Document:

EXHIBIT 10.16

             BASAL ZONE LEASE AGREEMENT STILLWATER COMPLEX, MONTANA
             ------------------------------------------------------

     THIS  LEASE  AGREEMENT ("Lease") is made and entered into as of the ___ day
of  ___________,  2003,  by  and  between  WILLIAM  G.  and  SHIRLEY  M.  MOUAT
individually,  FORT  STOCKTON  INVESTMENTS,  INC.,  and MOUAT NICKEL MINES, INC.
(collectively,  "Lessors")  and  AURORA  METALS  (BVI)  LIMITED,  a  company
incorporated  in  the  British Virgin Islands ("AMBVI"), having offices at Suite
1505,  1060  Alberni Street, Vancouver, British Columbia, Canada, V6E 4K2 (AMBVI
is  referred  to  as  "Lessee"  as  further  described  below).

                                    RECITALS:
                                    ---------

     By this Lease Agreement dated_________, 2003 between WILLIAM G. and SHIRLEY
M.  MOUAT,  and  LAURENNE SUE O'DORISIO, President of FORT STOCKTON INVESTMENTS,
INC., and MOUAT NICKEL MINES, INC. lease to AURORA METALS (BVI) LIMITED (AMBVI),
certain  patented  and  unpatented  mining  claims  and  tunnel sites located in
Stillwater  and  Sweet  Grass  Counties,  Montana.

                                I. GRANT OF LEASE
                                   --------------

     For and in consideration of the sum of ten dollars ($10.00) cash in hand
paid by Lessee to Lessors, the receipt of which is hereby acknowledged, in
consideration of the royalties and payments herein covenanted to be paid by
Lessee, and in consideration of the mutual covenants hereinafter set forth,
Lessors do hereby demise, lease and let unto Lessee those certain patented and
unpatented mining claims, mill sites and tunnel sites (collectively, the
"Subject Premises"), all listed in Schedule "1", "2", and "3", attached, and
incorporated herein by this reference, situated in Stillwater and Sweet Grass
Counties, Montana respectively.

In  connection  with, and as part of the leasehold estate hereby granted, Lessee
shall  have  and  may exercise the following rights for the benefit of all lands
owned,  leased  or  controlled  by  Lessee:

     (1)  the  right  to  explore, develop, mine, extract and remove or sell all
          ores,  minerals  and  metals,  (including  without  limitation nickel,
          copper, chromite and platinum group metals), precious stones, or rocks
          found  in,  on  or  under  the  Subject  Premises;

     (2)  the  right,  during the continuance of this Lease, to take and use any
          material  suitable  for backfilling, or for other mining purposes, and
          any  limestone  found  in  the  premises;

     (3)  the right to use all existing facilities, on the Subject Premises, and
          the  right  to  construct  all mills, plants, tracks, tramways, roads,
          buildings,  and  other  improvements;

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     (4)  the  right  to  use  and  develop  any  and all excavations, openings,
          tunnels, ditches, flumes, drains and other improvements on the Subject
          Premises:

     (5)  the  right  to use all water and water rights identified in Schedule 4
          and  to  develop  additional water and water rights appurtenant to the
          Subject  Premises;

     (6)  the  right  to  do  all other acts and things which are, or may become
          necessary  or  suitable in the discretion of Lessee, including without
          limitation  the  right  to  use  or disturb so much of the surface and
          surface  resources  of  the  Subject  Premises  as  Lessee  may  deem
          desirable,  for  the  mining  and  removing of ores, minerals, metals,
          precious  stones and rocks, the milling, beneficiating, concentrating,
          smelting,  refining,  or  leaching of such ores, minerals, metals, and
          other  materials,  or  the  concentrates  thereof;

     (7)  the right to cut and use timber and other raw materials found upon, or
          in  said premises for any purpose in connection with the operations to
          be  carried  on  under  this  Lease;  and

     (8)  such  rights  of  surface  and  underground access for men, equipment,
          supplies,  utilities  and  water as may be necessary or convenient for
          the  conduct  of  Lessee's  operations  on  any portion of the Subject
          Premises  or  on  other lands, including necessary access under, upon,
          and across any other contiguous land owned or controlled by Lessors or
          over  which  Lessors  may  have  dominion  or  control.

                       II. PRIMARY TERM AND LEASE PAYMENTS
                           -------------------------------

     A.  Term.  Unless  sooner  terminated  by the provisions hereof, this Lease
         ----
shall remain in full force and effect for an initial term of ten (10) years from
the  date  hereof  (the  "Primary  Term")  and so long thereafter as ore-bearing
materials  are  produced  from the Subject Premises in Commercial Quantities, as
that  term  is  defined  in  Article  VI  of  this  Lease.

     B  Monthly  Rental  Payment.  Lessee agrees to pay Lessors on or before the
        ------------------------
first  day  of each month of the primary term of the lease the following Monthly
Rental  Payments:

     (1)  From the first anniversary of the date of execution of this Lease,
          $500.00 per month.

     (2)  From the second anniversary of the date of execution of this Lease,
          $1,000.00 per month.

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     (3)  From the third anniversary of the date of execution of this Lease;
          $1,500.00 per month.

     (4)  From the sixth anniversary of the date of execution of this Lease and
          till the end of the Primary Term, $2,000.00 per month.

These  Monthly  Rental  Payments are expressly intended by the parties to negate
and  remove  any  obligation  on  the part of the Lessee, express or implied, to
explore,  develop and mine the Subject Premises with reasonable diligence during
said  ten-year  Primary  Term  or  during any five-year extension as provided in
Articles  II.C.

     C. Extension of Primary Term. Lessee, so long as it shall not be in default
        -------------------------
under  the  terms and provisions of this Lease, and so long as it is not already
producing  from  the  Subject  Premises  in  Commercial Quantities as defined in
Article  VI  shall  have the exclusive right, privilege and option to extend the
Primary  Term  for  an  additional  term  of  five  (5) years. Written notice of
Lessee's  intent  to extend the Primary Term shall be given by Lessee to Lessors
at least sixty (60) days prior to the expiration of the initial ten-year Primary
Term.

     D.  BLM Fees. Within  ninety  (90)  days  of  the date of execution of this
         ---------
Lease  Lessee  agrees  to  repay  Lessors  Bureau  of  Land  Management  ("BLM")
unpatented  mineral  claim  fees  of  two  thousand  and  six  hundred  dollars
($2,600.00)  for  the  2003/2004  assessment  year.

     E.  Payments. All payments payable to Lessor under this Lease shall be paid
         --------
to  Lessors  by  mailing  or  delivering  a  cashiers check to William G. Mouat,
Trustee,  herein  designated  by Lessors as their representative and depository,
the  Lessors  hereby  granting  to  said  depository full power and authority on
behalf  of  Lessors,  their successors and assigns to collect and distribute all
sums  of  money  due  and  payable hereunder. Adequate payment by Lessee to such
designated  representative  and  depository  shall  be  deemed full and adequate
payment to all Lessors. Notwithstanding the death of any Lessor or the transfer,
division,  or  hypothecation of a Lessor's royalty or other interest, payment or
tender  of  any  payment to the depository as herein designated shall be binding
upon  all  Lessors,  their  heirs,  personal  representatives,  transferees  and
assignees.  Change  of designated representative and depository by Lessors shall
not  be  effective  nor  binding upon Lessee until written notice is received by
Lessee  of  such changed designated representative and depository. Lessors shall
at  all  times  cause  there  to  be  a  single  designated  representative  and
depository.

     F.  Payment In Kind. Lessors may elect, by 60 days' prior notice to Lessee,
         ---------------
to  take  their  Production Royalties in kind, and the cost, if any, of doing so
shall  be  borne  entirely  by  Lessors.

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     G.  Proportional  Payments.  If  Lessors  own less than 100% of the mineral
         ----------------------
estate,  whether in fee or under mining claim, lease, or contract in the Subject
Premises,  or  any portion thereof, subject to the paramount title of the United
States,  then  the  Production  Royalties, Extension Payment and Advance Royalty
which  are  payable  under  this  Lease shall be reduced in the proportion which
Lessors'  interest  bears to 100% of the mineral estate of the Subject Premises.

                                   III. TITLE
                                        -----

     A.  Representations  and  Warranties.  Lessors  make  the  following
         --------------------------------
representations  and  warranties  effective  as  of  the  date  of  this  Lease:

     1.  With  respect  to the patented claims, subject to Lessee's rights under
the Original Lease, Lessors own such claims free and clear of all defects, liens
and  encumbrances  arising by, through or under Lessors, or any one of them, and
Lessors  have  no  knowledge  of  adverse  claims  or  interests.

     2. With respect to unpatented mining claims and mill site claims located by
Lessors,  or any one of them, that are included in the Subject Premises, subject
to  the paramount title of the United States, to the best of their knowledge and
belief:

     a.   the unpatented mining claims were properly laid out  and monumented;

     b.   all  required  location  validation  work  was  properly  performed;

     c.   location  notices  and  certificates  were properly recorded and filed
          with  appropriate  governmental  agencies;
     d.   assessment work required to hold the unpatented mining claims was
          performed  for the assessment years ending September 1, 1986 and 1987;
          and

     e.   affidavits  of  assessment work and other filings required to maintain
          the claims in good standing were properly and timely recorded or filed
          with appropriate governmental agencies for the assessment years ending
          September  1,  1986  and  1987.

     3.  With respect to those unpatented mining claims that were not located by
Lessors,  but  are  included  within  the  Subject Premises, and with respect to
completion  of  assessment  work and filing of affidavits of assessment work for
all  unpatented  mining  claims  for  all  assessment years not specified above,
Lessors  make  the  foregoing representations to the best of their knowledge and
belief.

     4.  With  respect  to  all  unpatented  mining  claims and mill site claims
included  in the Subject Premises, subject to Lessee's rights under the Original
Lease,  Lessors  warrant  that  the  claims  are  free  and  clear  of liens and

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encumbrances  arising  by,  through  or  under  Lessors, or any one of them; and
Lessors  have  no  knowledge  of  adverse  claims  or  interests.

     5.  With  respect  to  the  Subject  Premises, Lessors have no knowledge of
threatened  actions,  suits,  claims  or  proceedings.

     6.  Lessors  have  delivered  or  will  deliver  to  Lessee all information
reasonably  requested  by  Lessee  concerning  title  to the Subject Premises in
Lessors'  possession.

