that upon execution of the document, title to the assets shall immediately pass to Buyer and Buyer shall have complete use and control of assets.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual agreements, warranties and representations contained in this agreement, the parties hereby agree as follows. 

Incorporation of Recitals

The recitals and prefatory phrases and paragraphs set forth above are hereby incorporated in full and made part of this agreement. 

ASSET PURCHASE AND CONSIDERATION

1.  Studio Assets.  Seller agrees to sell and transfer, and Buyer agrees to purchase the Studio Assets free and clear of all liens, claims and encumbrances.  Seller hereby sells and transfers to Buyer the Studio Assets free and clear of all liens, claims and encumbrances by execution of this Agreement, effective upon Closing.  The Studio Assets are described in Exhibit A, attached.

(a) Studio Assets include any additional assets not specifically included or described in this agreement which are now owned or were acquired by the Seller subsequent to its purchase of the Studio Assets which are part and parcel to the Studio Assets and are necessary to conduct the business of LTV.

2.  Television Rights Assets.   Seller agrees to sell and transfer, and Buyer agrees to purchase the Television Rights Assets free and clear of all liens, claims and encumbrances by execution of this Agreement, effective upon Closing.  Seller hereby sells and transfers to Buyer the Television Rights Assets free and clear of all liens, claims and encumbrances by execution of this Agreement.  The Television Rights Assets are more fully described in Exhibit B, attached.

(a) Television Rights Assets include any additional assets not specifically included or described in this agreement which are now owned or were acquired by the Seller subsequent to its purchase of the Studio Assets which are part and parcel to the Studio Assets and are necessary to conduct the business of LTV.

3. Intellectual Property Rights Assets.  Seller agrees to sell and transfer, and Buyer agrees to purchase the Intellectual Property Rights Assets associated with Latin Television free and clear of all liens, claims and encumbrances by the execution of the Agreement, effective upon Closing.  Seller hereby sells and transfers to Buyer the Intellectual Property Rights Assets which includes all Latin Television intellectual property and associated rights owned, used and/or controlled by Seller.  Said intellectual property includes, but is not limited to all trade name(s), “d.b.a’s”, logos, trademarks, graphics, designs, devices, copyrights, website(s), website content, and URL(s).

4.  Assignment of Rights.  Seller will assign and Buyer will accept and assume all of Seller’s rights, title and interest in and to the Studio Assets, the Television Rights Assets, Intellectual Property Rights Assets and related assets if any.

5.  Purchase Price. The purchase price for the Assets shall consist of the issuance to Seller’s of 1,500,000 shares of restricted Common Stock (the “Shares”) of Stratus based upon the representations and warranties that the fair market value of the assets shall be no less than ONE MILLION FIVE HUNDRED AND TWENTY FIVE THOUSAND DOLLARS ($1,525,000 U.S.).  

6. Execution and Closing.  The consummation of the transaction contemplated by this Agreement (the "Closing") will take place at the offices of Seller (the "Closing”).  Upon the execution of this Agreement, Seller shall deliver to Buyer the Studio Assets, the Intellectual Property Assets and the Television Assets.  Buyer shall take possession of the Assets and have full use and control of those Assets. 

 After execution of this Agreement, Buyer and Seller will be allowed to verify warranties and representations made by the respective parties.  Additionally, Seller will provide at its own expense an audit of the acquired Assets.  Unless agreed to otherwise by both parties in writing, at the Closing the Seller shall provide assignments, such bills of sale and instruments of transfer and conveyance as shall be reasonably be required by Buyer for the transfer to Buyer of all right, title and interest of Seller in, to the Assets.  Each party shall also deliver to each other such officer certificates and other instruments as the other party shall reasonably request after the closing as may be reasonably requested.  

BULK SALE, ASSET LIABILITY, AND CREDITORS

7. Asset Liability.  Buyer shall not assume or be responsible for any liabilities or obligations of Seller including without limitation, any liabilities which Seller was obligated to satisfy prior to Closing Date, or for any tax liability of the Seller.  Buyer shall take all Assets transferred by this Agreement free of any liens, claims, and encumbrances existing or claimed to exist on the Assets.

8.  Bulk Sale.  Seller recognizes the regulation of “Bulk Transfers” by Article 6 of the Uniform Commercial Code generally, and that the states of Florida, Texas, and New Jersey have repealed such “Bulk Transfer” sections from their respective State versions of the Uniform Commercial Code.  

9.  Creditors.  In order to eliminate any and all liens, claims, and encumbrances that may currently existing on the Assets, the Seller shall pay all debts owed to creditors prior to the execution of this Agreement, excepting the following creditors which are necessary for the continuation of the Business, and which will follow this transfer of Assets to the Buyer, and which the Buyer agrees to accept the assignment of the following existing contracts, attached as Exhibit C, and any debt relating to those agreements:

(a)

AMC1 Master Services Agreement between Latin Television, Inc. and Globecast North America Incorporated.

(b)

Lease Agreement between Cabot North University Drive Lease Co, LLC and Latin Television, Inc.

9.1

Assumption of Debt on Notes.  In anticipation of, and in conjunction with, the execution of this Agreement, certain creditors of LTV which have loaned capital funds to New LTV Acquisition LLC (which LTV assumed with the merger with that company) in exchange for Promissory Notes (Notes) (said Notes are in excess of $1,500,000 with principal and interest)  have released LTV from repayment of, and any other obligation for, such Notes upon the assumption of, and transfer to, all obligations for such Notes to Mr. Hans Jonas Pettersson, individually.  The Notes were issued by Innovative Finance & Equity Exchange (“IFEX”) and to Mr. Pettersson in exchange for a loan to New LTV Acquisition, LLC.  Mr. Pettersson personally guaranteed the Notes at the time of their initial issuance, and has now agreed to assume all debts, obligations and all accumulated interest on those Notes as evidenced in the attached “Release, Transfer, and Assumption of Obligation on Notes,” Exhibit D.  IFEX and Mr. Pettersson have forever released LTV from all past, present or future, known or unknown obligations on the Notes.  LTV has no other outstanding loans or notes.  Should further creditors, not specifically mentioned herein, come forward and make claim(s) against Seller, Mr. Hans Jonas Pettersson, agrees to personally assume that debt and further Seller and Mr. Pettersson agree to indemnify Buyer against all claims and creditors of THE League Publishing, Inc. incurred while operating as Latin Television. 

