SHARE EXCHANGE AGREEMENT

(a)  

“Accounts Receivable” has the meaning set forth in Section 3.16;

(b)  

“Affiliate” with respect to any specified Person at any time, means each Person directly or indirectly through one or more intermediaries controlling, controlled by or under direct or indirect common control with such specified Person at such time;

(c)  

“Agreement” means this Share Exchange Agreement, and all of the schedules and other documents attached hereto, as it may from time to time be supplemented or amended;

(d)  

“Amended Property Agreement” has the meaning set forth in Recital B;

(e)  

“Amendments” has the meaning set forth in Recital A;

(f)  

“Applicable Laws” means, with respect to any Person, any domestic (whether federal,  state, territorial, provincial, municipal or local) or foreign statute, law, ordinance, rule, administrative interpretation, regulation, Order, writ, injunction, directive, judgment, decree or other requirement, all as in effect as of the Closing, of any Governmental Body  applicable to such Person or any of its Affiliates or any of their respective properties, assets, officers, directors, employees, consultants or agents (in connection with such officer’s, director’s, employee’s, consultant’s or agent’s activities on behalf of such Person or any of its Affiliates), including all Applicable Securities Laws;

(g)  

“Applicable Securities Laws” means applicable securities laws in all jurisdictions relevant to the issuance of the Consideration Shares and the Purchaser Common Shares to be issued upon conversion of the Purchaser Preferred Shares to the Target Shareholders pursuant to the terms of this Agreement;

(h)  

“Assignment Agreement” has the meaning set forth in Recital B;

(i)  

“Assignment Shares” has the meaning set forth in Recital C;

(j)  

“Business” means the business currently and heretofore carried on by the Purchaser or the Target, as the case may be;

(k)  

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in British Columbia, Canada or Nevada, USA are authorized or required by law to close;

(l)  

“Canadian Legend” means the restrictive legend specified in MI 51-105;

(m)  

“Charter Documents” means the articles of incorporation, by-laws, articles of association, memorandum of association or other constating documents of a party to this Agreement;

(n)  

“Closing” means the closing of the Transaction pursuant to the terms of this Agreement on the Closing Date;

(o)  

“Closing Date” means the date that is on or before 21 days following presentation by the Target to the Purchaser of the Target Financial Statements that are sufficient for filing purposes under Applicable Securities Laws, or such other date as the Purchaser and the Target may mutually agree to in writing, provided that the parties will use best efforts to effect the Closing on or before February 20, 2013;

(p)  

“Consideration Shares” means, collectively, the 100,000,000 fully paid and non-assessable Purchaser Common Shares and 5,000,000 Purchaser Preferred Shares to be issued to the Target Shareholders in consideration for the Target Shares in accordance with the terms of this Agreement;

(q)  

“Contracts” means all contracts, agreements, options, leases, licences, sales and purchase orders, commitments and other instruments of any kind, whether written or oral, to which the Target or the Purchaser, as applicable, is a party on the Closing Date;

(r)  

“Damages” means all demands, claims, actions, causes of action, assessments, Losses, damages, costs, expenses, Liabilities, judgments, awards, fines, sanctions, penalties, charges and amounts paid in settlement (net of insurance proceeds actually received), including: (i) interest on cash disbursements in respect of any of the foregoing; and (ii) reasonable costs, fees and expenses of attorneys, accountants and other agents of, or other Persons retained by, a Person;

(s)  

“Employee” means any current, former or retired employee, officer or director of the Target or the Purchaser, as applicable;

(t)  

“Employee Agreement” means each employment, severance, consulting or similar agreement or Contract between the Target or the Purchaser, as applicable, and any Employee;

(u)  

“Employee Plan” means any plan, program, policy, practice, Contract, agreement or other arrangement providing for bonuses, severance, termination pay, performance awards, stock or stock-related awards, fringe benefits or other Employee benefits of any kind, whether formal or informal, funded or unfunded, and whether or not legally binding, and pursuant to which the Target or the Purchaser, as applicable, has or may have any Liability, contingent or otherwise,

(v)  

“Encumbrance” means any Lien, claim, charge, pledge, hypothecation, security interest, mortgage, title retention agreement, option or encumbrance of any nature or kind whatsoever, other than: (i) statutory Liens for Taxes not yet due and payable; and (ii) such imperfections of title, easements and encumbrances, if any, that will not result in a Material Adverse Effect;

(w)  

“Environmental Laws” means, with respect to any Person or its Business, activities, property, assets or undertaking, all Applicable Laws, including the common laws, relating to environmental or health matters in the jurisdictions applicable to such Person or its Business, activities, property, assets or undertaking, including legislation governing the use and storage of Hazardous Substances;

(x)  

“Environmental Permits” means, collectively, all permits, certificates, variances, remedial orders, approvals, consents, authorizations, registrations, directions, instructions and licenses issued by or provided to, as the case may be, any Governmental Body pursuant to any Environmental Laws;

(y)  

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

(z)  

“GAAP” means United States generally accepted accounting principles, applied on a basis consistent with prior years;

(aa)  

“Governmental Authorization” means any: (a) permit, license, certificate, franchise, permission, variance, clearance, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement; or (b) right under any Contract with any Governmental Body;

(bb)  

“Governmental Body” means any: (i) nation, state, county, city, town, village, district, or other jurisdiction of any nature; (ii) federal, state, provincial, local, municipal, foreign, or other government; (iii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); (iv) multi-national organization or body; or (v) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature;

(cc)  

“Hazardous Substances” means any pollutant, contaminant, waste of any nature, hazardous substance, hazardous material, hazardous recyclable, toxic substance, dangerous substance or dangerous good as defined, judicially interpreted or identified in any Environmental Laws;

(dd)  

“Indebtedness” means all obligations, contingent (to the extent required to be reflected in financial statements prepared in accordance with GAAP) and otherwise, which in accordance with GAAP should be classified on the obligor’s balance sheet as Liabilities, including without limitation, in any event and whether or not so classified: (a) all debt and similar monetary obligations, whether direct or indirect; (b) all Liabilities secured by any mortgage, pledge, security interest, Lien, charge or other Encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; (c) all agreements of guarantee, support, indemnification, assumption or endorsement and other contingent obligations, whether direct or indirect, in respect of Indebtedness or performance of others, including any obligation to supply funds to, or in any manner to invest in, directly or indirectly, the debtor, to purchase Indebtedness, or to assure the owner of Indebtedness against loss, through an agreement to purchase goods, supplies or services for the purpose of enabling the debtor to make payment of the Indebtedness held by such owner or otherwise; (d) obligations to reimburse issuers of any letters of credit; and (e) capital leases;

(ee)  

“Indemnified Party” has the meaning set forth in Section 12.3(a);

(ff)  

“Indemnifying Party” has the meaning set forth in Section 12.3(a);

(gg)  

“International Jurisdiction” means a country other than Canada or the United States;

(hh)  

“Legal Requirement” means any federal, state, provincial, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute or treaty;

(ii)  

“Liabilities” means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, determined, determinable or otherwise, whether or not the same is required to be accrued on the financial statements of such Person;

(jj)  

“Lien” means, with respect to any asset, any mortgage, assignment, trust or deemed trust (whether contractual, statutory or otherwise arising), title defect or objection, lien, pledge, charge, security interest, hypothecation, restriction, Encumbrance or charge of any kind in respect of such asset;

(kk)  

“Losses” means any and all demands, claims, actions or causes of action, assessments, losses, Damages, Liabilities, costs and expenses, including, without limitation, interest, penalties, fines and reasonable attorneys, accountants and other professional fees and expenses, but excluding any indirect, consequential or punitive Damages suffered by the Purchaser, the Target or the Target Shareholders, including Damages for lost profits or lost business opportunities;

(ll)  

“Material Adverse Change” means, in respect of the Purchaser or the Target, any one or more changes, events or occurrences which may have a Material Adverse Effect, and “Material Adverse Effect” means, in respect of the Purchaser or the Target, any state of facts which, in any case, either individually or in the aggregate are, or would reasonably be expected to be, material and adverse to the Business, assets or financial condition of the Purchaser or the Target, as applicable, provided that a Material Adverse Change or Material Adverse Effect shall not include any change or effect (whether alone or in combination with any other effect), directly or indirectly, arising out of, relating to, resulting from or reasonably attributable to: (i) the announcement of this Agreement or the pending completion of the Transaction; (ii) changes in the economy generally; (ii) changes in the capital markets generally; (iii) changes in GAAP; or (iv) any matter that has been disclosed to the public or the other parties prior to the date of this Agreement;

