Document:

kodiak8k061908ex4-1.htm

    
      

      

    

    Canada &
Offshore

       

      Form of Subscription
Agreement for Private Placement of Shares

       

      A
completed and originally executed copy of this Subscription Agreement and
Schedules A. B and C, if applicable, duly completed and signed, must be
delivered to the Corporation.

       

       

      
        	
                TO:   Kodiak Energy, Inc. (the
      “Corporation”)

                 

              	 
      

      

      The
undersigned (the “Subscriber”) hereby
irrevocably subscribes for and agrees to purchase the number of units (the
“Units”) set forth below
for the subscription price of US$2.50 per Unit representing the aggregate
consideration set forth below (the “Aggregate Subscription
Price”),  upon and subject to the terms and conditions set
forth in “Terms and Conditions of Subscription for Units of Kodiak Energy, Inc.”
attached hereto (together with the face pages and the attached Exhibits, the
“Subscription
Agreement”).  Each Unit will consists of one common share in the capital of the
Corporation (“Common
Shares”) and one warrant (“Warrant”) where each Warrant
entitles the holder to purchase one Common Share in the capital of the
Corporation at an exercise price of US$3.50.

       

      
 

      
        
          	 
      	
                  Subscriber’s
      Particulars:

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  Number
      of Units :___________________

                	 
      
	 
      	
                  Name
      of Subscriber - please print

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  Aggregate
      Subscription Price:  $_______________________

                	 
      
	 
      	
                  By:
      

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  If
      the Subscriber is signing as agent for a principal, unless it
      is

                	 
      
	 
      	 
      	
                  Authorized
      Signature

                	 
      	 
      	 
      	 
      	 
      	
                  deemed
      to be purchasing as principal under NI 45-106,
    complete

                	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  the
      following and ensure that the applicable Schedule(s) are

                	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  completed
      on behalf of such principal:

                	 
      
	 
      	
                  Name
      and Official Capacity or Title of signatory if not Subscriber (please
      print)

                	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  Name
      of Principal

                	 
      
	 
      	
                  Subscriber’s
      Residential Address

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  Principal’s
      Residential  Address

                	 
      
	 
      	
                  City/Town

                	
                  Province

                	
                  Postal
      Code

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  City/Town

                	
                      Province

                	
                  Postal
      Code

                	 
      
	 
      	
                  Telephone
      Number

                	 
      	
                  Fax
      Number

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  Principal’s
      Telephone Number

                	 
      
	 
      	
                  e-mail
      address

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  Principal’s
      e-mail address

                	 
      
	 
      	 Citizenship:	
                   

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  Citizenship:

                	 
      	 
      	 
      
	 
      	
                  The
      Subscriber owns, directly or indirectly, the following
      securities

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                  (including
      options) of the Corporation: _______________

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                  The
      Subscriber is
      r or is not r an insider of the
      Corporation; or

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                  The
      Subscriber is
      r or is not r a member of the
      pro group of the

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                  Corporation                [Please
      check the applicable box(s)]

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                  Register the Common Shares as above , or as set forth
      below:

                	 
      	 
      	 
      	
                  Certificates
      for Common Shares will be delivered to the registered

                
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  shareholder
      unless delivery is otherwise specified as set forth
  below:

                
	 
      	
                  Name

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  Contact
      Name and Telephone Number

                	 
      
	 
      	
                  Account
      reference, if applicable

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  Account
      reference, if applicable

                	 
      
	 
      	
                  Address

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  Address

                	 
      
	 
      	
                  City/Town

                	
                  Province

                	
                  Postal
      Code

                	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                  City/Town

                	
                      Province

                	
                  Postal
      Code

                	 
      

        

      DATED
this _____ day of ___________________, 2008

       

      KODIAK
ENERGY, INC.

      
        	 	 	
                 

              	 
	Per: ______________________________________	 	   
      Subscription No:	 
	 	 	 	 
	 	 	
                 

              	 

      

      This is
the first page of an agreement comprised of 13 pages (not including Schedules A,
B and C).

      
        
           

        

        
           

          
            

          

        

        
           

          Canada & Offshore

        

      

      TERMS
AND CONDITIONS OF SUBSCRIPTION FOR UNITS OF

       

      KODIAK
ENERGY, INC.

       

      
        	
                1.

              	
                Terms of the
      Offering.  The Subscriber (on its own behalf and, if
      applicable, on behalf of each person on whose behalf the Subscriber is
      contracting) acknowledges that:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                this
      subscription is subject to rejection or allotment by the Corporation in
      whole or in part at any time and in accordance with applicable Securities
      Laws (as defined herein);

              

      

       

      
        	
                 
      

              	
                (b)

              	
                the
      Common Shares subscribed for by it hereunder form part of a larger
      issuance and sale by the Corporation of up to 3,000,000 Units (or such
      other number of Units as may be determined by the Corporation) at a
      subscription price of US$2.50 per Unit, where each Unit is comprised of
      one Common Share and one Warrant (the “Offering”);

              

      

       

      
        	
                 
      

              	
                (c)

              	
                each
      Warrant entitles the holder to purchase one Common Share in the capital of
      the Corporation at an exercise price of US$3.50 for a period of 24 months
      following the closing of the Offering (the “Expiry
      Date”);

              

      

       

      
        	
                 
      

              	
                (d)

              	
                in
      connection with the sale of the Units, if permitted by applicable
      securities legislation, the Corporation may pay a commission or finder’s
      fee, which could consist of cash or securities or a combination
      thereof,  to registered brokers or
  others;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                the
      Offering is not subject to any minimum subscription level, and therefore,
      any funds invested under this Subscription Agreement are available to the
      Corporation and will be paid on the Closing Date to the Corporation, and
      need not be refunded to the Subscriber unless the Closing Date does not
      occur by such date as may be agreed to by the
  Corporation;

              

      

       

      
        	
                 
      

              	
                (f)

              	
                if
      the Closing Date or Closing Dates do not occur on or before such dates as
      the Corporation may determine, or in the event that the Corporation
      rejects the Subscription Agreement, the subscription proceeds will be
      promptly returned to the Subscriber, without interest or
      deduction;

              

      

       

      
        	
                 
      

              	
                (g)

              	
                the
      Corporation is a company incorporated under the laws of the State of
      Delaware, and because the operations and officers and directors are
      located outside of Canada, it may not be possible for you to effect
      service of process on them within Canada or to enforce against them, in
      Canada, judgements obtained in Canadian courts; further, it may not be
      possible to enforce judgments of Canadian courts against the Corporation
      in the United States.

              

      

       

      
        	
                2.

              	
                Definitions.  In
      this Subscription Agreement, unless the context otherwise
      requires:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                “Accredited Investor Status
      Certificate” means the Accredited Investor Status Certificate in
      the form attached hereto as Schedule A which is required to be
      completed by a Subscriber who is purchasing securities as an “accredited
      investor” pursuant to
NI 45-106;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                “affiliate”, “distribution” and “insider” have the
      respective meanings ascribed to them in the Securities Act
      (Alberta);

              

      

       

      
        	
                 
      

              	
                (c)

              	
                “Closing” means the
      completion of the issue and sale by the Corporation and the purchase by
      the Subscribers of the Common Shares pursuant to the subscription
      agreements, in the form of this Subscription Agreement or the subscription
      agreement for Flow-Through Shares, completed by
    Subscribers;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                “Closing Date” or “Closing Dates” means
      such date or dates as the Corporation may
  determine;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                “Closing Time” means
      10:00 a.m. (Calgary time) on the Closing Date or such other time as the
      Corporation may determine;

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada
& Offshore

        

      

      
        	
                 
      

              	
                (f)

              	
                “Designated Provinces”
      means British Columbia, Alberta and Ontario and such other provinces that
      may be designated by the Corporation prior to the Closing
      Date;

              

      

       

      
        	
                 
      

              	
                (g)

              	
                “founder” means, in
      respect of the Corporation, a person
who:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                acting
      alone, in conjunction, or in concert with one or more persons, directly or
      indirectly, takes the initiative in founding, organizing or substantially
      reorganizing the business of the Corporation;
  and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                at
      the time of the trade is actively involved in the business of the
      Corporation;

              

      

       

      
        	
                 
      

              	
                (h)

              	
                “material” means material
      in relation to the Corporation and its subsidiaries considered on a
      consolidated basis;

              

      

       

      
        	
                 
      

              	
                (i)

              	
                “Offering” has the
      meaning given thereto in section 1;

              

      

       

      
        	
                 
      

              	
                (j)

              	
                “NI 45-106” means
      National Instrument 45-106 Prospectus and Registration
      Exemptions;

              

      

       

      
        	
                 
      

              	
                (k)

              	
                “person”
      includes:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                an
      individual;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                a
      corporation;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                a
      partnership, trust, fund and an association, syndicate, organization or
      other organized group of persons, whether incorporated or not;
      and

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                an
      individual or other person in that person’s capacity as a trustee,
      executor, administrator or personal or other legal
      representative;

              

      

       

      
        	
                 
      

              	
                (l)

              	
                “Securities” means the
      Common Shares, the Warrants and the Common Shares to be issued on the
      exercise of the Warrants;

              

      

       

      
        	
                 
      

              	
                (m)

              	
                “Securities Commissions”
      means, collectively, the securities commission or other securities
      regulatory authority in each of the Designated
  Provinces;

              

      

       

      
        	
                 
      

              	
                (n)

              	
                “Securities Laws”
      means collectively, the applicable securities laws of each of the
      Designated Provinces and the respective instruments, regulations and rules
      made and forms prescribed thereunder together with all applicable
      published policy statements, blanket orders, rulings and notices of the
      Securities Commissions;

              

      

       

      
        	
                 
      

              	
                (o)

              	
                “spouse” means an
      individual who:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                is
      married to another individual and is not living separate and apart within
      the meaning of the Divorce Act (Canada),
      from the other individual;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                is
      living with another individual in a marriage-like relationship, including
      a marriage-like relationship between individuals of the same gender;
      or

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                in
      Alberta, is an individual referred to in paragraph (i) or (ii), or is
      an adult interdependent partner within the meaning of the Adult Interdependent
      Relationships Act (Alberta);

              

      

       

      
        	
                 
      

              	
                (p)

              	
                “Subscribers” means all
      subscribers for the Shares pursuant to the Offering, including the
      Subscriber; and

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada
& Offshore

        

      

      
        	
                 
      

              	
                (q)

              	
                “U.S. Securities Act”
      means the United States Securities Act of
1933.

              

      

       

      
        	
                3.