OTHER REPRESENTATIONS OF THE SELLER’S AND BUYER 

10.  Other Agreements of the Seller.

(a)   Investigation.  Seller shall allow Buyer and its representatives and persons or entitles which may provide financing or legal services for Buyer in connection with the transactions contemplated hereby, at all reasonable times, full access during normal business hours to all offices of Seller to inspect Studio Assets and Television Rights Assets.  Seller further agrees to permit reasonable access to third parties having business dealings with the Seller regarding the Assets.  Such access shall not unreasonably interfere with the operation and conduct of the business of the Seller or the above described third parties.  

11.  Other Representations of the Seller. Seller hereby represents and warrants to Buyer as follows:

(a)   Title to the Purchase Assets.  Seller is the lawful owner and has good and marketable title to all of the Studio Assets and the Television Rights Assets and hereby grants indemnification unto Buyer and its successors and assigns against 

claims of any third parties.  Seller has authority to sell and transfer the Studio Assets and the Television Rights Assets, which are free and clear from any liens or encumbrances.  Additionally, Seller has received all consents regarding the acquisition from any entities whose consents are necessary, including but not limited to, any and all governmental regulatory agencies whose consents are necessary, holders of notes, company affiliates, and corporate consents.

(b)   Seller’s Liabilities.  Seller does not have any  liability or  obligation (direct or indirect, contingent or absolute, known or unknown, mature or unmatured of any nature whatsoever, whether arising out of contract, tort, statute or other ("Liabilities"), except: (i) as specifically disclosed in a Schedule hereto to be provided to the Seller on or before the Closing Date, which is incorporated herein by reference; (ii) liabilities incurred in the ordinary course of business which will not  individually or in the aggregate be materially adverse to, or result in a material increase in the current or long term liabilities or obligations of Seller.  To the best knowledge of the Seller, upon due inquiry, there is no basis for assertion against Seller of any liabilities accept for liabilities to be listed in a Schedule hereto to be provided to the Buyer at the closing. 

(d)   Compliance with Laws. Seller has complied with and is not in default under

any applicable law, ordinance regulation or order, the violation of which would materially and adversely affect the Assets. There is no litigation proceeding or investigation pending or known to be threatened which might materially and adversely effect the Studio Assets or the Television Assets.

(e)  Taxes.  Seller has duly filed all federal, state, local, and foreign tax returns, if any, necessary to be filed by it and has duly paid all taxes (including any interest or penalties) which are or will be due or payable with respect to taxes.  There are no known or proposed penalty, interest or deficiency assessments with respect to taxes that require payment by, relate to or could adversely affect the Purchased Assets.

(f)  Real Estate and Leases.  There is disclosed in Exhibit C a description of all real estate, if any, (including buildings and improvements) owned or leased by Seller according to the character of the property and the location thereof.  Seller is not and, to its best knowledge, in default in any material respect under any real property lease nor has any event occurred which with the passage of time or giving of notice or both would constitute such a default.  No encumbrances have been placed, or have been permitted to be placed by the Seller or any of his affiliates on such real property, if any.  The real property utilized by the Seller in the conduct of its business does not violate any building, zoning or other laws or ordinances, or any agreements, applicable thereto, and no notice of any such violation or claimed violation or of any condemnation proceedings has been received by the Seller or its affiliates.

(g)  Completeness of Statements.  No representation or warranty in this Agreement and no statement set forth in any schedule attached hereto contains any untrue statement of any material fact, or omits to state any material fact necessary to make the statements contained therein not misleading.

(h)   Operation in the Ordinary Course. During the period of Seller’s ownership up and to and including the Closing Date: (i) there has been no damage destruction or loss or any event materially adversely affecting the Assets, and (ii) there has been no sale or other disposition of the Assets.  Buyer has the duty to inspect all assets and upon closing will assume all assets “as is”, or in the alternative, Buyer may accept the appraisal and evaluation previously provided by the Bankruptcy Court.  Absent fraud, negligence, or misrepresentation, the value of the assets will be deemed to be as represented in that appraisal.  Seller does not warrant or guarantee the assets other than specifically stated in this agreement.  

(i)  Employment Matters.  Seller has employment agreements with three executive employees, however those employment agreements do not encumber or affect Seller’s rights to transfer the Studio Assets, the Television Rights Assets or the Intellectual Property Rights Assets. Buyer intends to operate the business as Latin Television, and retain the current management.  Buyer agrees to either assume said employment contracts or enter into new employment contracts under similar terms with the executive employees. 

(j)

Insurance. The assets to be purchased by Buyer are not covered by insurance of any kind.  Buyer assumes full responsibility for assets at upon execution of this Agreement.   Should any of the asset(s) lose all or part of their value after the execution date but prior to the closing or the date of issuance of the consideration shares (See Section 4 Purchase Price), Buyer must still pay full purchase price for the asset(s).

(k)

Going Concern:  The Seller warrants and represents that the sale of the assets will not cause the termination of the current Latin Television operation, in that it is the intention of THE League Publishing Inc. (LVTI) to continue its operation, as a sports magazine publishing operation. The sale of assets herein shall be considered to be a part of the restructuring of the current operation, and its change of direction. It is not the intention of any of the parties to this asset sale to effect a merger of either operation into the other, and further, that post asset sale, each operation shall continue to operate independently of the other.

