Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Quincy Resources Inc. - Exhibit 10.19

 THIS OFFERING IS ONLY BEING MADE TO RESIDENTS OF ONTARIO,
  RESIDENTS OF ALBERTA, RESIDENTS OF BRITISH COLUMBIA, AND PERSONS WHO RESIDE
  OUTSIDE OF THE UNITED STATES AND CANADA. THIS OFFERING IS NOT BEING MADE TO
  U.S. PERSONS (AS THAT TERM IS DEFINED IN REGULATION S). IN ADDITION, THIS OFFERING
  IS ONLY BEING MADE IN JURISDICTIONS WHERE THE SHARES MAY BE LAWFULLY OFFERED
  FOR SALE. NO OFFER IS MADE NOR WILL BE SUBSCRIPTIONS BE ACCEPTED FROM RESIDENTS
  OF ANY JURISDICTION WHERE THE OFFER AND SALE OF THE SHARES WILL CONTRAVENE APPLICABLE
  SECURITIES LAWS. 

 

_________________________________

  

QUINCY RESOURCES INC. 

 PRIVATE PLACEMENT

  2,000,000 COMMON SHARES  

  USD 500,000  

INSTRUCTIONS TO PURCHASER 

	 	1.	Complete all the information in the
        boxes on page 1 and sign where indicated with an “X”.

	 	 	 
	 	2.	If you are resident in Ontario, Alberta
        or British Columbia and you are an “accredited investor”,
        then complete the “Accredited Investor Questionnaire” that starts
        on page 4 and sign where indicated with an “X”. The purpose
        of the questionnaire is to determine whether you meet the standards for
        participation in a private placement under section 2.3 of Ontario Securities
        Commission Rule 45-501 and section 5.1 of Multilateral Instrument 45-103
        adopted by the Alberta and British Columbia Securities Commissions.

	 	 	 
	 	3.	If you are resident in Alberta or
        British Columbia and you are a family, friend or business associate
        of a director or senior officer of Quincy Resources Inc., then complete
        the “Family, Friend or Business Associate Questionnaire” on
        page 7. The purpose of the questionnaire is to determine whether you meet
        the standards for participation in a private placement under section 3.1
        of Multilateral Instrument 45-103 adopted by the Alberta and British Columbia
        Securities Commissions.

	 	 	 
	 	4.	This offering is not being made to
        U.S. Persons (as that term is defined in Regulation S).

 THE SECURITIES OFFERED HEREIN HAVE NOT BEEN REGISTERED UNDER
  THE SECURITIES ACT OF 1933 (THE "1933 ACT"), AS AMENDED, OR APPLICABLE STATE
  SECURITIES ACTS AND ARE RESTRICTED SECURITIES AS DEFINED BY RULE 144 OF THE
  1933 ACT. THE SECURITIES OFFERED HEREIN MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
  DISPOSED UNLESS IN   COMPLIANCE WITH THE 1933 ACT.  

 THIS SUBSCRIPTION AGREEMENT AND THE SECURITIES OFFERED HEREIN
  HAVE NOT BEEN  APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES
  AND EXCHANGE  COMMISSION OR ANY STATE SECURITIES AGENCIES. 

 This is page 1 of 22 pages of a subscription agreement and
  related appendixes. Collectively, these pages 

  together are referred to as the “Subscription Agreement”.  

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT 

 TO:                     
  Quincy Resources Inc. (the “Issuer”), of Hancock, Michigan, United
  States of America Subject and pursuant to the terms set out in the Terms on
  pages 2 to 3, the General Provisions on pages 13 to 22 and the appendices incorporated
  by reference herein, the undersigned (the “Purchaser”) hereby irrevocably
  subscribes for, and on Closing will purchase from the Issuer, the following
  securities on the following terms: 

	__________________________________________________common shares of the
      Issuer at a price of USD 0.25 per share
 

      For a total subscription of USD________________________________________________________________________

The Purchaser directs the Issuer to issue, register and deliver the certificates representing the Securities as follows:

	REGISTRATION INSTRUCTIONS:	 	DELIVERY INSTRUCTIONS:
	 	 	 
	 	 	 
	Name to appear on certificate	 	Name and account reference, if applicable
	 	 	 
	 	 	 
	Account reference, if applicable	 	Contact name
	 	 	 
	 	 	 
	Address	 	Address
	 	 	 
	 	 	 
	 	 	Telephone number

 EXECUTED by the Purchaser this _______ day of _____________
  , 2003. By executing this Agreement, the Purchaser certifies that the Purchaser
  and any beneficial purchaser for whom the Purchaser is acting is resident in
  the jurisdiction shown as the “Address of the Purchaser”. 

	WITNESS:	 	EXECUTION BY PURCHASER:
	 	 	X	 
	Signature of witness	 	 	Signature of individual (if Purchaser is an individual)
	 	 	 	 
	 	 	X	 
	Name of witness	 	 	Authorized signatory (if Purchaser is not an individual)
	 	 	 	 
	 	 	 	 
	Address of witness	 	 	Name of Purchaser (please print)
	 	 	 	 
	 	 	 	 
	 	 	 	Name of authorized signatory (please print)
	ACCEPTED this _______ day of ___________, 2003.	 	 	 
	QUINCY RESOURCES INC.	 	 	 
	 	 	 	Address of Purchaser (residence if an individual)
	 	 	 	 
	Per:	 	 	 
	 	 	 	 
	Authorized signatory	 	 	 
	 	 	 	Telephone Number
	 	 	 	 
	 	 	 	 
	 	 	 	E-mail Address

 By signing this acceptance, the Issuer agrees to be bound
  by the Terms on pages 2 to 4, the General Provisions on pages 13 to 22 and the
  other appendixes incorporated by reference. 

 

	Subscription Agreement (with related appendixes)	Page 2 of 22 pages

TERMS 

	Reference Date	October 14, 2003 (the “Subscription
        Date”)

	 	 	 
	The Offering
	 	 	 
	The Issuer	Quincy Resources Inc.

	 	 	 
	Offering	The offering consists of a maximum of
        2,000,000 Common Shares at a price of USD 0.25 per Common Share for gross
        proceeds to the Issuer of USD 500,000 (the “Offering”).

	 	 	 
	Securities	The Securities being offered are shares
        of the Issuer’s common stock, par value USD 0.001 per share.

	 	 	 
	Price	USD 0.25 per Common Share.

	 	 	 
	Additional provisions	The Common Shares will be issued and
        registered in the name of the purchasers or their nominees.

	 	 	 
	 	Subject to the Applicable Legislation,
        the Common Shares will be transferable.

	 	 	 
	 	The issuance of the Common Shares in
        the Offering will not restrict or prevent the Issuer from obtaining any
        other financing, or from issuing additional securities or rights.

	 	 	 
	Selling Jurisdictions	The Common Shares may be sold only in
        Ontario, Alberta, British Columbia and in other jurisdictions outside
        of the United States and Canada (the “Selling Jurisdictions”)
        solely in accordance with available exemptions and applicable law.

	 	 	 
	Exemptions	The Offering will be made in accordance
        with the following exemptions from the applicable prospectus and registration
        requirements:

	 	 	 
	 	(a) 
	outside of the United States, Regulation
        S of the 1933 Act;

	 	 	 
	 	(b)
	 in Ontario, the “Accredited Investor”
        exemption provided by section 2.3 of Ontario Securities Commission Rule
        45-501; and

	 	 	 
	 	(c)
	 in Alberta and British Columbia, the
        “Friends, Family and Business Associates” exemption provided
        by section 3.1 of Multilateral Instrument 45-103 or the “Accredited
        Investor” exemption provided by section 5.1 of Multilateral Instrument
        45-103.

	 	 	 
	Closing Date	Payment for, and delivery of, the Common
        Shares is scheduled to occur on or before November 30, 2003 (the “Closing
        Date”) or such other date as determined by the Issuer, in its sole
        discretion.

	 	 	 
	Risk factors and due

      diligence	The securities offered hereby involve
        a high degree of risk and should not be purchased by investors who can
        not afford the loss of their entire investment. The Issuer’s United
        States Securities and Exchange Commission (“SEC”) filings are
        available to the public from the Commission's web site at http://www.sec.gov.
        Quincy Resources’ file number is File No. 000-31501. The Common Stock
        is not traded on the OTC Electronic Bulletin Board.

 

	Subscription Agreement (with related appendixes)	Page 3 of 22 pages

	Resale restrictions and

      legends	Upon the closing of the
        Offering the Common Shares will be subject to a one year hold period plus
        a percentage of the Common Shares will become unrestricted securities
        in each quarter during the second year after the closing of the Offering.

	 	 
	 	The Purchaser acknowledges
        that the certificates representing the Common Shares will bear a legend
        in substantially the following form:

	 	 
	 	THE SECURITIES REPRESENTED
        BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
        ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR OTHER
        APPLICABLE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
        AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE OFFERED,
        SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH
        THE PROVISIONS OF REGULATIONS S, RULE 901 THROUGH RULE 905, AND PRELIMINARY
        NOTES UNDER THE U.S. SECURITIES ACT OR (2) PURSUANT TO AN AVAILABLE
        EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES
        ACT OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. HEDGING
        TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS
        IN COMPLIANCE WITH THE U.S. SECURITIES ACT.

	 	 
	 	In addition to the preceding,
        the Common Shares will be subject to an indefinite hold period in the
        provinces of Alberta, Ontario and British Columbia and can only be resold
        in those jurisdictions in compliance with an exemption from the prospectus
        and registration requirements in those jurisdictions.

	 	 
	 	Purchasers are advised
        to consult with their own legal counsel or advisors to determine the resale
        restrictions which may be applicable to them.

	 	 
	The Issuer
	 	 
	Jurisdiction of organization	The Issuer is incorporated
        under the laws of Nevada.

	 	 
	Authorized and outstanding

      capital	The authorized capital
        of the Issuer is 200,000,000 shares of common stock par value USD 0.001
        per share. The issued capital of the Issuer is 17,044,750 shares of common
        stock.

	 	 
	“Securities Legislation

      Applicable to the Issuer”	The United States Securities
        Act of 1933, the Securities Act (Alberta), the Securities Act
        (British Columbia) and the Securities Act (Ontario), together
        with theregulations and rules made and promulgated thereunder and all
        administrative policy statements, orders and rulings, notices and other
        administrative directions issued by the Commissions (as defined below).

END OF TERMS 

 This Memorandum of Terms contains forward-looking statements
  that involve risks and uncertainties. When used in this Memorandum,
  the words “believes”, “anticipates” ,”could”,
  “expects”, “projected”, and similar expressions are intended
  to identify, forward-looking statements. Such statements are subject to a number
  of risks and uncertainties that could cause actual results to differ materially
  from those projected. Given these uncertainties the reader is cautioned not
  to place undue reliance on such statements. There are no assurances Quincy Resources
  Inc. can fulfil such forward-looking statements. Quincy Resources Inc. also
  undertakes no obligation to update those forward-looking statements.

 

	Subscription Agreement (with related appendixes)	Page 4 of 22 pages

Accredited Investor Questionnaire 

 (Capitalized terms not specifically defined in this Questionnaire
  have the meaning ascribed to them in the Subscription Agreement to which this
  appendix is attached.) 