     7.  Subject  to  Lessee's  rights  under the Lease, Lessors own the Subject
Premises  and  no  other  parties  own  any  interest therein, or in any portion
thereof.

     The  representations  and  warranties  set  forth  above  shall survive the
execution  and  delivery of any documents of transfer provided under this Lease.
Nothing  in this Article III, however, shall be deemed to be a representation or
a  warranty  that  any  of  the unpatented mining claims contains a discovery of
minerals.

     B. Lessors' Covenants. Lessors covenant that during the term of this Lease,
        ------------------
Lessors shall maintain their interests in the Subject Premises free and clear of
any  liens  and  encumbrances,  not  in  existence  on  the date hereof, and not
resulting  from  Lessee's  operations  and  activities  hereunder.

     C.  Disclosures.  Lessors  and  Lessees represent and warrant that they are
         -----------
unaware  of any material facts or circumstances which have not been disclosed in
this Lease, which should be disclosed to the other party in order to prevent the
representations  in  this  Article  III  from  being  materially  misleading.

                            IV. PRODUCTION ROYALTIES
                                --------------------

     A.  All  Minerals.  Lessee shall pay to Lessors a Production Royalty of two
         -------------
percent  (2%)  of  the  Net  Smelter  Returns  (if  sold  to a mill, smelter, or
refinery)  or Net Income (if not sold to a mill, smelter or refinery), whichever
is  applicable,  from  the  sale  of  all  ores or concentrates from the Subject
Premises.  Lessors  may  take  in kind pursuant to Article II.F. By "Net Smelter
Returns"  is  meant  the amount received from the mill, smelter or refinery upon
the  sale  of  such  ores  or  concentrates after deducting from the gross value
thereof  the  cost of milling, concentrating, processing, smelting, refining and
transportation  to  the  mill, smelter or refinery. By "Net Income" is meant the
amount  received by Lessee from a purchaser of ores or concentrates other than a
mill,  smelter  or  refinery,  less costs of milling, concentrating, processing,
refining  and  transportation  (if  any).

     B.  Ores and Concentrates Not Sold. If ores, concentrates or other products
         ------------------------------
are  taken  in  kind  (produced  and  removed  from  the  subject  premises,

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but  not  sold)  by  Lessee,  then  Lessee shall nevertheless pay the Production
Royalty  as  specified  above, in which case the amounts received by Lessee (for
purposes of calculating net smelter returns or net income) shall be deemed to be
the amounts Lessee would have received if a sale of ore or concentrates had been
made.  Payments  shall be made in accordance with the provision in Article IV.C.
Ores,  minerals  or  other products produced by Lessee from the Subject Premises
that  are used by Lessee or its agents in the processing or refining of ores and
concentrates  shall not be deemed to be products taken in kind by Lessee, and no
royalty  need  be  paid  upon  such  products.

     C.  Payment. Royalty payments may be paid to the Lessors in accordance with
         -------
Articles  II.E and II.G above and shall be payable within a period of twenty-one
(21) days after the shipment and/or removal of ore or concentrates produced from
the  Subject  Premises  and/or  receipt  of proceeds from sale of other minerals
during  each mining period of one month. Accompanying each payment, Lessee shall
furnish  to  Lessor  a statement of the production used as a basis for computing
royalties.

     D.  Federal  Royalty. In the event the federal government imposes a royalty
     -   ----------------
on  any  of the Subject Premises (the "Federal Royalty"), fifty percent (50%) of
any  Federal  Royalty  payment  may  be  offset  against  and  deducted from any
Production  Royalties  payable  to  Lessors  hereunder.

                         V. MAINTENANCE OF MINING CLAIMS
                            ----------------------------

     During  the  continuance  of  this  Lease, Lessee agrees to comply with the
requirements  of  the state and federal statutes with respect to assessment work
or  maintenance  fees  in lieu of assessment work with respect to the unpatented
claims  within  the  Subject  Premises.  Lessee shall not, however, be liable or
responsible  for  any  claim  or  claims  which  may  be  lost  as  a  result of
insufficient performance of assessment work or improper payment of fees, so long
as  Lessee has made a good faith attempt to perform the required assessment work
or  pay  fees.  Lessee  will  provide  to  Lessor  a  copy of the operating plan
submitted  to  the National Forest Service with respect to the Subject Premises.

     Lessee shall pay the cost of spraying noxious weeds on the Subject Premises
as  required  by  law.

     This  Lease  shall  cover  and  extend  to any further or additional right,
title,  interest  or  estate  acquired  by Lessors, or any of them, in or to the
Subject  Premises  or  any  portion  thereof.

     Lessee  agrees  to  carry  on its operations hereunder, diligently and in a
good  and miner-like manner, and in accordance with accepted mining practices in
the  State  of  Montana,  and  Lessee agrees that all mining operations shall be

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carried  on  in  a  systematic,  orderly  and economical manner so as to realize
insofar  as  is  practicable,  the  full  ore resources of the Subject Premises.

                     VI. PRODUCTION IN COMMERCIAL QUANTITIES
                         -----------------------------------

     For  purposes  of  this  Lease, the term "Commercial Quantities" shall mean
production at a minimum level of 100,000 short tons of ore per annum, an average
of  275  tons of ore per day. Production in Commercial Quantities commences when
production  from  the Subject Premises on a commercial basis (excluding pilot or
test  operations)  first  reaches  an  average  of 275 tons of ore per day for a
90-day  period  (the  first  day of said 90-day period shall constitute "Initial
Commercial  Production")  and continues thereafter until the end of a production
year  in  which the total production for the year, including production credited
to  the  year  as set forth below, is less than 100,000 tons of ore, the initial
production  year  being  the  one-year  period  commencing  as  of  the  Initial
Commercial  Production  and  subsequent  production  years  being the subsequent
one-year  periods  each  commencing on the anniversary of the Initial Commercial
Production.  If Lessee in any production year produces in excess of 100,000 tons
of ore, 50% of the production in excess of 100,000 tons shall be credited toward
production in any subsequent production year or years in which actual production
is  less  than  100,000  tons  of  ore, provided that production of less than an
average  of  275  tons  of  ore  per  day shall not continue for longer than any
18-month  period, and during any 18-month period when production is less than an
average  of  275  tons  of  ore per day, Lessee shall nevertheless continue mine
development  activities  which  includes  without  limitation drilling, stoping,
raising,  raise-boring  or  shaft-sinking.  If  Commercial Production would have
ceased  during  the  Primary Term of this Lease, or at the end of the production
year  in  which  the Primary Term ends, Commercial Production shall be deemed to
have  continued  if prior to the end of the Primary Term of this Lease, or prior
to  the  end  of  the production year in which the Primary Term ends, production
again  reaches  an  average  of 275 tons of ore per day for a 90-day period, the
first  day  of which shall then constitute the Initial Commercial Production for
purposes  hereof.

                      VII. TAXES, ENCUMBRANCES AND INJURIES
                           --------------------------------

     A.  Taxes.  Lessee  agrees  to pay and discharge the Lessor for any and all
         -----
taxes  levied against the Subject Premises as paid by the Lessor during the life
of  this  Lease,  except  that in those cases in which said taxes cover a period
during  only  a  part  of  which  this  Lease  is in force, Lessee shall pay and
discharge  only  its  pro  rata share thereof determined by a comparison of such
part  with  the  total  period  covered.

     B.  Lessee's Encumbrances. Lessee will not permit any liens or encumbrances
         ---------------------
on  the  unpatented  and  patented  mining  claims  of  the  Subject  Premises.
Notwithstanding anything to the contrary in this section, the parties agree that
Lessee  has  the  right  to  encumber,  as  it  deems  necessary  or

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convenient,  its  leasehold  interest  including without limitation its share of
production  and  proceeds,  so  as  not  to  interfere  with Lessors' royalties.

     C.  Injuries  from  Lessee's Operations. Lessee shall save Lessors harmless
         -----------------------------------
from any and all damages, claims, costs and expenses arising from or growing out
of any or all injuries resulting from the operations of Lessee, or in connection
therewith,  on  the Subject Premises and occurring during the life of this Lease
except  as  provided  in  Article  XII  herein.

                                VIII. TERMINATION
                                      -----------

     A.  The  Lease may be terminated by Lessee at any time after the expiration
of  one  (1)  year  from  the date of this Lease by notice in writing thereof to
Lessors,  to  take  effect from such date as may be stipulated by Lessee in such
notice,  without,  subject  to the following paragraph, the Lessee incurring any
further  liability  whatsoever  as  regards Advance Royalty or other payments or
obligations.

     B.  Subject to the foregoing paragraph, upon such termination, Lessee shall
have  no  further  interest  or right in the Subject Premises, save the right to
remove  its  property as provided in Article XI, including all stockpiles of ore
and  concentrates  on  which  royalty  shall  have  been paid, and shall have no
obligation  or  duties  with  respect  to  the  Subject  Premises,  except  for
reclamation  of lands disturbed by Lessee and required by governmental authority
to  be  reclaimed,  and  except  as  herein  specifically  provided  and  as  to
obligations  which  have  accrued  hereunder  prior to such termination, but all
fences  or enclosures protecting open pits, shafts, tunnels, etc., shall be left
intact  and  Lessors shall be entitled to retain the entire amount of any moneys
paid  under  this  Lease  up  to  the  effective  date  of  termination.

     C.  This  Lease  shall not terminate for nonpayment by Lessee of royalties,
unless  such  nonpayment  continues  for  60  days after notice and Lessors give
notice  of  termination  pursuant  to  Article  XVII.

                                IX. FORCE MAJEURE
                                    -------------

     Lessee  shall  be  excused from the performance of its obligations of every
kind,  except  necessary  annual  assessment work or maintenance fees in lieu of
assessment  work,  during  such  period  or  periods  as performance may be made
impossible  by force majeure, and during such period or periods of force majeure
it  shall  be deemed that production is occurring in Commercial Quantities under
this Lease. By this it is intended to mean that the Lessee shall be excused from
the  performance  of  any  provision  of  this  Lease for such period of time as
performance  of  such  provision  is  prevented  by  fire,  flood,  earthquake,
explosion,  lack  of transportation facilities, Act of God, shortage of power or
water,  strike  or  similar  labor  difficulties,  insurrection or mob violence,
requirement  or  regulation  of

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government,  or  other  causes  beyond  the  reasonable  control  of Lessee. For
purposes  of  this  Lease,  force  majeure shall include a drop in the prices of
ores,  minerals  and  metals  such  that  it is uneconomic to produce said ores,
minerals  or  metals.