(mm)  

“Material Contracts” means those subsisting Contracts entered into by the Target or the Purchaser, as applicable, by which the Target or the Purchaser, as applicable, is bound or to which it or its respective assets are subject which have total payment obligations on the part of the Target or Purchaser, as applicable, which exceed $5,000 or are for a term of or in excess of one (1) year;

(nn)  

“Material Interest” has the meaning set forth in Section 1.1(hhh);

(oo)  

“MI 51-105” means Multilateral Instrument 51-105 – Issuers Quoted in the U.S. Over-the-Counter Markets;

(pp)  

“Non-U.S. Certificate” has the meaning set forth in Section 2.5;

(qq)  

“Order” means any award, decision, injunction, judgment, order, ruling, subpoena or verdict entered, issued, made or rendered by any Governmental Body or by any arbitrator;

(rr)  

“Original Property Agreement” has the meaning set forth in Recital A;

(ss)  

“Original Vendors” has the meaning set forth in Recital A;

(tt)  

“Person” includes an individual, corporation, body corporate, partnership, joint venture, association, trust or unincorporated organization or any trustee, executor, administrator or other legal representative thereof;

(uu)  

“Proceeding” means any action, suit, litigation, arbitration, audit, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Body or any arbitrator or arbitration panel;

(vv)  

“Property” has the meaning set forth in Recital A;

(ww)  

“Proposed Transaction” has the meaning set forth in Section 10.8(a);

(xx)  

“Purchaser” has the meaning set forth on page one of this Agreement;

(yy)  

“Purchaser Accounting Date” means December 31, 2012;

(zz)  

“Purchaser Disclosure Statement” means the disclosure statement of the Purchaser to be signed and dated by the Purchaser and delivered by the Purchaser to the Target at the Closing;

(aaa)  

“Purchaser Financial Statements” means the audited annual financial statements of the Purchaser for the fiscal years ended June 30, 2012 and 2011 and for the period from June 24, 2010 (date of inception) to June 30, 2012 and the unaudited interim financial statements of the Purchaser for the period ended on the Purchaser Accounting Date and comparative period thereto, including audited balance sheets of the Purchaser as of June 30, 2012 and 2011 and unaudited balance sheets of the Purchaser as of the Purchaser Accounting Date and December 31, 2011, together with related statements of operations, changes in stockholder’s equity (deficit) and cash flows for the fiscal years and interim periods then ended, all prepared in accordance with GAAP;

(bbb)  

“Purchaser Public Documents” has the meaning set forth in Section 5.7;

(ccc)  

“Purchaser Common Shares” means the shares of common stock in the capital stock of the Purchaser;

(ddd)  

“Purchaser Preferred Shares” means the shares Series A Convertible Preferred Stock  in the capital stock of the Purchaser;

(eee)  

“Purchaser’s Advisors” has the meaning set forth in Section 10.9(a)(i);

(fff)  

“Purchaser’s Solicitors” means the law firm of Clark Wilson LLP;

(ggg)  

“Regulation S” means Regulation S promulgated under the Securities Act;

(hhh)  

“Related Party” means, with respect to a particular individual:

(i)  

each other member of such individual’s Family,

(ii)  

any Person that is directly or indirectly controlled by such individual or one or more members of such individual’s Family,

(iii)  

any Person in which such individual or members of such individual’s Family hold (individually or in the aggregate) a Material Interest, or

(iv)  

any Person with respect to which such individual or one or more members of such individual’s Family serves as a director, officer, partner, executor or trustee (or in a similar capacity), and

(i)  

any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person,

(ii)  

any Person that holds a Material Interest in such specified Person,

(iii)  

each Person that serves as a director, officer, partner, executor or trustee of such specified Person (or in a similar capacity),

(iv)  

any Person in which such specified Person holds a Material Interest,

(v)  

any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity), and

(vi)  

any Related Person of any individual described in clause (ii) or (iii).

(iii)  

“SEC” means the United States Securities and Exchange Commission;

(jjj)  

“Securities Act” means the United States Securities Act of 1933, as amended;

(kkk)  

 “Share Exchange” means the issuance by the Purchaser of Consideration Shares to the Target Shareholders in exchange for the acquisition by the Purchaser of the Target Shares held by the Target Shareholders pursuant to the terms of this Agreement;

(lll)  

“Target” has the meaning set forth on page one of this Agreement;

(mmm)  

“Target Accounting Date” means  December 31, 2012;

(nnn)  

“Target Assets” means all of the assets owned or used by the Target, including the Target’s interests and rights in and to the Property;

(ooo)  

“Target Disclosure Statement” means the disclosure statement of the Target to be signed and dated by the Target and delivered by the Target to the Purchaser at the Closing;

(ppp)  

“Target Financial Statements” means the audited financial statements of the Target for the fiscal year ended June 30, 2012, and the comparative period thereto and the audited interim financial statements of the Target for the period ended on the Target Accounting Date and the comparative period thereto, including audited balance sheets of the Target as of  June 30, 2012 ,  and audited balance sheets of the Target as of the Target Accounting Date and June 30, 2012, together with related statements of operations, changes in stockholder’s equity (deficit) and cash flows for the fiscal years and interim periods then ended, all prepared in accordance with GAAP and audited by an independent auditor registered with both the  Canadian Public Accounting Board and the United States Public Company Accounting Oversight Board;

(qqq)  

“Target Shares” means the 5,000,000 common shares in the capital of the Target, being all of the issued and outstanding shares in the capital of the Target as of the date of this Agreement;

(rrr)  

“Target Shareholder” or “Target Shareholders” has the meaning set forth on page one of this Agreement;

(sss)  

“Taxes” means all taxes, assessments, charges, dues, duties, rates, fees, imposts, levies and similar charges of any kind, lawfully levied, assessed or imposed by any Governmental Body, including all income taxes (including any tax on or based upon net income, gross income, income as specially defined, earnings, profits or selected items of income, earnings or profits) and all capital taxes, gross receipts taxes, environmental taxes and charges, sales taxes, use taxes, ad valorem taxes, value added taxes, subsoil use or extraction taxes and ownership fees, transfer taxes (including, without limitation, taxes relating to the transfer of interests in real property or entities holding interests therein), franchise taxes, license taxes, withholding taxes, health taxes, payroll taxes, employment taxes, excise, severance, social

(ttt)  

“Tax Returns” means all returns, schedules, elections, declarations, reports, information returns and statements required to be filed with any taxing authority relating to Taxes;

(uuu)  

“Technical Report” means the National Instrument 43-101 compliant technical report with respect to the Property, to be prepared by the Target and issued and delivered to the Purchaser, in form and substance satisfactory to the Purchaser and its solicitors, prior to the Closing;

(vvv)  

“Third-Party Claim” has the meaning set forth in Section 12.3(a);

(www)  

“Transaction” means the Share Exchange and all related transactions incidental to effecting the Share Exchange as contemplated by this Agreement;

(xxx)  

“Transaction Documents” means this Agreement and any other documents contemplated by this Agreement to be signed by the Target, the Purchaser or the Target Shareholders, as applicable, that are necessary in order for the parties to perform their respective obligations hereunder and to consummate the Transaction; and

(yyy)  

 “U.S. Person” has the meaning set out  in Regulation S, promulgated under the Securities Act.