 In connection with the execution of the Subscription Agreement
  to which this appendix is attached, the undersigned (the “Purchaser”)
  represents and warrants to the Issuer that: 

 If I am an individual (that is, a natural person and not
  a corporation, partnership, trust or other entity), then I satisfy one or more
  of the categories indicated below (please place an “X” on the appropriate
  lines):  

	 ______Category 1	 	an individual who, either alone or jointly
        with a spouse, beneficially owns financial assets having an aggregate
        realizable value that before taxes, but net of any related liabilities,
        exceeds CAD 1,000,000, where “financial assets” means cash and
        securities and “related liabilities” means (i) liabilities incurred
        or assumed for the purpose of financing the acquisition or ownership of
        financial assets, or (ii) liabilities that are secured by financial assets

	 	 	 
	 ______Category 2	 	an individual whose net income before
        taxes exceeded CAD 200,000 in each of the two most recent years or whose
        net income before taxes combined with that of a spouse exceeded CAD 300,000
        in each of the two most recent years and who, in either case, reasonably
        expects to exceed that net income level in the current year

	 	 	 
	 ______Category 3	 	an individual registered under the securities
        legislation of any province or territory of Canada, as an adviser or dealer,
        other than a limited market dealer registered under the Securities
        Act (Ontario)

	 	 	 
	 ______Category 4	 	an individual registered or formerly
        registered under the securities legislation of any province or territory
        of Canada as a representative of a person or company registered under
        the securities legislation of any province or territory of Canada, as
        an adviser or dealer, other than a limited market dealer registered under
        the Securities Act (Ontario)

	 	 	 
	 	 	Categories 5 to 8 apply only to persons resident in Ontario
      only
	 	 	 
	 ______Category 5	 	a promoter of the Issuer or an affiliated
        entity of a promoter of the Issuer

	 	 	 
	 ______Category 6	 	a spouse, parent, grandparent or child
        of an officer, director or promoter of the Issuer

	 	 	 
	 ______Category 7	 	a person that, in relation to the Issuer,
        is an affiliated entity

	 	 	 
	 ______Category 8	 	a person that, in relation to the Issuer,
        is a person referred to in clause (c) of the definition of distribution
        in subsection 1(1) of the Securities Act (Ontario) (commonly known
        as a “control person”)

 If the Purchaser is NOT an individual (that is, the Purchaser
  is a corporation, partnership, trust or other entity other than an individual),
  then the Purchaser satisfies one or more of the categories indicated below (please
  place an “X” on the appropriate lines):  

	 ______Category 9	 	a bank listed in schedule I or II of
        the Bank Act (Canada), or an authorized foreign bank listed in
        schedule III of the Bank Act (Canada)

 

	Subscription Agreement (with related appendixes)	Page 5 of 22 pages

	 ______Category 10	   	the Business Development Bank of Canada
        incorporated under the Business Development Bank of Canada Act
        (Canada)

	 	 	 
	 ______Category 11	 	a loan corporation or trust company
        that, in each case, is authorized to carry on business in Canada or a
        province or territory of Canada

	 	 	 
	 ______Category 12	 	a credit union or caisse populaire that,
        in each case, is authorized to carry on business in Canada or a province
        or territory of Canada

	 	 	 
	 ______Category 13	 	an association under the Cooperative
        Credit Associations Act (Canada) located in Canada

	 	 	 
	 ______Category 14	 	an insurance company authorized to carry
        on business in Canada or a province or territory of Canada

	 	 	 
	 ______Category 15	 	a subsidiary of any company referred
        to in Categories 9 to 14 where the company owns all of the voting shares
        of the subsidiary

	 	 	 
	 ______Category 16	 	a person or company registered under
        the securities legislation of any province or territory of Canada, as
        an adviser or dealer, other than a limited market dealer registered under
        the Securities Act (Ontario)

	 	 	 
	 ______Category 17	 	a pension fund that is regulated by
        either the Office of the Superintendent of Financial Institutions (Canada)
        or a provincial pension commission or similar regulatory authority

	 	 	 
	 ______Category 18	 	a company, syndicate, partnership, trust
        or unincorporated organization organized outside of Canada that is analogous
        to any of the entities referred to in Categories 9 to 17 in form and function

	 	 	 
	 ______Category 19	 	the government of Canada or a province,
        or any crown corporation or agency of the government of Canada or a province

	 	 	 
	 ______Category 20	 	a municipality in Canada

	 	 	 
	 ______Category 21	 	any national, federal, state, provincial,
        territorial or municipal government of or in any foreign jurisdiction,
        or any agency of that government

	 	 	 
	 ______Category 22	 	a registered charity under the Income
        Tax Act (Canada)

	 	 	 
	 ______Category 23	 	a company, limited partnership, limited
        liability partnership, trust or estate, other than a mutual fund or non-redeemable
        investment fund, that had net assets of at least CAD 5,000,000 as reflected
        in its most recently prepared financial statements

	 	 	 
	 ______Category 24	 	a mutual fund or non-redeemable investment
        fund that, in the province or territory where the securities of the Issuer
        are being sold, distributes its securities only to persons or companies
        that are accredited investors

	 	 	 
	 ______Category 25	 	a mutual fund or non-redeemable investment
        fund that, in the province or territory where the securities of the Issuer
        are being sold, distributes its securities under a prospectus for which
        the regulator has issued a receipt

 

	Subscription Agreement (with related appendixes)	Page 6 of 22 pages

	 ______Category 26	 	an investment portfolio account of a
        client established in writing with a portfolio adviser who makes investment
        decisions for the account and has full discretion to trade in securities
        of the account without requiring the client’s express consent to
        a transaction

	 	 	 
	 ______Category 27	    	a person or company in respect of which
        all of the owners of interests, direct or indirect, legal or beneficial,
        are persons or companies that are accredited investors

	 	 	 
	 	 	Categories 28 to 30 apply only to persons resident in
      Ontario only
	 	 	 
	 ______Category 28	 	a promoter of the Issuer or an affiliated entity of a promoter
      of the Issuer
	 	 	 
	 ______Category29	 	a person or company that, in relation to the Issuer, is an
      affiliated entity

 The statements made in this Questionnaire are true and accurate
  to the best of my information and belief and I will promptly notify the Issuer
  of any changes in the answers. 

 Dated _______________ , 2003. 

  

	 	X 	 
	 	 	Signature of individual (if Purchaser is an individual) 
	 	 	 
	 	X 	 
	 	 	Authorized signatory (if Purchaser is not an individual)
	 	 	 
	 	 	 
	 	 	Name of Purchaser (please print)
	 	 	 
	 	 	 
	 	 	Name of authorized signatory (please print)
	 	 	 
	 	 	 
	 	 	Official capacity of authorized signatory (please print) 

 

	Subscription Agreement (with related appendixes)	Page 7 of 22 pages

Family, Friend or Business Associate Questionnaire 

 (Capitalized terms not specifically defined in this Questionnaire
  have the meaning ascribed to them in the Subscription Agreement to which this
  appendix is attached.) 

 In connection with the execution of the Subscription Agreement
  to which this appendix is attached, the undersigned (the “Purchaser”)
  represents and warrants to the Issuer that: 

 If I am an individual (that is, a natural person and not
  a corporation, partnership, trust or other entity), then I satisfy one or more
  of the categories indicated below (please place an “X” on the appropriate
  lines):  

	 ______Category 1	   	a director, senior officer or control
        person of the Issuer, or of an affiliate of the Issuer

	 	 	 
	 ______Category 2	 	A spouse, parent, grandparent, brother,
        sister, or child of [insert name], a director, senior officer or
        control person of the Issuer, or of an affiliate of the Issuer

	 	 	 
	 ______Category 3	 	A close personal friend of ________________________________________________
        [insert name], a director, senior officer or control person
        of the Issuer, or of an affiliate of the Issuer

	 	 	 
	 ______Category 4	 	A close business associate of ________________________________________________
        [insert name], a director, senior officer or control person of
        the Issuer, or of an affiliate of the Issuer

 If the Purchaser is NOT an individual (that is, the Purchaser
  is a corporation, partnership, trust or other entity other than an individual),
  then the Purchaser satisfies one or more of the categories indicated below (please
  place an “X” on the appropriate lines):  

	 ______Category 5	 	A person or company that is wholly-owned by any combination of the persons
      described above

 The foregoing statements are true and accurate to the best
  of my information and belief and I will promptly notify the Issuer of any changes
  in the foregoing answers. 

 Dated _______________ , 2003. 

	 	X 	 
	 	 	Signature of individual (if Purchaser is a natural person) 
	 	 	 
	 	X 	 
	 	 	Authorized signatory (if Purchaser is not a natural person) 
	 	 	 
	 	 	 
	 	 	Name of Purchaser (please print)
	 	 	 
	 	 	 
	 	 	Name of authorized signatory (please print)
	 	 	 
	 	 	 
	 	 	Official capacity of authorized signatory (please print) 

 

	Subscription Agreement (with related appendixes)	Page 8 of 22 pages

Provisions applicable to a purchaser resident in Ontario 

 IMPORTANT NOTE: the following provisions are applicable
  ONLY if the Purchaser is resident in Ontario.  

Additional definitions 

 In the following provisions applicable to a purchaser resident
  in Ontario and the Subscription Agreement (including the first (cover) page
  and all of the appendixes), the following words have the following meanings
  unless otherwise indicated: 

	(a)	“Accredited Investor” a person
        who falls into one of the categories set out in the “Accredited Investor
        Questionnaire” that starts on page 4;

	 	 
	(b)	“Applicable Legislation” includes
        the Securities Act (Ontario);

	 	 
	(c)	“Commissions” includes the
        Ontario Securities Commission;

	 	 
	(d)	“Securities Act (Ontario)”
        means the Securities Act, R.S.O. 1990, c. S.5, as amended.

Additional representations 

 IN ADDITION to the representations and warranties in the General
  Provisions (on pages 13 to 22), the Purchaser also represents and warrants to
  the Issuer that, as of the date of this Subscription Agreement and as of the
  Closing: 

	(a)	the Purchaser is an Accredited Investor
        and it is purchasing the Securities as principal; or

	 	 
	(b)	if not purchasing the Securities as
        principal, it is duly authorized to enter into this subscription and to
        execute all documentation in connection with the purchase on behalf of
        each beneficial purchaser, it acknowledges that the Issuer may in the
        future be required by law to disclose on a confidential basis to securities
        regulatory authorities the identity of each beneficial purchaser of Securities
        for whom it may be acting, and it is acting as agent for one or more disclosed
        principals, each of which principals is purchasing as principal for its
        own account, not for the benefit of any other person, and not with a view
        to the resale or distribution of all or any of the Securities and each
        of which principals is an Accredited Investor; and

	 	 
	(c)	the Purchaser is not a “control
        person” of the Issuer (that is, a person or company that, in relation
        to the issuer, is an affiliated entity or a person or company referred
        to in clause (c) of the definition of distribution in subsection 1(1)
        of the Securities Act (Ontario)), will not become a “control
        person” by virtue of this purchase of any of the Securities, and
        does not intend to act in concert with any other person to form a control
        group of the Issuer.

 

	Subscription Agreement (with related appendixes)	Page 9 of 22 pages

Provisions applicable to a purchaser resident in Alberta 

 IMPORTANT NOTE: the following provisions are applicable
  ONLY if the Purchaser is resident in Alberta.  

 Additional definitions  

 In the following provisions applicable to a purchaser resident
  in Alberta and the Subscription Agreement (including the first (cover) page
  and all of the appendixes), the following words have the following meanings
  unless otherwise indicated: 

	(a)	“Accredited Investor” means
        a person who falls into one of the categories set out in the “Accredited
        Investor Questionnaire” that starts on page 4;

	 	 
	(b)	“Family, Friend or Business Associate”
        means a person who falls into one of the categories set out in the “Family,
        Friend or Business Associate Questionnaire” that starts on page 7;

	 	 
	(c)	“Applicable Legislation” includes
        the Securities Act (Alberta);

	 	 
	(d)	“Commissions” includes the
        Alberta Securities Commission;

	 	 
	(e	“Securities Act (Alberta)”
        means the Securities Act, R.S.A. 2000, c. S-4, as amended, and
        the regulations and rules made thereunder and all administrative policy
        statements, blanket orders, notices, directions and rulings issued by
        the Alberta Securities Commission.

Applicable exemptions 

 IN ADDITION to the representations and warranties in the General
  Provisions (on pages 13 to 22), the Purchaser represents and warrants to the
  Issuer that, as of the date of this Subscription Agreement and as of the Closing,
  the Purchaser falls into one of the following categories: 

	(a)	the Purchaser is:

	 	 	 
	 	(i)
	an Accredited Investor;
        or

	 	 	 
	 	(ii)
	a Family, Friend or Business
        Associate; and

	 	 	 
	 	the Purchaser is either

	 	 	 
	 	(iii)
	purchasing the Securities
        as principal and no other person, corporation, firm or other organization
        will have a beneficial interest in the Securities; or

	 	 	 
	 	(iv)
	if not purchasing the Securities
        as principal, is duly authorized to enter into this Subscription Agreement
        and to execute all documentation in connection with the purchase on behalf
        of each beneficial purchaser, it acknowledges that the Issuer may in the
        future be required by law to disclose on a confidential basis to securities
        regulatory authorities the identity of each beneficial purchaser of Securities
        for whom it may be acting, and is

	 	 	 	 
	 	 	(A)
	trading for accounts fully managed by
        it and is a trust corporation trading as trustee or an agent, a portfolio
        manager trading as an agent, or a person or company trading as an agent
        that, except for an exemption under the Securities Act (Alberta)
        or the rules thereunder, is required to be registered as a portfolio manager;
        or

 

	Subscription Agreement (with related appendixes)	Page 10 of 22 pages

	 	 	(B)	acting as agent for one or more disclosed principals,
        each of which principals is purchasing as a principal for its own account,
        not for the benefit of any other person, and not with a view to the resale
        or distribution of all or any of the Securities and each of which principals
        complies with Clauses (i) or (ii).

 Additional representations  

 IN ADDITION to the representations and warranties in the General
  Provisions (on pages 13 to 22), the Purchaser also represents and warrants to
  the Issuer that, as of the date of this Subscription Agreement and as of the
  Closing the Purchaser is not a “control person” of the Issuer as defined
  in the Securities Act (Alberta), will not become a “control person”
  by virtue of this purchase of any of the Securities, and does not intend to
  act in concert with any other person to form a control group of the Issuer.