              	
                Delivery and
      Payment.  The Subscriber agrees that the following
      documents shall be delivered to Kodiak Energy, Inc., Suite 460, 734 - 7th
      Ave. SW, Calgary, AB  T2P 3P8 Attention:  William
      Tighe, not later than 5:00 p.m. (Calgary time) on the day that is 2
      business days prior to the Closing Date or such other date or place as the
      Corporation may advise:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                a
      completed and duly signed copy of this Subscription
    Agreement;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                if
      the Subscriber is purchasing Common Shares as an “accredited investor” (as
      such term is defined in NI 45-106), a completed and duly signed copy
      of the NI 45-106 Accredited Investor Status Certificate attached
      hereto as Schedule A;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                if
      the Subscriber is purchasing Common Shares as a close friend or business
      associate pursuant to section 5(g)(ii), a completed and duly signed copy
      of the close personal friend/close business associate questionnaire
      attached hereto as Schedule B;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                if
      the Subscriber is a corporation, a completed and duly signed copy of Form
      4C, Corporate Placee Registration Form attached hereto as Schedule
      C;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                any
      other documents required by applicable Securities Laws which the
      Corporation requests; and

              

      

       

      
        	
                 
      

              	
                (f)

              	
                a
      certified cheque or bank draft made payable in same day freely
      transferable Canadian funds at par in Calgary, Alberta to “Kodiak Energy,
      Inc.” representing the Aggregate Subscription Price payable by the
      Subscriber for the Units, or such other method of payment as the
      Corporation may accept.

              

      

       

      The
Subscriber acknowledges and agrees that documents referred to in this section,
when executed and delivered by the Subscriber, will form part of and will be
incorporated into this Subscription Agreement with the same effect as if each
constituted a representation and warranty or covenant of the Subscriber
hereunder in favour of the Corporation.  The Subscriber consents to
the filing of such documents as may be required to be filed with the applicable
securities regulatory authorities in connection with the transactions
contemplated hereby.  The Subscriber acknowledges and agrees that this
subscription, the Subscription Price and any other documents delivered in
connection herewith will be held by the [corporation] until
Closing.

       

      
        	
                4.

              	
                Closing.  The
      transactions contemplated hereby will be completed at the Closing Time in
      Calgary at the location determined by the
  Corporation.

              

      

       

      
        	
                5.

              	
                Authorization.  The
      Subscriber hereby irrevocably authorizes the Corporation, in its sole
      discretion: (a) to act as its representative at the closing and to execute
      in its name and on its behalf all closing receipts and documents required;
      (b) to complete or correct any errors or omissions in any form or document
      provided by the Subscriber; and (c) to receive on its behalf certificates
      representing the Common Shares and Warrants purchased under this
      Subscription Agreement or to arrange for their
  delivery.

              

      

       

      
        	
                6.

              	
                Subscriber’s Representations,
      Warranties, Covenants & Acknowledgments.  The
      Subscriber (on its own behalf and, if applicable, on behalf of each person
      on whose behalf the Subscriber is contracting) represents, warrants,
      covenants and acknowledges to the Corporation (and acknowledges that the
      Corporation and respective counsel are relying thereon), that both at the
      date hereof and at the Closing
Time:

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada
& Offshore

        

      

      
        	
                 
      

              	
                (a)

              	
                Authorization
      and Effectiveness.  If the Subscriber is an individual,
      it is of the full age of majority and has all requisite legal capacity and
      competence to execute and deliver this Subscription Agreement and to
      observe and perform its covenants and obligations hereunder, or if the
      Subscriber is a corporation, the Subscriber is a valid and subsisting
      corporation, has the necessary corporate capacity and authority to execute
      and deliver this Subscription Agreement and to observe and perform its
      covenants and obligations hereunder and has taken all necessary corporate
      action in respect thereof or, if the Subscriber is a partnership,
      syndicate or other form of unincorporated organization, the Subscriber has
      the necessary legal capacity and authority to execute and deliver this
      Subscription Agreement and to observe and perform its covenants and
      obligations hereunder and has obtained all necessary approvals in respect
      thereof, and, if the Subscriber is subscribing for Common Shares hereunder
      as agent for a principal, it is duly authorized to execute and deliver
      this Subscription Agreement and all other necessary documentation in
      connection with such subscription on behalf of such principal and, in any
      case, upon acceptance by the Corporation, this Subscription Agreement has
      been duly and validly authorized, executed and delivered by the Subscriber
      and constitutes a legal, valid and binding contract of the Subscriber (and
      any beneficial purchaser whom the Subscriber is subscribing on behalf of)
      enforceable against the Subscriber (and any beneficial purchaser whom the
      Subscriber is subscribing on behalf of) in accordance with its terms and
      will not result in a violation of any of the Subscriber’s applicable
      constating documents, any of the terms or provisions of any law applicable
      to the Subscriber or any agreement to which the Subscriber is a party or
      by which it is bound;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Residence;
      Citizenship.  The Subscriber is a resident of the
      jurisdiction referred to under “Subscriber’s Particulars” on page 1
      hereof, which will not be in the United States.  The Subscriber
      is not a citizen of the United
States;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                No
      Offering Memorandum.  The Subscriber has not received,
      nor has it requested, nor does it have any need to receive, any offering
      memorandum, or any other document (other than financial statements,
      interim financial statements or any other document, the content of which
      is prescribed by statute or regulation) describing the business and
      affairs of the Corporation which has been prepared for delivery to, and
      review by, prospective subscribers in order to assist it in making an
      investment decision in connection with this Offering and it has not become
      aware of any advertisement in printed media of general and regular paid
      circulation (or other printed public media) or on radio, television or
      telecommunications or other form of advertisement (including electronic
      display such as the Internet) with respect to the distribution of the
      Common Shares;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                Purchasing
      as Principal.  Except as provided in subsection 5(f)
      hereof, the Subscriber is purchasing the Units as principal (as defined in
      all applicable Securities Laws) for its own account, and not for the
      benefit of any other person;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                Purchasing
      for Investment Only.  Except as provided in
      subsection 5(f) hereof, the Subscriber is purchasing the Subscriber’s
      Units for investment only and not with a view to resale or
      distribution.  The Subscriber is aware that no prospectus has
      been filed with any of the Securities Commissions or similar regulatory
      authority in connection with the sale of the Units, and it is purchasing
      the Units pursuant to an exemption from the prospectus requirement or
      similar requirement under applicable Securities Laws and, as a
      consequence: (i) it is restricted from using most of the civil
      remedies available under Securities Laws; (ii) it may not receive
      information that would otherwise be required to be provided to it under
      Securities Laws; and (iii) the Corporation is relieved of certain
      obligations that would otherwise apply under Securities
    Laws;

              

      

       

      
        	
                 
      

              	
                (f)

              	
                Purchasing
      as Agent or Trustee.  In the case of the purchase
      hereunder by the Subscriber of Units as agent or trustee for any principal
      whose identity is disclosed or undisclosed or identified by account number
      only, each beneficial purchaser of the Units hereunder is purchasing the
      Units as principal for its own account, and not for the benefit of any
      other person, for investment only and not with a view to resale or
      distribution, is a resident and citizen of the jurisdiction as set out
      under “Subscriber’s Particulars” on page 1 hereof, and the Subscriber
      has due and proper authority to act as agent or trustee for and on behalf
      of such beneficial purchaser in connection with the transactions
      contemplated hereby, and this Subscription Agreement has been duly
      authorized, executed and delivered by or on behalf of, and constitutes a
      legal, valid and binding agreement of, such beneficial purchaser,
      and:

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada
& Offshore

        

      

      
        	
                 
      

              	
                (i)

              	
                it
      is an “accredited investor” as defined in paragraph (p) or (q) of the
      definition of “accredited investor” in NI 45-106 provided, however
      that it is not a trust company or trust corporation registered under the
      laws of Prince Edward Island that is not registered under the Trust and Loan Companies
      Act (Canada) or under comparable legislation in another
      jurisdiction of Canada and has concurrently executed and delivered the
      Accredited Investor Status Certificate in the form attached hereto as
      Schedule A and has initialled indicating that the Subscriber
      satisfies the category of “accredited investor” set forth in
      paragraph (p) or (q) thereof;
or

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      Subscriber is acting as agent for one or more disclosed principals, each
      of which principal 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 Common Shares, and each of which
      principals complies with subsection 5(g)
  below;

              

      

       

      
        	
                 
      

              	
                (g)

              	
                Subscriber
      Has Benefit of Statutory Exemptions.  Unless the
      Subscriber complies with the provisions of subsection 5(f) hereof,
      the Subscriber fully complies with one of the criteria set forth
      below:

              

      

       

      [MARK
BELOW THE CATEGORY WHICH DESCRIBES YOU]

       

      
        	
                 
      

              	
                (i)

              	
                it
      is a resident of a Designated Province and is an “accredited investor” as
      such term is defined in NI 45-106 and specifically represents and
      warrants that one or more of the categories set forth in the Accredited
      Investor Status Certificate correctly, and in all respects, describes the
      Subscriber and the Subscriber has so indicated by marking the box next to
      the category which so describes it and executing and delivering a copy of
      the Accredited Investor Status Certificate attached hereto as
      Schedule A with this Subscription Agreement and if the Subscriber is
      purchasing Common Shares as an “accredited investor” as defined in
      paragraph (m) of the definition of “accredited investor” in
      NI 45-106 it is not a person created or used solely to purchase or
      hold securities as an “accredited investor”;
or

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                it
      is a resident of British Columbia or Alberta and in the case of subclauses
      D, E and F, and if applicable H or I, it has completed and duly executed
      Schedule B, and it is:

              

      

       

      [CIRCLE
THE APPROPRIATE SUBCLAUSE A - I]

       

      
        	
                 
      

              	
                A.

              	
                a
      “director”, “executive officer” or “control person” (as such terms are
      defined in NI 45-106 and reproduced in Schedule A to this
      Subscription Agreement) of the Corporation or of an affiliate of the
      Corporation; or

              

      

       

      
        	
                 
      

              	
                B.

              	
                a
      spouse, parent, grandparent, brother, sister or child of any person
      referred to in subclause A above;
or

              

      

       

      
        	
                 
      

              	
                C.

              	
                a
      parent, grandparent, brother, sister or child of the spouse of any person
      referred to in subclause A above;
or

              

      

       

      
        	
                 
      

              	
                D.

              	
                a
      “close personal friend” (within the meaning thereof as set out in
      Companion Policy 45-106CP to NI 45-106) of any person referred to in
      subclause A above and; or

              

      

       

      
        	
                 
      

              	
                E.