                                   X. RECORDS
                                      -------

     Within  a  reasonable  time,  not  to  exceed six (6) months, following the
termination  of this Lease for any cause, Lessee shall furnish to Lessors a copy
of  its factual maps, drilling records, drill core and assay and smelter reports
relating  to  the  Subject  Premises.  Lessors agree, upon reasonable request by
Lessee,  to  furnish  to  Lessee  such  maps, records, reports and documents, as
Lessors  may  possess  relating  to  the  Subject  Premises. Such maps, records,
reports  and  documents  shall  be  returned,  if requested, to Lessors within a
reasonable  time  not  to  exceed  90  days.

                                   XI. REMOVAL
                                       -------

     Upon  the  termination  of this Lease for any reason, Lessee shall have the
right  to  remove  from  the  Subject  Premises, at any time within the 12-month
period  following  such termination, all stockpiles of ore and concentrates upon
which  royalties  shall  have  been  paid,  and all of its machinery, equipment,
tools,  structures  or  other property and improvements, fixtures and structures
constructed,  erected or placed on the Subject Premises, or any portion thereof,
by Lessee; provided, however, Lessee shall leave in place all timbering, framing
or  enclosures  protecting  open pits, shafts, tunnels and underground trackage;
and  provided  that  removal  of improvements, fixtures and structures shall not
damage  the  structures  remaining  on  the  Subject  Premises.

                             XII. POSSESSORY RIGHTS
                                  -----------------

     While  this  Lease  is  in  effect,  Lessee  shall be entitled to exclusive
possession  of  the  Subject  Premises,  except  that  Lessors  and  their
representatives, successors and assigns, at any reasonable time, may go upon the
Subject  Premises  to  inspect  the  operations  of  Lessee thereon. Lessors are
further  entitled  to  access to claims not included under this Lease ("Lessors'
Claims")  across  the  Subject Premises for men, equipment, supplies, utilities,
water  and  all  other items as may be reasonably necessary for the exploration,
development  and  operation  of  Lessors'  Claims; provided, however, that in so
doing  Lessors shall not unreasonably hinder Lessees' work; and provided further
that the Lessors hereby release Lessee from liability for any personal injury or
death of any employee or representative of Lessors while on the Subject Premises
and  the  Lessors  agree  that they will indemnify and save harmless Lessee from
liability  for  any  personal  injury  to  or death of any person or persons, or
damage  or  destruction  of  property  of Lessee or others done or caused by any
employee  or  representative  of  Lessors  while  so  visiting or traversing the
Subject

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Premises.  Lessors  further agree to hold Lessee harmless from any liability and
to  indemnify  Lessee  for  any  claims,  costs,  expenses and fees arising from
Lessors'  activities  on  Lessors'  Claims.

                         XIII. RELOCATION AND AMENDMENT
                               ------------------------

     Lessee  shall  have  the right at any time or times during the term of this
Lease,  upon written notice to Lessors, to amend the location of any one or more
of  the  unpatented  mining claims or millsite claims whenever such amendment is
deemed  necessary or desirable to correct errors or omissions in the location of
the  claim. Lessee shall have the further right, upon written notice to Lessors,
to  relocate any one or more of said claims whenever such action is deemed to be
necessary  or  desirable.  All  such  relocations or amendments shall be made by
Lessee  as agent for Lessors, placing all such amendments and relocations in the
name  of  Lessors.

     Lessee  shall have the further right at its discretion to repair or replace
any  claim  location  monument  or  marking which has been damaged or destroyed,
although  Lessee shall not be obligated to perform such repairs or replacements.

                                 XIV. PATENTING
                                      ---------

     Upon  request of Lessee at any time or times during the term of this Lease,
Lessors  agree to undertake and obtain patent to any or all of the mining claims
or millsite claims which are subject to this Lease, as designated by Lessee, and
Lessee  shall  prepare  all  documents  and  compile  all data and comply in all
respects  with  the  applicable  law,  all  at the expense of Lessee. Any patent
issued  shall  be in Lessors' names, or in a name designated by Lessors. Lessors
shall  execute  any  and  all  documents  required  for  this  purpose and shall
cooperate fully with Lessee in the patent application and proceedings subsequent
thereto. If Lessors begin or have begun patent proceedings and Lessee thereafter
or  hereafter requests Lessors to discontinue such proceedings, or if this Lease
is terminated while patent proceedings are pending, Lessee shall have no further
obligations  with  respect thereto, except to pay any unpaid expenses accrued in
such  proceedings  prior to its request to discontinue, or prior to termination,
whichever  occurs  first.

                                 XV. COMMINGLING
                                     -----------

     Lessee  shall have the right to commingle ore and minerals from the Subject
Premises,  or any portion thereof, with ore or minerals from any other property.

                                       10
<PAGE>
                       XVI. DRAFTING OF DOCUMENT - MUTUAL
                            -----------------------------

     This  Lease  has  been drafted through the joint efforts of the Lessors and
Lessee  and  their respective attorneys, and neither of the parties hereto shall
be  permitted  to  claim  that  the  drafting  of  this  Lease  was performed or
accomplished  to  a  greater  extent  by  the  other  party.

     The  parties  acknowledge  that  they  have  retained or employed their own
respective  attorneys  or  counsel in the preparation and/or examination of this
document.

                                  XVII. DEFAULT
                                        -------

     In  the  event  that  Lessee shall default in the performance of any of the
terms  and  provisions of this Lease, then, after written notice of such default
from  Lessors  to  Lessee,  if  Lessee  does  not  either:

     A.   Cure  such  default  within  sixty  (60)  days  after  such notice, or

     B.   Commence promptly within the said period of sixty (60) days to rectify
          such  default  and continue thereafter to use due diligence to rectify
          such  default  until  it  is  fully  remedied  or  cured,

Lessors  may  terminate  this  Agreement  at  any  time  thereafter  during  the
continuance of such default by giving written notice to Lessee of their election
to  terminate.

                                  XVIII. NOTICE
                                         ------

     Any  notice  required  or  permitted  to  be  given or served by one of the
parties  hereto  shall  be  sufficiently  given  or served by a communication in
writing, sent by registered or certified mail, to the other party at the address
given  below:

     FOR  THE  LESSORS

          William  G.  and  Shirley  M.  Mouat
          825  Parkhill  Drive  Billings,  MT  59102

          Laurenne  Sue  O'Dorisio
          President,  Fort  Stockton  Investments,  Inc. and Mouat Nickel Mines,
          Inc.
          2211  Fort  Stockton  Drive
          San  Diego
          California.  92103

                                       11
<PAGE>
     FOR  THE  LESSEE
          Aurora  Metals  (BVI)  Limited
          P.  O.  Box  27494
          Denver
          Colorado,  80227-0494

     Any party may change its address by giving written notice of such change to
the  other  parties.

                                 XIX. ASSIGNMENT
                                      ----------

     Lessee's  assignment of the benefit of this Lease may only be made with the
consent  of  the  Lessors,  which  consent  will  not  be unreasonably withheld.
Page  15  of  23  Basal  Zone  Agreement  December  4,  2003

                               XX. CONFIDENTIALITY
                                   ---------------

     Lessors  agree  that  all  information developed or acquired by Lessee as a
result  of  work  under  this Lease and conveyed to Lessors, or any one of them,
including  but  not  limited  to  information  relating to ore reserves, mineral
discoveries, mining or processing methods, plans, production schedules and other
information  shall  be  kept  strictly confidential by Lessors until released or
made  public  by  Lessee.

                      XXI. TIME OF ESSENCE: BINDING EFFECT
                           -------------------------------

     Time  is  of  the  essence  in this Lease. Each obligation set forth herein
shall  extend  to  and  be  binding  upon  and every benefit inure to the heirs,
personal  representatives,  successors  or  assigns  of  the  parties  hereto.

                            XXII. FURTHER ASSURANCES
                                  ------------------

     The  parties  agree  to  execute and deliver such other documents as may be
necessary  to  effectuate  the  intents  and  purposes  of  this  Lease.

                             XXIII. ENTIRE AGREEMENT
                                    ----------------

     This  Lease  may  not  be  amended  except  in  writing  by duly authorized
representatives  of  the  parties.  This  Lease constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior  agreements  with  respect  to  all  matters  covered  hereby.

                               XXIV. GOVERNING LAW
                                     -------------

                                       12
<PAGE>
     This  Lease  shall be governed by Montana law and the parties hereby submit
to  the  jurisdiction of the Montana courts, including the federal courts of the
district  of  Montana.

                          XXV. MEMORANDUM OF AGREEMENT
                               -----------------------

     This  Lease shall not be recorded without the consent of both parties. Upon
the  request  of  either  party, both parties shall execute a Memorandum of this
Lease  in  recordable  form,  which  memorandum  may  be  recorded.

                               XXVI. COUNTERPARTS
                                     ------------

     This  Lease  may  be  executed in counterparts, no one of which needs to be
executed  by all Lessors, and shall be binding upon each party upon execution by
that  party,  and  shall  be  effective  as  if  all parties had signed the same
document.

                                       13
<PAGE>
     IN  WITNESS  WHEREOF,  the parties hereto have caused this Lease to be duly
executed,  as  of  the  day  and  year  first  above  written.

LESSORS:
--------
MOUAT NICKEL MINES, INC.
                                           _____________________________________
                                           LAURENNE SUE O'DORISIO, President

                                           _____________________________________
                                           WILLIAM G. MOUAT, individually and as
                                           Trustee

                                           _____________________________________
                                           SHIRLEY M. MOUAT, individually

FORT STOCKTON INVESTMENTS, INC.
                                           _____________________________________
                                           LAURENNE SUE O'DORISIO, President

                                           LESSEE:
                                           -------

                                           AURORA METALS (BVI) LIMITED
                                           __________________________________
                                           JOHN A. A. JAMES, President

STATE OF MONTANA,                    )
                                     )ss.
                                     )

COUNTY OF __________________________________

This instrument was acknowledged before me on _______________, 2001, by William
G. Mouat, individually and as Trustee.