(a)  

all references in this Agreement to a designated Article, Section, subsection, paragraph or other subdivision, or to a Schedule, is to the designated Article, section, subsection, paragraph or other subdivision of, or Schedule to, this Agreement unless otherwise specifically stated;

(b)  

the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, clause, subclause or other subdivision or Schedule;

(c)  

the singular of any term includes the plural and vice versa and the use of any term is equally applicable to any gender and where applicable to a body corporate;

(d)  

the word “or” is not exclusive and the word “including” is not limiting (whether or not non-limiting language such as “without limitation” or “but not limited to” or other words of similar import are used with reference thereto);

(e)  

all accounting terms not otherwise defined in this Agreement have the meanings assigned to them in accordance with GAAP, applied on a basis consistent with prior years;

(f)  

except as otherwise provided, any reference to a statute includes and is a reference to such statute and to the regulations made pursuant thereto with all amendments made thereto and in force from time to time, and to any statute or regulations that may be passed which have the effect of supplementing or superseding such statute or such regulations;

(g)  

where the phrase “to the best of the knowledge of” or phrases of similar import are used in this Agreement, it will be a requirement that the Person in respect of whom the phrase is used will have made such due enquiries as are reasonably necessary to enable such Person to make the statement or disclosure;

(h)  

the headings to the Articles and sections of this Agreement are inserted for convenience of reference only and do not form a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof;

(i)  

any reference to a corporate entity includes and is also a reference to any corporate entity that is a successor to such entity;

(j)  

the parties acknowledge that this Agreement is the product of arm’s length negotiation between the parties, each having obtained its own independent legal advice, and that this Agreement will be construed neither strictly for nor strictly against any party irrespective of which party was responsible for drafting this Agreement;

(k)  

the representations, warranties, covenants and agreements contained in this Agreement will not merge at the Closing and will continue in full force and effect from and after the Closing Date for the applicable period set out in this Agreement; and

(l)  

unless otherwise specifically noted, all references to “$” or sums of money in this Agreement are expressed in United States dollars ($).  If it is necessary to convert money from another currency to United States dollars, such money will be converted using the exchange rates in effect at the date of payment.

(a)  

The entire authorized and issued capital stock and other equity securities of the Target consists of 5,000,000 shares of common stock. All of the issued and outstanding Target Shares and other securities of the Target are owned of record and beneficially by the Target Shareholders, free and clear of all Encumbrances.  All of the outstanding equity securities of the Target have been duly authorized and validly issued and are fully paid and non-assessable.  None of the outstanding equity securities or other securities of the Target or the Target Subisidary, if any, were issued in violation of any Applicable Securities Laws or any other Legal Requirement. The Target does not own, or have any Contract to acquire, any equity securities or other securities of any Person or any direct or indirect equity or ownership interest in any other business other than its Business or the Target Assets.

(b)  

The Target Shareholders own and have good marketable title to the Target Shares, as the legal and beneficial owners thereof, free of all Encumbrances.

(a)  

to require the Target to issue any further or other shares in its capital or any other security convertible or exchangeable into shares in its capital or to convert or exchange any securities into or for shares in the capital of the Target;

(b)  

for the issue or allotment of any unissued shares in the capital of the Target;

(c)  

to require the Target to purchase, redeem or otherwise acquire any of the issued and outstanding Target Shares or other securities of the Target; or

(d)  

to purchase or otherwise acquire from the Target any interest in the Property or any of the Target Assets.

(a)  

as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally;

(b)  

as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and

(c)  

as limited by public policy.

(a)  

contravene, conflict with, or result in a violation of any provision of the Charter Documents of the Target, or any resolution adopted by the board of directors  or shareholders of the Target;

(b)  

contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge the Transaction or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which the Target or the Target Assets, may be subject;

(c)  

contravene, conflict with, or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by the Target, or that otherwise relates to the Business of the Target, or any of the assets owned or used by, the Target or the Target Assets;

(d)  

cause the Purchaser or the Target to become subject to, or to become liable for the payment of, any Tax;

(e)  

cause any of the Target Assets to be reassessed or revalued by any taxing authority or other Governmental Body;

(f)  

contravene, conflict with, or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Material Contract;

(g)  

result in the imposition or creation of any Encumbrance upon or with respect to any of the Target Assets; or

(h)  

require the Target to obtain any consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of the Transaction.

(a)  

The Target has, or will prior to Closing have, delivered the Target Financial Statements to the Purchaser.

(b)  

The Target Financial Statements:

(i)  

are in accordance with the books and records of the Target;

(ii)  

present fairly the financial condition of the Target as of the respective dates indicated and the results of operations for such periods; and

(iii)  

have been prepared in accordance with GAAP and reflect the consistent application of GAAP throughout the periods involved.

(c)  

All material financial transactions of the Target have been accurately recorded in the books and records of the Target and such books and records fairly present the financial position and the affairs of the Target.

(d)  

Other than the costs and expenses incurred in connection with the negotiation and consummation of the Transaction, the Target does not have any material Liabilities or obligations, net of cash, either direct or indirect, matured or unmatured, absolute, contingent or otherwise, that exceed $5,000, which:

(i)  

are not set forth in the Target Financial Statements, the Target Disclosure Statement, or have not heretofore been paid or discharged;

(ii)  

did not arise in the regular and ordinary course of business under any Contract specifically disclosed in the Target Disclosure Statement; or

(iii)  

have not been incurred in amounts and pursuant to practices consistent with past business practice, in or as a result of the regular and ordinary course of its Business since the Target Accounting Date.

(e)  

Except to the extent reflected or reserved against in the Target Financial Statements or incurred subsequent to the Target Accounting Date in the ordinary and usual course of the business of the Target, the Target does not have any outstanding Indebtedness or any Liabilities or obligations (whether accrued, absolute, contingent or otherwise), and any Liabilities or obligations incurred in the ordinary and usual course of business since the Target Accounting Date have not had a Material Adverse Effect on either of the Target.

(f)  

Since the Target Accounting Date, there have not been:

(i)  

any changes in the condition or operations of the Business of the Target, financial affairs of the Target or Target Assets which have caused, individually or in the aggregate, a Material Adverse Effect on the Target; or

(ii)  

any damage, destruction or loss, labour trouble or other event, development or condition, of any character (whether or not covered by insurance) which is not generally known or which has not been disclosed to the Purchaser, which has or may cause a Material Adverse Effect on the Target.

(g)  

Since the Target Accounting Date, and other than as contemplated by this Agreement or as disclosed in the Target Disclosure Statement, the Target has not:

(i)  

transferred, assigned, sold or otherwise disposed of any of the Target Assets shown or reflected in the Target Financial Statements or cancelled any debts or claims except in each case in the ordinary and usual course of business;

(ii)  

incurred or assumed any obligation or Liability (fixed or contingent), except unsecured current obligations and Liabilities incurred in the ordinary and usual course of business;

(iii)  

issued or sold any shares in its capital or any warrants, bonds, debentures or other securities or issued, granted or delivered any right, option or other commitment for the issue of any such or other securities;

(iv)  

discharged or satisfied any Encumbrances, or paid any obligation or Liability (fixed or contingent), other than current Liabilities or the current portion of long term Liabilities disclosed in the Target Financial Statements or current Liabilities incurred since the date thereof in the ordinary and usual course of business;

(v)  

declared, made, or committed itself to make any payment of any dividend or other distribution in respect of any of the Target Shares or other securities of the Target, nor has it purchased, redeemed, subdivided, consolidated, or reclassified any of the Target Shares or other securities of the Target;

(vi)  

made any gift of money or of any Target Assets to any Person;

(vii)  

purchased or sold any Target Assets except in the ordinary and usual course of business;

(viii)  

amended or changed or taken any action to amend or change its Charter Documents;

(ix)  

made payments of any kind to or on behalf of either a Target Shareholder or any Related Parties of a Target Shareholder, nor under any management agreement save and except Business related expenses and salaries in the ordinary and usual course of business and at the regular rates payable to them;

(x)  

created, incurred, assumed or guaranteed any Indebtedness for money borrowed, or mortgaged, pledged or subjected any of the material Target Assets to any mortgage, Lien, pledge, security interest, Contract or other Encumbrance of any nature whatsoever;

(xi)  

made or suffered any amendment or termination of any Material Contract, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, other than in the ordinary course of business;

(xii)  

suffered any damage, destruction or loss, whether or not covered by insurance, that has had or may be reasonably expected to have a Material Adverse Effect on the Target;

(xiii)  

other than in the ordinary course of business, increased the salaries or other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its Employees or directors or made any increase in, or any addition to, other benefits to which any of its Employees or directors may be entitled;

(xiv)  

adopted, or increased the payments to or benefits under, any Employee Plan for or with any Employees of the Target; or

(xv)  

authorized or agreed or otherwise have become committed to do any of the foregoing.