              	
                a
      “close business associate” (within the meaning thereof as set out in
      Companion Policy 45-106CP to NI 45-106) of any person referred to in
      subclause A above; or

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada
& Offshore

        

      

      
        	
                 
      

              	
                F.

              	
                a
      “founder” (as such term is defined in NI 45-106 and reproduced in Schedule
      A to this Subscription Agreement) of the Corporation or a spouse, parent,
      grandparent, brother, sister, child, close personal friend or close
      business associate of a founder of the Corporation;
  or

              

      

       

      
        	
                 
      

              	
                G.

              	
                a
      parent, grandparent, brother, sister or child of the spouse of a founder
      of the Corporation; or

              

      

       

      
        	
                 
      

              	
                H.

              	
                a
      person or company of which a majority of the voting securities are
      beneficially owned by, or a majority of the directors are, persons
      referred to in subclauses A to G above;
or

              

      

       

      
        	
                 
      

              	
                I.

              	
                a
      trust or estate of which all of the beneficiaries or a majority of the
      trustees are persons described in subclauses A to G above;
      or

              

      

       

      (Note:  for the
purposes of subparagraphs (D) and (F) above, a person is not a” close personal
friend” solely because the individual is a relative or a member of the same
organization, association or religious group or because the individual is a
client, customer or former client or customer, nor is an individual a close
personal friend as a result of being a close personal friend of a close personal
friend of one of the listed individuals above, rather the relationship must be
direct.  A close personal friend is one who knows the director,
executive officer, founder or control person well enough and has known them for
a sufficient period of time to be in a position to assess their capabilities and
trustworthiness.  Further, for the purposes of subparagraphs (E)
and (F) above, a person is not a "close business associate" if the person is a
casual business associate or a person introduced or solicited for purposes of
purchasing securities nor is the individual a close business associate solely
because the individual is a client, customer, former client or customer, nor is
the individual a close business associate if they are a close business associate
of a close business associate of one of the listed individuals above, rather the
relationship must be direct.  A close business associate is an
individual who had sufficient prior dealings with the director, executive
officer, founder or control person to be in a position to assess their
capabilities and trustworthiness.)

       

      
        	
                 
      

              	
                (iii)      
      o

              	
                it
      is a resident of Ontario and it has purchased the Common Shares as
      principal and it is:

              

      

       

      [CIRCLE
THE APPROPRIATE SUBCLAUSE A - D]

       

      
        	
                 
      

              	
                A.

              	
                a
      founder of the Corporation;

              

      

       

      
        	
                 
      

              	
                B.

              	
                an
      affiliate of a founder of the
Corporation;

              

      

       

      
        	
                 
      

              	
                C.

              	
                a
      spouse, parent, brother, sister, grandparent or child of an executive
      officer, director or founder of the Corporation;
  or

              

      

       

      
        	
                 
      

              	
                D.

              	
                a
      person that is a control person of the Corporation;
  or

              

      

       

      
        	
                 
      

              	
                (iv)      
      o

              	
                it
      is purchasing the Common Shares as principal and is purchasing a
      sufficient number of Common Shares such that the aggregate acquisition
      cost to the Subscriber is not less than $150,000, paid in cash at the time
      of the trade; provided however that the Subscriber has not been created or
      used solely to purchase or hold securities in reliance on this exemption;
      or

              

      

       

      
        	
                 
      

              	
                (v)       
      o

              	
                it
      is an “employee”, “executive officer”, “director” or “consultant” (as such
      terms (other than employee) are defined in NI 45-106 and reproduced
      in Appendix A to this Subscription Agreement) of the Corporation or a
      related entity of the Corporation or a permitted assign (as defined in Ni
      45-106) of such person and its participation in the trade is voluntary,
      meaning it is not induced to participate in the trade by expectation of
      employment or continued employment with the Corporation or a related
      entity of the Corporation; or

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada
& Offshore

        

      

      
        	
                 
      

              	
                (vi)      
      o

              	
                it
      is a resident of a jurisdiction referred to in the preceding paragraphs
      but it is not purchasing thereunder, and instead is purchasing pursuant to
      a statutory exemption or an exemption order permitting such purchase,
      which exemption or order has the effect of eliminating any requirement for
      a prospectus or similar disclosure document in respect of the purchase of
      Common Shares by the Subscriber, the details of which are disclosed to the
      Corporation to its satisfaction;

              

      

       

      
        	
                 
      

              	
                (h)

              	
                Residents
      of Other Jurisdictions.  If the Subscriber is a resident
      of any jurisdiction not referred to in subsection 5(g) it complies
      with all requirements under applicable securities legislation and shall
      deliver to the Corporation such particulars of the exemption(s) and the
      Subscriber’s qualifications thereunder as the Corporation may reasonably
      request:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                No
      Undisclosed Information.  The Subscriber’s Units are not
      being purchased by the Subscriber as a result of any material information
      concerning the Corporation that has not been publicly disclosed and the
      Subscriber’s decision to enter into this Subscription Agreement and
      acquire the Subscriber’s Units has not been made as a result of any oral
      or written representation as to fact or otherwise made by or on behalf of
      the Corporation or any other person and is based entirely upon currently
      available public information concerning the
  Corporation;

              

      

       

      
        	
                 
      

              	
                (j)

              	
                Investment
      Suitability.  The Subscriber and any beneficial purchaser
      referred to in subsection 5(f) hereof has such knowledge and
      experience in financial and business affairs as to be capable of
      evaluating the merits and risks of the investment hereunder in the Units
      and is able to bear the economic risk of loss of such
      investment;

              

      

       

      
        	
                 
      

              	
                (k)

              	
                Aggregate
      Subscription Funds.  The Subscriber represents and
      warrants that the funds representing the Aggregate Subscription Price
      which will be advanced by the Subscriber to the Corporation hereunder will
      not represent proceeds of crime for the purposes of the Proceeds of Crime (Money
      Laundering) and Terrorist Financing Act (Canada) (the “PCMLTFA”) and the
      Subscriber acknowledges that the Corporation may in the future be required
      by law to disclose the Subscriber’s name and other information relating to
      this Subscription Agreement and the Subscriber’s subscription hereunder,
      on a confidential basis, pursuant to the PCMLTFA.  To the best
      of its knowledge: (a) none of the subscription funds to be provided
      by the Subscriber (i) have been or will be derived from or related to
      any activity that is deemed criminal under the laws of Canada, the United
      States of America, or any other jurisdiction or (ii) are being
      tendered on behalf of a person or entity who has not been identified to
      the Subscriber; and (b) it shall promptly notify the Corporation if
      the Subscriber discovers that any of such representations ceases to be
      true and provide the Corporation with appropriate information in
      connection therewith; and

              

      

       

      
        	
                 
      

              	
                (l)

              	
                Further
      Acknowledgments.  The Subscriber acknowledges
      that:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                no
      securities commission or similar regulatory authority has reviewed or
      passed on the merits of the Units;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                there
      is no government or other insurance covering the
  Units;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                there
      are risks associated with the purchase of the
  Units;

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                there
      are restrictions on the Subscriber’s (and if applicable, each beneficial
      purchaser for whom the Subscriber is contracting hereunder) ability to
      resell the Securities and it is the responsibility of the Subscriber (and
      if applicable, each beneficial purchaser for whom the Subscriber is
      contracting hereunder) to find out what those restrictions are and to
      comply with them before selling the Securities;
  and

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada
& Offshore

        

      

      
        	
                 
      

              	
                (v)

              	
                the
      Corporation has advised the Subscriber that the Corporation is relying on
      exemptions from the requirements to provide the Subscriber with a
      prospectus under the applicable securities legislation of the province or
      territory in which the Subscriber is resident, and, as a consequence of
      acquiring Units pursuant to these exemptions, certain protections, rights
      and remedies provided by the applicable securities legislation of the
      province or territory in which the Subscriber is resident, including
      statutory or contractual rights of rescission or damages, will not be
      available to the Subscriber; and

              

      

       

      
        	
                 
      

              	
                (vi)

              	
                all
      certificates representing Common Shares and Warrants held by the
      Subscriber will have a legend affixed thereto which describes certain
      resale restrictions applicable under Securities Laws applicable in the
      Designated Provinces and, if applicable, the United
  States;

              

      

       

      
        	
                 
      

              	
                (vii)

              	
                except
      for this Subscription Agreement, it has relied solely upon publicly
      available information relating to the Corporation and not upon any verbal
      or written representation as to fact or otherwise made by or on behalf of
      the Corporation.

              

      

       

      The
Subscriber acknowledges and agrees that the foregoing representations,
warranties and acknowledgments are made by it with the intention that they may
be relied upon in determining its eligibility or (if applicable) the eligibility
of others on whose behalf it is contracting hereunder to purchase the Units
under applicable Securities Laws.  The Subscriber further agrees that
acceptance of delivery of certificates for the Common Shares and Warrants by or
on behalf of the Subscriber on the Closing Date, it shall be representing and
warranting that the foregoing representations and warranties are true and
correct as at the Closing Time with the same force and effect as if they had
been made by the Subscriber at the Closing Time and that they shall survive the
purchase by the Subscriber of the Units and shall continue in full force and
effect notwithstanding any subsequent disposition by the Subscriber of the
Securities. The Subscriber undertakes to notify the Corporation immediately of
any change in any representation, warranty or other information relating to the
Subscriber set forth herein which takes place prior to the Closing
Time.

       

      
        	
                7.