 

	Subscription Agreement (with related appendixes)	Page 11 of 22 pages

 Provisions applicable to a purchaser resident in British
  Columbia  

 IMPORTANT NOTE: the following provisions are applicable
  ONLY if the Purchaser is resident in British Columbia.  

 Additional definitions  

 In the following provisions applicable to a purchaser resident
  in British Columbia and the Subscription Agreement (including the first (cover)
  page and all of the appendixes), the following words have the following meanings
  unless otherwise indicated: 

	(a)	“Accredited Investor” a person
        who falls into one of the categories set out in the “Accredited Investor
        Questionnaire” that starts on page 4;

	 	 
	(b)	“Family, Friend or Business Associate”
        means a person who falls into one of the categories set out in the “Family,
        Friend or Business Associate Questionnaire” that starts on page 7;

	 	 
	(c)	“Applicable Legislation” includes
        the Securities Act (B.C.);

	 	 
	(d)	“Commissions” includes the
        British Columbia Securities Commission;

	 	 
	(e)	“Securities Act (B.C.)”
        means the Securities Act, R.S.B.C. 1996, c. 418, as amended, and
        the regulations and rules made thereunder and all administrative policy
        statements, blanket orders, notices, directions and rulings issued by
        the British Columbia Securities Commission;

In the following provisions, a person is “Deemed to be Acting as a Principal” if the person is

	(a)	duly authorized to enter
        into this subscription and to execute all documentation in connection
        with the purchase on behalf of each beneficial purchaser; is purchasing
        the Purchased Securities as an agent or trustee for accounts that are
        fully managed by it and is

	 	 	 
	 	(i)
	a trust company or insurance company
        that has been authorized to do business under the Financial Institutions
        Act (British Columbia);

	 	 	 
	 	(ii)
	an adviser who manages the investment
        portfolio of clients through discretionary authority granted by one or
        more clients and who is registered as a portfolio manager under the Securities
        Act (B.C.) or is exempt from such registration;

	 	 	 
	 	(iii)
	a trust company or insurer, authorized
        under the laws of a province or territory of Canada other than British
        Columbia to carry on business in such province or territory;

	 	 	 
	 	(iv)
	a portfolio manager registered or exempt
        from registration under the laws of a province or territory of Canada
        other than British Columbia; or

	 	 	 
	 	(v)
	a portfolio manager in a jurisdiction
        other than Canada and has provided the “Certification by Foreign
        Portfolio Manager” contemplated by B.C. Instrument 45-504 or similar
        instrument; or

	 	 
	(b)	acting as agent for one
        or more disclosed principals, each of which principals is purchasing as
        a principal for its own account, not for the benefit of any other person,
        and not with a view to the resale or distribution of all or any of the
        Purchased Securities.

 In the case of any Purchaser who is Deemed to be Acting as
  a Principal, the Purchaser acknowledges that the Issuer may in the future be
  required by law to disclose on a confidential basis to securities regulatory
  authorities the identity of each beneficial purchaser of Purchased Securities
  for whom the Purchaser may be acting. 

 

	Subscription Agreement (with related appendixes)	Page 12 of 22 pages

 Applicable exemptions  

 IN ADDITION to the representations and warranties in the General
  Provisions (on pages 13 to 22), the Purchaser represents and warrants to the
  Issuer that, as at the Agreement Date and at the Closing, the Purchaser satisfies
  one or more of the following categories: 

	(a)	“Accredited Investor” (s.
        5.1, Multilateral Instrument MI 45-103): the Purchaser is an Accredited
        Investor and it is purchasing the Purchased Securities as principal or,
        if not purchasing the Purchased Securities as principal, it is duly authorized
        to enter into this subscription and to execute all documentation in connection
        with the purchase on behalf of each beneficial purchaser, it acknowledges
        that the Issuer may in the future be required by law to disclose on a
        confidential basis to securities regulatory authorities the identity of
        each beneficial purchaser of Purchased Securities for whom it may be acting,
        and it is acting as agent for one or more disclosed principals, each of
        which principals is purchasing as principal for its own account, not for
        the benefit of any other person, and not with a view to the resale or
        distribution of all or any of the Purchased Securities and each of which
        principals is an Accredited Investor; or

	 	 
	(b)	“Family, Friend or Business
        Associate” (s, 3.1, Multilateral Instrument MI 45-103): the Purchaser
        is a Family, Friend or Business Associate and it is purchasing the Purchased
        Securities as principal or, if not purchasing the Purchased Securities
        as principal, it is duly authorized to enter into this subscription and
        to execute all documentation in connection with the purchase on behalf
        of each beneficial purchaser, it acknowledges that the Issuer may in the
        future be required by law to disclose on a confidential basis to securities
        regulatory authorities the identity of each beneficial purchaser of Purchased
        Securities for whom it may be acting, and it is acting as agent for one
        or more disclosed principals, each of which principals is purchasing as
        principal for its own account, not for the benefit of any other person,
        and not with a view to the resale or distribution of all or any of the
        Purchased Securities and each of which principals is a Family, Friend
        or Business Associate.

Additional representations 

 IN ADDITION to the representations and warranties in the General
  Provisions (on pages 13 to 22), the Purchaser also represents and warrants to
  the Issuer that, as at the Agreement Date and at the Closing the Purchaser is
  not a “control person” of the Issuer as defined in the Securities
  Act (B.C.), will not become a “control person” by virtue of this
  purchase of any of the Securities, and does not intend to act in concert with
  any other person to form a control group of the Issuer. 

 

	Subscription Agreement (with related appendixes)	Page 13 of 22 pages

GENERAL PROVISIONS

	1.	  DEFINITIONS

	 	 	 	 
	 	1.1 
	In the Subscription Agreement
        (including the first (cover) page, the Terms on pages 2 to 4, the General
        Provisions on pages 13 to 22 and the other appendixes incorporated by
        reference), the following words have the following meanings unless otherwise
        indicated:

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

	 	 	 	 
	 	 	(b)
	“Applicable Legislation” means
        the Securities Legislation Applicable to the Issuer (as defined on page
        3) and all legislation incorporated in the definition of this term in
        other parts of the Subscription Agreement, together with the regulations
        and rules made and promulgated under that legislation and all administrative
        policy statements, blanket orders and rulings, notices and other administrative
        directions issued by the Commissions;

	 	 	 	 
	 	 	(c)
	“Closing” means the completion
        of the sale and purchase of the Securities;

	 	 	 	 
	 	 	(d)
	“Closing Date” has the meaning
        assigned in the Terms;

	 	 	 	 
	 	 	(e)
	“Commissions” means all securities
        commissions incorporated in the definition of this term in other parts
        of the Subscription Agreement and the SEC;

	 	 	 	 
	 	 	(f)
	“Final Closing” means the
        last closing under the Private Placement;

	 	 	 	 
	 	 	(g)
	“General Provisions” means
        those portions of the Subscription Agreement headed “General Provisions”
        and contained on page 13 to 22;

	 	 	 	 
	 	 	(h)
	“Private Placement” means
        the offering of the Securities on the terms and conditions of this Subscription
        Agreement;

	 	 	 	 
	 	 	(i)
	“Regulation S” means Regulation
        S promulgated under the 1933 Act;

	 	 	 	 
	 	 	(j)
	“Regulatory Authorities” means
        the Commissions;

	 	 	 	 
	 	 	(k)
	“Securities” has the meaning
        assigned in the Terms;

	 	 	 	 
	 	 	(l)
	“Subscription Agreement” means
        the first (cover) page, the Terms on pages 2 to 4, the General Provisions
        on pages 13 to 22 and the Questionnaires attached as schedules, all of
        which are hereby incorporated herein; and

	 	 	 	 
	 	 	(m)
	“Terms” means those portions
        of the Subscription Agreement headed “Terms” and contained on
        page 2 to 4.

	 	 	 	 
	 	1.2 
	In the Subscription Agreement,
        the following terms have the meanings defined in Regulation S: “U.S.
        Person” and “United States”.

	 	 	 	 
	 	1.3
	 In the Subscription Agreement,
        unless otherwise specified, currencies are indicated with the ISO 4217
        currency code so that, as examples, Canadian dollars are indicated with
        the prefix “CAD” and United States dollars are indicated with
        the prefix “USD”.

	 	 	 	 
	 	1.4
	 In the Subscription Agreement,
        other words and phrases that are capitalized have the meaning assigned
        in the Subscription Agreement.

 

	Subscription Agreement (with related appendixes)	Page 14 of 22 pages

	2. 	REPRESENTATIONS AND WARRANTIES
        OF PURCHASER

	 	 	 	 	 
	  	2.1 
	 	Acknowledgements concerning
        offering

	 	 	 	 	 
	 	The Purchaser acknowledges
        that:

	 	 
	 	 	(a)
	this Subscription is irrevocable
        by the Purchaser and may be rejected by the Issuer in whole or in part;

	 	 	 	 
	 	 	(b)
	no securities commission
        or similar regulatory authority has reviewed or passed on the merits of
        the Securities;

	 	 	 	 
	 	 	(c)
	there is no government or
        other insurance covering the Securities;

	 	 	 	 
	 	 	(d)
	there are risks associated
        with the purchase of the Securities;

	 	 	 	 
	 	 	(e)
	there are legal and contractual
        restrictions on the Purchaser’s ability to resell or otherwise dispose
        of the Securities and it is the responsibility of the Purchaser to find
        out what those restrictions are and to comply with them; and

	 	 	 	 
	 	 	(f)
	the Issuer has advised the
        Purchaser that the Issuer is relying on an exemption from the requirements
        to provide the Purchaser with a prospectus and to sell securities through
        a person registered to sell securities under the Applicable Legislation
        and, as a consequence of acquiring securities pursuant to this exemption,
        certain protections, rights and remedies provided by the Applicable Legislation,
        including statutory rights of rescission or damages, will not be available
        to the Purchaser.

	 	 	 	 
	 	2.2 
	Representations and warranties

	 	 	 	 
	 	The Purchaser represents,
        warrants, certifies and covenants to the Issuer, as of the date of this
        Subscription Agreement and as of the Closing Date:

	 	 	 	 
	 	 	(a)
	the Purchaser is purchasing
        the Securities as principal for its own account and not for the benefit
        of any other person;

	 	 	 	 
	 	 	(b)
	no prospectus has been filed
        by the Issuer with the Commissions in connection with the issuance of
        the Securities, the issuance is exempted from the prospectus and registration
        requirements of the Applicable Legislation, and

	 	 	 	 	 
	 	 	 	(i)
	the Purchaser is restricted from using
        most of the civil remedies available under the Applicable Legislation,

	 	 	 	 	 
	 	 	 	(ii)
	the Purchaser may not receive information
        that would otherwise be required to be provided to the Purchaser under
        the Applicable Legislation, and

	 	 	 	 	 
	 	 	 	(iii)
	the Issuer is relieved from certain
        obligations that would otherwise apply under the Applicable Legislation;

	 	 	 	 
	 	 	(c)
	to the best of the Purchaser’s
        knowledge, the sale of the Securities was not advertised;

	 	 	 	 
	 	 	(d)
	no person has made to the
        Purchaser any written or oral representations

	 	 	 	 	 
	 	 	 	(i)
	that any person will resell or repurchase
        the Securities,

 

	Subscription Agreement (with related appendixes)	Page 15 of 22 pages

	 	 	 	(ii)
	that any person will refund the purchase
        price of the Securities,

	 	 	 	 	 
	 	 	 	(iii)
	as to the future price or value of any
        of the Securities, or

	 	 	 	 	 
	 	 	 	(iv)
	that any of the Securities will be listed
        and posted for trading on a stock exchange or that application has been
        made to list and post any of the Securities for trading on a stock exchange;

	 	 	 	 
	 	 	(e)
	this subscription has not
        been solicited in any other manner contrary to the Applicable Legislation;

	 	 	 	 
	 	 	(f)
	the Purchaser is at arm’s
        length (as that term is customarily defined) with the Issuer;

	 	 	 	 
	 	 	(g)
	the Purchaser acknowledges
        (i) that the Securities (A) have not been registered under the 1933 Act
        or any applicable laws of any state of the United States and (B) may not
        be offered or sold in the United States unless registered under the 1933
        Act and all applicable securities laws of the states of the United States
        or an exemption from such registration requirements is available, and
        (ii) that, subject to section 4 hereof, the Issuer has no obligation or
        present intention of filing a registration statement under the 1933 Act
        in respect of the Securities;

	 	 	 	 
	 	 	(h)
	the Purchaser has not been
        organized for the purpose of subscribing for the Securities and has made
        all representations, warranties, covenants, acknowledgements, and understandings
        contained in this Subscription Agreement with respect to and on behalf
        of all of the beneficial owners of the Purchaser as well as the Purchaser;