12.    Representation and Warranties of the Buyer.  Buyer represents and warrants to Seller that Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and this agreement has been duly authorized by the Board of Directions of Buyer and constitutes the valid binding and enforceable obligation of the Buyer.  Buyer further represents and warrants; 

(a) 

Buyer does not have any  liability or obligation (direct or indirect, contingent or absolute, known or unknown, mature or unmatured) of any nature whatsoever, whether arising out of contract, tort, statute or other, except: (i) as specifically disclosed in a Schedule hereto to be provided to the Buyer upon the execution of this Agreement, which is incorporated herein by reference; (ii) liabilities incurred in the ordinary course of business which will not individually or in the aggregate be materially adverse to, or result in a material increase in the current or long term liabilities or obligations of Buyer.  To the best knowledge of the Buyer, upon due inquiry, there is no basis for assertion against Buyer of any liabilities accept for liabilities to be listed in a Schedule hereto to be provided to the Buyer at the closing. 

(d)

Compliance with Laws. Buyer has complied with and is not in default under any applicable law, ordinance regulation or order, the violation of which would materially and adversely affect the Assets.  There is no litigation proceeding or investigation pending or known to be threatened which might materially and adversely effect the Buyer.

(e)  Taxes.  Buyer has duly filed all federal, state, local, and foreign tax returns, if any, necessary to be filed by it and has duly paid all taxes (including any interest or penalties) which are or will be due or payable with respect to taxes.  There are no known or proposed penalty, interest or deficiency assessments with respect to taxes that require payment by, relate to or could adversely affect the Buyer.

13.    Indemnification.  Seller (solely in respect to any wrongful breach of any of the representations and warranties set forth in the foregoing sections) covenants and agrees with Buyer that they shall jointly and severally reimburse and indemnify and hold Buyer harmless from, against and in respect of any and all liabilities or obligations of Seller which: (a) shall have occurred, arising or existed prior to the date hereof; (b) shall arise out of any breach of his representations warranties or covenants hereunder; or (c) shall arise from any failure to comply with all applicable bulk sales and bulk sales tax laws affecting the transfers contemplated hereby.

14.    Conditions to Obligation of Buyer.  The obligations of Buyer hereunder are subject to the satisfaction of the following conditions, any one or more which may be waived in whole or in part by Buyer.

(a)   The representations and warranties of Buyer set forth in this agreement shall be true and correct in all material respects as of the execution date described above as if made on and as of such date and Seller shall have duly performed or complied with all of the obligations to be performed or complied with by it under the terms of this Agreement on or prior to Closing.

(b)   There shall have been no material adverse change in the Studio Assets or the Television Rights Assets. 

(c)   Seller have obtained such consents of its Board of Directors, shareholders, and any third parties as may be necessary to transfer such of the Assets as require consents.

(d)   Seller have paid, prior to or contemporaneously with the Closing, all accounts payable, trade creditors and other amounts owed to any third parties other than those described above in Section 8 of this Agreement and attached as Exhibits C.

(e)   Buyer shall be reasonably satisfied with the results of its investigation of Seller and the Studio Assets and the Television Assets, as provided in foregoing section 5(a).

(f)  Buyer shall have obtained any requisite approvals of the transaction contemplated by the Agreement by its Board of Directors. 

(g)

Such other documents as counsel for the Buyers shall reasonably request.

(h)

 It shall be the responsibility of the Seller, at its own expense to provide any and all appraisals, evaluations, or audits, as may be required to effect the asset sale herein, as well as any consolidation of the balance sheet of the Seller and Buyer in conformity with SEC reporting statutes and guidelines, including but not limited to 8K, and 14c filings as may be required

15.   Conditions to Obligations of Seller.  The obligations of Seller hereunder are subject to the satisfaction of the following conditions, any one or more of which may be waives in whole or part by Buyer:

(a)   The representations and warranties of Seller set forth in this Agreement shall be true and correct in all material respects as of the execution date as if made on and as of such date, and Seller shall have duly performed or complied with all of the obligations to be performed or complied with by it under the terms of this Agreement on or prior to closing.

(b)   Buyer shall have received from Seller such other documents as legal counsel for the Buyere shall reasonably request.

16. Termination and Unwinding of Agreement. Buyer and Seller agree that the following circumstance may cause this transaction to be terminated and unwound;

(a)

This Agreement may be terminated by the board of directors of Buyer or Seller at any time prior to the Closing Date if: (i) there shall be any actual or threatened action or proceeding before any court or any governmental body which shall seek to restrain, prohibit, or invalidate the transactions contemplated by this 

Agreement and which, in the judgment of such board of directors, made in good faith and based on the advice of its legal counsel, makes it inadvisable to proceed with the exchange contemplated by this Agreement; and (ii) any of the transactions contemplated hereby are disapproved by any regulatory authority whose approval is required to consummate such transactions or in the judgment of such board of directors, made in good faith and based on the advice of counsel, there is substantial likelihood that any such approval will not be obtained or will be obtained only on a condition or conditions which would be unduly burdensome, making it inadvisable to proceed with the Asset sale.  In the event of termination pursuant to this paragraph, no obligation, right, or liability shall arise hereunder, and each party shall bear all of the expenses incurred by it in connection with the negotiation, drafting, and execution of this Agreement and the transactions herein contemplated. and (iii) Buyer shall have the right to terminate if it appears that the transaction is deemed a merger as opposed to a sale by any regulating body, auditor, or group of auditors related to the transaction. 