              	
                U.S.
      Matters.  The
Subscriber:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                No U.S.
      Registration.  The Subscriber is aware that the
      Securities have not been registered and will not be registered under the
      U.S. Securities Act or the securities laws of any state and that these
      securities may not be offered or sold in the United States without
      registration under the U.S. Securities Act or compliance with requirements
      of an exemption from registration;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                No Sale in the
      U.S.  The Subscriber acknowledges the Units have not been
      offered to the Subscriber in the United States, and the individuals making
      the order to purchase the Units or executing and delivering this
      Subscription Agreement on behalf of the Subscriber were not in the United
      States when the order was placed and this Subscription Agreement was
      executed and delivered;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Not a U.S.
      Person.  The Subscriber is not a “U.S. Person” (as
      defined in Regulation S under the U.S. Securities Act, which
      definition includes, but is not limited to, an individual resident in the
      United States, an estate or trust of which any executor or administrator
      or trustee, respectively, is a U.S. Person and any partnership or
      corporation organized or incorporated under the laws of the United States)
      and is not purchasing the Units on behalf of, or for the account or
      benefit of, a person in the United States or a U.S.
  Person;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                Will Not Sell in
      U.S.  The Subscriber undertakes and agrees that it will
      not offer or sell the Securities in the United States unless such
      securities are registered under the U.S. Securities Act and the securities
      laws of all applicable states of the United States or an exemption from
      such registration requirements is available, and further that it will not
      resell the Securities except in accordance with the provisions of
      applicable securities laws;

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada
& Offshore

        

      

      
        	
                 
      

              	
                (e)

              	
                Former Shell
      Status.  The Subscriber is aware that the Corporation is
      a “former shell” company for purposes of Rule 144(i) of the U.S.
      Securities Act, and for the ability of the Subscriber to use the resale
      provisions of Rule 144, it will only be able to sell the Securities
      thereunder if the Corporation is in compliance with the reporting
      requirements of the United States Securities and Exchange Commission as
      specified therein and it obtains an opinion of counsel in respect of the
      sale of the Securities at the time of a sale transaction.  The
      Subscriber understands that any restrictive legend may not be removed
      unless it is in connection with a sale of the
  Securities;

              

      

       

      
        	
                 
      

              	
                (f)

              	
                Reliance on
      Exemptions.  The Subscriber acknowledges that the
      Offering has not been reviewed by the United States Securities and
      Exchange Commission (the “SEC”) or any state
      agency because it is intended to be an offshore transaction pursuant to
      Regulation S (“Regulation
      S”) as promulgated by the SEC under the U.S. Securities Act, as
      amended.  The Subscriber understands that the Corporation is
      relying in part upon the truth and accuracy of, and the Subscriber’s
      compliance with the representations, warranties, agreements,
      acknowledgments and understandings of the Subscriber set forth herein in
      order to determine the availability of such exemptions and the eligibility
      of the Subscriber to acquire the
Units;

              

      

       

      
        	
                 
      

              	
                (g)

              	
                Offshore
      Transaction.  The Subscriber agrees that it is acquiring
      the Units in an offshore transaction pursuant to Regulation S, promulgated
      under the U.S. Securities Act, and hereby represents to the Corporation as
      follows:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                the
      Subscriber is outside the United States when receiving and executing this
      Subscription Agreement; and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      Subscriber has not acquired the Units as a result of, and will not itself
      engage in, any “directed selling efforts” (as defined in Regulation S
      under the U.S. Securities Act) in the United States in respect of the
      Units which would include any activities undertaken for the purpose of, or
      that could reasonably be expected to have the effect of, conditioning the
      market in the United States for the resale of the Securities; provided,
      however, that the Subscriber may sell or otherwise dispose of the
      Securities pursuant to registration of the Securities under the U.S.
      Securities Act and any applicable state and provincial securities laws or
      under an exemption from such registration requirements and as otherwise
      provided herein;

              

      

       

      
        	
                 
      

              	
                (h)

              	
                Compliance with U.S. Securities
      Laws.  The Subscriber agrees that the Corporation will
      refuse to register any transfer of the Securities not made in accordance
      with the provisions of Regulation S, pursuant to an effective registration
      statement under the U.S. Securities Act, or pursuant to an available
      exemption from the registration requirements of the U.S. Securities Act
      and in accordance with applicable state and provincial securities
      laws;

              

      

       

      
        	
                 
      

              	
                (i)

              	
                Distribution Compliance
      Period.  The Subscriber understands and agrees that
      offers and sales of any of the Common Shares prior to the expiration of a
      period of six months after the date of transfer of the Common Shares under
      this Subscription Agreement (the “Distribution Compliance
      Period”), shall only be made in compliance with the safe harbor
      provisions set forth in Regulation S, pursuant to the registration
      provisions of the U.S. Securities Act or an exemption therefrom, and that
      all offers and sales after the Distribution Compliance Period shall be
      made only in compliance with the registration provisions of the U.S.
      Securities Act or an exemption therefrom, and in each case only in
      accordance with all applicable securities laws;
  and

              

      

       

      
        	
                 
      

              	
                (j)

              	
                Legends.  The
      Subscriber understands that the certificates representing the Common
      Shares, until such time as they have been registered under the U.S.
      Securities Act may have a distinct CUSIP number from other Common Shares
      of the Corporation and shall bear a restrictive legend in substantially
      the following form (and a stop-transfer order may be placed against
      transfer of such certificates or other
  instruments):

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada
& Offshore

        

      

      THESE
SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S.
PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ACCORDINGLY, NONE OF THE
SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE 1933
ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE
OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS
(AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933
ACT.

       

      The
legend set forth above shall be removed and the Corporation shall issue a
certificate without such legend to the holder of the applicable Securities, if
(a) such Securities are being sold pursuant to a registration statement
under the U.S. Securities Act, or (b) such holder delivers to the
Corporation an opinion of counsel, in a reasonably acceptable form, to the
Corporation that a disposition of the Securities is being made pursuant to an
exemption from such registration.

       

      
        	
                8.

              	
                Exchange
      Approval.  The obligations of the parties hereunder are
      subject to acceptance of the terms of the Offering by the TSX Venture
      Exchange and all other required regulatory
  approvals.

              

      

       

      
        	
                9.

              	
                Covenants of the
      Subscriber.  The Subscriber
  will:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                not
      resell any of the Securities acquired (directly or indirectly) hereunder,
      in whole or in part, directly or indirectly, except in accordance with the
      provisions of applicable Securities
Laws;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                execute,
      deliver, file and otherwise assist the Corporation in filing such further
      reports, undertakings, agreements, documents and writings, do all acts and
      things, and provide such further assurances as may be required to give
      effect to this Subscription Agreement as required, and, without limiting
      the generality of the foregoing, will execute and deliver all documents,
      agreements and writings and provide such assurances, undertakings,
      information and investment letters as may be required from time to time by
      the Securities Commissions or other regulatory authorities having
      jurisdiction over the Corporation’s affairs or as may be required under
      the applicable Securities Laws with respect to the issue and resale of the
      Offered Securities; and

              

      

       

      
        	
                 
      

              	
                (c)

              	
                provide
      the Corporation and applicable securities regulatory authorities, on
      request, particulars as to the identity of any undisclosed principals as
      may be required by the Corporation.

              

      

       

      
        	
                10.

              	
                No
      Representations.  The Subscriber acknowledges that no
      person has made to the Subscriber any written or oral representations that
      any person will resell or repurchase the Offered Securities, that any
      person will refund the Subscription Price of the Units, or to the future
      price or value of the Common Shares.  In addition, except as
      provided in this Subscription Agreement, the Subscriber has relied solely
      upon publicly available information relating to the Corporation and not
      upon any verbal or written representation as to fact or otherwise made by
      or on behalf of the Corporation.

              

      

       

      
        	
                11.

              	
                Subscriber’s
      Expenses.  The Subscriber acknowledges and agrees that
      all costs and expenses incurred by the Subscriber (including any fees and
      disbursements of special counsel retained by the Subscriber) relating to
      the purchase of the Units shall be borne by the
  Subscriber.

              

      

       

      
        	
                12.

              	
                Legal and Tax
      Advice.  The Subscriber acknowledges and agrees that it
      is solely responsible for obtaining such legal advice and tax advice as it
      considers appropriate in connection with the execution, delivery and
      performance by it of this Subscription Agreement and the completion of the
      transactions contemplated hereby.  The Subscriber further
      acknowledges and agrees that the Corporation’s legal counsel is acting
      exclusively on the Corporation’s behalf and not as counsel to the
      Subscriber.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada
& Offshore

        

      

      
        	
                13.

              	
                Indemnity.  The
      Subscriber agrees that the representations, warranties and covenants of
      the Subscriber herein will be true and correct both as of the execution of
      this Subscription Agreement and as of the Closing Time and will survive
      the completion of the issuance of the Units. The representations,
      warranties and covenants of the Subscriber herein are made with the intent
      that they be relied upon by the Corporation in determining the eligibility
      of a purchaser of Units The Subscriber agrees to indemnify and hold
      harmless the Corporation, its directors, officers, employees, agents,
      partners, advisers, affiliates and shareholders from and against any and
      all loss, liability, claim, damage and expense (including, but not limited
      to, any and all fees, costs and expenses reasonably incurred in
      investigating, preparing or defending against any claim, law suit,
      administrative proceeding or investigation whether commenced or
      threatened) arising out of or based upon any representation or warranty of
      the Subscriber contained herein or in any document furnished by the
      Subscriber to the Corporation in connection herewith being untrue in any
      material respect or any breach or failure by the Subscriber to comply with
      any covenant or agreement made by the Subscriber herein or in any document
      furnished by the Subscriber to the Corporation in connection
      herewith.

              

      

       

      
        	
                14.

              	
                Assignment.  The
      terms and provisions of this Subscription Agreement shall be binding upon
      and enure to the benefit of the Subscriber, the Corporation and their
      respective successors and assigns; provided that this Subscription
      Agreement shall not be assignable by the Subscriber without the prior
      written consent of the Corporation.

              

      

       

      
        	
                15.

              	
                Personal
      Information.  This Subscription Agreement and the
      schedules hereto require the Subscriber to provide certain personal
      information to the Corporation.  Such information is being
      collected by the Corporation for the purposes of completing this offering
      of Common Shares, which includes, without limitation, determining the
      Subscriber’s eligibility to purchase the Common Shares under applicable
      Securities Laws, preparing and registering certificates representing
      Common Shares to be issued to the Subscriber and completing filings
      required by any securities regulatory authority. The Subscriber’s personal
      information may be disclosed by the Corporation to: (a) stock
      exchanges and securities regulatory authorities, (b) the
      Corporation’s registrar and transfer agent, and (c) any of the other
      parties involved in this offering of Common Shares, including the
      Corporation’s legal counsel.  By executing this Subscription
      Agreement, the Subscriber is deemed to be consenting to the foregoing
      collection, use and disclosure of the Subscriber’s personal
      information.  The Subscriber specifically consents to the
      disclosure of personal information to the TSX Venture Exchange as such
      information is defined in Appendix 6A to the TSX Venture Exchange
      policies. The Subscriber
      also consents to the filing of copies or originals of any of the
      Subscriber’s documents described in this Subscription Agreement as may be
      required to be filed with any securities regulatory authority in
      connection with the transactions contemplated by this Subscription
      Agreement and the inclusion of them in the closing books prepared in
      connection with the transactions contemplated by this Subscription
      Agreement.  The Subscriber hereby acknowledges that it has been
      notified by the Corporation: (i) of the delivery to the Ontario
      Securities Commission (the “OSC”) of the
      Subscriber’s personal information; (ii) that the Subscriber’s
      personal information is being collected indirectly by the OSC under the
      authority granted to it in the securities legislation; (iii) the
      Subscriber’s personal information is being collected for the purposes of
      the administration and enforcement of the securities legislation of
      Ontario; and (iv) the contact information of the public official in
      Ontario who can answer questions about the OSC’s indirect collection of
      personal information is, Administrative Assistant to the Director of
      Corporate Finance, the Ontario Securities Commission, Suite 1903, Box
      5520, Queen Street West, Toronto, Ontario, M5H 3S8, telephone
      (416) 593-8086, facsimile
  (416) 593-8252.