                                          ______________________________________
                                          Notary Public for the State of Montana
                                          Residing at__________________, Montana
                                          My commission expires:________________

                                       14
<PAGE>
STATE OF MONTANA,                    )
                                     )ss.
                                     )

COUNTY OF __________________________________

This instrument was acknowledged before me on _______________, 2001, by Shirley
M. Mouat,

                                          ______________________________________
                                          Notary Public for the State of Montana
                                          Residing at__________________, Montana
                                          My commission expires:________________

STATE OF CALIFORNIA,                 )
                                     )ss.
                                     )

COUNTY OF __________________________________

This instrument was acknowledged before me on _______________, 2001, by Laurenne
Sue O'Dorisio, individually, and as President of Fort Stockton Investments, Inc.
and Mouat Nickel Mines, Inc.

                                       _________________________________________
                                       Notary Public for the State of California
                                       Residing at _________________, California
                                       My commission expires:___________________

STATE OF COLORADO,                   )
                                     )ss.
                                     )

COUNTY OF ____________________

This instrument was acknowledged before me on _______________, 2003, by John A.
A. James, President of Aurora Metals (BVI) Limited.

                                         _______________________________________
                                         Notary Public for the State of Colorado
                                         Residing at _________________, Colorado
                                         My commission expires:_________________

                                       15
<PAGE>
<TABLE>
<CAPTION>
                         SCHEDULE 1 BASAL ZONE AGREEMENT
           PATENTED LODE AND PLACER CLAIMS IN STILLWATER COUNTY MONTANA

<S>             <C>               <C>                             <C>
 Mineral Claim                      Status                          BLM Montana
     Name                                                         Mineral Claim #
      1         Nio Placer        Patented East Stillwater River  MSN 10783
      2         Chrome            Patented East Stillwater River  MSN 10781
      3         Lookover          Patented East Stillwater River  MSN 10781
      4         Jackson           Patented East Stillwater River  MSN 10781
      5         Gabbro            Patented East Stillwater River  MSN 10781
      6         Pada #1           Patented East Stillwater River  MSN 10782
      7         Pada #2           Patented East Stillwater River  MSN 10782
      8         Big Ben           Patented East Stillwater River  MSN 10782
      9         Lucky T           Patented East Stillwater River  MSN 10782
      10        L.T.X.            Patented East Stillwater River  MSN 10782
      11        H.E.D.            Patented East Stillwater River  MSN 10782
      12        Copper            Patented East Stillwater River  MSN 10782
      13        Gold Tip          Patented East Stillwater River  MSN 10782
      14        Beauty            Patented East Stillwater River  MSN 10782
      15        Patent            Patented East Stillwater River  MSN 10782
      16        Opal              Patented East Stillwater River  MSN 10782
      17        Dave              Patented East Stillwater River  MSN 10782
      18        Mountain View     Patented West Stillwater River  MSN 63A
      19        Rough Rock        Patented West Stillwater River  MSN 63B
      20        Redbird           Patented West Stillwater River  MSN 63C
      21        Big Thing         Patented West Stillwater River  MSN 63D
      22        Stillwater        Patented West Stillwater River  MSN 63E
      23        Summit            Patented West Stillwater River  MSN 68A
      24        New Wabeliski     Patented West Stillwater River  MSN 68B
      25        Brooklyn          Patented West Stillwater River  MSN 69A
      26        Avalanche         Patented West Stillwater River  MSN 69B
      27        Cataract          Patented West Stillwater River  MSN 69C
      28        Perseverance      Patented West Stillwater River  MSN 70A
      29        Emerald           Patented West Stillwater River  MSN 70B
      30        Blue Jay          Patented West Stillwater River  MSN 70C
      31        Copper Bottom     Patented West Stillwater River  MSN 70D
      32        Ridge             Patented West Stillwater River  MSN 70E
      33        Rough Rock No. 2  Patented West Stillwater River  MSN 72A
      34        Something         Patented West Stillwater River  MSN 72B
</TABLE>

                                       16
<PAGE>
<TABLE>
<CAPTION>
                  SCHEDULE 2 BASAL ZONE AGREEMENT
     UNPATENTED LODE AND PLACER CLAIMS IN STILLWATER COUNTY MONTANA

<S>    <C>                 <C>                               <C>
  Mineral Claim                         Status                 BLM Montana
      Name                                                   Mineral Claim #
1      Giant               Unpatented West Stillwater River  MMC 36382
2      Red Bird #2         Unpatented West Stillwater River  MMC 36396
3      Smelter             Unpatented West Stillwater River  MMC 36401
4      Billie              Unpatented West Stillwater River  MMC 36407
5      Gap                 Unpatented West Stillwater River  MMC 36410
6      Jame                Unpatented West Stillwater River  MMC 36412
7      Westlake            Unpatented West Stillwater River  MMC 36431
8      Snookie Placer (2)  Unpatented West Stillwater River  MMC 36402
9      Basin Placer        Unpatented East Stillwater River  MMC 36777
</TABLE>

(1) Stillwater Mining Company leases "that part (of the Snookie Placer) in
conflict with the unpatented lode claims Schmidt Numbers 1 &2, Blitz Numbers. 3,
4, 7, 8, 11,12,15, and 16."

     (2) SMC is also paying BLM fees on this claim

                                       17
<PAGE>
<TABLE>
<CAPTION>
                    SCHEDULE 3 BASAL ZONE AGREEMENT
      LODE AND PLACER CLAIMS SITUATED IN SWEET GRASS COUNTY MONTANA

<S>      <C>      <C>                          <C>
Mineral Claim             Status                BLM Montana
    Name                                       Mineral Claim #
1        RAM 1    Unpatented Crescent Creek    MMC 128417
2        RAM 2    Unpatented Crescent Creek    MMC 128418
3        RAM 4    Unpatented Crescent Creek    MMC 128420
4        RAM 5    Unpatented Crescent Creek    MMC 128421
5        RAM 7    Unpatented Crescent Creek    MMC 128423
6        RAM 8    Unpatented Crescent Creek    MMC 128424
7        RAM 11   Unpatented Crescent Creek    MMC 128427
8        RAM 12   Unpatented Crescent Creek    MMC 128428
9        RAM 14   Unpatented Crescent Creek    MMC 128430
10       RAM 15   Unpatented Crescent Creek    MMC 128431
11       RAM 17   Unpatented Crescent Creek    MMC 128433
12       RAM 18   Unpatented Crescent Creek    MMC 128434
13       RAM 19   Unpatented Crescent Creek    MMC 128435
14       RAM 20   Unpatented Crescent Creek    MMC 128436
15       RAM 24   Unpatented Crescent Creek    MMC 128440
16       RAM 44   Unpatented Crescent Creek    MMC 134180
17       RAM 45   Unpatented Crescent Creek    MMC 134181
</TABLE>

                                       18
<PAGE><PAGE>

                                                                     EXHIBIT 4.3

                          SECURITIES PURCHASE AGREEMENT
                          -----------------------------

         THIS SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of May
18, 2004, by and among OXFORD VENTURES INC., a Nevada corporation, with
headquarters located at 4655 East Ivy Street - Suite 101 Mesa, Arizona 85205
(the "COMPANY"), and the Buyers listed on Schedule I attached hereto
(individually, a "BUYER" or collectively "BUYERS").

                                   WITNESSETH:
                                   -----------

         WHEREAS, the Company and the Buyer(s) are executing and delivering this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 506 of Regulation D ("REGULATION D") as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 ACT");

         WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Buyer(s),
as provided herein, and the Buyer(s) shall purchase up to Five Hundred Thousand
Dollars ($500,000) of secured convertible debentures (the "CONVERTIBLE
DEBENTURES"), which shall be convertible into shares of the Company's common
stock, par value $.001 (the "COMMON STOCK") (as converted, the "CONVERSION
SHARES") of which One Hundred Twenty Five Thousand Dollars ($125,000) shall be
funded no later than the fifth (5th) business day following the date hereof (the
"FIRST CLOSING"), Two Hundred Twenty Five Thousand Dollars ($225,000) shall be
funded no later than the fifth (5th) business day following on the date the
Registration Statement filed pursuant to the Investor's Registration Rights
Agreement dated the date hereof (the "INVESTOR'S REGISTRATION RIGHTS AGREEMENT")
is filed with the United States Securities and Exchange Commission (the "SEC")
(the "SECOND CLOSING"), and One Hundred Fifty Thousand Dollars ($150,000) shall
be funded no later than the fifth (5th) business day following the date the
Registration statement is declared effective by the SEC (the "THIRD CLOSING")
(individually referred to as a "CLOSING" collectively referred to as the
"CLOSINGS"), for a total purchase price of up to Five Hundred Thousand Dollars
($500,000), (the "PURCHASE PRICE") in the respective amounts set forth opposite
each Buyer(s) name on Schedule I (the "SUBSCRIPTION AMOUNT"); and

         WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement substantially in the form attached hereto as EXHIBIT A (the "INVESTOR
REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company has agreed to
provide certain registration rights under the 1933 Act and the rules and
regulations promulgated there under, and applicable state securities laws; and

         WHEREAS, the aggregate proceeds of the sale of the Convertible
Debentures contemplated hereby shall be held in escrow pursuant to the terms of
an escrow agreement substantially in the form of the Escrow Agreement attached
hereto as EXHIBIT B.

<PAGE>

         WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering Irrevocable Transfer
Agent Instructions substantially in the form attached hereto as EXHIBIT C (the
"IRREVOCABLE TRANSFER AGENT INSTRUCTIONS").

         WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Security Agreement
substantially in the form attached hereto as EXHIBIT D (the "SECURITY
AGREEMENT") pursuant to which the Company has agreed to provide the Buyer a
security interest in Pledged Collateral (as this term is defined in the Security
Agreement dated the date hereof) to secure Company's obligations under this
Agreement, the Convertible Debenture, the Investor Registration Rights
Agreement, the Irrevocable Transfer Agent Instructions, and the Security
Agreement, all as more fully setforth therein; and

         NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement the Company and the Buyer(s)hereby agree
as follows:

         1.       PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.
                  --------------------------------------------

                  (a) PURCHASE OF CONVERTIBLE DEBENTURES. Subject to the
satisfaction (or waiver) of the terms and conditions of this Agreement, each
Buyer agrees, severally and not jointly, to purchase at Closing (as defined
herein below) and the Company agrees to sell and issue to each Buyer, severally
and not jointly, at Closing, Convertible Debentures in amounts corresponding
with the Subscription Amount set forth opposite each Buyer's name on Schedule I
hereto. Upon execution hereof by a Buyer, the Buyer shall wire transfer the
Subscription Amount set forth opposite his name on Schedule I in same-day funds
payable to "Butler Gonzalez LLP, as Escrow Agent for Oxford Ventures Inc.
/Cornell Capital Partners, LP", which Subscription Amount shall be held in
escrow pursuant to the terms of the Escrow Agreement (as hereinafter defined)
and disbursed in accordance therewith. Notwithstanding the foregoing, a Buyer
may withdraw his Subscription Amount and terminate this Agreement as to such
Buyer at any time after the execution hereof and prior to First Closing (as
hereinafter defined).