(h)  

The Target does not have any guarantees, indemnities or contingent or indirect obligations with respect to the Liabilities or obligations of any other Person including any obligation to service the debt of or otherwise acquire an obligation of another Person or to supply funds to, or otherwise maintain any working capital or other balance sheet condition of any other Person.

(i)  

The Target is not a party to, bound by or subject to any indenture, mortgage, lease, agreement, license, permit, authorization, certification, instrument, statute, regulation, Order, judgment, decree or law that would be violated or breached by, or under which default would occur or which could be terminated, cancelled or accelerated, in whole or in part, as a result of the execution and delivery of this Agreement or the consummation of the Transaction.

(a)  

Except as set forth in the Target Disclosure Statement, the Target has filed or caused to be filed all Tax Returns that are or were required to be filed by or with respect to it, either separately or as a member of a group of corporations, pursuant to all applicable statutes and other Legal Requirements.  The Target has made available to the Purchaser copies of all such Tax Returns filed by the Target.  Except as set forth in the Target Disclosure Statement, the Target has not given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment by the Target or for which the Target may be liable.

(b)  

Except as set forth in the Target Disclosure Statement, all Taxes that the Target is or was required to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Body or other Person.

(c)  

The Target has paid all Taxes that have become or are due with respect to any period ended on or prior to the date hereof and has established an adequate reserve therefore in the Target Financial Statements for those Taxes not yet due and payable, except for (i) any Taxes the non-payment of which will not have a Material Adverse Effect on the Target, and (ii) such Taxes, if any, as are listed in the Target Disclosure Statement and are being contested in good faith and as to which adequate reserves (determined in accordance with GAAP) have been provided in the Target Financial Statements.

(d)  

The Target is not presently under, or has not received notice of, any contemplated investigation or audit by any regulatory or government agency or body or any foreign or state taxing authority concerning any fiscal year or period ended prior to the date hereof.

(e)  

The Target Financial Statements contain full provision for all Taxes including any deferred Taxes that may be assessed to the Target.

(a)  

The Amended Property Agreement is all valid and subsisting, in full force and effect and unamended, no material default or violation exists in respect thereof on the part of the Target or, to the best of the knowledge of the Target, on the part of any of the other parties thereto. The Target is not aware of any intention on the part of any of the other parties thereto to terminate or materially alter the Amended Property Agreement or of any event that with notice or the lapse of time, or both, will create a material breach or violation thereof or default under the Amended Property Agreement. To the best knowledge of the Target, the continuation, validity, and effectiveness of the Amended Property Agreement will in no way be affected by the consummation of the Transaction. There exists no actual or threatened termination, cancellation, or limitation of, or any amendment, modification, or change to the Amended Property Agreement.

(b)  

The Target has paid the $950,000 to the Original Vendors as required under the Amended Property Agreement.

(a)  

For purposes of this Section 3.18, the following terms will have the meanings set forth below:

(i)  

“Employee Plan” refers to any plan, program, policy, practice, contract, agreement or other arrangement providing for bonuses, severance, termination pay, performance awards, stock or stock-related awards, fringe benefits or other employee benefits of any kind, whether formal or informal, funded or unfunded and whether or not legally binding, and pursuant to which the Target has or may have any material liability contingent or otherwise;

(ii)  

“Employee” means any current, former, or retired employee, officer, or director of the Target; and

(iii)  

“Employee Agreement” refers to each employment, severance, consulting or similar agreement or contract between the Target and any Employee.

(b)  

The Target has made available to Purchaser:

(i)  

correct and complete copies of all documents embodying each Employee Plan and each Employee Agreement including all amendments thereto and copies of all forms of agreement and enrollment used in connection therewith;

(ii)  

the most recent annual actuarial valuations, if any, prepared for each Employee Plan;

(iii)  

if the Employee Plan is funded, the most recent annual and periodic accounting of the Employee Plan assets; and

(iv)  

all communications material to any Employee or Employees relating to the Employee Plan and any proposed Employee Plan, in each case, relating to any amendments, terminations, establishments, increases or decreases in benefits, acceleration of payments or vesting schedules or other events which would result in any material liability to the Target.

(c)  

The Target has performed, in all material respects, all obligations required to be performed by it under, is not in default or violation of, and has no knowledge of any default or violation by another party to any Employee Plan, and all Employee Plans have been established and maintained in all material respects in accordance with their respective terms and in substantial compliance with all Applicable Laws.  There are no actions, suits or claims pending, or, to the knowledge of the Target, threatened or anticipated (other than routine claims for benefits), against any Employee Plan or against the assets of any Employee Plan.  The Employee Plans can be amended, terminated or otherwise discontinued after the Closing in accordance with their terms, without liability to the Target, the Purchaser or any Affiliate thereof (other than ordinary administration expenses typically incurred in a termination event).  There are no audits, inquiries or proceedings pending or, to the knowledge of the Target threatened, by any Governmental Body.

(d)  

Except as set forth in the Target Disclosure Statement, the execution of this Agreement and the consummation of the Transaction will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under an Employee Plan, Employee Agreement, trust or loan that will or may result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Employee.

(e)  

The Target:

(i)  

is in compliance in all material respects with all Applicable Laws respecting employment, employment practices, terms and conditions of employment and wages and hours, in each case, with respect to Employees;

(ii)  

has withheld all amounts required by law or by agreement to be withheld from the wages, salaries and other payments to Employees;

(iii)  

is not liable for any arrears of wages or any Taxes or any penalty for failure to comply with any of the foregoing;

(iv)  

is not liable for any payment to any trust or other fund or to any governmental or administrative authority, with respect to unemployment compensation benefits, social security or other benefits for Employees (other than routine payments to be made in the normal course of business and consistent with past practice);

(v)  

has provided the Employees with all wages, benefits, stock options, bonuses, incentives and all other compensation that became due and payable through the date of the Agreement; and

(vi)  

represents that in the last three (3) years, no citation has been issued by any federal, state,  provincial or local occupational safety and health board or agency against them and no notice of contest, claim, complaint, charge, investigation or other administrative enforcement proceeding involving them has been filed or is pending or, to their knowledge, threatened, against them under any federal, state, provincial or local occupational safety and health board or any other Applicable Law relating to occupational safety and health.

(f)  

No work stoppage, labour strike or other “concerted action” involving Employees against the Target is pending or, to the knowledge of the Target, threatened. The Target is not involved in or, to the knowledge of the Target, threatened with, any labour dispute, grievance, or litigation relating to labour, safety or discrimination matters involving any Employee, including, without limitation, charges of unfair labour practices or discrimination complaints, which, if adversely determined, would, individually or in the aggregate, result in a Material Adverse Effect on the Target.  The Target is not presently, or has been in the past, a party to, or bound by, any collective bargaining agreement or union contract with respect to any Employees and no collective bargaining agreement is being negotiated.  There are no activities or proceedings of a labour union to organize any of the Employees.

(g)  

Except as set forth in the Target Disclosure Statement and except for claims by Employees under any applicable workers’ compensation or similar legislation which, if adversely determined, would not, either individually or in the aggregate, have a Material Adverse Effect on the Target, there are no complaints, claims or charges pending or outstanding or, to the best of the knowledge of the Target, anticipated, nor are there any orders, decisions, directions or convictions currently registered or outstanding by any tribunal or agency against or in respect of the Target under or in respect of any employment legislation.  The Target Disclosure Statement lists all Employees in respect of whom of the Target has been advised by any workers compensation or similar authority that such Employees are in receipt of benefits under workers’ compensation or similar legislation. There are no appeals pending before any workers compensation or similar authority involving the Target and all levies, assessments and penalties made against the Target pursuant to workers’ compensation or similar legislation have been paid. The Target is not aware of any audit currently being performed by any workers compensation or similar authority, and all payments required to be made in respect of termination or severance pay under any employment standards or similar legislation in respect of former Employees or Employees listed on the Target Disclosure Statement have been made.