              

      

       

      
        	
                16.

              	
                Survival.  All
      representations, warranties, agreements and covenants made or deemed to be
      made by the Subscriber herein will survive Closing of the
      Offering.

              

      

       

      
        	
                17.

              	
                Governing
      Law.  This Subscription Agreement shall be governed by
      and construed in accordance with the laws of the Province of Alberta and
      the federal laws of Canada applicable therein.  The Subscriber,
      on its own behalf and, if applicable, on behalf of others for whom it is
      contracting hereunder, and the Corporation hereby irrevocably attorn to
      the jurisdiction of the courts of the Province of Alberta with respect to
      any matters arising out of this Subscription Agreement and agree to be
      bound by any suit, action or proceeding commenced in such courts and by
      any order or judgment resulting from such suit, action or
      proceeding.  Each of the parties hereto irrevocably waives, to
      the fullest extent it may effectively do so, the defense of an
      inconvenient forum to the maintenance of such action or
      proceeding.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

          Canada & Offshore

        

      

      
        	
                18.

              	
                Facsimile Subscriptions and
      Counterparts.  The Corporation shall be entitled to rely
      on delivery by facsimile machine of an executed copy of this Subscription
      Agreement, including the completed schedule hereto, and acceptance by the
      Corporation of such facsimile copy shall be legally effective to create a
      valid and binding agreement between the Subscriber and the Corporation in
      accordance with the terms hereof.  This Subscription Agreement
      may be executed in any number of counterparts, each of which when
      delivered, either in original or facsimile form, shall be deemed to be an
      original and all of which together shall constitute one and the same
      document.

              

      

       

      
        	
                19.

              	
                Entire Agreement and
      Modification.  This Subscription Agreement (including the
      schedules hereto) contains the entire agreement of the parties hereto
      relating to the subject matter hereof and there are no representations,
      covenants or other agreements relating to the subject matter hereof except
      as stated or referred to herein.  Subject to the terms hereof,
      neither this Subscription Agreement nor any provision hereof shall be
      modified, changed, discharged or terminated except by an instrument in
      writing signed by the party against whom any waiver, change, discharge or
      termination is sought.

              

      

       

      
        	
                20.

              	
                Headings.  The
      headings contained herein are for convenience only and shall not affect
      the meanings or interpretation
hereof.

              

      

       

      
        	
                21.

              	
                Language.  The
      Subscriber acknowledges its consent and requests that all documents
      evidencing or relating in any way to its purchase of Common Shares be
      drawn up in the English language only.  Nous reconnaissons par
      les présentes avoir consenti et demandé que tous les documents faisant foi
      ou se rapportant de quelque manière à notre achat des actions accréditives
      soient rédigés en anglais
seulement.

              

      

       

      
        	
                22.

              	
                Time of
      Essence.  Time is of the essence of this Subscription
      Agreement.

              

      

       

      
        	
                23.

              	
                Effective
      Date.  This Subscription Agreement is intended to and
      shall take effect on the Closing Date, notwithstanding its actual date of
      execution or delivery by any of the
parties.

              

      

       

      
        	
                24.

              	
                Currency.  Except
      if specifically stated otherwise, all dollar Prices herein (including the
      Schedule hereto) are in Canadian
dollars.

              

      

       

      
        	
                25.

              	
                Severability.  If
      any one or more of the provisions contained in this Subscription Agreement
      should be invalid, illegal or unenforceable in any respect in any
      jurisdiction, the validity, legality and enforceability of such provision
      or provisions shall not in any way be affected or impaired thereby in any
      other jurisdiction and the validity, legality and enforceability of the
      remaining provisions contained herein shall not in any way be affected or
      impaired thereby, unless in either case as a result of such determination
      this Subscription Agreement would fail of its essential
      purpose.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 	
                 A-1

              	Canada &
      Offshore

      

       

      SCHEDULE
A

       

      ACCREDITED
INVESTOR STATUS CERTIFICATE

       

      The
undersigned Subscriber hereby represents and warrants to the Corporation, as an
integral part of the attached Subscription Agreement, that he, she or it is
correctly and in all respects described by the category or categories set forth
directly next to which the Subscriber has marked below.

       

      [MARK
BELOW THE CATEGORY OR CATEGORIES WHICH DESCRIBES YOU]

       

      
        	
                o

              	
                (a)      
      A Canadian financial institution, or a Schedule III
      bank.

              
	
                o

              	
                (b)      
      The Business Development Bank of Canada incorporated under the
      Business Development
      Bank of Canada Act (Canada).

              
	
                o

              	
                (c)      
      A subsidiary of any person referred to in paragraphs  (a) or
      (b), if the person owns all of the voting securities of the subsidiary,
      except the voting securities required by law to be owned by directors of
      that subsidiary.

              
	
                o

              	
                (d)     
      A person registered under the securities legislation of a
      jurisdiction of Canada as an adviser or dealer, other than a person
      registered solely as a limited market dealer under one or both of the
      Securities Act
      (Ontario) or the Securities Act
      (Newfoundland and Labrador).

              
	
                o

              	
                (e)      
      An individual registered or formerly registered under the
      securities legislation of a jurisdiction of Canada as a representative of
      a person referred to in paragraph (d).

              
	
                o

              	
                (f)      
      The Government of Canada or a jurisdiction of Canada, or any crown
      corporation, agency or wholly owned entity of the Government of Canada or
      a jurisdiction of Canada.

              
	
                o

              	
                (g)      
      A municipality, public board or commission in Canada and a
      metropolitan community, school board, the Comité de gestion de la taxe
      scolaire de l’île de Montréal or an intermunicipal management board in
      Québec.

              
	
                o

              	
                (h)      
      Any national, federal, state, provincial, territorial or municipal
      government of or in any foreign jurisdiction, or any agency of that
      government.

              
	
                o

              	
                (i)       
      A pension fund that is regulated by either the Office of the
      Superintendent of Financial Institutions (Canada) or a pension commission
      or similar regulatory authority of a jurisdiction of
    Canada.

              
	
                o

              	
                (j)       
      An individual who, either alone or with a spouse, beneficially
      owns, directly or indirectly, financial assets having an aggregate
      realizable value that before taxes, but net of any related liabilities,
      exceeds $1,000,000.

              
	
                o

              	
                (k)      
      An individual whose net income before taxes exceeded $200,000 in
      each of the 2 most recent calendar years or whose net income before taxes
      combined with that of a spouse exceeded $300,000 in each of the 2 most
      recent calendar years and who, in either case, reasonably expects to
      exceed the net income level in the current calendar
  year.

              
	
                o

              	
                (l)       
      An individual who, either alone or with a spouse, has net assets of
      at least $5,000,000.

              
	
                o

              	
                (m)      A
      person, other than an individual or investment fund, that has net assets
      of at least $5,000,000 as shown on its most recently prepared financial
      statements.

              
	
                o

              	
                (n)      
      An investment fund that distributes or has distributed its
      securities only to:

              
	
                 

              	
                (A)    
        a person that is or was an accredited investor at the time
      of the distribution,

              
	
                 

              	
                (B)      
      a person that acquires or acquired securities in the circumstances
      referred to in sections 2.10 and 2.19 of NI 45-106,
      or

              
	
                 

              	
                (C)      
      a person described in paragraph (A) or (B) that acquires or
      acquired securities under section 2.18 of
    NI 45-106.

              
	
                o

              	
                (o)      
      An investment fund that distributes or has distributed securities
      under a prospectus in a jurisdiction of Canada for which the regulator or,
      in Québec, the securities regulatory authority, has issued a
      receipt.

              
	
                o

              	
                (p)      
      A trust company or trust corporation registered or authorized to
      carry on business under the Trust and Loan Companies
      Act (Canada) or under comparable legislation in a jurisdiction of
      Canada or a foreign jurisdiction, acting on behalf of a fully managed
      account managed by the trust company or trust corporation, as the case may
      be.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        
           

          
            	 	
                     A-2

                  	Canada &
      Offshore

          

        

         

      

      
        	
                o

              	
                (q)      
      A person acting on behalf of a fully managed account managed by
      that person, if that person:

              
	 
      	
                (A)      
      is registered or authorized to carry on business as an adviser or
      the equivalent under the securities legislation of a jurisdiction of
      Canada or a foreign jurisdiction, and

              
	
                 

              	
                (B)      
      in Ontario, is purchasing a security that is not a security of an
      investment fund.

              
	
                o

              	
                (r)       
      A registered charity under the Income Tax Act (Canada)
      that, in regard to the trade, has obtained advice from an eligibility
      adviser or an adviser registered under the securities legislation of the
      jurisdiction of the registered charity to give advice on the securities
      being traded.

              
	
                o

              	
                (s)      
      An entity organized in a foreign jurisdiction that is analogous to
      any of the entities referred to in paragraphs (a) to (d) or
      paragraph (i) in form and function.

              
	
                o

              	
                (t)       
      A person in respect of which all of the owners of interests,
      direct, indirect or beneficial, except the voting securities required by
      law to be owned by directors, are persons that are accredited
      investors.

              
	
                o

              	
                (u)      
      An investment fund that is advised by a person registered as an
      adviser or a person that is exempt from registration as an
      adviser.

              
	
                o

              	
                (v)      
      A person that is recognized or designated by the securities
      regulatory authority or, except in Ontario and Québec, the regulator
      as:

              
	 
      	
                (A)      
      an accredited investor, or

              
	 
      	
                (B)      
      an exempt purchaser in Alberta or British
  Columbia.

              

      

      

      Note:                      A
summary of the meanings of certain of the terms used in this Accredited Investor
Status Certificate follows the signature block below.