                  (b) CLOSING DATE. The First Closing of the purchase and sale
of the Convertible Debentures shall take place at 10:00 a.m. Eastern Standard
Time no later than the fifth (5th) business day following the date hereof,
subject to notification of satisfaction of the conditions to the First Closing
set forth herein and in Sections 6 and 7 below (or such later date as is
mutually agreed to by the Company and the Buyer(s)) (the "FIRST CLOSING DATE"),
the Second Closing of the purchase and sale of the Convertible Debentures shall
take place at 10:00 a.m. Eastern Standard Time no later than the fifth (5th)
business day following on the date the Registration Statement filed pursuant to
the Investor's Registration Rights Agreement is filed by with the SEC, subject
to notification of satisfaction of the conditions to the Second Closing set
forth herein and in Sections 6 and 7 below (or such later date as is mutually
agreed to by the Company and the Buyer(s)) (the "SECOND CLOSING DATE"), and the
Third Closing of the purchase and sale of the Convertible Debentures shall take
place at 10:00 a.m. Eastern Standard Time no later than the fifth (5th) business
day following the date the Registration Statement is declared effective by the
SEC subject to notification of satisfaction of the conditions to the Second
Closing set forth herein and in Sections 6 and 7 below (or such later date as is
mutually agreed to by the Company and the Buyer(s)) (the "THIRD CLOSING DATE")
(collectively referred to a the "CLOSING DATES"). The Closing shall occur on the
respective Closing Dates at the offices of Butler Gonzalez, LLP, 1416 Morris
Avenue, Suite 207, Union, NJ 07083 (or such other place as is mutually agreed to
by the Company and the Buyer(s)).

                                       2
<PAGE>

                  (c) ESCROW ARRANGEMENTS; FORM OF PAYMENT. Upon execution
hereof by Buyer(s) and pending the Closings, the aggregate proceeds of the sale
of the Convertible Debentures to Buyer(s) pursuant hereto shall be deposited in
a non-interest bearing escrow account with Butler Gonzalez LLP, as escrow agent
(the "ESCROW AGENT"), pursuant to the terms of an escrow agreement between the
Company, the Buyer(s) and the Escrow Agent in the form attached hereto as
EXHIBIT B (the "ESCROW AGREEMENT"). Subject to the satisfaction of the terms and
conditions of this Agreement, on the Closing Dates, (i) the Escrow Agent shall
deliver to the Company in accordance with the terms of the Escrow Agreement such
aggregate proceeds for the Convertible Debentures to be issued and sold to such
Buyer(s), minus the fees and expenses of Butler Gonzalez LLP of which Ten
Thousand Dollars ($10,000) which sum shall be paid directly from the gross
proceeds held in escrow for distribution upon the First Closing , and (ii) the
Company shall deliver to each Buyer, Convertible Debentures which such Buyer(s)
is purchasing in amounts indicated opposite such Buyer's name on Schedule I,
duly executed on behalf of the Company.

         2.       BUYER'S REPRESENTATIONS AND WARRANTIES.
                  ---------------------------------------

         Each Buyer represents and warrants, severally and not jointly, to the
Company that:

                  (a) INVESTMENT PURPOSE. Each Buyer is acquiring the
Convertible Debentures and, upon conversion of Convertible Debentures, the Buyer
will acquire the Conversion Shares then issuable, for its own account for
investment only and not with a view towards, or for resale in connection with,
the public sale or distribution thereof, except pursuant to sales registered or
exempted under the 1933 Act; provided, however, that by making the
representations herein, such Buyer reserves the right to dispose of the
Conversion Shares at any time in accordance with or pursuant to an effective
registration statement covering such Conversion Shares or an available exemption
under the 1933 Act.

                  (b) ACCREDITED INVESTOR STATUS. Each Buyer is an "ACCREDITED
INVESTOR" as that term is defined in Rule 501(a)(3) of Regulation D.

                  (c) RELIANCE ON EXEMPTIONS. Each Buyer understands that the
Convertible Debentures are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying in part upon the truth and
accuracy of, and such Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Buyer set forth herein in
order to determine the availability of such exemptions and the eligibility of
such Buyer to acquire such securities.

                  (d) INFORMATION. Each Buyer and its advisors (and his or, its
counsel), if any, have been furnished with all materials relating to the
business, finances and operations of the Company and information he deemed
material to making an informed investment decision regarding his purchase of the
Convertible Debentures and the Conversion Shares, which have been requested by
such Buyer. Each Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and its management. Neither such

                                       3
<PAGE>

inquiries nor any other due diligence investigations conducted by such Buyer or
its advisors, if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's representations and warranties contained
in Section 3 below. Each Buyer understands that its investment in the
Convertible Debentures and the Conversion Shares involves a high degree of risk.
Each Buyer is in a position regarding the Company, which, based upon employment,
family relationship or economic bargaining power, enabled and enables such Buyer
to obtain information from the Company in order to evaluate the merits and risks
of this investment. Each Buyer has sought such accounting, legal and tax advice,
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Convertible Debentures and the Conversion
Shares.

                  (e) NO GOVERNMENTAL REVIEW. Each Buyer understands that no
United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the
Convertible Debentures or the Conversion Shares, or the fairness or suitability
of the investment in the Convertible Debentures or the Conversion Shares, nor
have such authorities passed upon or endorsed the merits of the offering of the
Convertible Debentures or the Conversion Shares.

                  (f) TRANSFER OR RESALE. Each Buyer understands that except as
provided in the Investor Registration Rights Agreement: (i) the Convertible
Debentures have not been and are not being registered under the 1933 Act or any
state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder, or (B) such Buyer
shall have delivered to the Company an opinion of counsel, in a generally
acceptable form, to the effect that such securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from
such registration requirements; (ii) any sale of such securities made in
reliance on Rule 144 under the 1933 Act (or a successor rule thereto) ("RULE
144") may be made only in accordance with the terms of Rule 144 and further, if
Rule 144 is not applicable, any resale of such securities under circumstances in
which the seller (or the person through whom the sale is made) may be deemed to
be an underwriter (as that term is defined in the 1933 Act) may require
compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder. The Company reserves the right to place stop transfer
instructions against the shares and certificates for the Conversion Shares.

                  (g) LEGENDS. Each Buyer understands that the certificates or
other instruments representing the Convertible Debentures and or the Conversion
Shares shall bear a restrictive legend in substantially the following form (and
a stop transfer order may be placed against transfer of such stock
certificates):

                                       4
<PAGE>

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
                  APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
                  ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
                  TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD,
                  TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
                  REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
                  ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
                  OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT
                  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
                  STATE SECURITIES LAWS.

The legend set forth above shall be removed and the Company within two (2)
business days shall issue a certificate without such legend to the holder of the
Conversion Shares upon which it is stamped, if, unless otherwise required by
state securities laws, (i) in connection with a sale transaction, provided the
Conversion Shares are registered under the 1933 Act or (ii) in connection with a
sale transaction, after such holder provides the Company with an opinion of
counsel, which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public
sale, assignment or transfer of the Conversion Shares may be made without
registration under the 1933 Act.

                  (h) AUTHORIZATION, ENFORCEMENT. This Agreement, the
Convertible Debentures, the Security Agreement, the Irrevocable Transfer Agent
Instructions, the Investor Registration Rights Agreement, and any related
agreement have been duly and validly authorized, executed and delivered on
behalf of each Buyer and is a valid and binding agreement of such Buyer
enforceable in accordance with its terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.

                  (i) RECEIPT OF DOCUMENTS. Each Buyer and his or its counsel
has received and read in their entirety: (i) this Agreement and each
representation, warranty and covenant set forth herein, the Security Agreement,
the Investor Registration Rights Agreement, the Escrow Agreement, and the
Irrevocable transfer Agent Instructions; (ii) all due diligence and other
information necessary to verify the accuracy and completeness of such
representations, warranties and covenants; (iii) the Company's Form 10-KSB for
the fiscal year ended December 31, 2004 and (iv) answers to all questions each
Buyer submitted to the Company regarding an investment in the Company; and each
Buyer has relied on the information contained therein and has not been furnished
any other documents, literature, memorandum or prospectus.

                  (j) DUE FORMATION OF CORPORATE AND OTHER BUYERS. If the
Buyer(s) is a corporation, trust, partnership or other entity that is not an
individual person, it has been formed and validly exists and has not been
organized for the specific purpose of purchasing the Convertible Debentures and
is not prohibited from doing so.

                  (k) NO LEGAL ADVICE FROM THE COMPANY. Each Buyer acknowledges,
that it had the opportunity to review this Agreement and the transactions
contemplated by this Agreement with his or its own legal counsel and investment
and tax advisors. Each Buyer is relying solely on such counsel and advisors and
not on any statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with respect to
this investment, the transactions contemplated by this Agreement or the
securities laws of any jurisdiction.

                                       5
<PAGE>

         3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
                  ----------------------------------------------

         The Company represents and warrants to each of the Buyers that, except
as set forth in the SEC Documents (as defined herein):

                  (a) ORGANIZATION AND QUALIFICATION. The Company and its
subsidiaries are corporations duly organized and validly existing in good
standing under the laws of the jurisdiction in which they are incorporated, and
have the requisite corporate power to own their properties and to carry on their
business as now being conducted. Each of the Company and its subsidiaries is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted by it makes
such qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole.