(b)

This Agreement may be terminated at any time prior to the Closing by action of the board of directors of Buyer if Seller shall fail to comply in any material respect with any of its covenants or agreements contained in this Agreement or if any of the representations or warranties of Seller contained herein shall be inaccurate in any material respect, or if there shall have been any change after the date of the latest balance sheets of Seller, in the assets, properties, business, or financial condition of Seller, which could have a materially adverse affect on the value of the business of Seller, except any changes disclosed in the Seller Schedules, dated as of the date of execution of this Agreement. If this Agreement is terminated pursuant to this paragraph, this Agreement shall be of no further force or effect, and no obligation, right, or liability shall arise hereunder, except that Seller shall bear its own costs in connection with the negotiation, preparation, and execution of this Agreement.

(c)

This Agreement may be terminated at any time prior to the Closing by action board of directors of Seller if Buyer shall fail to comply in any material respect with any of its covenants or agreements contained in this Agreement or if any of the representations or warranties of Buyer contained herein shall be inaccurate in any material respect.  If this Agreement is terminated pursuant to this paragraph, this Agreement shall be of no further force or effect, and no obligation, right, or liability shall arise hereunder, except that Buyer shall bear its own costs  incurred in connection with the negotiation, preparation, and execution of this Agreement. 

(d)

This Agreement may be terminated by either party if the transactions shall not have been closed within 5 days from execution of this agreement.  That closing date may, in any case, be extended by mutual agreement of the parties in writing.  Provided, however, that the right to terminate the Agreement under this paragraph will not be available to a party whose action or failure to act has 

contributed to the failure of the transactions to be consummated on or before such date and such action or failure to act constitutes a material breach of this Agreement.

(e)

This Agreement may be terminated by either party if within 30 days after mutual execution of this Agreement, such party gives written notice to the other that it is not reasonably satisfied with the results of its due diligence investigation of the other party.

(f)

In the event that Buyer is unable to raise investment capital in an amount not less than $2,000,000 or should this agreement be terminated for other cause, all the transactions mandated by this agreement shall be unwound and all documents executed in reliance thereon will be considered null and void.  

(g)

In the event of the transaction being terminated and unwound, all stock issued pursuant to or in reliance of this Agreement and shall be returned to its original stockholders or its assigns. 

(h)

Notice of Default. In the event of default by either party, the non-defaulting party shall provide written notice of default to the defaulting party.  Such notice of default shall provide ninety (90) days, unless otherwise stated herein, for the defaulting party to cure the default prior to the transaction being terminated and unwound. 

17.   Payment of Expenses.  Regardless of where the closing shall occur, the Seller shall pay all expenses incurred by on his behalf (unless the parties have agreed in writing prior to such expenses having been incurred, that such expenses are for the post-closing benefit of the Buyer, in which case the Buyer will pay for such expenses) and Buyer shall pay all expenses incurred by or on behalf of Buyer in connection execution and delivery of this agreement and the other agreements and documents referred to herein and the consummation of the transactions contemplated hereby and thereby.  If any audits of the Assets are required by Buyer, Seller at no additional expense to Buyer, will assist with audit preparation by preparing work papers and lead sheets, and by providing other relevant services consistent with acceptable audit procedures.

17.  Commissions and Finder's Fees.  Buyer and the Seller each hereby represent and warrant that neither of them have retained or used the services of any individual, firm or corporation in such manner as to entitle such individual, firm or corporation to any compensation for broker's or finder's fees with respect to the transactions contemplated hereby for which the other may be liable.

18.  Governing Law.  By executing this Agreement, the parties agree that this Agreement shall be governed by and construed in accordance with the laws of the State of Florida.  It is the intention of the parties that this Agreement and any dispute arising out of this agreement be governed and construed, by any Court or judicial body, under the laws of Florida.  Furthermore the parties recognize and declare that Florida has the most significant relationship to 

this Agreement and any dispute that may arise from it and that any other claimed venue or claimed jurisdiction has no legitimate interest in this Agreement or any dispute arising from. 

19.  Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the respective successors of Seller and Buyer and their assigns.  Neither party hereto may assign its right or obligations under this Agreement without the written consent of the other, which consent will not be unreasonably with held.

20.  Entire Agreement.  This Agreement sets forth the entire Agreement and understanding of Seller and the Buyer with respect to the subject matter hereof and supersedes all prior contemporaneous written or oral agreements, understandings or representations which are not specifically contained herein.  Both parties participated in the drafting of this Agreement and therefore consent that the terms of this Agreement shall not be construed for or against either party.  This Agreement may be amended or modified only by a written instrument signed by Seller and the Buyer.

21.  Disputes.  The parties agree to attempt to resolve any claim or dispute arising out of or relating to this Agreement by mediation and good faith reasonable negotiation prior to resorting to litigation or other judicial process.  In the event this Agreement is placed in the hands of an attorney for enforcement, the prevailing party shall be entitled to recover court costs and their reasonable attorney fees.

22.  Publicity.  Prior to the Closing Date, no notices to third parties (including press releases) or to any employees, suppliers or customers of Buyer or Seller (other than key management and other persons whose knowledge is required), shall be made by any party hereto unless mutually agreed to, planned and coordinated jointly among the parties hereto.

23.  Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same Agreement.

24. No Third Party Beneficiaries. The terms and provisions contained in this Agreement (including the documents and the instruments referred to herein) are not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.

25.  Further Assurances.  From and after the Closing Date, upon the request of any party, 

the other party shall do, execute, acknowledge and deliver all such further acts, assurances, deeds, assignments, transfers, conveyances and other instruments and papers as may be reasonably required or appropriate to carry out the transactions contemplated by this Agreement.

26.  Amendment.  This Agreement maybe amended, or any provision of this Agreement may be waived, provided that any such amendment or waiver is set forth in a writing executed by Seller and Buyer or their assigns or respective successors in interest.  No course of dealing between or among any persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any person 

under or by reason of this Agreement.