       

      DATED  _______________________________________,
2007

      
        	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Name
      of Subscriber  (please print)

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                By:

              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Official
      Capacity or Title, if any  (please print)

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Name
      of Authorized Signing Authority (please print)

              	 
      	 
      

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 	
                 A-3

              	Canada &
      Offshore

      For the
purposes of this Accredited Investor Status Certificate the following
definitions are included for convenience:

       

      
        	
                 
      

              	
                (a)

              	
                “affiliate” means an
      issuer connected with another issuer
because

              

      

       

      
        	
                 
      

              	
                (i)

              	
                one
      of them is the subsidiary of the
other;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                each
      of them is controlled by the same person;
or

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                for
      the purposes of Saskatchewan securities law, both are subsidiaries of the
      same issuer;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                “bank” means a bank named
      in Schedule I or II of the Bank Act
      (Canada);

              

      

       

      
        	
                 
      

              	
                (c)

              	
                “Canadian financial
      institution” means:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                an
      association governed by the Cooperative Credit
      Associations Act (Canada) or a central cooperative credit society
      for which an order has been made under section 473(1) of that Act;
      or

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                a
      bank, loan corporation, trust company, trust corporation, insurance
      company, treasury branch, credit union, caisse populaire, financial
      services cooperative, or league that, in each case, is authorized by an
      enactment of Canada or a jurisdiction of Canada to carry on business in
      Canada or a jurisdiction of Canada;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                “consultant” means, for
      an issuer, a person, other than an employee, executive officer, or
      director of the issuer or of a related entity of the issuer,
      that:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                is
      engaged to provide services to the issuer or a related entity of the
      issuer, other than services provided in relation to a
      distribution;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                provides
      the services under a written contract with the issuer or a related entity
      of the issuer; and

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                spends
      or will spend a significant Price of time and attention on the affairs and
      business of the issuer or a related entity of the
  issuer,

              

      

       

      and
includes, for an individual consultant, a corporation of which the individual
consultant is an employee or shareholder, and a partnership of which the
individual consultant is an employee or partner;

       

      
        	
                 
      

              	
                (e)

              	
                “control person” has the
      same meaning as in securities legislation except in Manitoba, Newfoundland
      and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince
      Edward Island and Québec, where control person means any person that holds
      or is one of a combination of persons that
  holds:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                a
      sufficient number of any securities of an issuer so as to affect
      materially the control of the issuer;
or

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                more
      than 20% of the outstanding voting securities of an issuer except where
      there is evidence showing that the holding of those securities does not
      affect materially the control of that
issuer;

              

      

       

      
        	
                 
      

              	
                (f)

              	
                “debt security” means any
      bond, debenture, note or similar instrument representing indebtedness,
      whether secured or unsecured;

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 	
                 A-4

              	Canada &
      Offshore

      
        	
                 
      

              	
                (g)

              	
                “director”
      means:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                a
      member of the board of directors of a company or an individual who
      performs similar functions for a company;
and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                with
      respect to a person that is not a company, an individual who performs
      functions similar to those of a director of a
  company;

              

      

       

      
        	
                 
      

              	
                (h)

              	
                “eligibility adviser”
      means:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                a
      person that is registered as an investment dealer or in an equivalent
      category of registration under the securities legislation of the
      jurisdiction of a purchaser and authorized to give advice with respect to
      the type of security being distributed;
and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                in
      Saskatchewan or Manitoba, also means a lawyer who is a practicing member
      in good standing with a law society of a jurisdiction of Canada or a
      public accountant who is a member in good standing of an institute or
      association of chartered accountants, certified general accountants or
      certified management accountants in a jurisdiction of Canada provided that
      the lawyer or public accountant must
not:

              

      

       

      
        	
                 
      

              	
                (A)

              	
                have
      a professional, business or personal relationship with the issuer, or any
      of its directors, executive officers, founders, or control persons,
      and

              

      

       

      
        	
                 
      

              	
                (B)

              	
                have
      acted for or been retained personally or otherwise as an employee,
      executive officer, director, associate or partner of a person that has
      acted for or been retained by the issuer or any of its directors,
      executive officers, founders or control persons within the previous 12
      months;

              

      

       

      
        	
                 
      

              	
                (i)

              	
                “executive officer”
      means, for the Corporation, an individual who
  is:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                a
      chair, vice-chair or president;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                a
      vice-president in charge of a principal business unit, division or
      function including sales, finance or
production;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                an
      officer of the Corporation or any of its subsidiaries and who performs a
      policy-making function in respect of the Corporation;
  or

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                performing
      a policy-making function in respect of the
  Corporation;

              

      

       

      
        	
                 
      

              	
                (j)

              	
                “financial assets”
      means:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                cash;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                securities;
      or

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                a
      contract of insurance, a deposit or an evidence of a deposit that is not a
      security for the purposes of securities
  legislation;

              

      

       

      
        	
                 
      

              	
                (k)

              	
                “foreign jurisdiction”
      means a country other than Canada or a political subdivision of a country
      other than Canada;

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 	
                 A-5

              	Canada &
      Offshore

      
        	
                 
      

              	
                (l)

              	
                “founder” means, in
      respect of an issuer, a person who,

              

      

       

      
        	
                 
      

              	
                (i)

              	
                acting
      alone, in conjunction, or in concert with one or more persons, directly or
      indirectly, takes the initiative in founding, organizing or substantially
      reorganizing the business of the issuer,
and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                at
      the time of the trade is actively involved in the business of the
      issuer;

              

      

       

      
        	
                 
      

              	
                (m)

              	
                “fully managed account”
      means an account of a client for which a person makes the investment
      decisions if that person has full discretion to trade in securities for
      the account without requiring the client’s express consent to a
      transaction;

              

      

       

      
        	
                 
      

              	
                (n)

              	
                “individual” means a
      natural person, but does not
include

              

      

       

      
        	
                 
      

              	
                (i)

              	
                a
      partnership, unincorporated association, unincorporated syndicate,
      unincorporated organization or a trust,
or

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                a
      natural person in the person’s capacity as trustee, executor,
      administrator or other legal
representative;

              

      

       

      
        	
                 
      

              	
                (o)

              	
                “investment fund” means a
      mutual fund or a non-redeemable investment fund, and, for greater
      certainty in British Columbia, includes an EVCC and a VCC, both as defined
      in National Instrument 81-106 Investment Fund Continuous
      Disclosure;

              

      

       

      
        	
                 
      

              	
                (p)

              	
                “jurisdiction” means a
      province or territory of Canada except when used in the term foreign
      jurisdiction;

              

      

       

      
        	
                 
      

              	
                (q)

              	
                “mutual fund” includes an
      issuer of securities that entitles the holder to receive on demand or
      within a specified period after demand, an Price computed by reference to
      the value of a proportionate interest in the whole or in part of the net
      assets, including a separate fund or trust account, of the issuer of the
      securities;

              

      

       

      
        	
                 
      

              	
                (r)

              	
                “NI 45-106” means
      National Instrument 45-106 Prospectus and Registration
      Exemptions;

              

      

       

      
        	
                 
      

              	
                (s)

              	
                “non-redeemable investment
      fund” means an issuer,

              

      

       

      
        	
                 
      

              	
                (i)

              	
                whose
      primary purpose is to invest money provided by its
      securityholders;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                that
      does not invest for the purpose of exercising or seeking to exercise
      effective control of an issuer, other than an issuer that is a mutual fund
      or a non-redeemable investment fund or for the purpose of being actively
      involved in the management of any issuer in which it invests, other than
      an issuer that is a mutual fund or a non-redeemable investment fund;
      and

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                that
      is not a mutual fund;

              

      

       

      
        	
                 
      

              	
                (t)

              	
                “person”
      includes:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                an
      individual;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                a
      corporation;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                a
      partnership, trust, fund and an association, syndicate, organization or
      other organized group of persons, whether incorporated or not;
      and

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 	
                 A-6

              	Canada &
      Offshore

      
        	
                 
      

              	
                (iv)

              	
                an
      individual or other person in that person’s capacity as a trustee,
      executor, administrator or personal or other legal
      representative;

              

      

       

      
        	
                 
      

              	
                (u)

              	
                “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;

              

      

       

      
        	
                 
      

              	
                (v)

              	
                “Schedule III bank” means
      an authorized foreign bank named in Schedule III of the Bank Act
      (Canada);

              

      

       

      
        	
                 
      

              	
                (w)

              	
                “spouse” means, an
      individual who:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                is
      married to another individual and is not living separate and apart within
      the meaning of the Divorce Act (Canada),
      from the other individual;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                is
      living with another individual in a marriage-like relationship, including
      a marriage-like relationship between individuals of the same gender;
      or

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                in
      Alberta, is an individual referred to in paragraph (i) or (ii), or is
      an adult interdependent partner within the meaning of the Adult Interdependent
      Relationships Act (Alberta);
and

              

      

       

      
        	
                 
      

              	
                (x)

              	
                “subsidiary” means an
      issuer that is controlled directly or indirectly by another issuer and
      includes a subsidiary of that
subsidiary.

              

      

       

      All
monetary references in this Schedule A are in Canadian
dollars.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 	
                B-1

              	Canada &
      Offshore

      SCHEDULE
B

       

      CLOSE
PERSONAL FRIEND / CLOSE BUSINESS ASSOCIATE QUESTIONNAIRE

       

       

        
          

        

      

      To be
completed by Subscribers to whom section 5(g)(ii)(D), (E) or (F) of the
Subscription Agreement applies.

       

       

      

        
          

        

      

      Name of
director, executive officer, control person or founder

       

       

      

        
          

        

      

      Length of
relationship

       

       

      

        
          

        

      

      Details
of relationship or prior business dealings

       

      

      
        
          

        

      

      

      
        
          

        

       

      

      
        
          

        

       

      

      
        
          

        

       

      

      
        
          

        

       

      The
undersigned understands that the Corporation is relying on this information in
determining to sell securities to the undersigned in a manner exempt from the
registration and prospectus requirements of applicable securities
laws.

       

      Dated:  _________________________,
2007

       

      
        	 
      	 
      
	 
      	
                Print
      name of Subscriber

              
	 	 	 
	 
      	
                By:

              	 
      
	 
      	 
      	
                Signature

              
	 	 	 
	 	 	 
	 
      	 
      	
                Print
      name of Signatory (if different from Subscriber)

              
	 	 	 
	 	 	 
	 
      	 
      	
                Title

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 	
                C-1

              	Canada &
      Offshore

      SCHEDULE
C

       

      NOTE:  IF
YOU HAVE ALREADY COMPLETED THIS FORM FOR ANOTHER TRANSACTION PLEASE INDICATE IN
THE FIRST QUESTION THAT IT IS ALREADY ON FILE WITH THE EXCHANGE.