                  (b) AUTHORIZATION, ENFORCEMENT, COMPLIANCE WITH OTHER
INSTRUMENTS. (i) The Company has the requisite corporate power and authority to
enter into and perform this Agreement, the Security Agreement, the Investor
Registration Rights Agreement, the Escrow Agreement, the Irrevocable Transfer
Agent Instructions, and any related agreements, and to issue the Convertible
Debentures and the Conversion Shares in accordance with the terms hereof and
thereof, (ii) the execution and delivery of this Agreement, the Security
Agreement, the Investor Registration Rights Agreement, the Escrow Agreement, the
Irrevocable Transfer Agent Instructions (as defined herein) and any related
agreements by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of
the Convertible Debentures the Conversion Shares and the reservation for
issuance and the issuance of the Conversion Shares issuable upon conversion or
exercise thereof, have been duly authorized by the Company's Board of Directors
and no further consent or authorization is required by the Company, its Board of
Directors or its stockholders, (iii) this Agreement, the Security Agreement, the
Investor Registration Rights Agreement, the Escrow Agreement, the Irrevocable
Transfer Agent Instructions and any related agreements have been duly executed
and delivered by the Company, (iv) this Agreement, the Security Agreement, the
Investor Registration Rights Agreement, the Escrow Agreement, the Irrevocable
Transfer Agent Instructions and any related agreements constitute the valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors' rights and remedies. The authorized officer of the
Company executing this Agreement, the Security Agreement, the Investor
Registration Rights Agreement, the Escrow Agreement, the Irrevocable Transfer
Agent Instructions and any related agreements knows of no reason why the Company
cannot file the registration statement as required under the Investor
Registration Rights Agreement or perform any of the Company's other obligations
under such documents.

                                       6
<PAGE>

                  (c) CAPITALIZATION. The authorized capital stock of the
Company consists of 400,000,000 shares of Common Stock, par value $.001 per
share and no shares of Preferred Stock. As of the date hereof, the Company has
140,117,848 shares of Common Stock issued and outstanding. All of such
outstanding shares have been validly issued and are fully paid and
nonassessable. Except as disclosed in the SEC Documents (as defined in Section
3(f)), no shares of Common Stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the
Company. Except as disclosed in the SEC Documents, as of the date of this
Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, (ii) there are no outstanding debt securities and (iii) there are
no agreements or arrangements under which the Company or any of its subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act
(except pursuant to the Registration Rights Agreement) and (iv) there are no
outstanding registration statements and there are no outstanding comment letters
from the SEC or any other regulatory agency. There are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Convertible Debentures as described in this
Agreement. The Company has furnished to the Buyer true and correct copies of the
Company's Articles of Incorporation, as amended and as in effect on the date
hereof (the "ARTICLES OF INCORPORATION"), and the Company's By-laws, as in
effect on the date hereof (the "BY-LAWS"), and the terms of all securities
convertible into or exercisable for Common Stock and the material rights of the
holders thereof in respect thereto other than stock options issued to employees
and consultants.

                  (d) ISSUANCE OF SECURITIES. The Convertible Debentures are
duly authorized and, upon issuance in accordance with the terms hereof, shall be
duly issued, fully paid and nonassessable, are free from all taxes, liens and
charges with respect to the issue thereof. The Conversion Shares issuable upon
conversion of the Convertible Debentures have been duly authorized and reserved
for issuance. Upon conversion or exercise in accordance with the Convertible
Debentures the Conversion Shares will be duly issued, fully paid and
nonassessable.

                  (e) NO CONFLICTS. Except as disclosed in the SEC Documents,
the execution, delivery and performance of this Agreement, the Security
Agreement, the Investors Registration Rights Agreement, the Escrow Agreement and
the Irrevocable Transfer Agent Instructions by the Company and the consummation
by the Company of the transactions contemplated hereby will not (i) result in a
violation of the Articles of Incorporation, any certificate of designations of
any outstanding series of preferred stock of the Company or the By-laws or (ii)
conflict with or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations and the
rules and regulations of The National Association of Securities Dealers Inc.'s
OTC Bulletin Board on which the Common Stock is quoted) applicable to the

                                       7
<PAGE>

Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected. Except as disclosed in
the SEC Documents, neither the Company nor its subsidiaries is in violation of
any term of or in default under its Articles of Incorporation or By-laws or
their organizational charter or by-laws, respectively, or any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company or its
subsidiaries. The business of the Company and its subsidiaries is not being
conducted, and shall not be conducted in violation of any material law,
ordinance, or regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the 1933 Act and any
applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any
of its obligations under or contemplated by this Agreement or the Registration
Rights Agreement in accordance with the terms hereof or thereof. Except as
disclosed in the SEC Documents, all consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the date
hereof. The Company and its subsidiaries are unaware of any facts or
circumstance, which might give rise to any of the foregoing.

                  (f) SEC DOCUMENTS: FINANCIAL STATEMENTS. Since March 31, 2002,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC under of the Securities
Exchange Act of 1934, as amended (the "1934 ACT") (all of the foregoing filed
prior to the date hereof or amended after the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to as the "SEC
DOCUMENTS"). The Company has delivered to the Buyers or their representatives,
or made available through the SEC's website at http://www.sec.gov., true and
complete copies of the SEC Documents. As of their respective dates, the
financial statements of the Company disclosed in the SEC Documents (the
"FINANCIAL STATEMENTS") complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
Financial Statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and, fairly present in all material respects the
financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Buyer which is not
included in the SEC Documents, including, without limitation, information
referred to in this Agreement, contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

                  (g) 10(b)-5. The SEC Documents do not include any untrue
statements of material fact, nor do they omit to state any material fact
required to be stated therein necessary to make the statements made, in light of
the circumstances under which they were made, not misleading.

                                       8
<PAGE>

                  (h) ABSENCE OF LITIGATION. Except as disclosed in the SEC
Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization
or body pending against or affecting the Company, the Common Stock or any of the
Company's subsidiaries, wherein an unfavorable decision, ruling or finding would
(i) have a material adverse effect on the transactions contemplated hereby (ii)
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, this Agreement or any of the
documents contemplated herein, or (iii) except as expressly disclosed in the SEC
Documents, have a material adverse effect on the business, operations,
properties, financial condition or results of operations of the Company and its
subsidiaries taken as a whole.

                  (i) ACKNOWLEDGMENT REGARDING BUYER'S PURCHASE OF THE
CONVERTIBLE DEBENTURES. The Company acknowledges and agrees that the Buyer(s) is
acting solely in the capacity of an arm's length purchaser with respect to this
Agreement and the transactions contemplated hereby. The Company further
acknowledges that the Buyer(s) is not acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to this Agreement and
the transactions contemplated hereby and any advice given by the Buyer(s) or any
of their respective representatives or agents in connection with this Agreement
and the transactions contemplated hereby is merely incidental to such Buyer's
purchase of the Convertible Debentures or the Conversion Shares. The Company
further represents to the Buyer that the Company's decision to enter into this
Agreement has been based solely on the independent evaluation by the Company and
its representatives.

                  (j) NO GENERAL SOLICITATION. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the 1933 Act) in connection with the offer or sale of the
Convertible Debentures or the Conversion Shares.

                  (k) NO INTEGRATED OFFERING. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
Convertible Debentures or the Conversion Shares under the 1933 Act or cause this
offering of the Convertible Debentures or the Conversion Shares to be integrated
with prior offerings by the Company for purposes of the 1933 Act.

                  (l) EMPLOYEE RELATIONS. Neither the Company nor any of its
subsidiaries is involved in any labor dispute nor, to the knowledge of the
Company or any of its subsidiaries, is any such dispute threatened. None of the
Company's or its subsidiaries' employees is a member of a union and the Company
and its subsidiaries believe that their relations with their employees are good.

                  (m) INTELLECTUAL PROPERTY RIGHTS. The Company and its
subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. The Company and its subsidiaries do not have any
knowledge of any infringement by the Company or its subsidiaries of trademark,

                                       9
<PAGE>

trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service mark registrations, trade secret or other
similar rights of others, and, to the knowledge of the Company there is no
claim, action or proceeding being made or brought against, or to the Company's
knowledge, being threatened against, the Company or its subsidiaries regarding
trademark, trade name, patents, patent rights, invention, copyright, license,
service names, service marks, service mark registrations, trade secret or other
infringement; and the Company and its subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

                  (n) ENVIRONMENTAL LAWS. The Company and its subsidiaries are
(i) in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval.

                  (o) TITLE. Any real property and facilities held under lease
by the Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries.

                  (p) INSURANCE. The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
subsidiaries are engaged. Neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its subsidiaries, taken as a whole.

                  (q) REGULATORY PERMITS. The Company and its subsidiaries
possess all material certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.

                  (r) INTERNAL ACCOUNTING CONTROLS. The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, and (iii) the recorded amounts for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

                                       10
<PAGE>

                  (s) NO MATERIAL ADVERSE BREACHES, ETC. Except as set forth in
the SEC Documents, neither the Company nor any of its subsidiaries is subject to
any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation which in the judgment of the Company's officers has or
is expected in the future to have a material adverse effect on the business,
properties, operations, financial condition, results of operations or prospects
of the Company or its subsidiaries. Except as set forth in the SEC Documents,
neither the Company nor any of its subsidiaries is in breach of any contract or
agreement which breach, in the judgment of the Company's officers, has or is
expected to have a material adverse effect on the business, properties,
operations, financial condition, results of operations or prospects of the
Company or its subsidiaries.

                  (t) TAX STATUS. Except as set forth in the SEC Documents, the
Company and each of its subsidiaries has made and filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject and (unless and only to the extent that the
Company and each of its subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has paid
all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.

                  (u) CERTAIN TRANSACTIONS. Except as set forth in the SEC
Documents, and except for arm's length transactions pursuant to which the
Company makes payments in the ordinary course of business upon terms no less
favorable than the Company could obtain from third parties and other than the
grant of stock options disclosed in the SEC Documents, none of the officers,
directors, or employees of the Company is presently a party to any transaction
with the Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

                  (v) FEES AND RIGHTS OF FIRST REFUSAL. The Company is not
obligated to offer the securities offered hereunder on a right of first refusal
basis or otherwise to any third parties including, but not limited to, current
or former shareholders of the Company, underwriters, brokers, agents or other
third parties.

         4.       COVENANTS.
                  ----------

                  (a) BEST EFFORTS. Each party shall use its best efforts timely
to satisfy each of the conditions to be satisfied by it as provided in Sections
6 and 7 of this Agreement.

                                       11
<PAGE>

                  (b) FORM D. The Company agrees to file a Form D with respect
to the Conversion Shares as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Conversion Shares, or obtain an exemption
for the Conversion Shares for sale to the Buyers at the Closing pursuant to this
Agreement under applicable securities or "Blue Sky" laws of the states of the
United States, and shall provide evidence of any such action so taken to the
Buyers on or prior to the Closing Date.