	 	 	 	 
	 	 	(i)
	the Purchaser has been advised
        to consult its own legal and tax advisors with respect to applicable resale
        restrictions and tax considerations, and it is solely responsible for
        compliance with applicable resale restrictions and applicable tax legislation;

	 	 	 	 
	 	 	(j)
	the Purchaser has no knowledge
        of a “material fact” or “material change” (as those
        terms are defined in the Applicable Legislation) in the affairs of the
        Issuer that has not been generally disclosed to the public, save knowledge
        of this particular transaction;

	 	 	 	 
	 	 	(k)
	the offer made by this subscription
        is irrevocable (subject to the Purchaser’s right to withdraw the
        subscription and to terminate the obligations as set out in this Subscription
        Agreement) and requires acceptance by the Issuer;

	 	 	 	 
	 	 	(l)
	the Purchaser has the legal
        capacity and competence to enter into and execute this Subscription Agreement
        and to take all actions required pursuant to the Subscription Agreement
        and, if the Purchaser is an entity other than a natural person, the Purchaser
        is duly organized and validly existing under the laws of its jurisdiction
        of organization and has all requisite organizational power and authority
        to execute, deliver and perform its obligations under this Subscription
        Agreement;

	 	 	 	 
	 	 	(m)
	the entering into of this
        Subscription Agreement and the transactions contemplated hereby will not
        result in the violation of any of the terms and provisions of any law
        applicable to, or the constating documents of, the Purchaser or of any
        agreement, written or oral, to which the Purchaser may be a party or by
        which the Purchaser is or may be bound;

	 	 	 	 
	 	 	(n)
	this Subscription Agreement
        has been duly executed and delivered by the Purchaser and constitutes
        a legal, valid and binding agreement of the Purchaser enforceable against
        the Purchaser in accordance with its terms, except as may be limited by
        bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
        and similar laws of general applicability relating to or affecting creditors’
        rights and to general equity principles;

 

	Subscription Agreement (with related appendixes)	Page 16 of 22 pages

	 	 	(o)	the Purchaser has been independently
        advised as to the applicable hold period imposed in respect of the Securities
        by securities legislation in the jurisdiction in which the Purchaser resides
        and confirms that no representation has been made respecting the applicable
        hold periods for the Securities and is aware of the risks and other characteristics
        of the Securities and of the fact that the Purchaser may not be able to
        resell the Securities except in accordance with the applicable securities
        legislation and regulatory policies;

	 	 	 	 
	 	 	(p)	the Purchaser is resident in the jurisdiction
        set out on the first (cover) page of this Subscription Agreement;

	 	 	 	 
	 	 	(q)	the Purchaser is capable of assessing
        the proposed investment as a result of the Purchaser’s financial
        and business experience or as a result of advice received from a registered
        person other than the Issuer or any affiliates of the Issuer;

	 	 	 	 
	 	 	(r)	if required by applicable securities
        legislation, policy or order or by any securities commission, stock exchange
        or other regulatory authority, the Purchaser will execute, deliver, file
        and otherwise assist the Issuer in filing, such reports, undertakings
        and other documents with respect to the issue of the Securities as may
        be required;

	 	 	 	 
	 	 	(s)	the Purchaser understands that the Securities
        have not been registered under the 1933 Act in reliance on an exemption
        contained in Regulation S, and that the Issuer is relying upon the truth
        and accuracy of the representations, warranties, covenants, acknowledgements
        and understandings of the Purchaser set forth herein in order to determine
        the applicability of such exemptions and the Purchaser’s suitability
        to purchase the Securities;

	 	 	 	 
	 	 	(t)	the Purchaser is not, and at the time
        of the acquisition of the Securities will not be, a U.S. Person;

	 	 	 	 
	 	 	(u)	the Purchaser is not, and at the time
        of the acquisition of the Securities will not be, acquiring the Securities
        for the account or benefit of a U.S. Person;

	 	 	 	 
	 	 	(v)	upon consummation of the transactions
        contemplated by this Subscription Agreement, the Purchaser will be the
        sole beneficial owner of the Securities issued to it pursuant to this
        Subscription Agreement, and the Purchaser has not pre-arranged any sale
        with any purchaser or purchasers in the United States;

	 	 	 	 
	 	 	(w)	the Purchaser is outside the United
        States; provided, that delivery of the Securities may be effected in the
        United States through the Purchaser’s agent as long as the Purchaser
        is outside the United States at the time of such delivery;

	 	 	 	 
	 	 	(x)	the Purchaser understands that the Securities
        cannot be offered for sale, sold or otherwise transferred unless in accordance
        with the provisions of Regulation S, pursuant to registration under the
        1933 Act, or pursuant to an available exemption from registration under
        the 1933 Act;

	 	 	 	 
	 	 	(y)	the Purchaser has no present intention
        to sell or otherwise transfer the Securities except in accordance with
        Regulation S, pursuant to registration under the 1933 Act, or pursuant
        to an available exemption from registration under the 1933 Act, in each
        case in accordance with all applicable securities laws;

	 	 	 	 
	 	 	(z)	the Purchaser understands that the Issuer
        is required, under Rule 903 of Regulation S, to refuse to register the
        transfer of any of the Securities to be received by the Purchaser pursuant
        to this Subscription Agreement that are not transferred pursuant to a
        registration statement under the 1933 Act, in compliance with Regulation
        S, or otherwise pursuant to an available exemption from registration;

 

	Subscription Agreement (with related appendixes)	Page 17 of 22 pages

	 	 	(aa)	the Purchaser will not, directly or
        indirectly, or through one or more intermediaries, maintain any short
        position in the Securities during the applicable distribution compliance
        period;

	 	 	 	 
	 	 	(bb)	the Purchaser will not engage in hedging
        transactions with regard to the Securities unless in compliance with the
        provisions of Regulation S, pursuant to registration under the 1933 Act,
        or pursuant to an exemption from the registration requirements of the
        1933 Act; and

	 	 	 	 
	 	 	(cc)	the Purchaser will resell the Securities
        only in accordance with the provisions of Regulation S, pursuant to a
        registration under the Securities Act, or pursuant to an available exemption
        from registration under the 1933.

	 	2.3 	Reliance, indemnity and notification of changes
      
	 	 	 
	 	The representations, warranties,
        covenants acknowledgements and understandings of the Purchaser in this
        Subscription Agreement (including the first (cover) page, the Terms on
        pages 2 to 4, the General Provisions on pages 13 to 22 and the other appendixes
        incorporated by reference) are made by the Purchaser with the intent that
        they be relied upon by the Issuer in determining its suitability as a
        purchaser of Securities. The Purchaser hereby agrees to indemnify the
        Issuer, and its agents, officers, directors, employees and shareholders
        and their respective successors and assigns, from, against, and with respect
        to, against any and all claims, liabilities, obligations, losses, settlements,
        fines, deficiencies, damages, assessments, judgments, costs and expenses
        (including reasonable attorneys’ and accountants’ fees and costs
        and expenses reasonably incurred in investigating, preparing, defending
        against or prosecuting any litigation or claim, action, suit, proceeding
        or demand, interest, penalties and costs and expenses of enforcing the
        indemnification provided hereunder) of any kind or character, arising
        directly out of (a) any inaccuracy in any such representation or any breach
        of any such warranty; and (b) any failure by the Purchaser to perform
        or observe, or to have performed or observed, in full, any material covenant,
        agreement or condition to be performed or observed by it under this Subscription
        Agreement or under any certificates or other documents executed by the
        Purchaser in connection with this Subscription Agreement. The Purchaser
        undertakes to notify the Issuer immediately of any change in any representation,
        warranty or other information relating to the Purchaser set forth in the
        Subscription Agreement (including the first (cover) page, the Terms on
        pages 2 to 4, the General Provisions on pages 13 to 22 and the other appendixes
        incorporated by reference) which takes place prior to the Closing. 

	 	 	 
	 	2.4 
	 Survival of representations
        and warranties 

	 	 	 
	 	The representations, warranties,
        certifications and covenants contained in this Section will survive the
        Closing. 

	 	 	 
	3.  	REPRESENTATION AND WARRANTIES
        OF THE ISSUER 

	 	 	 
	 	3.1 
	Representations and warranties
      

	 	 	 	 
	 	The Issuer represents and
        warrants that, as of the Subscription Date and at the Closing Date: 

	 	 	 	 
	 	 	(a)
	the Issuer is a valid and subsisting
        corporation duly incorporated and in good standing under the laws of its
        jurisdiction of incorporation;

	 	 	 	 
	 	 	(b)
	the Issuer is duly registered and licensed
        to carry on business in the jurisdictions in which it carries on business
        or owns property where so required by the laws of that jurisdiction;

	 	 	 	 
	 	 	(c)
	the authorized capital of the Issuer
        consists of 200,000,000 shares of common stock, of which there were 17,044,750
        shares issued and outstanding as of the Subscription Date as fully paid
        and non-assessable shares;

	 	 	 	 
	 	 	(d)
	the Issuer will reserve or set aside
        sufficient shares in its treasury to issue the Securities, and all such
        Securities will upon issuance be duly and validly issued as fully paid
        and non-assessable;

 

	Subscription Agreement (with related appendixes)	Page 18 of 22 pages

	 	 	(e)	the financial statements of the Issuer
        filed with the Securities and Exchange Commission have all been prepared
        in accordance with generally accepted accounting principles, accurately
        reflect the financial position and all material liabilities (accrued,
        absolute, contingent or otherwise) of the Issuer, and its subsidiaries,
        if any, as of the dates thereof, and no adverse material changes in the
        financial position of the Issuer have taken place since the date thereof,
        save in the ordinary course of the Issuer’s business;

	 	 	 	 
	 	 	(f)	the Issuer has complied and will comply
        fully with the requirements of all applicable corporate and securities
        laws and administrative policies and directions in relation to all matters
        relating to the Private Placement;

	 	 	 	 
	 	 	(g)	the issue and sale of the Securities
        by the Issuer does not and will not conflict with, and does not and will
        not result in a breach of, any of the terms of its incorporating documents
        or any agreement or instrument to which the Issuer is a party;

	 	 	 	 
	 	 	(h)	there are no judgments against the Issuer
        or any of its subsidiaries, if any, which are unsatisfied, nor is the
        Issuer or any of its subsidiaries, if any, subject to any consent decrees
        or injunctions;

	 	 	 	 
	 	 	(i)	this Agreement has been or will be by
        the Closing Date, duly authorized by all necessary corporate action on
        the part of the Issuer, and the Issuer has full corporate power and authority
        to undertake the Private Placement;

	 	 	 	 
	 	 	(j)	the Issuer is a "reporting issuer" under
        section 12 of the Securities Exchange Act of 1934 and is not in default
        of any of the requirements of that Act;

	 	 	 	 
	 	 	(k)	no order ceasing, halting or suspending
        trading in securities of the Issuer nor prohibiting the sale of such securities
        has been issued to and is outstanding against the Issuer or its directors,
        officers or promoters or against any other companies that have common
        directors, officers or promoters;

	 	 	 	 
	 	 	(l)	no person, firm or corporation acting
        or purporting to act at the request of the Issuer is entitled to any brokerage,
        agency or finder’s fee in connection with the purchase and sale of
        the Securities described herein;

	 	 	 	 
	 	 	(m)	the Issuer has not advertised the Securities;
        and

	 	 	 	 
	 	 	(n)	the warranties and representations in
        this section are true and correct and will remain so as of the Closing
        Date.

	 	 	 	 
	 	3.2 	 Survival of representations and warranties
      
	 	 	 
	 	The representations and warranties contained
      in this Section will survive the Closing. 
	 	 	 
	4. 	DEMAND REGISTRATION RIGHTS 
	 	 	 
	 	4.1	Registration Statement 
	 	 	 
	 	After the date which is
        one hundred and twenty (120) days after the Final Closing Date, and upon
        receipt of a written request by the Purchaser, the Issuer shall use its
        best efforts to file a registration statement on Form SB-2 (or similar
        form) under the United States Securities Act of 1933 and under any applicable
        Blue Sky laws covering the Securities and shall use its best efforts to
        cause such registration statement to be declared effective by the Commission
        at the earliest practicable date, all at the Issuer’s sole cost and
        expense. Such best efforts shall include promptly responding to all comments
        received by the staff of the Commission, and promptly preparing and filing
        amendments 

 

	Subscription Agreement (with related appendixes)	Page 19 of 22 pages

	 	to such registration statement
        which are responsive to the comments received from the staff of the Commission,
        and in no event later than twenty-one (21) days from receipt by the Issuer
        of the comments of the staff of the Commission. Such registration statement
        shall name the Purchaser as a selling shareholder and shall provide for
        the sale of the Securities by the Purchaser from time to time directly
        to purchasers or in the over-the-counter market or through or to securities
        brokers or dealers that may receive compensation in the form of discounts,
        concessions, or commissions. The Issuer shall provide the Purchaser with
        such number of copies of the prospectus as shall be reasonably requested
        to facilitate the sale of the Securities. None of the foregoing shall
        in any way limit the Purchaser’s rights to sell the Securities in
        reliance on an exemption from the registration requirements under the
        Securities Act in connection with a particular transaction. In the event
        that any other purchasers under the Private Placement exercise the registration
        rights provided for herein, the Issuer shall also register the Securities
        issued to the Purchaser therein. 

