Diversified Restructures and Signs Acquisition of `Whitelight' Technology.

Business Editors

SIDNEY, British Columbia--(BUSINESS WIRE)--Oct. 3, 2003

Diversified Industries Ltd. ("Diversified") is pleased to announce that it has signed a final agreement to acquire from Dr. Norman Arrison, Dr. Charlie Jeong, Mr. Henry Kong, and Mr. Dong Soo Lee (the "Inventors") a 100% interest in the intellectual property referred to by the Inventors as the Thermal Light Energy Technology (the "Technology"). The Technology utilizes a high intensity plasma arc lamp and proprietary application processes to generate an ultra hot beam.

Three directors of Diversified witnessed a demonstration of the Technology during which the intense light was used to break solid rock, suggesting the Technology's possible application to the mining and tunnelling industries. The application of the Technology may be useful in such other industries as oil & gas, construction, agriculture, recreation, water treatment, metal treatment, solar simulation and paint removal. Preliminary negotiations have begun for the sale of several prototype units, each unit ranging in price from US$400,000 to US$735,000.

On September 16, 2003, Diversified announced that it had signed a term sheet to acquire a 70% interest in Whitelight Thermal Technologies Ltd. ("Whitelight"). As a result of ongoing due diligence and negotiations between the principals of Diversified and Whitelight, Diversified will no longer acquire an ownership interest in Whitelight, but instead will acquire a 100% interest in the Technology, including all forms of patents and patent applications, trade secrets, and know how, directly from the Inventors.

Terms of Acquisition:

-- Consideration - Diversified will issue to the Inventors

1,666,667 shares of Diversified at a price of $0.75 per share,

for total consideration value of $1,250,000, in exchange for

all of the right, title and interest in the Technology. These

shares may be subject to escrow provisions imposed by the TSX 

Venture Exchange ("the Exchange") and will be subject to

additional escrow provisions imposed by Diversified.

-- Employment Contracts - Diversified will enter into an

employment contract with Dr. Jeong, a consulting contract with

Dr. Arrison and an agency agreement with Mr. Kong.

-- Stock Options - As previously announced on September 16, 2003,

Diversified will grant up to 100,000 stock options to each of

Dr. Jeong, Dr. Arrison, and Mr. Kong as part of their future

contracts. These proposed stock options will be issued

pursuant to Diversified's current stock option plan and be

exercisable at a price of $1.00 for a period of five years

from the date of grant. These options will comply with the

Exchange policies and will be subject to a four-month hold,

the vesting provisions of the plan and additional contractual

vesting provisions imposed by Diversified. Dr. Arrison is

currently a director of Diversified, however, his options are

not being issued to him in his capacity as a director.

-- License Back - Diversified will grant to the Inventors a

license back of the Technology for a period of six months in

order to allow the Inventors time to fulfill specific

obligations arising from a previous contract for the sale and

installation of one solar simulation unit in South Korea. The

total contract price for this unit is US$735,000. Diversified

will not receive any proceeds from this sale.

-- Additional Financing - Diversified may seek additional

financing to further the research and development of the

Technology and its applications as required.

Diversified is a product development and marketing company specializing in unique technologies and solutions targeting a cross section of industries. Diversified has developed its first technology, DVS 6000, for the removal of various contaminants such as H2S from oil, gas, air and water. DVS 6000 has proven itself in several applications thus far within the oil and gas industry. Diversified's management team will continue to evaluate new technologies in order to carry out Diversified's strategic goal of diversifying its technology portfolio.

Diversified is listed on the Exchange under the symbol "DVS".

ON BEHALF OF THE BOARD OF DIRECTORS

OF DIVERSIFIED INDUSTRIES LTD.

Stephen L. Davis, President / CEO 

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this Press Release.