Merger Agreement Term Sheet

·   Sound Revolution shall have raised a minimum of US$400,000 through a private placement of units at US$0.15 per unit, each unit comprised of one common share and one half warrant to purchase one common share at a price of US$1.00 for a period of 12 months (the “Units”). The warrants shall be subject to an acceleration clause whereby Sound Revolution will have the right to accelerate the exercise of the options via a press release notice should the share price exceed US$1.15 for seven consecutive trading days.

·   Both parties shall submit the Merger to a vote of their shareholders and obtain approval from holders of a majority of both parties’ respective voting shares once $400,000 has been raised by Sound Revolution.

·   Sound Revolution shall have forwarded to On4 a bridge loan of at least US$250,000 with no interest. On4 shall return the entire amount of the bridge loan if the merger agreement is terminated.

·   Sound Revolution shall enter into a Convertible Note in the amount of US$95,000 with Penny Green, the majority shareholder, CEO, a Director and the sole officer of Sound Revolution, which shall be convertible into common stock at US$0.10 at the option of the holder, and which shall be due in seven months (the “Note”), and which shall be reduced to US$75,000 if On4 incurs legal fees in excess of US$10,000 in connection with the Merger.

·   Sound Revolution will have transferred all of its assets and debts, other than the Note and any debt owing to Penny Green, to its wholly owned subsidiary, Charity Tunes Inc., a Delaware company.

·   Sound Revolution and On4 will have received necessary approval for the Merger from shareholders, and have taken all steps to complete the Merger as required by applicable corporate and securities rules and regulations Sound Revolution will not have issued any securities other than the Note and the Units, unless such issuance had been approved in writing by On4.

·   It shall adopt the articles and bylaws of Sound Revolution, except that the name of the surviving entity shall be On4 Communications, Inc

·   the directors shall be Cameron Robb and Gordon Jessop

·   Cameron Robb shall be the CEO

·   The head office shall be located at the location designated by On4

·   Charity Tunes Inc. shall be sold to Bacchus Filings Inc., a company controlled by Penny Green, in consideration for which Bacchus Filings Inc. shall assume the entire amount of loan owing to Penny Green, exclusive of the Note, which shall result in a debt to be assumed by Bacchus Filings Inc. of approximately $335,000 which represents the remaining debt currently owed by Sound Revolution; and

·   17,000,000 common shares of Sound Revolution in the name of Bacchus Entertainment Ltd. shall be cancelled:

·   the only debt carried from Sound Revolution remaining will be the Note.

·   all On4 deferred or accrued salaries shall be limited to an amount representing not more than 30 days of pay to each employee, and in some instances it will be required for employees and consultant to convert such accrued salary to shares.

·   all notes payable by On4 in excess of US$100,000 shall be converted to equity at a price to be mutually agreed on by On4 and the specific creditor or receive a repayment extension of no less than six months and with an annual interest rate not to exceed 12%.

·   By mutual consent and such consent will not be unreasonably withheld;

·   By either party, after 30 days, if Sound Revolution has not raised a minimum of US$400,000 pursuant to a private placement issuance of the Units, in accordance with the terms as set out in the term sheet attached as Exhibit A; or

·   By On4, after 30 days, if Sound Revolution has not forwarded to On4 a minimum of US$50,000 as an interest free bridge loan, to be repaid only upon the termination of the Merger.

·   It shall act in good faith in attempting to raise capital according to the Financing Term Sheet attached hereto as Exhibit A (the “First Financing”) which is subject to a minimum of $400,000 and a maximum of $750,000

·   Upon receiving private placements in the amount of a minimum of $400,000, Sound Revolution shall complete the First Financing, of which the proceeds shall be used as follows:

·   $150,000 shall be repaid to Penny Green towards the outstanding loans owed to her by Sound Revolution

·   The balance of the net proceeds of the First Financing may be immediately provided to On4 as a non interest bearing loan, to be repaid only upon termination of the merger

·   After completion of the First Financing, if requested by On4 to raise additional capital, Sound Revolution shall act in good faith in attempting to raise capital according to the Financing Term Sheet attached hereto as Exhibit B (the “Second Financing”) which, when combined with the total amount raised in the First Financing, shall not exceed a maximum of $1,500,000.  The proceeds of the Second Financing shall be held in trust pending the Merger Closing.