	 	 	 
	 	4.2 	Currency of Registration Statement 
	 	 	 
	 	The Issuer shall use its
        best efforts to maintain the currency of the registration statement filed
        with the Commission and under all applicable Blue Sky laws in respect
        of the Securities for 12 months from the Closing Date. 

	 	 	 
	 	4.3 	Indemnification of Purchaser by Issuer 
	 	 	 
	 	To the extent permitted
        by law, the Issuer will indemnify the Purchaser, within the meaning of
        Section 15 of the 1933 Act, with respect to which registration, qualification
        or compliance has been effected pursuant to this Subscription Agreement,
        and each underwriter, if any, and each person who controls any underwriter
        within the meaning of Section 15 of the 1933 Act, against all expenses,
        claims, losses, damages or liabilities (or actions in respect thereof),
        including any of the foregoing incurred in settlement of any litigation,
        commenced or treated, to the extent such expenses, claims, losses, damages
        or liabilities arise out of or are based on any untrue statement (or alleged
        untrue statement) of a material fact contained in any registration statement,
        prospectus, offering circular or other document, or any amendment or supplement
        thereto, incident to any such registration, qualification or compliance,
        or based on any omission (or alleged omission) to state therein a material
        fact required to be stated therein or necessary to make the statements
        therein, in light of the circumstances in which they were made, not misleading,
        or any violation by the Issuer of the 1933 Act or any rule or regulation
        promulgated under the 1933 Act applicable to the Issuer in connection
        with any such registration, qualification or compliance, and the Issuer
        will reimburse the Purchaser, each of its officers and directors and partners,
        and each person controlling the Purchaser, each such underwriter and each
        person who controls any such underwriter, for any legal and any other
        expense reasonably incurred in connection with investigation, preparing
        or defending any such claim, loss, damage, liability or action, provided,
        however, that the indemnity contained herein shall not apply to amounts
        paid in settlement of any claim, loss, damage, liability or expense if
        settlement is effected without the consent of the Issuer (which consent
        shall not unreasonably be withheld); provided, further, that the Issuer
        will not be liable in any such case to the extent that any such claim,
        loss, damage, liability or expense arises out of or is based on any untrue
        statement or omission or alleged untrue statement or omission, made in
        reliance upon and in conformity with written information furnished to
        the Issuer by the Purchaser, such controlling person or such underwriter
        specifically for use therein. Notwithstanding the foregoing, insofar as
        the foregoing indemnity relates to any such untrue statement (or alleged
        untrue statement) or omission (or alleged omission) made in the preliminary
        prospectus but eliminated or remedied in the amended prospectus on file
        with the Commission at the time the registration statement becomes effective
        or in the final prospectus filed with the Commission pursuant to Rule
        424(b) of the Commission, the indemnity agreement herein shall not inure
        to the benefit of any underwriter or (if there is no underwriter) the
        Purchaser if a copy of the final prospectus file pursuant to Rule 424(b)
        was not furnished to the person or entity asserting the loss, liability,
        claim or damage at or prior to the time such furnishing is required by
        the 1933 Act. 

	 	 	 
	 	4.4 	Indemnification of Issuer by Purchaser 
	 	 	 
	 	To the extent permitted
        by law, the Purchaser will, if registrable Securities owned by the Purchaser
        are included in the securities as to which such registration, qualification
        or compliance is being effected, indemnify the Issuer, each of its directors
        and officers, affiliates, counsel, advisors, employees and, each underwriter,
        if any, of the Issuer's securities covered by such a registration statement,
        each person who controls the Issuer or such underwriter within 

 

	Subscription Agreement (with related appendixes)	Page 20 of 22 pages

	 	the meaning of Section 15
        of the 1933 Act, and each other person selling the Issuer's securities
        covered by such registration statement, each of such person's officers
        and directors and each person controlling such persons within the meaning
        of Section 15 of the 1933 Act, against all claims, losses, damages and
        liabilities (or actions in respect thereof), including attorneys fees
        and costs, arising out of or based on any untrue statement (or alleged
        untrue statement) of a material fact contained in any such registration
        statement, prospect, offering circular or other document, or any omission
        (or alleged omission) to state therein or necessary to make the statements
        therein not misleading or any violation by the Purchaser of any rule or
        regulation promulgated under the 1933 Act applicable to the Purchaser
        and relating to action or inaction required of the Purchaser in connection
        with any such registration, qualification or compliance, and will reimburse
        the Issuer, such other person, such directors, officers, persons, underwriters
        or control persons for any legal or other expenses reasonably incurred
        in connection with investigating or defending any such claim, loss, damage,
        liability or action; provided, however, that the indemnity contained herein
        shall not apply to amounts paid in settlement of any claim, loss, damage,
        liability or expense if settlement is effected without the consent of
        the Purchaser (which consent shall not be unreasonably withheld). Notwithstanding
        the foregoing, the liability of the Purchaser under this subsection (b)
        shall be limited in an amount equal to the net proceeds from the sale
        of the shares sold by the Purchaser, unless such liability arises out
        of or is based on wilful conduct by the Purchaser.

	 	 	 
	 	4.5 	 Legend 
	 	 	 
	 	At the Closing Date, the
        Issuer will deliver the certificates representing the Securities to the
        Purchaser (unless the Purchaser otherwise instructs the Issuer in writing).
        The Certificate representing the Securities delivered pursuant to this
        Subscription Agreement will bear a legend in substantially the following
        form, unless such Securities have been registered under the 1933 Act,
        as amended: 

	 	 	 
	 	 	THE SECURITIES REPRESENTED BY THIS CERTIFICATE
        HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
        (THE “U.S. SECURITIES ACT”) OR OTHER APPLICABLE SECURITIES LAWS.
        THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
        TO DISTRIBUTION OR RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
        TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATIONS
        S, RULE 901 THROUGH RULE 905, AND PRELIMINARY NOTES UNDER THE U.S. SECURITIES
        ACT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
        OF THE U.S. SECURITIES ACT OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
        STATEMENT. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE
        CONDUCTED UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES ACT.

	 	 	 
	 	4.6 	Removal of Legend 
	 	 	 
	 	After the registration statement,
        referenced in Section 4 is declared effective by the Commission, the Purchaser
        may deliver to the Issuer the certificate representing the Securities
        issued to the Purchaser and the Issuer will, within three days after receipt
        by the Issuer of the foregoing, issue a new certificate representing and
        in exchange for the aforementioned certificate, which new certificate
        shall be legended as follows: 

	 	 	 
	 	 	THE SECURITIES REPRESENTED BY THIS CERTIFICATE
        HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
        SECURITIES MAY BE SOLD PURSUANT TO THE REGISTRATION STATEMENT PROVIDED
        THAT (I) THE REGISTRATION STATEMENT IS CURRENT AND EFFECTIVE, (II) THE
        HOLDER COMPLIES WITH THE PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES
        ACT OF 1933, AS AMENDED, AND (III) THE SALE IS IN COMPLIANCE WITH THE
        PLAN OF DISTRIBUTION SET FORTH IN THE PROSPECTUS. THE TRANSFER OF SUCH
        SECURITIES IS RESTRICTED AS SET FORTH IN A SUBSCRIPTION AGREEMENT BETWEEN
        THE ISSUER AND THE HOLDER, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER.
        

 

	Subscription Agreement (with related appendixes)	Page 21 of 22 pages

	5. 	CLOSING 

	 	 	 
	 	5.1 
	The Purchaser acknowledges that, although Securities
        may be issued to other purchasers under the Private Placement concurrently
        with the Closing, there may be other sales of Securities under the Private
        Placement, some or all of which may close before or after the Closing.
        The Purchaser further acknowledges that there is a risk that insufficient
        funds may be raised on the Closing to fund the Issuer’s objectives
        and that further closings may not take place after the Closing. 

	 	 	 
	 	5.2 
	On or before the end of the fifth business day before
        the Closing Date, the Purchaser will deliver to the Issuer the Subscription
        Agreement and the appropriate Questionnaire, if required, duly executed,
        and payment in full for the total price of the Securities to be purchased
        by the Purchaser by certified check, bank draft or money order payable
        to the Issuer. 

	 	 	 
	 	5.3 
	At Closing, the Issuer will deliver to the Purchaser
        or its nominee the certificates representing the Securities purchased
        by the Purchaser registered in the name of the Purchaser or its nominee.
      

	 	 	 
	6. 	MISCELLANEOUS 

	 	 	 
	 	6.1 
	The Purchaser shall not sell, assign, pledge, transfer
        or otherwise dispose of the Securities except in accordance with the requirements
        of all applicable securities laws, any legends placed on the Securities,
        and the terms and conditions of this Subscription Agreement. 

	 	 	 
	 	6.2 
	The Purchaser hereby authorizes the Issuer to correct
        any minor errors in, or complete any minor information missing from any
        part of the Subscription Agreement and any other schedules, forms, certificates
        or documents executed by the Purchaser and delivered to the Issuer in
        connection with the Private Placement. 

	 	 	 
	 	6.3 
	The Issuer will be entitled to rely on delivery by
        fax machine of an executed copy of this subscription, and acceptance by
        the Issuer of such faxed copy will be equally effective to create a valid
        and binding agreement between the Purchaser and the Issuer in accordance
        with the terms of the Subscription Agreement. 

	 	 	 
	 	6.4 
	Notwithstanding anything else in this Subscription
        Agreement to the contrary, this Subscription Agreement and the transactions
        contemplated hereby are conditional upon and subject to the Issuer’s
        having obtained such regulatory approval of this Subscription Agreement
        and the transactions contemplated by this Subscription Agreement as the
        Issuer, in its sole discretion, considers necessary. 

	 	 	 
	 	6.5 
	This Subscription Agreement is not assignable or
        transferable by either party hereto without the prior written consent
        of the other party hereto.

	 	 	 
	 	6.6 
	Time is of the essence of this Subscription Agreement.
      

	 	 	 
	 	6.7 
	Except as expressly provided in this Subscription
        Agreement and in the agreements, instruments and other documents contemplated
        or provided for herein, this Subscription Agreement contains the entire
        agreement between the parties with respect to the Securities and there
        are no other terms, conditions, representations or warranties whether
        expressed, implied, oral or written, by statute, by common law, by the
        Issuer, or by anyone else. 

	 	 	 
	 	6.8 
	This Subscription Agreement may be modified and amended
        only by written agreement executed by all the parties hereto. 

	 	 	 
	 	6.9 
	This Subscription Agreement enures to the benefit
        of and is binding upon the parties to this Subscription Agreement and
        their successors and permitted assigns. Nothing in this Subscription Agreement
        shall be construed to create any rights or obligations except among the
        parties hereto. 

	 	 	 
	 	6.10 
	All notices, requests, consents and other communications
        hereunder shall be in writing, shall be addressed to the receiving party’s
        address as set forth below or to such other address as a party may designate
        by

 

	Subscription Agreement (with related appendixes)	Page 22 of 22 pages

	 	 	notice hereunder, and shall be either (a) delivered
        by hand, (b) made by facsimile transmission (receipt confirmed), (c) sent
        by international overnight or express courier, or (d) sent by registered
        mail, return receipt requested, postage prepaid. 

	 	 	 
	 	 	If to Issuer:            Quincy
        Resources Inc. 

                                        
        309 Center Street 

                                        
        Hancock, MI, USA 49930 

                                       
        Attn: Daniel T. Farrell 

       If to Purchaser, to the address set forth above. 

	 	 	 
	 	 	All notices, requests, consents and other communications
        hereunder shall be deemed to have been given either (w) if by hand, at
        the time of the delivery thereof to the receiving party at the address
        of such party set forth above, (x) if made by facsimile transmission,
        at the time that receipt thereof has been acknowledged by electronic confirmation
        or otherwise, (y) if sent by overnight or express courier, on the business
        day following the day such notice is delivered to the courier service,
        or (z) if sent by registered mail, on the fifth business day following
        the day such mailing is made. 

	 	 	 
	 	6.11 	This Subscription Agreement is to be read with all
        changes in gender or number as required by the context. The headings and
        captions of the various subdivisions of this Subscription Agreement are
        for the convenience of reference only and shall in no way modify or affect
        the meaning or construction of any of the terms or provisions hereof.
      