      
      

       

      
        	 	
                 FORM
      4C

                CORPORATE PLACEE REGISTRATION
      FORM

              	
                 

              

      

       

       

      Where subscribers to a Private
Placement are not individuals, the following information about the placee must
be provided.  This Form will remain on file with the
Exchange.  The corporation, trust, portfolio manager or other entity
(the “Placee”) need only file it on one time basis, and it will be referenced
for all subsequent Private Placements in which it participates.  If
any of the information provided in this Form changes, the Placee must notify the
Exchange prior to participating in further placements with Exchange listed
companies.  If as a result of the Private Placement, the Placee
becomes an Insider of the Issuer, Insiders of the Placee are reminded that they
must file a Personal Information Form (2A) or, if applicable, Declarations, with
the Exchange.

       

       

      
        	
                1.

              	
                Placee
      Information:

              

      

       

      
        	
                (a)

              	
                Name:

              	 

      

       

      
        	
                (b)

              	
                Complete
      Address:

              	 

      

       

      
        	
                 
      

              	 

      

       

      
        	
                (c)

              	
                Jurisdiction
      of Incorporation or Creation:

              	 

      

       

      
        	
                 
      

              	
                2.

              	
                (a)

              	
                Is
      the Placee purchasing securities as a portfolio manager (Yes/No)?
      __________

              

      

       

      (b)           Is
the Placee carrying on business as a portfolio manager outside of Canada
(Yes/No)? __________

       

      
        	
                3.

              	
                If
      the answer to 2(b) above was “Yes”, the undersigned certifies
      that:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                It
      is purchasing securities of an Issuer on behalf of managed accounts for
      which it is making the investment decision to purchase the securities and
      has full discretion to purchase or sell securities for such accounts
      without requiring the client’s express consent to a
      transaction;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                it
      carries on the business of managing the investment portfolios of clients
      through discretionary authority granted by those clients (a “portfolio
      manager” business) in ____________________ [jurisdiction], and it is
      permitted by law to carry on a portfolio manager business in that
      jurisdiction;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                it
      was not created solely or primarily for the purpose of purchasing
      securities of the Issuer;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                the
      total asset value of the investment portfolios it manages on behalf of
      clients is not less than $20,000,000;
and

              

      

       

      
        	
                 
      

              	
                (e)

              	
                it
      has no reasonable grounds to believe, that any of the directors, senior
      officers and other insiders of the Issuer, and the persons that carry on
      investor relations activities for the Issuer has a beneficial interest in
      any of the managed accounts for which it is
  purchasing.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	 	
                C-2

              	Canada &
      Offshore

      
        	
                4.

              	
                If
      the answer to 2(a). above was “No”, please provide the names and addresses
      of control persons of the Placee:

              

      

       

      
        	
                Name

              	
                City

              	
                Province
      or State

              	
                Country

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      

      

      

       

      The
undersigned acknowledges that it is bound by the provisions of applicable
Securities Law, including provisions concerning the filing of insider reports
and reports of acquisitions (See for example, sections 87 and 111 of the
Securities Act (British
Columbia) and sections 176 and 182 of the Securities Act
(Alberta).

       

      Acknowledgement
- Personal Information

       

      “Personal
Information” means any information about an identifiable individual, and
includes information contained in sections 1, 2 and 4, as applicable, of
this Form.

       

      The
undersigned hereby acknowledges and agrees that it has obtained the express
written consent of each individual to:

       

      
        	
                (a)

              	
                the
      disclosure of Personal Information by the undersigned to the Exchange (as
      defined in Appendix 6B) pursuant to this Form;
  and

              

      

       

      
        	
                (b)

              	
                the
      collection, use and disclosure of Personal Information by the Exchange for
      the purposes described in Appendix 6B or as otherwise identified by
      the Exchange, from time to time.

              

      

       

      Dated at
_________________________ on
______________________________________.

       

       

      
        	 
      	 
      
	 
      	
                (Name
      of Purchaser - please print)

              
	 
      	 
      
	 
      	 
      
	 
      	
                (Authorized
      Signature)

              
	 
      	 
      
	 
      	 
      
	 
      	
                (Official
      Capacity - please print)

              
	 
      	 
      
	 
      	 
      
	 
      	
                (please
      print name of individual whose signature appears
  above)

              

      

      

      

      THIS IS
NOT A PUBLIC DOCUMENTEXHIBIT 10.1

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (“Agreement”) deemed effective as of June 16,
2008 and is entered into by and among Westaff Support, Inc., Westaff (USA), Inc.
and Westaff, Inc. (collectively, the “Company”) and Stephen J. Russo (the “Executive”).
The parties agree to the following terms and conditions of the Executive’s
employment.

 

1.  EMPLOYMENT.  The
Company hereby employs the Executive, and the Executive hereby accepts such
employment, upon the terms and subject to the conditions hereinafter set forth.

 

2.  DUTIES.

 

(a)           Position
and Responsibilities. The
Executive shall be employed as the Company’s Executive Vice President and Chief
Operating Officer.  After six (6) months
of employment, the Executive shall assume the title of President in addition to
Chief Operating Officer, contingent upon achieving mutually agreed upon targets
which will be set in writing between the Company and the Executive within the
first two (2) weeks of employment. Executive shall have such responsibilities
and duties as are consistent with his position, and any other duties that the
Company may assign to him.  The Executive
shall devote his full working time, attention and energies to the performance
of his duties for the Company and the Executive shall at all times comply with
the Company’s Conflict of Interest Policy and Code of Business Conduct and
Ethics and abide by the rules, regulations, and practices as adopted or
modified from time to time by the Company.

 

(b)           Term.
The Executive’s
employment shall commence on Monday, June 16, 2008, and his employment
shall be of indefinite duration, subject to termination under Section 4 of
this Agreement. The Executive acknowledges that there is no express or implied
agreement between him and the Company or any of its subsidiaries, whether
domestic or foreign, for any specific period of employment or for continuing or
long-term employment.

 

(c)           Other Activities.  Except upon the prior written consent of the
Company, the Executive will not, during the term of this Agreement, (i) accept
any other employment, or (ii) engage, directly or indirectly, in any other
business activity (whether or not pursued for pecuniary advantage) that might
interfere with Executive’s duties and responsibilities hereunder or create a
conflict of interest with the Company.

 

(d)           No Conflict.  Executive represents and warrants that his
execution of this Agreement, employment with the Company, and the performance
of his proposed duties under this Agreement shall not violate any obligations
he may have to any other employer, person or entity, including any obligations
with respect to proprietary or confidential information of any other person or
entity.

 

3.  COMPENSATION
AND BENEFITS.  In consideration for the services of the Executive,
the Company shall compensate the Executive as follows:

 

(a)           Base
Salary. The Company
shall pay the Executive an initial annual base salary of $375,000 (“Base Salary”),
less required and authorized withholdings, which shall be paid to the Executive
in accordance with the Company’s normal payroll practices and schedule.

 

(b)           Benefits.  As
the Executive becomes eligible, he shall have the right to participate in and
to receive benefits from all present and future employee benefit plans
specified in the Company’s policies and generally made available to similarly
situated employees of the Company. The amount and 

 

1

 

extent of benefits to which the Executive is entitled shall be governed
by the specific benefit plan, as amended.

 

(c)           Expenses.
The Company shall
reimburse the Executive for all reasonable travel and other business expenses
incurred by the Executive in the performance of his duties, in accordance with
Company policies, as they may be amended in the Company’s sole discretion.

 

(d)           Incentive
Compensation. The Executive
shall be eligible for an annual bonus of up to 50% of his Base Salary, prorated
for FY 2008.  The bonus will be based on
the Company’s performance metrics and will be approved annually by the
Compensation Committee.  The Executive
will not be eligible for any bonus or incentive compensation payment if his
employment with the Company terminates for cause before such bonus or incentive
compensation payment is earned or paid.   If the Executive’s employment with the
Company terminates without Cause prior to such bonus or incentive compensation
payment being earned or paid, Executive will be entitled to a prorated portion
of such bonus or incentive compensation.

 

(e)           Stock
Options.  Subject to approval from the Company’s Board
of Directors (or a duly authorized committee of the Company’s Board of
Directors) (the “Board”),  the
Executive will be eligible to participate in the Company’s 2006 Stock Incentive
Plan (the “Stock Option Plan”).  If
approved, Executive will be awarded 150,000 stock options pursuant to the terms
stated in the Company’s Stock Option Plan and the Notice of Stock Option Award
(including, but not limited to the vesting schedule for the option shares).

 

(f)            Vacation. 
The Executive shall
accrue four (4) weeks of vacation per year, subject to the Company’s
policies with respect to maximum vacation accruals.

 

(g)           Indemnification.  The Company and the Executive
shall enter into the Company’s customary form of indemnification agreement
applicable to directors and executive officers of the Company, in the form
attached as Exhibit A (the “Indemnification Agreement”).

 

4.  TERMINATION
OF EMPLOYMENT.

 

(a)           Termination
of Employment For Cause.  For purposes of this Agreement, the Company
may terminate the Executive’s employment for “Cause” at any time, without any
notice, if the Executive does any one or more of the following:

 

(i)            acts in bad faith,
or in breach of trust, to the detriment of the Company;

 

(ii)           refuses or fails to
act in accordance with any policy of the Company or any specific direction or
order of the Company;

 

(iii)          exhibits, in regard
to his employment and as determined by the Company in its sole discretion,
unfitness or unavailability for service, unsatisfactory or inadequate
performance (including but not limited to the Executive’s failure or inability
to meet the Company’s expectations, goals, standards and/or deadlines with
respect to his duties), misconduct, dishonesty, habitual neglect of duties or
incompetence;

 

(iv)          commits, is
convicted of, or pleads no contest to a crime involving dishonesty, breach of
trust, moral turpitude, or physical harm to any person;

 

2

 

(v)           breaches any
material term of this Agreement or any other agreement that the Executive has
entered into with the Company (including but not limited to his Confidentiality,
Invention, Design Agreement, which is attached hereto and incorporate herein as
Exhibit B);

 

(vi)          dies; or

 

(vii)         becomes disabled and
therefore unable to perform the essential duties of his position for a period
of more than 12 workweeks within any twelve (12)-month period.

 

If the Executive’s employment shall be terminated by the Company for
Cause as defined above, the Company shall pay the Executive his earned but
unpaid Base Salary and accrued but unused vacation pay, and shall provide his
benefits under the applicable benefit plans through the date of termination and
otherwise as required by law.  The Executive
shall not be eligible or entitled to a severance payment described in Section 4(b) below
if his employment is terminated for Cause and no other compensation or benefits
will accrue or be owed to the Executive for any period after the effective date
of termination in the event of a termination for Cause.