27.  Waiver.  No waiver by either party of any breach of a provision of this Agreement shall be a waiver of any subsequent breach, whether of the same or a different provision of this Agreement.

IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the date first above written.

				
	BUYER:

	 
	SELLER’S:

	 
	 
	 

	Stratus Entertainment, Inc.

	 
	THE League Publishing Inc. 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	By 

	/s/Derek Jones

	  

	/s/ Randall Appel

	Mr. Derek Jones    

	 
	Mr. Randall Appel

	President 

	 
	President and Chief Executive Officer

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	/s/ Hans Jonas Petterson

	 
	 
	Mr. Hans Jonas Petterson

	 
	 
	Executive Director of THE League Publishing Inc

	 
	 
	Personal Guarantor of Note and debtsCC Filed by Filing Services Canada Inc. 403-717-3898

EURASIA ENERGY LIMITED

2006 STOCK OPTION PLAN

1.

PURPOSE.   The Plan is intended to provide incentive to employees, directors, advisors and consultants of the Corporation to encourage proprietary interest in the Corporation, to encourage such employees to remain in the employ of the Corporation or such directors, advisors and consultants to remain in the service of the Corporation, and to attract new employees, directors, advisors and consultants with outstanding qualifications.

2.

DEFINITIONS.   Unless otherwise defined or the context otherwise requires, the capitalized terms used shall have the following meanings:

(a)

"Administrator" means the Board or the Plan Committee of the Board, whichever administers the Plan from time to time in the discretion of the Board, as described in Section 4 of the Plan.

(b)

"Board" means the Board of Directors of the Corporation.

(c)

"Change of Control" shall mean, a change of control of a nature that would be required to be reported in response to Item 1 of Form 8-K required to be filed pursuant to the Exchange Act;

(d)

"Code" means the Internal Revenue Code of 1986, as amended.

(e)

"Commission" means the Securities and Exchange Commission.

(f)

"Corporation" means Eurasia Energy Limited, a Nevada, USA corporation.

(g)

"Disability" means a medically determinable physical or mental impairment which has made an individual incapable of engaging in substantial gainful activity.  A condition shall be considered a Disability only if (i) it can be expected to result in death or has lasted or it can be expected to last for a continuous period of not less than twelve (12) months, and (ii) the Administrator, based upon medical evidence, has expressly determined that Disability exists.

(h)

"Employee" means an individual who is employed (within the meaning of Section 3401 of the Code and the regulations thereunder) by the Corporation.

(i)

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

(j)

"Exercise Price" means the price per Share determined by the Administrator, at which an Option may be exercised.

(k)

"Fair Market Value" means the average closing price of the Shares for the preceding 30 days or a combination of closing prices and average of daily bid and ask prices for the preceding 30 days or the Fair Market Value shall be determined by the Administrator in good faith.  Such determination shall be conclusive and binding on all persons. 

(l)

"Grant Date" means the date on which the granting of an Option is authorized by the Administrator or such other date as prescribed by the Administrator.

(m)

"Incentive Stock Option" means an option described in Section 422 of the Code.

(n)

"Option" means any stock option granted pursuant to the Plan.

(o)

"Option Agreement" means a written stock option agreement evidencing the grant of an Option.

- 2 -

(p)

"Option Limit" has the meaning assigned to it in Section 6.

(q)

"Optionee" means a Participant who has received an Option.

(r)

"Participant" has the meaning assigned to it in Section 5(a) hereof.

(s)

"Plan" means this Eurasia Energy Limited 2006 Stock Option Plan, as it may be amended from time to time.

(t)

"Plan Committee" shall mean a committee of two or more directors appointed by the Board to administer the Plan.

(u)

"Purchase Price" means the Exercise Price multiplied by the number of Shares with respect to which an Option is exercised.

(v)

"Retirement" means the voluntary termination of employment by an employee after qualifying for early or normal retirement under any pension plan or profit sharing or benefit plan of the Corporation or its Subsidiaries.  If an employee is not covered by any such plan, "Retirement" shall mean voluntary termination of employment after the employee has attained age sixty-five (65) and after the employee has attained the tenth (10th) anniversary of his or her last preceding date of hire, or as otherwise determined in the Administrator's sole discretion.

(w)

"Securities Act" means the Securities Act of 1933, as amended.

(x)

"Subsidiary" means any subsidiary corporation as defined in Section 425(f) of the Code.

(y)

"Share" means one share of Common Stock of the Corporation, adjusted in accordance with Section 10 of the Plan (if applicable).

(z)

"Shareholders" means holders of Shares.

(aa)

"Transfer Agent" means a third-party organization retained by the Corporation to maintain the stock transfer records of the Corporation.

3.

EFFECTIVE DATE.   The Plan was adopted by the Board effective March 13, 2006.

4.

ADMINISTRATION.

(a)

Administrator.  Subject to subsection (c) below, the Plan shall be administered, in the discretion of the Board from time to time, by the Board or by a Plan Committee which shall be appointed by the Board.  The Board may from time to time remove members from, or add members to, the Plan Committee.  Vacancies on the Plan Committee, however caused, shall be filled by the Board.  The Board shall appoint one of the members of the Plan Committee as Chairman.  The Administrator shall hold meetings at such times and places as it may determine.  Acts of a majority of the members of the Administrator at which a quorum is present, or acts reduced to or approved in writing by the unanimous consent of the members of the Administrator, shall be the valid acts of the Administrator.