(a)  

consummate the Transaction;

(b)  

execute and deliver all of the documents and instruments to be delivered by the Target Shareholders and the Target under this Agreement;

(c)  

duly perform and observe the terms and provisions of this Agreement; or

(d)  

render this Agreement legal, valid, binding and enforceable.

(a)  

the Target is, and at all times has been, in full compliance with all of the terms and requirements of each Governmental Authorization required for the operation of the Business;

(b)  

no event has occurred or circumstance exists that may (with or without notice or lapse of time) constitute or result directly or indirectly in a violation of or a failure to comply with any term or requirement of any Governmental Authorization required for the operation of the Business or may result directly or indirectly in the revocation, withdrawal, suspension, cancellation, or termination of, or any modification to, any Governmental Authorization required for the operation of the Business;

(c)  

the Target has not received, except as set forth in the Target Disclosure Statement, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of or failure to comply with any term or requirement of any Governmental Authorization, or any actual, proposed, possible, or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to any Governmental Authorization; and

(d)  

all applications required to have been filed for the renewal of the Governmental Authorizations required for the operation of the Business have been duly filed on a timely basis with the appropriate Governmental Bodies, and all other filings required to have been made with respect to such Governmental Authorizations have been duly made on a timely basis with the appropriate Governmental Bodies.

(a)  

The Target:

(i)  

 has obtained all Environmental Permits that are required to carry on its Business and operations as currently carried out under all applicable Environmental Laws, except where the non-compliance with such laws or permits or failure to obtain those permits could not reasonably be expected to have a Material Adverse Effect on the Target; and

(ii)  

 is in substantial compliance with all applicable Environmental Laws and Environmental Permits in all jurisdictions having environmental regulatory jurisdiction over the Target or the Target Assets and in all jurisdictions in which the Target owns Target Assets or conducts operations, except where the non-compliance with such laws or permits or failure to obtain such permits could not reasonably be expected to have a Material Adverse Effect on the Target.

(b)  

There have not occurred any material spills, emissions or pollution on any property of the Target or the Target Assets or as a result of their operations, nor has the Target been subject to any stop orders, control orders, clean-up orders or reclamation orders under any Environmental Laws, any of which would individually or in the aggregate have a Material Adverse Effect on the Target.

(c)  

In the ordinary course of its Business, the Target periodically reviews the effect of Environmental Laws on its Business, operations and properties, in the course of which it identifies and evaluates associated costs and Liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential Liabilities to third parties). On the basis of such review, the Target has reasonably concluded that such associated costs and Liabilities, if any, would not result in a Material Adverse Change for the Target.

(d)  

The Target is not aware of or is not subject to:

(i)  

 any Proceeding, application, Order or directive which relates to environmental, health or safety matters, and which may require any material work, repairs, construction, or expenditures; or

(ii)  

 any demand or notice with respect to the breach of any Environmental Laws applicable to the Target, including any regulations respecting the use, storage, treatment, transportation, or disposition of any Hazardous Substances,

(a)  

Except as set forth in the Target Disclosure Statement, there is no pending Proceeding:

(i)  

that has been commenced by or against the Target or that otherwise relates to or may affect the Business, or any of the Target Assets; or

(ii)  

that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, the Transaction.

(b)  

Except as set forth in the Target Disclosure Statement, to the knowledge of the Target, no Proceeding has been threatened, and  no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Proceeding.

(c)  

Except as set forth in the Target Disclosure Statement:

(i)  

there is no Order to which the Target or any of the Target Assets is subject; and

(ii)  

no officer, director, agent, or Employee of the Target is subject to any Order that prohibits such officer, director, agent, or Employee from engaging in or continuing any conduct, activity, or practice relating to the Business.

(a)  

The Target does not have any specific information relating to the Target which is not generally known or which has not been disclosed to the Purchaser and which could reasonably be expected to have a Material Adverse Effect on the Target.

(b)  

No representation or warranty of the Target in this Agreement and no statement in the Target Disclosure Statement omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading.

 

(a)  

as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally;

(b)  

as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and

(c)  

as limited by public policy.

(a)  

any provision of any agreement, instrument or other obligation to which such  Target Shareholder is a party or by which such Target Shareholder is bound; or

(b)  

any Applicable Laws.

(a)  

as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally;

(b)  

as limited by laws relating to the availability of specific performance, injunctive relief of other equitable remedies; and

(c)  

as limited by public policy.

(a)  

conflict with, result in a violation of, cause a default under (with or without notice, lapse of time or both) or give rise to a right of termination, amendment, cancellation or acceleration of any obligation contained in or the loss of any material benefit under, or result in the creation of any Lien, security interest, charge or Encumbrance upon any of the material properties or assets of the Purchaser under any term, condition or provision of any loan or credit agreement, note, debenture, bond, mortgage, indenture, lease or other agreement, instrument, permit, license, judgment, Order, decree, statute, law, ordinance, rule or regulation applicable to the Purchaser or its material property or assets;

(b)  

contravene, conflict with, or result in a violation of, any provision of the Charter Documents of the Purchaser, any resolution adopted by the board of directors of the Purchaser or the shareholders of the Purchaser, or any Applicable Laws;

(c)  

contravene, conflict with, or result in a violation or breach of any provision of, or give any person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, any Material Contract; or

(d)  

violate any Order, writ, injunction, decree, statute, rule, or regulation of any court or Governmental Body applicable to the Purchaser or any of its material property or assets.

(a)  

To the best knowledge of the Purchaser, the Purchaser is in compliance with, is not in default or violation in any material respect under, and has not been charged with or received any notice at any time of any material violation of any Applicable Laws related to the business or operations of the Purchaser.

(b)  

To the best knowledge of the Purchaser, the Purchaser is not subject to any judgment, Order or decree entered in any lawsuit or Proceeding applicable to its Business and operations that would have a Material Adverse Effect on the Purchaser.

(c)  

The Purchaser has duly filed all reports and returns required to be filed by it with any Governmental Body and has obtained all governmental permits and other governmental consents, except as may be required after the execution of this Agreement.  All of such permits and consents are in full force and effect, and no Proceedings for the suspension or cancellation of any of them, and no investigation relating to any of them, is pending or to the best knowledge of the Purchaser, threatened, and none of them will be affected in a material adverse manner by the consummation of the Transaction.

(a)  

are in accordance with the books and records of the Purchaser;

(b)  

present fairly the financial condition of the Purchaser as of the respective dates indicated and its results of operations for such periods; and

(c)  

have been prepared in accordance with GAAP.

(a)  

As of the date hereof:

(i)  

the Purchaser has timely filed all Tax Returns in connection with any Taxes which are required to be filed on or prior to the date hereof, taking into account any extensions of the filing deadlines which have been validly granted to it, and

(ii)  

all such Tax Returns are true and correct in all material respects.

(b)  

The Purchaser has paid all Taxes that have become or are due with respect to any period ended on or prior to the date hereof and has established an adequate reserve therefore on its balance sheets for those Taxes not yet due and payable, except for any Taxes the non-payment of which will not have a Material Adverse Effect on the Purchaser.

(c)  

The Purchaser is not presently under and has not received notice of, any contemplated investigation or audit by any Governmental Body concerning any fiscal year or period ended prior to the date hereof.

(d)  

All Taxes required to be withheld on or prior to the date hereof from Employees for Taxes have been properly withheld and, if required on or prior to the date hereof, have been deposited with the appropriate Governmental Body.

(e)  

To the best knowledge of the Purchaser, the Purchaser Financial Statements contain full provision for all Taxes including any deferred Taxes that may be assessed to the Purchaser for the accounting period ended on the Purchaser Accounting Date or for any prior period in respect of any transaction, event or omission occurring, or any profit earned, on or prior to the Purchaser Accounting Date or for which the Purchaser is accountable up to such date and all contingent Liabilities for Taxes have been provided for or disclosed in the Purchaser Financial Statements.