 

(b)           Termination
by Employer Not For Cause.  The Company may terminate the Executive’s
employment at any time for any reason.  If
the Executive’s employment is terminated without Cause, the Company shall pay
the Executive his earned but unpaid Base Salary, his accrued but unused
vacation pay and his earned but unpaid bonus, if any, and shall provide his
benefits under the applicable benefit plans through the date of termination and
otherwise as required by law.  In
addition, the Executive shall be entitled to a severance payment, as set forth
below (the “Severance Payment”), provided he signs a separation agreement and
general release of claims (to be prepared by the Company at the time of
termination) in exchange for such severance payment:

 

(i)            If the Executive’s
employment is terminated without Cause within one year from his date of hire, or
if the Company relocates its headquarter offices outside a thirty-five (35)
mile radius of 298 N. Wiget Lane, Walnut Creek, CA  94598, or Executive’s duties and
responsibilities are significantly reduced without Cause, Executive’s Severance
Payment shall be equal to six (6) months’ pay at his current Base Salary,
less required and authorized withholdings, which shall be paid to the Executive
in the form of salary continuation for a period of six (6) months
following the effective date of termination, payable in accordance with the
Company’s normal payroll practices and schedule.

 

The Company shall be
entitled to cease its payment of the Severance Payment in the event that the Executive
breaches or violates any of his obligations under this Agreement or his
Confidential Information and Invention Agreement during the applicable
severance period.  Notwithstanding any other provision of this Agreement to the contrary,
the Company, in its sole discretion and without the Executive’s consent, may
amend or modify this Agreement in any manner to provide for the application and
effects of Section 409A of the Internal Revenue Code (the “Code”)
(relating to deferred compensation arrangements) and any related regulatory or
administrative guidance issued by the Internal Revenue Service.  The Company shall have the authority to delay
the payment of any benefits described under this Agreement to the extent it
deems necessary or appropriate to comply with Section 409A(a)(2)(B)(i) of
the Code (relating to payments made to certain “key employees” of certain
publicly-traded companies) and in such event, any such payments to which the Executive
would otherwise be entitled during the six (6) month period immediately
following the Executive’s separation from service will be paid on the first
business day following the expiration of such six (6) month period.

 

(c)           Resignation
by Executive. At any
time, the Executive may terminate his employment for any reason by providing
the Company two (2) weeks’ advance written notice.  If the Executive’s employment is terminated
due to the Executive’s resignation, the Company shall pay the 

 

3

 

Executive his earned but unpaid Base Salary and accrued vacation pay,
and shall provide his benefits under the applicable benefit plans, through the
date of termination and otherwise as required by law.  The Executive shall not be entitled to the
Severance Payment under Section 4(b) if he resigns for any reason,
and no other compensation or benefits will accrue or be owed to the Executive
for any period after the effective date of termination in the event of that he
resigns for any reason.

 

5.  TERMINATION
OBLIGATIONS.

 

(a)           Representations
and Warranties.  The Executive shall sign, as a condition of
employment, the Company’s Confidential Information and Invention Agreement.  The representations and warranties contained
in this Agreement and the Executive’s obligations under his Confidential
Information and Invention Agreement shall survive the termination of employment
for any reason.  Nothing in this
Agreement shall be deemed to modify or limit the Executive’s obligations under his
Confidential Information and Invention Agreement, and nothing in the
Confidential Information and Invention Agreement shall be deemed to modify or
limit the Executive’s obligations under this Agreement.

 

(b)           Cooperation
in Pending Work. Following
any termination of employment, the Executive shall fully cooperate with the
Company in all matters relating to the winding up of pending work on behalf of
the Company and the orderly transfer of work to other executives/employees of
the Company or any of its domestic subsidiaries.

 

(c)           Return
of Company Property.  All property including, without limitation,
all equipment, tangible Proprietary Information as defined in Section 6(a),
documents, books, records, reports, notes, contracts, lists, computer disks
(and other computer-generated files and data), and copies thereof, created on
any medium and furnished to, obtained by, or prepared by the Executive in the
course of or incident to his employment, belongs to the Company or any of its
subsidiaries, whether domestic or foreign, and shall be returned promptly to
the Company upon termination of employment for any reason.  In addition, the Executive shall immediately
return to or arrange for prompt delivery to the Company all equipment,
supplies, keys, manuals, and other property or equipment of whatever nature in his
possession or control or which he may have entrusted to any other party.

 

6.  PROPRIETARY
INFORMATION AND NON-SOLICITATION.

 

(a)           Proprietary
Information. The Executive
recognizes and acknowledges that certain assets of the Company or its
subsidiaries, whether domestic or foreign, constitute “Proprietary Information,”
including all information that is known only to the Executive or the Company or
such subsidiaries, and relating to the business of the Company or such
subsidiaries (including, without limitation, information regarding employees,
clients, customers, bill and pay rates, employees’ pay and skills, pricing
policies, methods of operation, operating manuals, sales, sales techniques,
advertising materials, products, costs, markets, key personnel, formulas,
product applications, technical processes, other statistical information,
confidential data, and trade secrets), and that protection of such information
is essential to the interests of the Company and such subsidiaries.

 

(b)           Non-Solicitation
of Employees and Clients. The Executive acknowledges and agrees that the pursuit of activities
forbidden by this subsection would necessarily involve the use or disclosure of
Proprietary Information in breach of the Company’s Confidential Information and
Invention Agreement.  To forestall this
disclosure, use, and breach, and in consideration of the employment under this
Agreement, the Executive agrees that for a period of one (1) year after
termination of his employment, he shall not, directly or indirectly, for or on behalf of any other person, firm,
corporation or other entity that directly competes with the Company:  (i) solicit, induce, or influence any
employee, consultant, or independent contractor of the Company or any of its
subsidiaries, whether domestic or foreign, to terminate 

 

4

 

his employment or relationship with the Company or any of such
subsidiaries or to work for any other business entity or person; or (ii) solicit
(other than on behalf of the Company or such subsidiaries), divert, or attempt
to divert the business of any client or customer of the Company in any
district, territory, state or country where the Company conducts business, unless the Executive can prove that any action
taken in violation of this Section 6(b) was taken without the use of
any of the Company’s Proprietary Information. For purposes of this
non-solicitation covenant, a customer of the Company is defined as any person,
firm or corporation that the Company or any of its subsidiaries has serviced
within one year preceding the termination of the Executive’s employment and with whom the Executive is or became
familiar as a result of his employment with the Company.  For
purposes of this non-solicitation covenant,  an
employee of the Company is defined as any person who has received salary or
wages from the Company or any of its subsidiaries within one year preceding the
termination of the Executive’s employment and with whom the Executive is or became familiar as a result of his
employment with the Company.

 

(c)           Injunctive
Relief for Violation. The
Executive acknowledges that the obligations and restrictions set forth in this Section 6
are reasonably necessary for the protection of the Company’s business, goodwill,
property, customer and employee relationships. 
The Executive further acknowledges that the character, duration and
geographical scope of his obligations under this Section 6 are reasonable
in light of the circumstances as they exist on the date upon which this
Agreement has been executed. The Executive recognizes that irreparable damage
will result to the Company in the event of any violation of his obligations
under this Section 6 and agrees to the issuance of a restraining order
and/or an injunction against him for such a material violation in addition to
any other legal or equitable remedies that the Company may have.

 

7.  GENERAL.

 

(a)           Severability.
If any provision of
this Agreement is or becomes invalid, illegal or unenforceable in any respect
under any law, the validity, legality or enforceability of the remaining
provisions hereof shall not in any way be affected or impaired.  If any provision of this Agreement is found
by a court of competent jurisdiction to be invalid, illegal or unenforceable,
the affected provisions of this Agreement shall automatically and without
requirement of further action by the parties be deemed reformed solely to the
extent required to render such provisions valid, enforceable and legal and this
Agreement, including such reformed provisions, shall continue in full force and
effect.  If such reformation is not
possible, then the affected provisions shall be eliminated from this Agreement
to the extent necessary to permit the remaining provisions to be enforced.

 

(b)           Counterparts.
This Agreement may be
executed in multiple counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.

 

(c)           Entire Agreement.  This Agreement is intended to be the final, complete, and exclusive
statement of the terms of the Executive’s employment by the Company and may not
be contradicted by evidence of any prior or contemporaneous statements or
agreements, except for agreements specifically referenced herein (including the
Indemnification Agreement attached as Exhibit A, the Confidentiality
Agreement attached as Exhibit B, and the Stock Plan and Stock Option
Agreement of the Company).  To the extent
that the practices, policies or procedures of the Company, now or in the
future, apply to the Executive and are inconsistent with the terms of this
Agreement, the provisions of this Agreement shall control.  Any subsequent change in the Executive’s
duties, position, or compensation will not affect the validity or scope of this
Agreement.

 

(d)           Amendments;
Waivers. This
Agreement may not be amended except by an instrument in writing, signed by each
of the parties. No failure to exercise and no delay in exercising any right,
remedy, or power under this Agreement shall operate as a waiver thereof, nor
shall any single or 

 

5

 

partial exercise of any right, remedy, or power under this Agreement
preclude any other or further exercise thereof, or the exercise of any other
right, remedy, or power provided herein or by law or in equity.

 

(e)           Assignment;
Successors and Assigns. The
Executive agrees that he will not assign, sell, transfer, delegate, or
otherwise dispose of, whether voluntarily or involuntarily, or by operation of
law, any rights or obligations under this Agreement. Any such purported
assignment, transfer, or delegation shall be void. Nothing in this Agreement
shall prevent the consolidation of the Company with, or its merger into, any
other entity, or the sale by the Company of all or substantially all of its
assets, or the otherwise lawful assignment by the Company of any rights or
obligations under this Agreement. 
Subject to the foregoing, this Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective heirs, legal
representatives, successors, and permitted assigns, and shall not benefit any
person or entity other than those specifically enumerated in this Agreement.

 

(f)            Governing
Law. This Agreement
and the performance hereof shall be construed and governed in accordance with
the laws of the State of California.

 

The parties have duly executed this Agreement as of the date and year
first above written.

 

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Stephen J. Russo

  	
   

  
	
   

  	
  Stephen
  J. Russo

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Michael T. Willis

  	
   

  
	
   

  	
   

  	
   Michael
  T. Willis

  
	
   

  	
  Title: COB, President & CEO

  
				

 

6

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