·   Other than pursuant to First Financing, the Second Financing and the Note, Sound Revolution shall not issue any securities or enter into any agreement unless the issuance or the agreement has first been approved in writing by On4

Sound Revolution represents and warrants to ON4 that:

1.   Sound Revolution is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to own, lease and to carry on its business as now being conducted.  Sound Revolution is duly qualified to do business and is in good standing as a foreign corporation in each of the jurisdictions in which Sound Revolution owns property, leases property, does business, or is otherwise required to do so, where the failure to be so qualified would have a material adverse effect on the business of Sound Revolution taken as a whole.

2.   To the best knowledge of Sound Revolution, there is no basis for and there is no action, suit, judgment, claim, demand or proceeding outstanding or pending, or threatened against or affecting Sound Revolution or which involves any of the business, or the properties or assets of Sound Revolution that, if adversely resolved or determined, would have a material adverse effect on the business, operations, assets, properties, prospects, or conditions of Sound Revolution taken as a whole (a “Sound Revolution Material Adverse Effect”).  There is no reasonable basis for any claim or action that, based upon the likelihood of its being asserted and its success if asserted, would have such a Sound Revolution Material Adverse Effect.

a) For a period of 6 months following the Merger Closing, Penny Green agrees to personally indemnify and to hold harmless Sound Revolution and On4, their affiliates, and their respective officers, directors, agents and employees, against any and all losses and damages to the extent any such losses or damages are due to a judgment entered against Sound Revolution with regard to an agreement entered into by Sound Revolution before the Merger Closing and up to a maximum of US$500,000.  Penny Green, in her sole discretion, shall select counsel to defend any action pursuant to this indemnity. Sound Revolution hereby covenants not to settle or compromise any claim or cause of action for which indemnification is sought from Penny Green without the written permission of Penny Green. The obligation of Penny Green to so indemnify Sound Revolution is expressly contingent upon Sound Revolution notifying Penny Green, in writing, within seven (7) calendar days after Sound Revolution knows, or reasonably should have known, of any claim, complaint, potential cause of action or proceeding. Failure by Sound Revolution to timely notify Penny Green shall relieve Penny Green of her obligation to so indemnify Sound Revolution. Penny Green shall have no obligation to indemnify Sound Revolution should any such losses or damages result, in whole or in part, from acts, omissions, willful misconduct or gross negligence of Sound Revolution, its affiliates, officers, directors, agents and employees after the Merger Closing.

3.   Sound Revolution has all requisite corporate power and authority to execute and deliver this Agreement and any other document contemplated by this Agreement (collectively, the “Sound Revolution Documents”) to be signed by Sound Revolution and to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery of each of the Sound Revolution Documents by Sound Revolution and the consummation by Sound Revolution of the transactions contemplated hereby have been duly authorized by its board of directors and no other corporate or shareholder proceedings on the part of Sound Revolution is necessary to authorize such documents or to consummate the transactions contemplated hereby.  This Agreement has been, and the other Sound Revolution Documents when executed and delivered by Sound Revolution as contemplated by this Agreement will be, duly executed and delivered by Sound Revolution and this Agreement is, and the other Sound Revolution Documents when executed and delivered by Sound Revolution, as contemplated hereby will be, valid and binding obligations of Sound Revolution enforceable in accordance with their respective terms, except:

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.

4.   The Sound Revolution common shares to be issued upon the Merger Closing will, upon issuance, have been duly and validly authorized and, when so issued in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable.

5.   No representation or warranty by Sound Revolution in this Agreement nor any certificate, schedule, statement, document or instrument furnished or to be furnished to On4 pursuant hereto contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not materially misleading.

6.   Sound Revolution has 30,258,478 shares of common stock outstanding and no outstanding derivative securities other than the Note and no issued or outstanding preferred shares.

7.   Compliance

a)   To the best knowledge of Sound Revolution, Sound Revolution 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 statute, law, ordinance, regulation, rule, decree or other applicable regulation to the business or operations of Sound Revolution;

b)   To the best knowledge of Sound Revolution, Sound Revolution is not subject to any judgment, order or decree entered in any lawsuit or proceeding applicable to its business and operations that would constitute a Sound Revolution Material Adverse Effect;

c)   Sound Revolution has duly filed all reports and returns required to be filed by it with governmental authorit