(b)

Powers of Administrator.  The Administrator shall from time to time at its discretion select the Optionees who are to be granted Options, determine the number of Shares to be subject to Options to be granted to each Optionee.  The Administrator shall have full power and authority to operate, manage and administer the Plan and interpret and construe the Plan and the terms of all Option Agreements.  The interpretation and construction by the Administrator of any provision of the Plan or of any Option 

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or Option Agreement shall be final.  No member of the Administrator shall be liable for any action or determination made in good faith with respect to the Plan or any Option.

5.

PARTICIPATION.

(a)

Eligibility.  The Optionee shall be such persons (collectively, "Participants"; individually a "Participant") as the Administrator may select from among the following classes of persons:

(i)

Employees (who may be officers, whether or not they are directors) of the Corporation or of a Subsidiary and non-employees to whom an offer of employment has been extended; and 

(ii)

directors, advisors and consultants of the Corporation or a Subsidiary.

Notwithstanding provisions of the first paragraph of this Section 5(a), the Administrator may at any time or from time to time designate one or more directors as being ineligible for selection as Participants in the Plan for any period or periods of time.  The Administrator may, in its sole discretion and upon such terms as it deems appropriate, require as a condition of the grant of an Option to a Participant that the Participant surrender for cancellation some or all of the Options which have been previously granted to such person under this Plan or otherwise.  An Option, the grant of which is conditioned upon such surrender, may have an option price lower (or higher) than the exercise price of such surrendered Option, may cover the same (or a lesser or greater) number of shares as such surrendered Option, may contain such other terms as the Administrator deems appropriate, and shall be exercisable in accordance with its terms, without regard to the number of shares, price, exercise period or any other term or condition of such surrendered Option.

6.

STOCK.  The stock subject to Options granted under the Plan shall be from the Corporation's authorized but unissued or reacquired Shares.  The aggregate number of Shares which may be issued upon exercise of Options under the Plan at any time shall not exceed TWO MILLION (2,000,000) Shares (the "Option Limit"), subject to adjustment as provided for in this Plan.

7.

TERMS AND CONDITIONS OF OPTIONS.

(a)

Stock Option Agreements.  Each Option shall be evidenced by an Option Agreement in such other form as the Administrator shall from time to time determine.  Such Option Agreements need not be identical but shall comply with and be subject to the terms and conditions set forth in this Section 7.

(b)

Optionee's Undertaking.  Each Optionee shall agree to remain in the employ or service of the Corporation and to render services for a period as shall be determined by the Administrator, from the Grant Date of the Option or such other date agreed to by the Optionee and the Corporation, but such agreement shall not impose upon the Corporation any obligation to retain the Optionee in their employ or service for any period.

(c)

Number of Shares.  Each Option shall state the number of Shares to which it pertains and shall provide for the adjustment thereof in accordance with the provisions of Section 10 hereof.

(d)

Exercise Price; Exercise of Options.  Each Option shall state the Exercise Price.  The Exercise Price in the case of any Incentive Stock Option granted shall not be less than the Fair Market Value on the Grant Date.  At the sole discretion of the Administrator, any Option granted under this Plan to any Participant may be exercisable in whole or in part immediately upon the grant thereof, or only after the occurrence of a specified event and/or only in installments, which installments may be equal or otherwise, and which installments may vary as to the number thereof as well as to whether any unexercised installments are cumulative through the life of a particular Option; provided that, in any event, to the 

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extent required by law or regulation such Option shall be exercisable at a minimum rate of at least twenty percent (20%) per year over the period five years from the Grant Date for the Option in question; however, in the case of an Option granted to a Participant who is a director, consultant, advisor or officer of the Corporation, the Administrator may provide that the Option may become fully exercisable, subject to reasonable conditions such as continued employment or service to the Corporation, at any time or during any period established by the Administrator.

(e)

Medium and Time of Payment; Notice.  The Purchase Price shall be payable in full in United States dollars upon the exercise of the Option.

In the event the Corporation determines that it is required to withhold state, United States Federal or foreign income tax as a result of the exercise of an Option, as a condition to the exercise thereof, an Optionee must make arrangements satisfactory to the Corporation to enable it to satisfy such withholding requirements before the Optionee shall be permitted to exercise the Option.

The Optionee shall exercise an Option by completing and delivering to the Corporation, concurrently with the payment of the Purchase Price in the manner described above, an exercise notice in such form as the Administrator shall from time to time determine.

(f)

Term and Non-Transferability of Options.  Each Option shall state the time or times when all or part thereof becomes exercisable.  No Option shall be exercisable after the expiration of five (5) years (or less, in the discretion of the Administrator) from the Grant Date.  During the lifetime of the Optionee, the Option shall be exercisable only by the Optionee or the Optionee's guardian or legal representative and shall not be assignable or transferable.  The Option shall not be transferable by the Optionee other than by will or the laws of descent and distribution.  Any other attempted alienation, assignment, pledge, hypothecation, attachment, execution or similar process, whether voluntary or involuntary, with respect to all or any part of any Option or right thereunder, shall be null and void and, at the Corporation's option, shall cause all of the Optionee's rights under the Option to terminate.

(g)

Cessation of Employment (Except by Death, Disability or Retirement).  If an Optionee's employment or service with the Corporation ceases for any reason or no reason, whether voluntarily or involuntarily, with or without cause, other than pursuant to death, Disability or Retirement, such Optionee shall have the right, subject to the restrictions referred to in Section 7(f) above, to exercise the Option at any time within ninety (90) days after such cessation, but, except as otherwise provided in the applicable Option Agreement, only to the extent that, at the date of such cessation, the Optionee's right to exercise such Option had accrued pursuant to the terms of the applicable Option Agreement and had not previously been exercised.

For purposes of this Section 7(g), the employment relationship shall be treated as continuing intact while the Optionee is on military leave, sick leave or other bona fide leave of absence (to be determined in the sole discretion of the Administrator).  The foregoing notwithstanding, in the case of an Incentive Stock Option, employment shall not be deemed to continue beyond the ninetieth (90th) day after the Optionee ceased active employment, unless the Optionee's reemployment rights are guaranteed by statute or by contract.