	 	 	 
	 	6.12 	This Subscription Agreement will be governed by and
        construed in accordance with the internal laws of the state of Nevada
        (without reference to its rules governing the choice or conflict of laws
        that would cause the laws of any other jurisdiction to be applied), and
        the parties hereto irrevocably attorn and submit to the exclusive jurisdiction
        of the courts of Michigan with respect to the enforcement of any arbitration
        decision related to this Subscription Agreement. Any controversy arising
        out of, connected to, or relating to any matters herein of the transactions
        between the Purchaser and the Issuer (including for purposes of arbitration,
        officers, directors, employees, controlling persons, affiliates, professional
        advisors, attorneys, agents, or promoters of the Issuer), on behalf of
        the undersigned, or this Subscription Agreement, or the breach thereof,
        including, but not limited to any claims of violations of Federal and/or
        State Securities Acts, Banking Statutes, Consumer Protection Statutes,
        Federal and/or State anti-Racketeering (e.g. RICO) claims as well as any
        claims relating or deriving from Securities, or underlying securities
        law and any State Law claims of fraud, negligence, negligent misrepresentations,
        and/or conversion shall be settled by arbitration; and in accordance with
        this paragraph and judgment on the arbitrator's award may be entered in
        any court having jurisdiction thereof in accordance with the provisions
        of Nevada Law. The Purchaser waives any right to punitive damage claims.
        In the event of such a dispute, each party to the conflict shall select
        an arbitrator, both of whom shall then select a third arbitrator, which
        shall constitute the three person arbitration board. The decision of a
        majority of the board of arbitrators, who shall render their decision
        within thirty (30) days of appointment of the final arbitrator, shall
        be binding upon the parties.

END OF GENERAL PROVISIONS  

END OF SUBSCRIPTION AGREEMENTFiled by Automated Filing Services Inc. (604) 609-0244 - August Biomedical Corporation - Exhibit 10.1

 Zone
  Exploration, Inc.  

  P.O. Box 1362 Billings, Montana 59103 

  ph and fax (406) 259-5106 zonexplore@aol.com 

 

December 15, 2003 

 Mr. Scott Houghton 

  August Biomedical Corp. 

  P.O. Box 73575 

  Vancouver, British Columbia 

  Canada V6E 4L9

	 	Re:	Agreement for Sale and Purchase 

      Horizontal Amsden Play 

      Musselshell and Yellowstone Counties, Montana (USA) 

Dear Mr. Houghton:

                This
  letter sets forth terms of an agreement for sale and purchase (“Agreement”),
  which, when accepted by you, shall form a binding Agreement between Zone Exploration,
  Inc. and John Fredlund (jointly referred to herein as “Zone”) and
  August Biomedical Corp. (“August”), subject to the terms and conditions
  hereinafter set forth. 

	1. 	This Agreement is entered
        into on the basis of the following representations and warranties made
        to August by Zone.

	 	 	 
	 	a) 
	Zone is the owner of an oil and gas prospect called
        the “Horizontal Amsden Play,” which has been described in certain
        materials presented to August, and which is herein referred to as the
        “Prospect;”

	 	 	 
	 	b) 
	Zone is the legal owner of a number of oil and gas
        leases within the Prospect, covering approximately 12,972.14 gross leasehold
        acres (and approximately 9,268.32 net leasehold acres) in Musselshell
        and Yellowstone Counties, Montana, USA, more particularly described on
        Exhibit “A” attached hereto, and which are henceforth referred
        to as “the Leases;”

	 	 	 
	 	c) 
	Zone represents that the Leases are in good standing
        and that they comply with all regulatory requirements and laws;

	 	 	 
	 	d) 
	Zone is not in breach of any laws, ordinances, statutes,
        regulations, bylaws or decrees to which it is subject or which applies
        to it which may adversely affect the Leases;

	 	 	 
	 	e) 
	There are no claims being made nor are any claims
        anticipated to be made as against Zone or the Leases;

 1 

 

	 	f)	No person, company or entity has any right, agreement
      or option to purchase any interest in, or portion or, the Leases; 
	 	 	 	 
	 	g)	Zone has the full and absolute
        right, power and authority to enter into this Agreement on the terms and
        conditions herein set forth, to carry out the transactions contemplated
        in this Agreement and to sell one hundred percent (100%) of its respective
        legal and beneficial title and ownership of the Leases to August; 

	 	 	 
	 	h) 	Any assignments from Zone
        to August shall conform to the regulations of both the State of Montana
        and the United States Bureau of Land Management; 

	 	 	 
	 	i) 	There is no action, suit,
        judgment, litigation, strike, labour disturbance, proceeding or investigation
        against or pending against or involving Zone which might adversely affect
        Zone transferring one hundred percent (100%) of its respective legal and
        beneficial ownership of the Leases to August, or which will result in
        any liability to August in respect of the Leases; 

	 	 	 
	 	j) 	Zone holds all permits,
        licenses, consents and authorities issued by any Government or governmental
        authority having jurisdiction or any subdivision thereof, including without
        limitation, any governmental department, commission, bureau, board or
        administrative agency which are necessary in relation to its respective
        ownership of the Leases and its respective ability to sell and transfer
        those Leases to August; 

	 	 	 
	 	k)	Zone is not in default or
        breach of any provision of any contract, agreement, lease, indenture or
        other instrument which may adversely affect the Leases or the sale and
        transfer of the ownership of the Leases to August; 

	 	 	 
	 	l) 	The sale or transfer of
        the Leases to August will not: 

	 	 	 
	 	 	i) 
	violate any provisions of the constating
        documents of Zone, or 

	 	 	 	 
	 	 	ii)
	result in or require the creation or
        imposition of any mortgage, deed of trust, pledge, lien, security interest,
        claim, charge, right of others or any encumbrances of any nature upon
        or with respect to the Leases, except as provided for in this Agreement.
      

	 	 	 
	 	m) 	Zone is a corporation duly
        incorporated, validly existing and in good standing under the laws of
        the State of Montana, USA; 

	 	 	 
	 	n) 	Zone knows of no environmental
        hazards that will adversely affect the drilling for oil and gas on the
        properties encompassed by the Leases. To the best of its knowledge and
        belief, all environmental laws and ordinances have been complied with.
      

2 

 

	2.	August warrants and represents as follows:

	 	 	 
	 	a)	This it is a publicly traded company
        duly incorporated in the State of Nevada (U.S.) The shares of August trade
        on the NASD over-the-counter bulletin board market in the United States
        of America under the symbol “AGBM”.

	 	 	 
	 	b)	August will not be in breach of any
        of its constating documents in entering into this Agreement for purchasing
        the Leases from Zone;

	 	 	 
	 	c)	 August will obtain all authorizations
        as are necessary in order to enter into this Agreement and purchase the
        Leases.

	 	 	 
	3.	Following execution of this
        Agreement by Zone and August (jointly referred to as the “parties”),
        August shall pay to Zone a non-refundable deposit of twenty thousand dollars
        ($20,000.00) in United States funds (“Initial Deposit”).

	 	The above Initial Deposit shall be sent by wire transfer
      to the following:
	 	 	 	 
	 	 	Wire to Account Name:	John Fredlund
	 	 	 	 
	 	 	Account Number:	XXXXXXXXXXXX
	 	 	 	 
	 	 	Routing Number:	XXXXXXXXX
	 	 	 	 
	 	 	Bank:	XXXXXXXXXX
	 	 	 	XXXXXXXXXXXX
	 	 	 	XXXXXXXX, XXXXXXX XXX XXXXX
	 	 	 	(XXX) XXX-XXXX
	 	 
	4.	Within two business days of the execution
        of this Agreement, Zone shall provide to August complete access to all
        of the Leases and all other relevant documentation in possession of Zone
        respecting the Leases in a data room at the following location: 115 N.
        Broadway, Suite 315, Billings, Montana, USA, Monday through Friday, between
        the hours of 9 a.m. and 5 p.m. MST, in order to assist August in obtaining
        a legal opinion and accounting advise and undertake its requisite due
        diligence respecting the terms and conditions of the Leases and whether
        what is proposed herein is feasible. August shall have sixty (60) days
        after execution of this Agreement in which to obtain this advice. If the
        legal and other opinions obtained by August support the project and indicate
        that the project is feasible, then, on or before the sixtieth (60th)
        day, August shall so advise Zone in writing of August’s selection
        to proceed with the project, and immediately wire transfer to Zone to
        the account named herein, a non-refundable payment of one hundred sixty-five
        thousand three hundred sixty-six dollars ($165,366.00) in United States
        funds. This payment is the balance due on the purchase price for the Leases,
        and will be known as the “Exercise Payment.”

3 

 

	5.	The aforesaid twenty thousand
        dollars ($20,000.00) U.S. Initial Deposit and the one hundred sixty-five
        thousand three hundred sixty-six dollars ($165,366.00) U.S. Exercise Payment
        together shall constitute the “Purchase Price” for the Leases.
        Zone and August agree that the total Purchase Price per net acre for the
        Leases is $20.00 U.S. per net acre. Based on the net acres represented
        by Zone (9,268.32 net acres), the total Purchase Price is one hundred
        eighty-five thousand three hundred sixty-six dollars ($185,366.00) U.S.
        [9,268.32 x $20.00 = $185,366.00]. If a due diligence title examination
        by August reveals that Zone owns a different number of net leasehold acres,
        the parties herein agree to adjust the Purchase Price accordingly.

	 	 	 
	6.
   	
Upon payment of the Purchase Price in full, Zone shall
        deliver to August in a timely fashion, an Assignment of Oil and Gas Leases
        (“Assignment”) constituting 100% of all of the right, title
        and interest of Zone in the Leases, and at the same time reserve an Overriding
        Royalty Interest on the Leases, resulting in the delivery of an 82% Net
        Revenue Interest to August (100% - landowners’ royalty – override
        = 82%) on each of the leases, proportionately reduced in cases where the
        leased mineral interest is less than 100%. Furthermore, Zone shall retain
        the rights of REASSIGNMENT AND RENEWAL, as follows:

      

	 	 	 
	 	 	“The overriding royalty reserved
        herein, and all other terms and conditions of this assignment or transfer
        shall apply to any and all extensions, renewals and substitute leases
        obtained by Assignee, its successors or assigns on the lands described
        herein. In the event Assignee desires to surrender said lease as to all
        or any part of the acreage covered thereby, said Assignee agrees to notify
        Assignor by registered mail, at least 30 days in advance of the anniversary
        date specified in said lease, and Assignor hereunder shall then have 15
        days after receipt of such notice within which to elect to take a reassignment
        of said lease as to the portion thereof to be relinquished. Should Assignor
        hereunder elect to receive such a reassignment, same will be delivered
        by Assignee prior to the anniversary date of the lease. It is understood,
        however, that there shall be no penalty for oversight or clerical error,
        except liability not to exceed the amount that was paid for the assignment.
        Any relinquishment under the terms of this paragraph shall be free and
        clear of all burdens, encumbrances, or outstanding interests other than
        those existing on the date hereof.”

	 	 	 
	7.	Zone and August will enter
        into an Area of Mutual Interest Agreement (“AMI”), wherein Zone
        will reserve a maximum of a three percent (3%) Overriding Royalty Interest
        on subsequently acquired leases within the AMI. This AMI Agreement and
        the geographical area that it covers are both described on Exhibit “B”
        attached hereto.

	 	 	 
	8.	Zone and August will enter
        into a Lease Brokerage Agreement (“Broker Agreement”), wherein
        August agrees to retain Zone to research mineral title throughout the
        AMI and negotiate and acquire additional oil and gas leases in a manner
        agreeable with August. This Brokerage Agreement is attached hereto as
        Exhibit “C.”

4

 

	9.	August commits to the following project expenditures
        (“Project Expenditures”) in addition to the funds tendered for
        the purchase of the Leases (all funds U.S.):

	 	YEAR 1	 	 	Amount	 	Purpose
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	Date of Agreement	 	$	20,000.00	 	Initial Deposit
	 	 	 	 	 	 	 
	 	Within 60 days	 	$	165,366.00	 	Exercise Payment
	 	 	 	 	 	 	 
	 	Within 90 days	 	$	300,000.00	 	Acquisition of additional
	 	 	 	 	 	 	Prospect leases (15,000 acres)
	 	 	 	 	 	 	 
	 	Within 120 days	 	$	200,000.00	 	Acquisition of additional
	 	 	 	 	 	 	Prospect leases (10,000 acres)
	 	 	 	 	 	 	 
	 	 	 	$	300,000.00	 	Negotiations and Purchase
	 	 	 	 	 	 	of existing vertical oil well
	 	 	 	 	 	 	properties (2-6 wells possible)
	 	 	 	 	 	 	 
	 	Within 180 days	 	$	300,000.00	 	Acquisition of additional
	 	 	 	 	 	 	Prospect leases (15,000 acres)
	 	 	 	 	 	 	 
	 	 	 	$	200,000.00	 	3-D seismic survey at
	 	 	 	 	 	 	Wolf Springs field
	 	 	 	 	 	 	 
	 	Within 300 days	 	$	1,200,000.00	 	Drilling participation budget
	 	 	 	 	 	 	For 1, 2 or 3-well program
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	YEAR 2	 	 	Amount	 	Purpose
	 	 	 	 	 	 	 
	 	First 9 months	 	$	750,000.00	 	Drilling participation budget
	 	 	 	 	 	 	For additional drilling
	 	 	 	 	 	 	 
	 	 	 	$	75,000.00	 	2nd year lease rentals
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	TOTAL 2-YR. BUDGET:	 	$	3,510,366.00	 	 

5

 

	10.	August will determine who shall be the
        operator of the drilling project. At August’s request, Zone may assist
        by providing to August a list of operators who are capable of undertaking
        the seismic, drilling or production responsibilities. August hereby agrees
        to indemnify and hold Zone harmless from any and all liabilities, claims,
        demands or suits arising as a result of any exploration operations conducted
        pursuant to this paragraph.