                  (c) REPORTING STATUS. Until the earlier of (i) the date as of
which the Buyer(s) may sell all of the Conversion Shares without restriction
pursuant to Rule 144(k) promulgated under the 1933 Act (or successor thereto),
or (ii) the date on which (A) the Buyer(s) shall have sold all the Conversion
Shares and (B) none of the Convertible Debentures are outstanding (the
"REGISTRATION PERIOD"), the Company shall file in a timely manner all reports
required to be filed with the SEC pursuant to the 1934 Act and the regulations
of the SEC thereunder, and the Company shall not terminate its status as an
issuer required to file reports under the 1934 Act even if the 1934 Act or the
rules and regulations thereunder would otherwise permit such termination.

                  (d) USE OF PROCEEDS. The Company will use the proceeds from
the sale of the Convertible Debentures for general corporate and working capital
purposes.

                  (e) RESERVATION OF SHARES. The Company shall take all action
reasonably necessary to at all times have authorized, and reserved for the
purpose of issuance, such number of shares of Common Stock as shall be necessary
to effect the issuance of the Conversion Shares. If at any time the Company does
not have available such shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all of the Conversion Shares of the
Company shall call and hold a special meeting of the shareholders within sixty
(60) days of such occurrence, for the sole purpose of increasing the number of
shares authorized. The Company's management shall recommend to the shareholders
to vote in favor of increasing the number of shares of Common Stock authorized.
Management shall also vote all of its shares in favor of increasing the number
of authorized shares of Common Stock.

                  (f) LISTINGS OR QUOTATION. The Company shall promptly secure
the listing or quotation of the Conversion Shares upon each national securities
exchange, automated quotation system or The National Association of Securities
Dealers Inc.'s Over-The-Counter Bulletin Board ("OTCBB") or other market, if
any, upon which shares of Common Stock are then listed or quoted (subject to
official notice of issuance) and shall use its best efforts to maintain, so long
as any other shares of Common Stock shall be so listed, such listing of all
Conversion Shares from time to time issuable under the terms of this Agreement.
The Company shall maintain the Common Stock's authorization for quotation on the
OTCBB.

                  (g) FEES AND EXPENSES. Each of the Company and the Buyer(s)
shall pay all costs and expenses incurred by such party in connection with the
negotiation, investigation, preparation, execution and delivery of this
Agreement, the Escrow Agreement, the Investor Registration Rights Agreement, the
Security Agreement and the Irrevocable Transfer Agent Instructions. The Buyer(s)
shall be entitled to a ten percent (10%) discount on the Purchase Price.

                                       12
<PAGE>

                  (h) The costs and expenses of the Buyer(s) and Butler Gonzalez
LLP shall be paid directly from the proceeds of the First Closing in the amount
of Ten Thousand Dollars ($10,000), as set forth in Section 1(c).

                  (i) CORPORATE EXISTENCE. So long as any of the Convertible
Debentures remain outstanding, the Company shall not directly or indirectly
consummate any merger, reorganization, restructuring, reverse stock split
consolidation, sale of all or substantially all of the Company's assets or any
similar transaction or related transactions (each such transaction, an
"ORGANIZATIONAL CHANGE") unless, prior to the consummation an Organizational
Change, the Company obtains the written consent of each Buyer. In any such case,
the Company will make appropriate provision with respect to such holders' rights
and interests to insure that the provisions of this Section 4(i) will thereafter
be applicable to the Convertible Debentures. Notwithstanding the foregoing, the
acquisition of a subsidiary for cash, debt, and/or stock shall not be considered
an Organizational Change. In the event the Company does make an acquisition the
Company shall provide the Buyer(s) fifteen (15) business days prior written
notice.

                  (j) TRANSACTIONS WITH AFFILIATES. So long as any Convertible
Debentures are outstanding, the Company shall not, and shall cause each of its
subsidiaries not to, enter into, amend, modify or supplement, or permit any
subsidiary to enter into, amend, modify or supplement any agreement,
transaction, commitment, or arrangement with any of its or any subsidiary's
officers, directors, person who were officers or directors at any time during
the previous two (2) years, stockholders who beneficially own five percent (5%)
or more of the Common Stock, or Affiliates (as defined below) or with any
individual related by blood, marriage, or adoption to any such individual or
with any entity in which any such entity or individual owns a five percent (5%)
or more beneficial interest (each a "RELATED PARTY"), except for (a) customary
employment arrangements and benefit programs on reasonable terms, (b) any
investment in an Affiliate of the Company, (c) any agreement, transaction,
commitment, or arrangement on an arms-length basis on terms no less favorable
than terms which would have been obtainable from a person other than such
Related Party, or (d) any agreement transaction, commitment, or arrangement
which is approved by a majority of the disinterested directors of the Company.
For purposes hereof, any director who is also an officer of the Company or any
subsidiary of the Company shall not be a disinterested director with respect to
any such agreement, transaction, commitment, or arrangement. "AFFILIATE" for
purposes hereof means, with respect to any person or entity, another person or
entity that, directly or indirectly, (i) has a ten percent (10%) or more equity
interest in that person or entity, (ii) has ten percent (10%) or more common
ownership with that person or entity, (iii) controls that person or entity, or
(iv) shares common control with that person or entity. "CONTROL" or "CONTROLS"
for purposes hereof means that a person or entity has the power, direct or
indirect, to conduct or govern the policies of another person or entity.

                  (k) TRANSFER AGENT. The Company covenants and agrees that, in
the event that the Company's agency relationship with the transfer agent should
be terminated for any reason prior to a date which is two (2) years after the
Closing Date, the Company shall immediately appoint a new transfer agent and
shall require that the new transfer agent execute and agree to be bound by the
terms of the Irrevocable Transfer Agent Instructions (as defined herein).

                                       13
<PAGE>

                  (l) RESTRICTION ON ISSUANCE OF THE CAPITAL STOCK. So long as
any Convertible Debentures are outstanding, the Company shall not, without the
prior written consent of the Buyer(s), issue or sell shares of Common Stock or
Preferred Stock (i) without consideration or for a consideration per share less
than the Bid Price of the Common Stock determined immediately prior to its
issuance, (ii) any warrant, option, right, contract, call, or other security
instrument granting the holder thereof, the right to acquire Common Stock
without consideration or for a consideration less than such Common Stock's Bid
Price value determined immediately prior to the issuance of such instrument,
(iii) enter into any security instrument granting the holder a security interest
in any and all assets of the Company, or (iv) file any registration statement on
Form S-8 that registers more than five million (5,000,000) shares of Common
Stock. Notwithstanding the foregoing in the event Company intends to file any
registration statement on Form S-8 that registers five million (5,000,000) or
fewer shares of Common Stock the Company must provide the Buyer(s) fifteen (15)
business days prior written notice.

         5.       TRANSFER AGENT INSTRUCTIONS.
                  ----------------------------

         The Company shall issue the Irrevocable Transfer Agent Instructions to
its transfer agent irrevocably appointing Butler Gonzalez LLP as its agent for
purpose of having certificates issued, registered in the name of the Buyer(s) or
its respective nominee(s), for the Conversion Shares representing such amounts
of Convertible Debentures as specified from time to time by the Buyer(s) to the
Company upon conversion of the Convertible Debentures, for interest owed
pursuant to the Convertible Debenture, and for any and all Liquidated Damages
(as this term is defined in the Investor Registration Rights Agreement). Butler
Gonzalez LLP shall be paid a cash fee of Fifty Dollars ($50) for every occasion
they act pursuant to the Irrevocable Transfer Agent Instructions. The Company
shall not change its transfer agent without the express written consent of the
Buyer(s), which may be withheld by the Buyer(s) in its sole discretion. Prior to
registration of the Conversion Shares under the 1933 Act, all such certificates
shall bear the restrictive legend specified in Section 2(g) of this Agreement.
The Company warrants that no instruction other than the Irrevocable Transfer
Agent Instructions referred to in this Section 5, and stop transfer instructions
to give effect to Section 2(g) hereof (in the case of the Conversion Shares
prior to registration of such shares under the 1933 Act) will be given by the
Company to its transfer agent and that the Conversion Shares shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the Investor Registration Rights Agreement.
Nothing in this Section 5 shall affect in any way the Buyer's obligations and
agreement to comply with all applicable securities laws upon resale of
Conversion Shares. If the Buyer(s) provides the Company with an opinion of
counsel, in form, scope and substance customary for opinions of counsel in
comparable transactions to the effect that registration of a resale by the
Buyer(s) of any of the Conversion Shares is not required under the 1933 Act, the
Company shall within two (2) business days instruct its transfer agent to issue
one or more certificates in such name and in such denominations as specified by
the Buyer. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyer by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Section 5 will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Section 5, that the Buyer(s)
shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.

                                       14
<PAGE>

         6.       CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
                  -----------------------------------------------

         The obligation of the Company hereunder to issue and sell the
Convertible Debentures to the Buyer(s) at the Closings is subject to the
satisfaction, at or before the Closing Dates, of each of the following
conditions, provided that these conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion:

                  (a) Each Buyer shall have executed this Agreement, the
Security Agreement, the Escrow Agreement and the Investor Registration Rights
Agreement and the Irrevocable Transfer Agent Instructions and delivered the same
to the Company.

                  (b) The Buyer(s) shall have delivered to the Escrow Agent the
Purchase Price for Convertible Debentures in respective amounts as set forth
next to each Buyer as outlined on Schedule I attached hereto and the Escrow
Agent shall have delivered the net proceeds to the Company by wire transfer of
immediately available U.S. funds pursuant to the wire instructions provided by
the Company.

                  (c) The representations and warranties of the Buyer(s) shall
be true and correct in all material respects as of the date when made and as of
the Closing Dates as though made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer(s) shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Buyer(s) at or prior to the Closing Dates.

                  (d) The Company shall have filed a form UCC-1 with regard to
the Pledged Property and Pledged Collateral as detailed in the Security
Agreement dated the date hereof and provided proof of such filing to the
Buyer(s).

         7.       CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
                  -------------------------------------------------

         The obligation of the Buyer(s) hereunder to purchase the Convertible
Debentures at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions:

                  (a) The Company shall have executed this Agreement, the
Security Agreement, the Convertible Debenture, the Escrow Agreement, the
Irrevocable Transfer Instructions and the Investor Registration Rights
Agreement, and delivered the same to the Buyer(s).

                  (b) The Common Stock shall be authorized for quotation on the
OTCBB, trading in the Common Stock shall not have been suspended for any reason
and all of the Conversion Shares issuable upon conversion of the Convertible
Debentures shall be approved the OTCBB.