(a)  

incurred any Liabilities, other than Liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any Lien or Encumbrance, or paid any Liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any Liabilities of which the failure to pay or discharge has caused or will cause any Material Adverse Effect to it or any of its assets or properties;

(b)  

sold, encumbered, assigned or transferred any material fixed assets or properties;

(c)  

created, incurred, assumed or guaranteed any Indebtedness for money borrowed, or mortgaged, pledged or subjected any of the material assets or properties of the Purchaser to any mortgage, Lien, pledge, security interest, conditional sales contract or other Encumbrance of any nature whatsoever;

(d)  

made or suffered any amendment or termination of any Material Contract to which it is a party or by which it is bound, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, other than in the ordinary course of business;

(e)  

declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of the Purchaser Common Shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of the Purchaser Common Shares;

(f)  

suffered any damage, destruction or loss, whether or not covered by insurance, that has had a Material Adverse Effect on its Business, operations, assets, properties or prospects;

(g)  

suffered any material adverse change in its Business, operations, assets, properties, prospects or condition (financial or otherwise);

(h)  

received notice or had knowledge of any actual or threatened labour trouble, termination, resignation, strike or other occurrence, event or condition of any similar character which has had or might have a Material Adverse Effect on its Business, operations, assets, properties or prospects;

(i)  

made commitments or agreements for capital expenditures or capital additions or betterments exceeding in the aggregate $5,000;

(j)  

other than in the ordinary course of business, increased the salaries or other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its Employees or directors or made any increase in, or any addition to, other benefits to which any of its Employees or directors may be entitled;

(k)  

entered into any transaction other than in the ordinary course of business consistent with past practice; or

(l)  

agreed, whether in writing or orally, to do any of the foregoing.

(a)  

a Material Adverse Effect with respect to the Purchaser; or

(b)  

any material change by the Purchaser in its accounting methods, principles or practices.

(a)  

The Purchaser does not have any specific information relating to the Purchaser which is not generally known or which has not been disclosed to the Target and which could reasonably be expected to have a Material Adverse Effect on the Purchaser.

(b)  

To the Purchaser’s knowledge, no representation or warranty of the Purchaser in this Agreement and no statement in the Purchaser Disclosure Statement omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading.

(a)  

the Purchaser will have reviewed and approved of all materials in the possession and control of the Target and the Target Shareholders which are germane to the Purchaser’s decision to proceed with the Transaction;

(b)  

the Purchaser and its solicitors will be reasonably satisfied that the due diligence, analysis and other customary examinations that they have performed regarding the financial position and the business of the Target are consistent, in all material respects, with the representations and warranties of the Target and the Target Shareholders set forth in this Agreement;

(c)  

the Purchaser and its accountants shall have received, and had a reasonable opportunity to review, a copy of the Target Financial Statements from the Target and will be reasonably satisfied with the content of the Target Financial Statements;

(d)  

the Target will have provided the Purchaser with a legal opinion of its counsel, in a form reasonably satisfactory to the Purchaser’s Solicitors;

the title report with respect to the Property, is in form and substance satisfactory to the Purchaser, in its sole discretion;

(f)  

the Technical Report will have been completed and delivered to the Purchaser, in form and substance satisfactory to the Purchaser and its solicitors;

(g)  

all consents, renunciations, authorizations or approvals of third parties, which, in the Purchaser’s reasonable opinion must be obtained prior to the Closing in order to give effect to the purchase of the Target Shares and the other transactions contemplated herein, must be obtained to the Purchaser’s satisfaction or in accordance with the relevant agreements, covenants or applicable law;

(h)  

the Target will have obtained the consent of any parties from whom consent to the Transaction is required;

(i)  

the Target and the Target Shareholders will have performed and complied with all obligations, covenants and agreements of the Target and the Target Shareholders set out in this Agreement and the representations and warranties of the Target and each of the Target Shareholders set forth in this Agreement will be true, correct and complete in all material respects as of the Closing Date and with the same effect as if made at and as of the Closing Date and the Purchaser will have received:

(i)  

from the Target, a certificate executed by an officer of the Target certifying that all obligations, covenants and agreements of the Target contained in this Agreement have been performed and complied with and that the representations and warranties of  the Target set forth in this Agreement are true and correct in all material respects as at the Closing Date; and

(ii)  

from each Target Shareholder, a completed and executed Non-US Certificate;

(j)  

on the Closing Date, the Target’s total Liabilities, determined in accordance with GAAP, net of cash, shall not exceed $5,000, save for the payments as required under the Option Agreement;

(k)  

no Material Adverse Change will have occurred with respect to the Business of the Target or the Target Shares;

(l)  

this Agreement, the Transaction Documents and all other documents necessary or reasonably required to consummate the Transaction, all in form and substance reasonably satisfactory to the Purchaser, will have been executed and delivered to the Purchaser;

(m)  

no claim will have been asserted or made that any Person (other than the Purchaser, the Target or the Target Shareholders) is the holder or the beneficial owner of, or has the right to acquire or to obtain beneficial ownership of, any of the Target Shares, or any other voting, equity, or ownership interest in, the Target or (other than the Target Shareholders) is entitled to all or any portion of the Consideration Shares;

(n)  

no Order (whether temporary, preliminary or permanent) shall have been enacted, entered, promulgated or enforced by any Governmental Body which prohibits, restrains, enjoins or restricts the consummation of the Transaction;

(o)  

approval of the board of directors of the Purchaser and the Target will have been obtained;

(p)  

the Assignment Shares will have been cancelled and returned to treasury of the Purchaser in accordance with Section 10.6;

(q)  

 the Target Shares will have been delivered in accordance with Section 6.2; and

(r)  

the Purchaser will have received from the Target, the following closing documentation:

(i)  

a certified copy of resolutions of the directors of the Target authorizing the transfer of the Target Shares from the Target Shareholders to the Purchaser, the registration of the Target Shares into the name of the Purchaser and the issue of share certificates representing the Target Shares from the Target Shareholders registered in the name of the Purchaser;

(ii)  

a certified copy of the central securities register of the Target showing the Purchaser as the registered owner of the Target Shares from the Target Shareholders;

(iii)  

all such instruments of transfer, duly executed, which in the opinion of the Purchaser acting reasonably are necessary to effect and evidence the transfer of the Target Shares from the Target Shareholders to the Purchaser free and clear of all Encumbrances; and

(iv)  

the corporate minute books and all other books and records of the Target.

the Target will have reviewed and approved of all materials in the possession and control of the Purchaser which are germane to the Target’s decision to proceed with the Transaction;

(b)  

the Target and its solicitors will be reasonably satisfied that the due diligence, analysis and other customary examinations that they have performed regarding the financial position and the business of the Purchaser are consistent, in all material respects, with the representations and warranties of the Purchaser set forth in this Agreement;

the Target and its accountants shall have had a reasonable opportunity to review the Purchaser Financial Statements and will be reasonably satisfied with the content of the Purchaser Financial Statements;

(d)  

all consents, renunciations, authorizations or approvals of third parties, which, in the Target’s reasonable opinion are necessary to give effect to the transactions contemplated herein, must be obtained to the Target’s satisfaction or in accordance with the relevant agreements, covenants or applicable law;

(e)  

the Purchaser will have obtained the consent of any parties from whom consent to the Transaction is required;

(f)  

the Purchaser will have performed and complied with all obligations, covenants and agreements of the Purchaser set out in this Agreement and the representations and warranties of the Purchaser set forth in this Agreement will be true, correct and complete in all material respects as of the Closing Date and with the same effect as if made at and as of the Closing Date and the Target will have received from the Purchaser, a certificate executed by an officer of the Purchaser certifying that all obligations, covenants and agreements of the Purchaser contained in this Agreement have been performed and complied with and that the representations and warranties of  the Purchaser set forth in this Agreement are true and correct in all material respects as at the Closing Date; and

(g)  

no Material Adverse Change will have occurred with respect to the Business of the Purchaser;

(h)  

the approval of the boards of directors of the Target and the Purchaser for the Transaction will have been obtained;

(i)  

immediately prior to the Closing, there will be no more than 435,000,000 Purchaser Common Shares issued and outstanding;

(j)  

this Agreement, the Transaction Documents and all other documents necessary or reasonably required to consummate the Transaction, all in form and substance satisfactory to the Target will have been executed and delivered to the Target;

(k)  

the Consideration Shares will have been delivered in accordance with Section 6.3; and

(l)  

no Order (whether temporary, preliminary or permanent) shall have been enacted, entered, promulgated or enforced by any Governmental Body which prohibits, restrains, enjoins or restricts the consummation of the Transaction.