	 	 
	11.	In the event that August defaults on
        any of its payments with respect to the Purchase Price to Zone, Zone will
        provide written notice to August of such default. Upon receipt of such
        written notice, August will have fourteen (14) days to cure the defect
        and rectify the situation by making the outstanding payment of the Purchase
        Price that is owning to Zone. Should August fail to cure the default within
        that time, August shall immediately forfeit its entire interest in the
        Prospect and the Leases described herein, unless both August and Zone
        agree otherwise.

	 	 
	12.	In the event that August defaults on
        any of its payments with respect to payments that may be due to Zone under
        the terms of the AMI Agreement or the Brokerage Agreement, the terms of
        those agreements shall prevail.

	 	 
	13.	In the event that August defaults on
        any of its payments with respect to the Project Expenditures other than
        those referred to in paragraph 12, the prevailing Model Form Operating
        Agreements between August and other partners shall dictate remedies, unless
        said expenditures are owed to specifically to Zone. Under this circumstance,
        Zone will provide written notice to August of such default. Upon receipt
        of such written notice, August will have sixty (60) days to cure the defect
        and by making the outstanding payment of the Project Expenditure that
        is owed to Zone.

6

 

	14.	All notices and communications required or permitted
        under this Agreement shall be in writing and shall be effective when received
        by mail, certified mail;, registered mail, return receipt requested, facsimile
        or hand delivery as follows:

	 	Zone Exploration, Inc.	-and-	Gary G. Broeder
	 	Attn: John Fredlund	 	Attorney at Law
	 	115 N. Broadway, Suite 315	 	Transwestern I
	 	Billings, Montana USA 59101	 	404 N. 31st Street
	 	-also-	 	Billings, Montana USA 59101
	 	P.O. Box 1362	 	Ph           (406)
      255-8630
	 	Billings, Montana USA 59103	 	Fax          (406)
      255-7125
	 	Ph          (406)
      259-5106	 	E-mail:     ggbroeder@aol.com
	 	Fax         (406)
      259-5106	 	 
	 	E-mail:    zonexplore@aol.com	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	August Biomedical Corp.	-and-	Stephen O’Neill
	 	Attn: Scott Houghton	 	O’Neill & Co.
	 	1014 Robson Street	 	Suite 80, 1055 West Georgia
	 	Vancouver, British Columbia	 	Vancouver, British Columbia
	 	Canada V6E 4L9	 	CanadaV6B 2A3
	 	-also-	 	Ph          (604)
      687-5792
	 	P.O. Box 73575	 	Fax         (604)
      687-6650
	 	Vancouver, British Columbia	 	E-Mail    son@stockslaw.com
	 	Canada V6E 4L9	 	                abo@stockslaw.com
	 	Ph          
      (604) 608-3831	 	 
	 	Fax          (604)
      608-3382	 	 
	 	Cell         (604)
      341-6051	 	 
	 	E-mail     sch@novus-tele.net	 	 

	15.	Until such time that Zone has been paid
        the full Purchase Price, Zone is entitled to notification of and a timely
        copy of all press releases and other public announcements that may be
        issued by August concerning the Prospect.

	 	 
	16.	Either party may, by written notice so delivered to the other,
      change the address to which notice shall thereafter be made.

7

 

	17.	This instrument contains the entire
        Agreement of the parties with respect to the transactions contemplated
        herein, supersedes any and all prior agreements or understandings, written
        or oral, and cannot be amended except by a writing signed by all of the
        parties. The parties agree to be reasonable with respect to any amendments
        sought by another party.

	 	 
	18.	In the event that any party is required
        to seek legal or equitable action to interpret or enforce any provision
        of this Agreement, the prevailing party shall be entitled to its reasonable
        costs and fees, including attorney fees.

	 	 
	19.	This Agreement may be executed by facsimile
        and in any number of counterparts, each of which shall be deemed an original
        instrument, but all of which together shall constitute one and the same
        instrument.

	 	 
	20.	The waiver of any breach or any term
        or condition of this Agreement shall not be deemed to constitute a waiver
        of any other breach of the same or any other term or condition of the
        Agreement.

	 	 
	21.	Both Zone and August will bear their
        own costs and expenses, including the fees of legal, accounting and other
        professional advisors engaged by them in connection with the transactions
        contemplated by this Agreement and its preparation.

	 	 
	22.	The parties shall perform such further
        acts and execute such other agreements or documents as may be reasonably
        necessary to carry out the intent and provisions of the Agreement.

	 	 
	23.	In addition to complying with any specific
        standards of conduct set forth herein, the parties have acted and shall
        continue to act toward each other in good faith in the negotiation, execution,
        delivery and performance of this Agreement.

	 	 
	24.	This Agreement and all transactions
        contemplated herein shall be interpreted in accordance with the laws of
        the State of Montana and shall inure to the benefit of, and be binding
        upon, the parties hereto, their respective heirs, administrators, successors
        and assigns as the case may be.

	 	 
	25.	Time is of the essence of this Agreement.

8

                If
  the foregoing accurately sets forth your understanding of our agreement, kindly
  sign this Agreement where indicated below, and return it to the office of Zone
  no later than Friday, December 19, 2003, at 3:00 P.M. Mountain Standard Time.
  Your signature and acceptance will form a binding Agreement between us, subject
  only to the terms and conditions aforesaid. 

  

Respectfully, 

  

Zone Exploration, Inc. 

 By: /s/ John Fredlund . 

         John Fredlund, President 

        /s/ John Fredlund .
  

        John Fredlund

TERMS UNDERSTOOD AND AGREED TO AND THE WITHIN OFFER
  ACCEPTED THIS 18th DAY OF DECEMBER , 2004.
  

   August 

   By: /s/ Scott Houghton .  

           Scott Houghton, President 

  

9

  
   

 Exhibit “A”  

                Attached
  to and made part of that certain Agreement for Sale and Purchase dated December
  15, 2003, between Zone Exploration, Inc. and John Fredlund (jointly referred
  to herein as “Zone”), and August Biomedical Corp. (“August”),
  to wit: 

 Oil and Gas Leases – Musselshell and Yellowstone
  Counties, Montana (USA) 

	 	Lessee /	 	 
	 	Lease Date /	Land Description/	 
	Lessors	Term
      Length	Net
      Acres	Recording
	 	 	 	 
	 	 	 	 
	 	 	 	 
	North Mason Lake and Stag-Summit
      Prospects	 
	 	 	 	 
	State of Montana	John Fredlund	Township 10 North, Range 24 East	 
	(34,875-02)	12-3-2002	Section 36: All	 
	 	10 years	 	 
	 	 	Containing 640.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(640.0 net acres)	 
	 	 	 	 
	 	 	 	 
	John Fredlund,	Zone Exploration, Inc.	Township 9 North, Range 24 East	 
	et ux Bess Snyder	9-1-2003	Section 2: S2	 
	 	5 years	Section 11: Lots 1-4, N2S2, N2	 
	 	 	Section 12: E2, SW	 
	 	 	 	 
	 	 	Containing 1,402.46 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(105.90 net acres)	 
	 	 	 	 
	 	 	 	 
	John Fredlund,	Zone Exploration, Inc.	Township 9 North, Range 25 East	 
	et ux Bess Snyder	9-1-2003	Section 19: Lots 1, 2, E2NW	 
	 	5 years	 	 
	 	 	Containing 161.40 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(20.18 net acres)	 
	 	 	 	 
	 	 	 	 
	State of Montana	John Fredlund	Township 9 North, Range 25 East	 
	(34,872-02)	12-3-2002	Section 16: All	 
	 	10 years	 	 
	 	 	Containing 640.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(640.0 net acres)	 

 1 

 Exhibit “A” – Page 2 

  Agreement for Sale and Purchase 

  December 15, 2003 

	AgAmerica, FCB	John Fredlund	Township 9 North, Range 25 East	Book 373
	(FCB 01-0164)	5-10-2001	Section 9: S2	Page 707
	 	5 years	 	 
	 	 	Containing 320.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(160.0 net acres)	 
	 	 	 	 
	 	 	 	 
	AgAmerica, FCB	John Fredlund	Township 9 North, Range 25 East	Book 385
	(FCB 02-0161)	12-9-2002	Section 17: All	Page 164
	 	5 years	 	 
	 	 	Containing 640.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(320.0 net acres)	 
	 	 	 	 
	 	 	 	 
	Bryan W. Adolph,	Zone Exploration, Inc.	Township 9 North, Range 25 East	Book 385
	et ux Kathy J.	9-15-2003	Section 7: Lots 3, 4, E2SW, NE	Page 687
	 	7 years	Section 8: W2W2	 
	 	 	Section 15: W2	 
	 	 	Section 17: W2	 
	 	 	Section 18: NE	 
	 	 	Section 22: SE	 
	 	 	 	 
	 	 	Containing 1,442.08 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(1,091.95 net acres)	 
	 	 	 	 
	 	 	 	 
	USA	John Fredlund	Township 9 North, Range 25 East	 
	(MTM-85136)	7-1-1996	Section 10: All	 
	 	10 years	Section 15: E2	 
	 	 	Section 22: N2NW	 
	 	 	 	 
	 	 	Containing 1,040.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(1,040.0 net acres)	 

2

 Exhibit “A” – Page 3

  Agreement for Sale and Purchase 

  December 15, 2003 

	USA	John Fredlund	Township 9 North, Range 25 East	 
	(MTM-85137)	7-1-1996	Section 18: SE	 
	 	10 years	Section 19: E2	 
	 	 	Section 20: All	 
	 	 	 	 
	 	 	Containing 1,120.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(1,120.0 net acres)	 
	 	 	 	 
	 	 	 	 
	USA	John Fredlund	Township 9 North, Range 25 East	 
	(MTM-85370)	7-1-1996	Section 22: NE, S2NW	 
	 	10 years	 	 
	 	 	Containing 240.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(240.0 net acres)	 
	 	 	 	 
	 	 	 	 
	USA	John Fredlund	Township 9 North, Range 25 East	 
	(MTM-85545)	9-1-1996	Section 22: SW	 
	 	10 years	 	 
	 	 	Containing 160.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(160.0 net acres)	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Conoco Prospect	 	 	 
	 	 	 	 
	State of Montana	John Fredlund	Township 9 North, Range 25 East	 
	(34,873-02)	12-3-2002	Section 36: All	 
	 	10 years	 	 
	 	 	Containing 640.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(640.0 net acres)	 

 3 

 Exhibit “A” – Page 4

  Agreement for Sale and Purchase 

  December 15, 2003 

	Gage Dome Prospect	 	 	 
	 	 	 	 
	USA	John Fredlund	Township 9 North, Range 26 East	 
	(MTM-85735)	11-1-1996	Section 8: SE	 
	 	10 years	Section 14: SESE	 
	 	 	Section 18: Lots 1, 2	 
	 	 	 	 
	 	 	Containing 282.89 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(282.89 net acres)	 
	 	 	 	 
	 	 	 	 
	USA	John Fredlund	Township 9 North, Range 26 East	 
	(MTM-84837)	2-1-1996	Section 21: All	 
	 	10 years	 	 
	 	 	Containing 640.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(640.0 net acres)	 
	 	 	 	 
	 	 	 	 
	Delphia Prospect	 	 	 
	 	 	 	 
	State of Montana	John Fredlund	Township 9 North, Range 27 East	 
	(34,874-02)	12-3-2002	Section 36: All, excpt RR r/w	 
	 	10 years	 	 
	 	 	Containing 613.50 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(613.50 net acres)	 
	 	 	 	 
	 	 	 	 
	USA	John Fredlund	Township 9 North, Range 27 East	 
	(MTM-85736)	11-1-1996	Section 21: E2	 
	 	10 years	Section 22: SWNE, S2NW, SW	 
	 	 	 	 
	 	 	Containing 600.0 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(600.0 net acres)	 