(h)

Death of Optionee.  If an Optionee's employment or service with the Corporation ceases by reason of the Optionee's death, or after ceasing to be a Participant but during the period in which he or she could have exercised the Option under this Section 7, and has not fully exercised the Option, then the Option may be exercised in full, subject to the restrictions referred to in Section 7(f) above, at any time within twelve (12) months after the Optionee's death by the executor or administrator of his or her estate or by any person or persons who have acquired the Option directly from the Optionee by bequest or inheritance, but, except as otherwise provided in the applicable Option Agreement, only to the extent 

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that, at the date of death, the Optionee's right to exercise such Option had accrued and had not been forfeited pursuant to the terms of the applicable Option Agreement and had not previously been exercised.

(i)

Disability of Optionee.  If an Optionee's employment or service with the Corporation ceases by reason of the Optionee's Disability, such Optionee shall have the right, subject to the restrictions referred to in Section 7(f) above, to exercise the Option at any time within twelve (12) months after such cessation by reason of Disability, but, except as provided in the applicable Option Agreement, only to the extent that, at the date of such cessation, the Optionee's right to exercise such Option had accrued pursuant to the terms of the applicable Option Agreement and had not previously been exercised.

(j)

Retirement of Optionee.  If an Optionee's employment or service with the Corporation ceases by reason of the Optionee's Retirement, such Optionee shall have the right, subject to the restrictions referred to in Section 7(f) above, to exercise the Option at any time within ninety (90) days after the date of Retirement, but only to the extent that, at the date of such cessation, the Optionee's right to exercise such Option had accrued pursuant to the terms of the applicable Option Agreement and had not previously been exercised.

(k)

Time of Cessation of Service.  For purposes of this Plan, the Optionee's employment or service shall be deemed to have ceased or be terminated on the date when the Optionee's employment or service in fact ceased or Optionee is in fact terminated.

(l)

Rights as a Shareholder.  No one shall have rights as a Shareholder with respect to any Shares covered by an Option until the date of the issuance of a stock certificate for such Shares.  No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property), distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 10 hereof.

(m)

Modification, Extension and Renewal of Options.  Within the limitations of the Plan, the Administrator may modify an Option, extend or renew outstanding Options or accept the cancellation of outstanding Options (to the extent not previously exercised) for the granting of new Options in substitution therefor.  The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, alter or impair any rights or obligations under any Option previously granted.  With the consent of the affected Optionee, the Administrator may cancel any agreement evidencing Options.  In the event of such cancellation, the Administrator may authorize the granting of new Options, which may or may not cover the same number of Shares that have been the subject of the prior award, at such Exercise Price and subject to such terms, conditions and discretions as would have been applicable under this Plan had the canceled Options not been granted.

(n)

Substitution of Options.  Notwithstanding any inconsistent provisions or limits under the Plan, in the event the Corporation acquires (whether by purchase, merger or otherwise) all or substantially all of outstanding capital stock or assets of another corporation or of any reorganization or other transaction qualifying under Section 424 of the Code, the Administrator may, in accordance with the provisions of that Section, substitute Options under the Plan for options under the plan of the acquired corporation.

(o)

Forfeiture of Option Gain and Unexercised Options Held By Directors, Officers or Consultants who Engage in Certain Activities.  At the discretion of the Administrator, and unless otherwise prohibited by applicable laws, an Option Agreement provided to a director, officer or consultant of the Corporation may provide that if at any time within (i) the term of an Option granted to a Optionee or (ii) within one year after the termination of such Optionee's employment or service with the Corporation for any reason or no reason or (iii) within one year after such Optionee exercises any portion of an Option, whichever is the latest, such Optionee engages in any activity in direct competition with the principal business of 

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the Corporation, or inimical, contrary or harmful to the interests of the Corporation, including, but not limited to: (A) conduct related to Optionee's employment for which either criminal or civil penalties against Optionee may be sought, (B) violation of Corporation policies, including, without limitation, the Corporation's insider trading policy, (C) accepting employment with or serving as a consultant, advisor or in any other capacity to an employer that is in direct competition with or acting against the interests of the Corporation, including employing or recruiting any present, former or future employee of the Corporation, (D) disclosing or misusing any confidential information or material concerning the Corporation, or (E) participating in a hostile takeover attempt against the Corporation, then, at the discretion of the Administrator, (1) any Options granted under the Plan to such Optionee shall terminate effective the date on which such Optionee entered into such activity, unless terminated sooner by operation of another term or condition of the Plan, and (2) any gain realized by such Optionee from exercising all or a portion of any Option shall be paid by Optionee to the Corporation.

(p)

Right of Set-Off.  Optionee shall consent to a deduction from any amounts the Corporation owes Optionee from time to time (including amounts owed as wages or other compensation, fringe benefits or vacation pay, as well as any other amounts owed to Optionee by the Corporation), to the extent of the amounts Optionee owes the Corporation, including pursuant to subparagraph (o) above.  Whether or not the Corporation elects to make any set-off in whole or in part, if the Corporation does not recover by means of set-off the full amount Optionee owes to the Corporation, Optionee shall agree to pay immediately the unpaid balance to the Corporation.

(q)

Other Provisions.  An Option Agreement authorized under the Plan may contain such terms and provisions not inconsistent with the terms of the Plan (including, without limitation, restrictions upon the exercise of the Option) as the Administrator shall deem advisable in its sole and absolute discretion.

8.

LIMITATION ON ANNUAL AWARDS.

As long as the Plan is in effect, at no time will Options granted to any one Participant pursuant to the Plan exceed 1,000,000 Shares, subject to adjustment as provided for in Section 10.