                                       15
<PAGE>

                  (c) The representations and warranties of the Company shall be
true and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such representations and warranties shall be true and
correct without further qualification) as of the date when made and as of the
Closing Dates as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Dates. If requested
by the Buyer, the Buyer shall have received a certificate, executed by the
President of the Company, dated as of the Closing Dates, to the foregoing effect
and as to such other matters as may be reasonably requested by the Buyer
including, without limitation an update as of the Closing Dates regarding the
representation contained in Section 3(c) above.

                  (d) The Company shall have executed and delivered to the
Buyer(s) the Convertible Debentures in the respective amounts set forth opposite
each Buyer(s) name on Schedule I attached hereto.

                  (e) The Buyer(s) shall have received an opinion of counsel
from Sichenzia Ross Friedman Ference LLP in a form satisfactory to the Buyer(s).

                  (f) The Company shall have provided to the Buyer(s) a
certificate of good standing from the secretary of state from the state in which
the company is incorporated.

                  (g) As of the Closing Date, the Company shall have reserved
out of its authorized and unissued Common Stock, solely for the purpose of
effecting the conversion of the Convertible Debentures, shares of Common Stock
to effect the conversion of all of the Conversion Shares then outstanding.

                  (h) The Irrevocable Transfer Agent Instructions, in form and
substance satisfactory to the Buyer, shall have been delivered to and
acknowledged in writing by the Company's transfer agent.

                  (i) The Company shall have provided to the Buyer(s) an
acknowledgement, to the satisfaction of the Buyer(s), from Braverman & Company,
P.C. as to its ability to provide all consents required in order to file a
registration statement in connection with this transaction.

                  (j) The Company shall have filed a form UCC-1 or such other
forms as may be required to perfect the Buyer's interest in the Pledged Property
and Pledged Collateral as detailed in the Security Agreement dated the date
hereof and provided proof of such filing to the Buyer(s).

         8.       INDEMNIFICATION.
                  ----------------

                  (a) In consideration of the Buyer's execution and delivery of
this Agreement and acquiring the Convertible Debentures and the Conversion
Shares hereunder, and in addition to all of the Company's other obligations
under this Agreement, the Company shall defend, protect, indemnify and hold
harmless the Buyer(s) and each other holder of the Convertible Debentures and
the Conversion Shares, and all of their officers, directors, employees and

                                       16
<PAGE>

agents (including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "BUYER
INDEMNITEES") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Buyer Indemnitee is a
party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the "INDEMNIFIED
LIABILITIES"), incurred by the Buyer Indemnitees or any of them as a result of,
or arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in this Agreement, the
Convertible Debentures or the Investor Registration Rights Agreement or any
other certificate, instrument or document contemplated hereby or thereby, (b)
any breach of any covenant, agreement or obligation of the Company contained in
this Agreement, or the Investor Registration Rights Agreement or any other
certificate, instrument or document contemplated hereby or thereby, or (c) any
cause of action, suit or claim brought or made against such Indemnitee and
arising out of or resulting from the execution, delivery, performance or
enforcement of this Agreement or any other instrument, document or agreement
executed pursuant hereto by any of the Indemnities, any transaction financed or
to be financed in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Convertible Debentures or the status of the Buyer or holder
of the Convertible Debentures the Conversion Shares, as a Buyer of Convertible
Debentures in the Company. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities, which is permissible under applicable law.

                  (b) In consideration of the Company's execution and delivery
of this Agreement, and in addition to all of the Buyer's other obligations under
this Agreement, the Buyer shall defend, protect, indemnify and hold harmless the
Company and all of its officers, directors, employees and agents (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "COMPANY INDEMNITEES") from
and against any and all Indemnified Liabilities incurred by the Indemnitees or
any of them as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Buyer(s) in this Agreement, , instrument or document contemplated hereby or
thereby executed by the Buyer, (b) any breach of any covenant, agreement or
obligation of the Buyer(s) contained in this Agreement, the Investor
Registration Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby executed by the Buyer, or (c) any cause of
action, suit or claim brought or made against such Company Indemnitee based on
material misrepresentations or due to a material breach and arising out of or
resulting from the execution, delivery, performance or enforcement of this
Agreement, the Investor Registration Rights Agreement or any other instrument,
document or agreement executed pursuant hereto by any of the Company
Indemnities. To the extent that the foregoing undertaking by each Buyer may be
unenforceable for any reason, each Buyer shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law.

                                       17
<PAGE>

         9.       GOVERNING LAW: MISCELLANEOUS.
                  -----------------------------

                  (a) GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Nevada without regard to
the principles of conflict of laws. The parties further agree that any action
between them shall be heard in Hudson County, New Jersey, and expressly consent
to the jurisdiction and venue of the Superior Court of New Jersey, sitting in
Hudson County and the United States District Court for the District of New
Jersey sitting in Newark, New Jersey for the adjudication of any civil action
asserted pursuant to this Paragraph.

                  (b) COUNTERPARTS. This Agreement may be executed in two or
more identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. In the event any signature page is
delivered by facsimile transmission, the party using such means of delivery
shall cause four (4) additional original executed signature pages to be
physically delivered to the other party within five (5) days of the execution
and delivery hereof.

                  (c) HEADINGS. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

                  (d) SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

                  (e) ENTIRE AGREEMENT, AMENDMENTS. This Agreement supersedes
all other prior oral or written agreements between the Buyer(s), the Company,
their affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be waived or amended other than by an instrument in writing signed
by the party to be charged with enforcement.

                  (f) NOTICES. Any notices, consents, waivers, or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally; (ii) upon confirmation of receipt, when sent
by facsimile; (iii) three (3) days after being sent by U.S. certified mail,
return receipt requested, or (iv) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:

                                       18
<PAGE>

If to the Company, to:              Oxford Ventures Inc.
                                    4655 East Ivy Street - Suite 101
                                    Mesa, AZ 852105
                                    Attention:    Daniel K. Leonard, President
                                    Telephone:   (480) 924-4123
                                    Facsimile:   (480) 924-7038

With a copy to:                     Sichenzia Ross Friedman Ference LLP
                                    1065 Avenue of the Americas
                                    New York, NY 10018
                                    Attention:   Gregory Sichenzia, Esq.
                                    Telephone:   (212) 930-9700
                                    Facsimile:   (212) 930-9725

If to the Transfer Agent, to:       Continental Stock Transfer and Trust Company
                                    17 Battery Place
                                    New York, NY 10004
                                    Telephone:   (212) 845-3212
                                    Facsimile:   (212) 616-7616

With Copy to:                       Butler Gonzalez LLP
                                    1416 Morris Avenue - Suite 207
                                    Union, NJ 07083
                                    Attention:   David Gonzalez, Esq.
                                    Telephone:   (908) 810-8588
                                    Facsimile:   (908) 810-0973

         If to the Buyer(s), to its address and facsimile number on Schedule I,
with copies to the Buyer's counsel as set forth on Schedule I. Each party shall
provide five (5) days' prior written notice to the other party of any change in
address or facsimile number.

                  (g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns. Neither the Company nor any Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party hereto.

                  (h) NO THIRD PARTY BENEFICIARIES. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.

                  (i) SURVIVAL. Unless this Agreement is terminated under
Section 9(l), the representations and warranties of the Company and the Buyer(s)
contained in Sections 2 and 3, the agreements and covenants set forth in
Sections 4, 5 and 9, and the indemnification provisions set forth in Section 8,
shall survive the Closing for a period of two (2) years following the date on
which the Convertible Debentures are converted in full. The Buyer(s) shall be
responsible only for its own representations, warranties, agreements and
covenants hereunder.

                                       19
<PAGE>

                  (j) PUBLICITY. The Company and the Buyer(s) shall have the
right to approve, before issuance any press release or any other public
statement with respect to the transactions contemplated hereby made by any
party; provided, however, that the Company shall be entitled, without the prior
approval of the Buyer(s), to issue any press release or other public disclosure
with respect to such transactions required under applicable securities or other
laws or regulations (the Company shall use its best efforts to consult the
Buyer(s) in connection with any such press release or other public disclosure
prior to its release and Buyer(s) shall be provided with a copy thereof upon
release thereof).

                  (k) FURTHER ASSURANCES. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

                  (l) TERMINATION. In the event that the Closing shall not have
occurred with respect to the Buyers on or before five (5) business days from the
date hereof due to the Company's or the Buyer's failure to satisfy the
conditions set forth in Sections 6 and 7 above (and the non-breaching party's
failure to waive such unsatisfied condition(s)), the non-breaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of business on such date without liability of any party to any
other party; provided, however, that if this Agreement is terminated by the
Company pursuant to this Section 9(l), the Company shall remain obligated to
reimburse the Buyer(s) for the fees and expenses of Butler Gonzalez described in
Section 4(g) above.

                  (m) NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

                    [REMAINDER PAGE INTENTIONALLY LEFT BLANK]

                                       20
<PAGE>

         IN WITNESS WHEREOF, the Buyers and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first written
above.

                                                    COMPANY:
                                                    OXFORD VENTURES INC.

                                                    By: /S/ DANIEL K. LEONARD
                                                        ------------------------
                                                    Name    Daniel K. Leonard
                                                    Title:  President

                                       21
<PAGE>

                                                                       EXHIBIT A

                 FORM OF INVESTOR REGISTRATION RIGHTS AGREEMENT
                 ----------------------------------------------

                                       22
<PAGE>

                                                                       EXHIBIT B

                            FORM OF ESCROW AGREEMENT
                            ------------------------

                                       23
<PAGE>

                                                                       EXHIBIT C

                           TRANSFER AGENT INSTRUCTIONS
                           ---------------------------

                                       24
<PAGE>
<TABLE>

                                                            SCHEDULE I
                                                            ----------

                                                        SCHEDULE OF BUYERS
                                                        ------------------

                                                                                 ADDRESS/FACSIMILE             AMOUNT OF
               NAME                              SIGNATURE                        NUMBER OF BUYER             SUBSCRIPTION
               ----                              ---------                        ---------------             ------------
<S>                                 <C>                                  <C>                                    <C>
Cornell Capital Partners, LP        By:      Yorkville Advisors, LLC     101 Hudson Street - Suite 3700         $  500,000
                                    Its:     General Partner             Jersey City, NJ  07303
                                                                         Facsimile:        (201) 985-8266

</TABLE>

                                    By: /S/ MARK A. ANGELO
                                        ----------------------
                                    Name:   Mark A. Angelo
                                    Its:    Portfolio Manager

                                       25

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