 4 

 Exhibit “A” – Page 5

  Agreement for Sale and Purchase 

  December 15, 2003 

	Hawk Creek Prospect	 	 	 
	 	 	 	 
	John Fredlund,	Zone Exploration, Inc.	Township 8 North, Range 29 East	 
	et ux Bess Snyder	9-1-2003	Section 2: Lots 13-20	 
	 	5 years	 	 
	 	 	Township 8 North, Range 30 East	 
	 	 	Section 6: Lots 4, 5, 12, 13, 20, 21,	 
	 	 	25, 26, E2SW, W2SE, NESE	 
	 	 	Section 18: Lots 1-4, E2W2, E2	 
	 	 	 	 
	 	 	Containing 1,429.81 acres, more or less.	 
	 	 	Musselshell Co., Montana	 
	 	 	(89.91 net acres)	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Wolf Springs Prospect	 	 	 
	 	 	 	 
	Charles Ruthern Horton,	Reger Oil, Inc.	Township 7 North, Range 32 East	Doc. No.
	aka Charles R. Horton	6-22-2000	Section 19: Lots 2-4, SENW, S2NE,	3096057
	aka Charley R. Horton	5 years	E2SW, SE	 
	 	 	Section 30: E2	 
	 	 	 	 
	 	 	Containing 800.0 acres, more or less.	 
	 	 	Yellowstone Co., Montana	 
	 	 	(152.0 net acres)	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Charles Rockwood Horton,	Reger Oil, Inc.	Township 7 North, Range 32 East	Doc. No.
	aka Charles Rocky Horton	8-3-2000	Section 19: Lots 2-4, SENW, S2NE,	3264951
	 	5 years	E2SW, SE	 
	 	 	Section 30: E2	 
	 	 	 	 
	 	 	Containing 800.0 acres, more or less.	 
	 	 	Yellowstone Co., Montana	 
	 	 	(48.0 net acres)	 

 5 

 Exhibit “A” – Page 6

  Agreement for Sale and Purchase 

  December 15, 2003 

	Jeffrey D. Horton,	Reger Oil, Inc.	Township 7 North, Range 32 East	Doc. No.
	Personal Representative	7-24-2000	Section 19: Lots 2-4, SENW, S2NE,	3264952
	of the Estate of	5 years	E2SW, SE	 
	Roland Dean Horton,	 	Section 30: E2	 
	deceased	 	 	 
	 	 	Containing 800.0 acres, more or less.	 
	 	 	Yellowstone Co., Montana	 
	 	 	(184.0 net acres)	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	Gross Leasehold Acres:	12,972.14	 
	 	Net Leasehold Acres:	9,268.32	 

 6 

  
   

 Exhibit “B”  

 Agreement for Area of Mutual Interest 

                Attached
  to and made part of that certain Agreement for Sale and Purchase dated December
  15, 2003, between Zone Exploration, Inc. and John Fredlund (jointly referred
  to herein as “Zone”), and August Biomedical Corp. (“August”),
  to wit: 

 All lands located in Musselshell and Yellowstone Counties,
  Montana (USA)

	 	The Area of Mutual Interest is defined as the following
      lands: 
	 	 	 
	 	Township 10 North, Range 24 East	Sections 25-27, 34-35
	 	Township 10 North, Range 25 East	Sections 29-32
	 	 	 
	 	Township 9 North, Range 24 East	Sections 1-3, 10-15
	 	Township 9 North, Range 25 East	Sections 1-27, 34-36
	 	Township 9 North, Range 26 East	Sections 7-36
	 	Township 9 North, Range 27 East	Sections 19-36
	 	Township 9 North, Range 28 East	Sections 19, 30, 31
	 	Township 9 North, Range 29 East	Sections 34-36
	 	Township 9 North, Range 30 East	Sections 31-33
	 	 	 
	 	Township 8 North, Range 25 East	Sections 1, 12, 13
	 	Township 8 North, Range 26 East	Sections 1-18
	 	Township 8 North, Range 27 East	Sections 1-6
	 	Township 8 North, Range 28 East	Section 6
	 	Township 8 North, Range 29 East	Sections 1-3, 10-15, 22-27, 34-36
	 	Township 8 North, Range 30 East	Sections 4-9, 16-21, 28-33
	 	Township 8 North, Range 31 East	Sections 31-36
	 	Township 8 North, Range 32 East	Sections 31-34
	 	 	 
	 	Township 7 North, Range 31 East	Sections 1-14, 23-26, 35, 36
	 	Township 7 North, Range 32 East	Sections 3-10, 15-22, 27-34
	 	 	 
	 	Township 6 North, Range 31 East	Sections 1, 2
	 	Township 6 North, Range 32 East	Sections 3-6

 For the certain terms and conditions of this AMI, refer to page 2 of Exhibit
  “B.” 

 Exhibit “B” – Page 2 

  Agreement for Purchase and Sale 

  December 15, 2003 

 Area of Mutual Interest Terms:  

 1.                Length
  of Term. The term of this AMI Agreement shall extend for five (5) years
  from December 15, 2003, and shall govern the subsequent acquisition of oil and
  gas leases and other oil and gas properties, including producing oil and gas
  wells, within the defined geographical area described herein. 

 2.               
  Subsequent Leases acquired by Zone. If Zone acquires any subsequent oil
  and gas leases or other oil and gas properties within the AMI, Zone shall, within
  90 days, offer August a 100% interest in these leases or properties. August
  shall have 45 days to elect to acquire said leases at a cost of $20.00 –U.S.
  per net mineral acre. Zone shall reserve an Overriding Royalty equal to the
  lesser interest of either a three percent (3%) Overriding Royalty or
  the difference between the existing lease burdens and an 80% Net Revenue Interest
  (NRI). [100% - existing lease burdens (landowners’ royalty + pre-existing
  overrides) = Net Revenue Interest (NRI)]. However, under no circumstances shall
  the Overriding Royalty to be reserved by Zone be less than one percent (1%).

 3               .
  Subsequent Leases acquired by August. In the event that August acquires
  any oil and gas leases or other properties within the AMI, August shall, within
  90 days or within a mutually agreeable time, assign to Zone an Overriding Royalty
  equal to the lesser interest of either a three percent (3%) Overriding Royalty
  or the difference between the existing lease burdens and an 80% NRI.
  However, under no circumstances shall the Overriding Royalty to be assigned
  to Zone be less than one percent (1%). 

 4.               
  In the Event of Default on Payment of Purchase Price. In the event that
  August acquires any leases or properties with the AMI before the Purchase Price
  for the Prospect has been paid in full and August owns 100% of the record title
  interest in the Prospect and the Leases, as defined under the terms of the Agreement
  to which this Exhibit is attached, and August elects not to participate in the
  Prospect or defaults on the Purchase Price payments and forfeits its interest
  in the Prospect, August shall offer all of these subsequently acquires leases
  or properties to Zone “at cost.” Within 90 days of forfeiture, August
  shall offer these leases to Zone, and Zone shall have 45 days to elect to acquire
  any or all of those leases or properties, and shall tender payment to August.
  August shall then make an assignment of 100% of its interest in said leases
  or properties to Zone, and the leases shall not be burdened with any overrides.
  If Zone elects not to acquire said leases or properties, August shall own said
  leases or properties with no further obligations to Zone regarding those leases
  or properties. 

 5.               
  Less than Full Mineral Interest. If any subsequently acquired oil and
  gas lease constitutes less than a full 100% mineral interest lease, the overrides
  reserved or conveyed shall be proportionately reduced with respect to the actual
  interest leased. 

 6.               
  Successors and Assigns. This AMI shall apply to the heirs, successors
  and assigns of both parties. 

  
   

 Exhibit “C”  

 Brokerage Agreement for Acquiring Subsequent Leases and
  Properties 

                Attached
  to and made part of that certain Agreement for Sale and Purchase dated December
  15, 2003, between Zone Exploration, Inc. and John Fredlund (jointly referred
  to herein as “Zone”), and August Biomedical Corp. (“August”),
  to wit: 

                NOTWITHSTANDING
  ANYTHING CONTAINED IN THE AGREEMENT FOR SALE AND PURCHASE TO THE CONTRARY, 

                Zone
  and August agree to the following: 

	 	1.
 	This Brokerage Agreement
        addresses the future work that will be conducted pursuant to the goals
        of the Horizontal Amsden Play (“project”). The work will involve
        labor directed at acquiring additional oil and gas lease acreage and other
        related properties, and all of the labor associated therewith, in a professional
        and an organized fashion. All future work done by Zone on the project
        will be done with the prior consent and at the direction of the August.

	 	 	 	 
	 	2.	The project area is defined
        as the area described in the larger Agreement for Sale and Purchase and
        the related Exhibits.

	 	 	 	 
	 	3.	The work required of Zone
        is the research and compilation of mineral ownership title, surface title,
        oil and gas leasing, property acquisitions, well site and access permitting,
        damage settlements and other germane land functions required to properly
        assemble a leasehold position suitable for drilling wells, and to facilitate
        the appropriate land-related issues associated with the drilling and development
        programs.

	 	 	 
	 	4.	Compensation to Zone is as follows:
	 	 	 	 
	 	 	a) 	$350 per day for work on the project.
	 	 	 	 
	 	 	b) 	Reimbursement for 100% of applicable
        expenses in the field, including motels, meals, copy work, mailing, reasonable
        telephone charges and the like.

	 	 	 	 
	 	 	c) 	Mileage allowance of .40/mile

	 	 	 	 
	 	 	d) 	100% cost reimbursement for sub-brokers
        (hired and managed by Zone) of up to $350 per day per man plus applicable
        expenses

 Exhibit “C” – Page 2 

  Agreement for Sale and Purchase 

  December 15, 2003 

	 	 	e) 	The cash difference between the actual cost of acquired
      oil and gas leases and $20.00 per net acre. Zone and August agree
      that August shall pay $20.00 per net acre to Zone for all oil and gas leases
      acquired throughout the project area. In the event that the actual cost
      of an oil and gas lease or another related property is more than $20.00
      per net acre, August shall have the right to acquire said lease or property
      “at cost” with no additional compensation to Zone.
	 	 	 	 
	 	4.	That August shall have the right, following reasonable
      notice, to audit the documentation and the cost and expense records of Zone
      specifically regarding the subject project.
	 	 	 	 
	 	Zone agrees to the following:
	 	 	 	 
	 	1.	To serve as the lead broker
        for field land services for the project.

	 	 	 	 
	 	2.	With prior consent of August,
        to hire experienced and dependable sub-brokers (landmen) to assist with
        the expedition of the project.

	 	 	 	 
	 	3.	To focus work efforts according
        to the priorities set by August, and to deliver to August all mineral
        and ownership and leasehold reports, executed leases, contracts, agreements,
        easements and executed permits and the relevant paperwork involving damage
        settlements in a timely and expeditious manner.

	 	 	 	 
	 	4.	To research title records
        for fee, state and federal ownerships and to render proper reports on
        the same. On the freehold title, to research the county records from the
        “patent to the present,” and render landman’s “Mineral
        Ownership and Leasehold Reports” based on the ownership of freehold
        oil and gas rights.

	 	 	 	 
	 	5.	To acquire leases and other
        related properties, and easements, permits and damage settlements according
        to terms set by August, and solely for the benefit of August or any other
        entity specified by August. At August’s choice, leases, permits and
        easements may be acquired in either the name of “August” or
        in the name of “Zone Exploration, Inc.” Any leases acquired
        by Zone in the prospect area shall be for the benefit of August, subject
        to the specific terms and restrictions defined in this larger Agreement.

	 	 	 	 
	 	6.	To assign “all right,
        title and interest” in any leases, contracts, permits or easements
        acquired, pursuant to clause #5 previous, to August in a timely fashion,
        when requested by August.

	 	 	 	 
	 	7.	To adhere to the Landman’s
        “Code of Ethics,” as stated by the American Association of Professional
        Landmen (copy attached).

 Exhibit “C” – Page 3 

  Agreement for Sale and Purchase

  December 15, 2003 

	 	August agrees to the following:
	 	 	 
	 	1.	To provide reasonable and ethical guidelines
        for the work required.

	 	 	 
	 	2.	To pay all invoices in a timely fashion,
        buy no longer than thirty (30) days following receipt of any invoice.

                This
  Brokerage Agreement is non-exclusive and does not prohibit August from hiring
  other people or corporations to do similar work within the project area under
  separate arrangements. 

                AGREED
  TO by the undersigned and effective as of December 15, 2003. 

	     Zone Exploration, Inc 	 	 	August Biomedical Corp.
	 	 	 	 	 
	 	 	 	 	 
	By:	            /s/
      John Fredlund	 	By:	            /s/
      Scott Houghton
	 	John Fredlund, President	 	 	Scott Houghton, President
	 	 	 	 	 
	 	 	 	 	 
	By:	            /s/
      John Fredlund	 	 	 
	 	John Fredlund, President

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