9.

TERM OF PLAN.   

Options may be granted pursuant to the Plan until the expiration of the Plan five (5) years after the effective date referred to in Section 3.

10.

EFFECT OF CERTAIN EVENTS.

(a)

Adjustments Upon Changes in Stock.  The Administrator shall make or provide for such adjustments in the Option Limit, the Exercise Price and in the number or kind of shares or other securities (including shares or other securities of another issuer) covered by this Plan and outstanding Options as the Administrator in its sole discretion, exercised in good faith, shall determine is equitably required to prevent dilution or enlargement of rights of optionees that would otherwise result from (a) any stock dividend, stock split, combination of shares, issuance of rights or warrants to purchase stock, spin-off, recapitalization or other changes in the capital structure of the Corporation, (b) any merger, consolidation, reorganization or partial or complete liquidations, or (c) any other corporate transaction or event having an effect similar to any of the foregoing.  The Administrator also shall make or provide for such adjustment in the number or kind of shares of the Corporation's capital stock or other securities (or in shares or other securities of another issuer) which may be acquired pursuant to Options granted under the Plan and the number of such securities to be awarded to each Optionee as the Administrator in its sole discretion, shall determine is appropriate to reflect any transaction or event described in the preceding sentence.  In the event of any such transaction or event, the Administrator may provide in substitution for any or all outstanding Options under the Plan such alternative consideration (including 

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securities of any surviving entity) as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all Options so replaced.  In any case, such substitution of securities shall not require the consent of any person who is granted Options pursuant to the Plan.  The determination of the Administrator as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive.

(b)

Change of Control.  In addition to the rights set forth in Section 10(a) above, in the event of a Change of Control, the Administrator may in its sole discretion, without obtaining Shareholder approval or the consent of any person granted Options under the Plan, take one or more of the following actions:

(i)

Accelerate the exercise dates of any outstanding Option, or make the Option fully vested and exercisable;

(ii)

Pay cash to any or all owners of Options in exchange for the cancellation of their outstanding Options; or

(iii)

Make any other adjustments or amendments to the Plan and outstanding Options and substitute new Options for outstanding Options.

(c)

Adjustment Determination.  To the extent that the foregoing adjustments relate to securities of the Corporation, such adjustments shall be made by the Administrator, whose determination shall be conclusive and binding on all persons.

(d)

Limitation on Rights.  Except as expressly provided in this Section 10, the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, merger or consolidation or spinoff of assets or stock of another corporation, and any issue by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option.  The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.

11.

SECURITIES LAW REQUIREMENTS.

(a)

Legality of Issuance.  No Shares shall be issued upon the exercise of any Option unless and until the Corporation has determined that:

(i)

it and the Optionee have taken all actions required to register the offer and sale of the Shares under the Securities Act, or to perfect an exemption from the registration requirements thereof;

(ii)

any applicable listing requirement of any stock exchange on which the Shares are listed has been satisfied; and

(iii)

any other applicable provision of state, United States Federal or foreign law has been satisfied.

(b)

Restrictions on Transfer; Representations of Optionee; Legends.  Regardless of whether the offering and sale of Shares under the Plan has been registered under the Securities Act or has been registered or qualified under the securities laws of any state, the Corporation may impose restrictions upon the grant of Options and the sale, pledge or other transfer of Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of the Corporation and its counsel, such restrictions are 

- 8 -

necessary or desirable in order to achieve compliance with the provisions of the Securities Act, the securities laws of any state or any other law.  In the event that the sale of Shares under the Plan is not registered under the Securities Act but an exemption is available which requires an investment representation or other representation, each Optionee shall be required to represent that such Shares are being acquired for investment, and not with a view to the sale or distribution thereof, and to make such other representations as are deemed necessary or appropriate by the Corporation and its counsel.  Stock certificates evidencing Shares acquired under the Plan pursuant to an unregistered transaction shall bear the following restrictive legend and such other restrictive legends as are required or deemed advisable under the provisions of any applicable law:

"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").  ANY TRANSFER OR PLEDGE OF SUCH SECURITIES WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER OR PLEDGE TO COMPLY WITH THE ACT."

Any determination by the Corporation and its counsel in connection with any of the matters set forth in this Section 11 shall be conclusive and binding on all persons.

(c)

Registration or Qualification of Securities.  The Corporation may, but shall not be obligated to, register or qualify the sale of Shares under the Securities Act or any other applicable law.  The Corporation shall not be obligated to take any affirmative action in order to cause the sale of Shares under the Plan to comply with any law.

(d)

Exchange of Certificates.  If, in the opinion of the Corporation and its counsel, any legend placed on a stock certificate representing Shares sold under the Plan is no longer required, the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but without such legend.

12.

AMENDMENT OF THE PLAN.   The Board may from time to time, with respect to any Shares at the time not subject to Options, suspend or discontinue the Plan or revise or amend it in any respect whatsoever.

The Administrator may amend this Plan to eliminate provisions which are no longer necessary as a result of changes in tax or securities laws or regulations, or in the interpretation thereof.

13.

FINANCIAL STATEMENTS.  Each Optionee shall receive financial statements of the Corporation not less than annually.

14.

APPLICATION OF FUNDS.  The proceeds received by the Corporation from the sale of Shares pursuant to the exercise of an Option will be used for general corporate purposes.

15.

GOVERNING LAW.  This Plan, and the Option Agreements, shall be governed by and enforced and construed in accordance with the laws of the State of Nevada, U.S.A..

To record the adoption of the Plan by the Board as of March 13, 2006, the Board has caused its authorized officers to sign the Plan and affix the corporate seal hereto.

EURASIA ENERGY LIMITED

Per:

Authorized Signatory

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