(a)  

conduct the Business in the ordinary and usual course and in a continuous fashion and shall not, without the prior written consent of the Purchaser:

(i)  

make any capital expenditures, additions or improvements or commitments for the same which individually or in the aggregate exceed $10,000, other than in the ordinary and usual course of business;

(ii)  

acquire or agreed to acquire (by tender offer, exchange offer, merger, amalgamation, acquisition of shares or assets or otherwise) any Person or other business organization or division or acquire or agree to acquire any material assets;

(iii)  

sell, lease, sublease, assign or transfer (by tender offer, exchange offer, merger, amalgamation, sale of shares or the Target Assets or otherwise) any of the Target Assets;

(iv)  

enter into any Material Contracts regarding its business operations, including joint ventures, partnerships or other arrangements;

(v)  

make any material change in accounting procedures or practices;

(vi)  

sell, or undertake to sell, any of the Target Shares or any securities of the Target;

(vii)  

other than in the ordinary and usual course of business, enter into any agreement or arrangement granting any rights to purchase or lease any of the Target Assets or rights or requiring the consent of any Person to the transfer, assignment or lease of any Target Assets or rights;

(viii)  

other than in the ordinary and usual course of business, enter into any other material transaction, or any amendment of any Contract which is material to its Business;

(ix)  

increase the salaries or other compensation of, or make any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its Employees, officers or directors or make any increase in, or any addition to, other benefits to which any of its Employees, officers or directors may be entitled;

(x)  

create, incur, assume or guarantee any indebtedness for money borrowed, or mortgaged or pledged by the Target or a third party, and will not subject any of the material assets or properties of the Target to any mortgage, lien, pledge, security interest, conditional sales contract or other Encumbrance related to any such indebtedness for money borrowed;

(xi)  

other than in the ordinary and usual course of business, cancel, waive or compromise any Indebtedness or claims, including any accounts payable and receivable;

(xii)  

settle any outstanding claim, dispute, litigation matter or Tax dispute;

(xiii)  

declare, set aside or pay any dividend or make or agree to make any other distribution or payment in respect of the Target’s capital shares or redeem, repurchase or otherwise acquire or agree to redeem, purchase or acquire any of the Target’s capital shares or equity securities; or

(xiv)  

pay any amount (other than salaries in the ordinary course of business) to any Related Party of the Target or the Target Shareholders;

(b)  

comply with all laws affecting the operation of the Business and pay all required Taxes;

(c)  

not take any action or omit to take any action which would, or would reasonably be expected to, result in a breach of or render untrue any representation, warranty, covenant or other obligation of the Target or the Target Shareholders contained herein;

(d)  

use commercially reasonable efforts to preserve intact the Business and the assets, operations and affairs of the Target and carry on the Business and the affairs of the Target substantially as currently conducted, and use commercially reasonable efforts to promote and preserve for the Purchaser the goodwill of suppliers, customers and others having business relations with the Target;

(e)  

take all necessary actions, steps and proceedings that are necessary to approve or authorize, or to validly and effectively undertake, the execution and delivery of this Agreement and the completion of the Transaction;

(f)  

otherwise respond reasonably promptly to reasonable requests from the Purchaser for information concerning the status of the Business, operations, and finances of  the Target; and

(g)  

comply with the provisions of Article 10 of this Agreement.

(a)  

The current directors of the Purchaser will, subject to compliance with applicable corporate laws and the Purchaser’s Charter Documents, adopt resolutions appointing Carlos De La Torre and such other persons as the Target may advise to the board of directors of the Purchaser and accepting the resignation of Michel Voyer from  the board of directors of the Purchaser, which appointments and resignations will be effective on Closing or, if applicable, ten days after the filing of a Schedule 14f-1 in accordance with the Transaction.

(b)  

If applicable, the Purchaser shall prepare and file a Schedule 14f-1 information statement with the SEC as required under the Exchange Act in connection with the change of directors arising in connection with the completion of the Transaction.

(a)  

solicit, initiate, encourage, facilitate or discuss any proposition, offer, inquiry, submission or proposal from any other Person concerning: (i)  the purchase of any part of their issued and outstanding securities, including the Target Shares; (ii) the purchase of any significant elements of their respective assets; or (iii) any merger, reorganization, arrangement, capitalization or any other form of business merger implicating, directly or indirectly, any party to this Agreement or their respective Businesses (a “Proposed Transaction”); or

(b)  

enter into any agreement, discussions or negotiations with any Person, company or other entity with respect to a Proposed Transaction.

(a)  

Between the date of this Agreement and the Closing Date, the Target shall:

(i)  

afford the Purchaser, the Purchaser’s Solicitors and the Purchaser’s representatives, advisors, prospective lenders and their representatives (collectively, the “Purchaser’s Advisors”) full and free access to the Target’s personnel, properties, Contracts, books and records, and other documents and data, in each case during normal business hours, upon a reasonable number of occasions, upon reasonable notice and in a manner calculated to minimize disruption of the Target’s Business;

(ii)  

furnish the Purchaser and the Purchaser’s Advisors with copies of all such Contracts, books and records, and other existing documents and data, as the Purchaser may reasonably request; and

(iii)  

furnish the Purchaser and the Purchaser’s Advisors with such additional financial, operating, and other data and information, as the Purchaser may reasonably request.

(b)  

Between the date of this Agreement and the Closing Date, the Purchaser shall:

(i)  

afford the Target and its respective representatives, legal and advisors and prospective lenders and their representatives (collectively, the “Target’s Advisors”) full and free access to the Purchaser’s personnel, properties, contracts, books and records, and other documents and data, in each case during normal business hours, upon a reasonable number of occasions, upon reasonable notice and in a manner calculated to minimize disruption of the Purchaser’s business;

(ii)  

furnish the Target and the Target’s Advisors with copies of all such contracts, books and records, and other existing documents and data, as the Target may reasonably request; and

(iii)  

furnish the Target and the Target’s Advisors with such additional financial, operating, and other data and information, as the Target may reasonably request.

(a)  

As promptly as practicable after the date of this Agreement, the Target and the Target Shareholders shall make all filings required by Legal Requirements to be made by it in order to consummate the Transaction. Between the date of this Agreement and the Closing Date, the Target and the Target Shareholders shall cooperate with the Purchaser with respect to all filings that the Purchaser elects to make or is required by Legal Requirements to make in connection with the Transaction.

(b)  

As promptly as practicable after the date of this Agreement, the Purchaser will make all filings required by Legal Requirements to be made by it in order to consummate the Transaction. The Purchaser will (i) provide the Target with copies of all correspondence with Governmental Bodies relating to such Legal Requirements, (ii) allow the Target to participate on all discussions or meetings (whether in person or via phone or other technology) with Governmental Bodies relating to such Legal Requirements, and (iii) provide the Target with reasonable notice of each of the foregoing, and a reasonable opportunity to participate in the process where appropriate.

(a)  

the Governmental Body;

(b)  

the Purchaser’s registrar and transfer agent;

(c)  

Canadian tax authorities; and

(d)  

authorities pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).

(a)  

such information is already known to such party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party;

(b)  

the use of such information is necessary or appropriate pursuant to Applicable Securities Laws or in making any filing or obtaining any consent or approval required for the consummation of the Transaction; or

(c)  

the furnishing or use of such information is required by or necessary or appropriate in connection with legal Proceedings.

(a)  

mutual agreement of the Purchaser and the Target;

(b)  

the Purchaser, if there has been a material breach by the Target or a Target Shareholder of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of the Target or a Target Shareholder that is not cured, to the reasonable satisfaction of the Purchaser, within seven (7) Business Days after notice of such breach is given by the Purchaser (except that no cure period will be provided for a breach by the Target or a Target Shareholder that, by its nature, cannot be cured);

(c)  

the Target, if there has been a material breach by the Purchaser of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of the Purchaser that is not cured, to the reasonable satisfaction of the Target, within seven (7) Business Days after notice of such breach is given by the Target (except that no cure period will be provided for a breach by the Purchaser that by its nature cannot be cured);

(d)  

the Purchaser or the Target if any permanent injunction or other order of a Governmental Body of competent authority preventing the consummation of the transaction contemplated by this Agreement has become final and non-appealable; or

(e)  

if the Transaction has not been consummated prior to the Closing Date, unless otherwise extended by the written agreement of the parties hereto.

(a)  

the material breach by the Purchaser of any representation or warranty of the Purchaser contained in or made pursuant to this Agreement or any certificate or other instrument delivered pursuant to this Agreement; or

(b)  

the material breach or partial breach by the Purchaser of any covenant or agreement of the Purchaser made in or pursuant to this Agreement or any certificate or other instrument delivered pursuant to this Agreement.

(a)  

the material breach by the Target or a Target Shareholder of any representation or warranty of the Target or a Target Shareholder contained in or made pursuant to this Agreement or any certificate or other instrument delivered pursuant to this Agreement; or

(b)  

the material breach or partial breach by the Target or a  Target Shareholder of any covenant or agreement of the Target or a  Target Shareholder made in or pursuant to this Agreement or any certificate or other instrument delivered pursuant to this Agreement.

(a)  

If any third party notifies a party entitled to indemnification under Section 12.1 or 12.2 (each, an “Indemnified Party”) with respect to any matter (a “Third-Party Claim”) which may give rise to an indemnity claim against a party required to indemnify such Indemnified Party under Section 12.1 or 12.2 (each, an “Indemnifying Party”), then the Indemnified Party will promptly give written notice to Indemnifying Party; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party will relieve the Indemnifying Party from any obligation under this Article 12, except to the extent such delay actually and materially prejudices the Indemnifying Party.

(b)  

The Indemnifying Party will be entitled to participate in the defense of any Third-Party Claim that is the subject of a notice given by the Indemnified Party pursuant to Section 12.3(a).  In addition, the Indemnifying Party will have the right to defend the Indemnified Party against the Third-Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying Party gives written notice to the Indemnified Party within fifteen (15) days after the Indemnified Party has given notice of the Third-Party Claim that the Indemnifying Party elects to assume the defense of such Third-Party Claim, (ii) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have adequate financial resources to defend against the Third-Party Claim and fulfill its indemnification obligations hereunder, (iii) if the Indemnifying Party is a party to the Third-Party Claim or, in the reasonable opinion of the indemnified Party some other actual or potential conflict of interest exists between the Indemnifying Party and the Indemnified Party, the Indemnified Party determines in good faith that joint representation would not be inappropriate, (iv) the Third-Party Claim does not relate to or otherwise arise in connection with Taxes or any criminal or regulatory enforcement action, (v) settlement of, an adverse judgment with respect to or the Indemnifying Party’s conduct of the defense of the Third-Party Claim is not, in the good faith judgment of the Indemnified Party, likely to be materially adverse to the Indemnified Party’s reputation or continuing business interests (including its relationships with current or potential customers, suppliers or other parties material to the conduct of its business) and (vi) the Indemnifying Party conducts the defense of the Third-Party Claim actively and diligently.  The Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third-Party Claim; provided, however, that the Indemnifying Party will pay the reasonable fees and expenses of separate co-counsel retained by the Indemnified Party that are incurred prior to Indemnifying Party’s assumption of control of the defense of the Third-Party Claim.

(c)  

The Indemnifying Party will not consent to the entry of any judgment or enter into any compromise or settlement with respect to the Third-Party Claim without the prior written consent of the Indemnified Party unless such judgment, compromise or settlement (i) provides for the payment by the Indemnifying Party of money as sole relief for the claimant, (ii) results in the full and general release of the Indemnified Party from all liabilities arising or relating to, or in connection with, the Third-Party Claim and (iii) involves no finding or admission of any violation of Legal Requirements or the rights of any Person and has no effect on any other claims that may be made against the Indemnified Party.

(d)  

If the Indemnifying Party does not deliver the notice contemplated by Section 12.3(b)(i), or the evidence contemplated by Section 12.3(b)(ii), within fifteen (15) days after the Indemnified Party has given notice of the Third-Party Claim, or otherwise at any time fails to conduct the defense of the Third-Party Claim actively and diligently, the Indemnified Party may defend, and may consent to the entry of any judgment or enter into any compromise or settlement with respect to, the Third-Party Claim in any manner it may deem appropriate; provided, however, that the Indemnifying Party will not be bound by the entry of any such judgment consented to, or any such compromise or settlement effected, without its prior written consent (which consent will not be unreasonably withheld or delayed).  In the event that the Indemnified Party conducts the defense of the Third-Party Claim pursuant to this Section 12.3(d), the Indemnifying Party will (i) advance the Indemnified Party promptly and periodically for the costs of defending against the Third-Party Claim (including reasonable attorneys’ fees and expenses) and (ii) remain responsible for any and all other Losses that the Indemnified Party may incur or suffer resulting from, arising out of, relating to, in the nature of or caused by the Third-Party Claim to the fullest extent provided in this Article 12.

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

Per:                                                                

        Authorized Signatory

Per:                                                                

        Authorized Signatory

Per:                                                                

        Authorized Signatory

Per:                                                                

        Authorized Signatory

Per:                                           

        Authorized Signatory

Per:                                           

        Authorized Signatory

Per:                                           

        Authorized Signatory

Per:                                           

        Authorized Signatory

Per:                                           

        Authorized Signatory

 

 

 

(a)

is knowledgeable of, or has been independently advised as to, the Applicable Securities Laws of the securities regulators having application in the jurisdiction in which the undersigned is resident (the “International Jurisdiction”) which would apply to the acquisition of the Securities;

 

(b)

the undersigned is acquiring the Securities pursuant to exemptions from prospectus or equivalent requirements under Applicable Securities Laws or, if such is not applicable, the undersigned is permitted to acquire the Securities under the Applicable Securities Laws of the securities regulators in the International Jurisdiction without the need to rely on any exemptions;

 

(c)

the Applicable Securities Laws of the authorities in the International Jurisdiction do not require the Purchaser to make any filings or seek any approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection with the issue and sale or resale of the Securities; and

 

(d)

the acquisition of the Securities by the undersigned does not trigger:

 

(i)

any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction; or

 

(ii)

any continuous disclosure reporting obligation of the Purchaser in the International Jurisdiction; and

 

(a)

that any Person will resell or repurchase any of the Securities;

 

(b)

that any Person will refund the purchase price of any of the Securities;

 

(c)

as to the future price or value of any of the Securities; or

 

(d)

that any of the Securities 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 Securities on any stock exchange or automated dealer quotation system, except that currently certain market makers make market in the Purchaser Common Shares on the OTC Bulletin Board;

(a)  

pursuant to MI 51-105, a subsequent trade in any of the Securities in or from Canada will be a distribution subject to the prospectus and registration requirements of Applicable Securities Laws unless certain conditions are met, which conditions include, among others, a requirement that any certificate representing the Securities (or ownership statement issued under a direct registration system or other book entry system) bear the Canadian Legend;

(b)  

the undersigned is not a resident of Canada and undertakes not to trade or resell any of the Securities in or from Canada unless the trade or resale is made in accordance with MI 51-105.  The undersigned understands that others will rely upon the truth and accuracy of the representations and warranties contained in this Certificate and agrees that if such representations and warranties are no longer accurate or have been breached, the undersigned shall immediately notify the Purchaser;

(c)  

by executing and delivering the Share Exchange Agreement and this Certificate and as a consequence of the representations and warranties made by the undersigned contained in this Certificate, the undersigned will have directed the Purchaser not to include the Canadian Legend on any certificates representing any of the Securities to be issued to the undersigned.  As a consequence, the undersigned will not be able to rely on the resale provisions of MI 51-105, and any subsequent trade in any of the Securities in or from Canada will be a distribution subject to the prospectus and registration requirements of the Applicable Securities Laws; and

(d)  

if the undersigned wishes to trade or resell any of the Securities in or from Canada, the undersigned agrees and undertakes to return, prior to any such trade or resale, any certificate representing the Securities to the Purchaser’s transfer agent or the Purchaser, as applicable, to have the Canadian Legend imprinted on such certificate or to instruct the Purchaser’s transfer agent to include the Canadian Legend on any ownership statement issued under a direct registration system or other book entry system; and