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MFA MORTGAGE
INVESTMENTS, INC.  

2004 EQUITY COMPENSATION PLAN 

RESTRICTED
STOCK AWARD AGREEMENT 

     AGREEMENT
by and between MFA  Mortgage  Investments,  Inc.,  a Maryland  corporation  (the  “Company”)
and  Stewart  Zimmerman  (the  “Executive”),  dated  as of the  16th  day of
April, 2006. 

     WHEREAS,
the  Company  maintains  the  MFA  Mortgage  Investments,  Inc. 2004 Equity  Compensation
Plan (the “Plan”)  (capitalized  terms  used but not  defined  herein  shall
have  the respective meanings ascribed thereto by the Plan); 

     WHEREAS,
the Company and the Executive  entered into  that  certain  Amended  and  Restated
Employment  Agreement,  dated April 16, 2006 (the “Employment Agreement”); and 

     WHEREAS,
pursuant  to the  terms  of the  Employment  Agreement,  subject to the Executive’s
continuing  employment  with the  Company,  the  Company  has  agreed  to issue to the
Executive  as of April  16,  2006 and on  January  1st (or the  first  business day
thereafter) of each of the following four  years  thereafter,  common stock with an
aggregate fair market  value  on  each  such  date  (or  the  first  business  day
thereafter) of $100,000. 

     NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 

     1.
 Grant of Common Stock. 

     (a)
The Company  hereby  confirms,  effective as  the date set forth above,  subject to the
following  terms and  conditions  and  subject  to the  provisions  of the Plan (the
terms of which  are  incorporated  herein by  reference),  the  right of the  Executive
to  receive  shares of the  Company's  common  stock,  par  value  $0.01  per  share  (“Shares”),
as  provided for in Section 3 of the Employment Agreement. 

     (b)
Subject  to  the  Executive’s  continuing  employment  with  the  Company,  as of
April  16,  2006,  and  January 1st (or the first  business  day  thereafter)  of each
of the  following  four  years  (each  a  “Grant  Date”),  the  Company  shall
issue  to the  Executive  a number  of  Shares  determined  by  dividing  (x)  $100,000
by (y) the fair market  value of a Share on the last  trading  day  prior to the Grant
Date (rounded up to the nearest Share). 

     2.
Restrictions and Conditions. 

     The
Shares awarded  pursuant to this Agreement  shall  be subject to the following
restrictions and conditions: 

	 	(i)
The  Executive  shall  not  be  permitted  voluntarily or  involuntarily  to  sell,
transfer,  pledge,  anticipate,  alienate,  encumber  or  assign  the  Shares  (or  have
such  Shares  attached  or  garnished)  until  such time as the value of  the  Executive’s
holdings  in  the  Company  exceeds  five  times  his Base  Compensation  (as  defined in
the  Employment  Agreement).  Other  than  as  provided  below,  such  transfer
restriction  shall  lapse  with  respect  to the  Shares  only to the  extent  the
Executive’s  holdings  in  the  Company  exceed such  threshold  (such period
during  which  Shares  may not be  transferred,  the  “Transfer Restriction Period”).
 

	 	(ii)
Except  as  provided  in  the  foregoing  clause  (i)  and  clause  (iv)  below,  the
Executive  shall  have,  in  respect  of the  Shares,  all of the  rights  of a
stockholder  of the Company,  including  the  right to vote the  Shares  and  receive
cash  dividends  on  such  Shares.  Certificates  for  Shares  (not  subject  to
restrictions)  shall  be  delivered  to  the  Executive  promptly  after,  and only
after,  the  Transfer  Restriction  Period  shall  lapse.
 

	 	(iii)
Upon  the  Executive’s  Termination  of  Service  for any  reason,  the  transfer
restrictions  described  herein  will  immediately lapse.
 

	 	(iv)
No  additional  Shares  shall  be  issued  to the  Executive  pursuant  to this
Agreement  with  respect  to any Grant  Date  which occurs  following the  termination
of  the  Executive’s  employment  with  the  Company.
 

     3. Certain Terms of Shares 

		(a) 	 The
Company  shall have a stock  certificate  in  respect  of  Shares  issued  under  this
Agreement  registered  in  the  name  of the  Executive.  The  certificates  for  Shares
issued  hereunder  may  include  any  legend  which  the  Board  of  Directors  of  the
Company (the “Board”)  deems  appropriate to  reflect  any  restrictions  on
transfer  hereunder,  or as the  Board  may  otherwise  deem  appropriate,  and,  without
limiting  the  generality  of  the  foregoing,  shall  bear a  legend  referring  to  the
transfer  restrictions  applicable  to  such  Shares,  substantially in the following
form: 

	 	“THE
TRANSFERABILITY  OF  THIS  CERTIFICATE  AND THE SHARES OF STOCK  REPRESENTED  HEREBY  ARE
SUBJECT TO THE TERMS AND  CONDITIONS  OF  AN  AGREEMENT  ENTERED  INTO  BETWEEN  THE
REGISTERED  OWNER  AND  MFA  MORTGAGE  INVESTMENTS,  INC.  COPIES OF SUCH AGREEMENT  ARE
ON FILE IN THE  OFFICES OF MFA  MORTGAGE  INVESTMENTS,  INC. AT 350 PARK  AVENUE,  NEW
YORK, NEW YORK 10022.”
 

		(b) 	 All
Shares shall be, at the  Company's  sole  cost: (i) duly  authorized,  validly issued,
fully  paid  and  nonassessable,  (ii)  registered  and qualified for sale,  and for
resale,  under  all  applicable  state  and  Federal  securities  laws (e.g., on SEC Form
S-8),  and  (iii)  listed  or  otherwise  qualified  for  trading  on  any  national
securities  exchange or national  securities  market  on  which  securities  of  the
same  class  issued  by  the  Company  are  then  listed or qualified. 

     4.  Miscellaneous. 

		(a) 	 THIS
AGREEMENT  SHALL  BE  GOVERNED  BY THE  LAWS  OF  THE  STATE  OF  MARYLAND,  WITHOUT
REFERENCE  TO  PRINCIPLES  OF  CONFLICT  OF  LAWS.  The  captions of this  Agreement  are
not  part  of  the  provisions  hereof  and  shall  have  no  force  or  effect.  This
Agreement  may not be  amended  or  modified  except by a written  agreement  executed
by  the  parties  hereto  or  their  respective  successors  and legal  representatives.
The  invalidity  or  unenforceability  of  any  provision  of  this  Agreement  shall
not  affect the  validity  or  enforceability  of  any other provision of this Agreement. 

2 

		(b) 	 The
Committee  may construe  and  interpret  this  Agreement  and  establish,  amend  and
revoke  such  rules,  regulations  and  procedures  for the  administration  of this
Agreement  as it  deems  appropriate  to the  extent  consistent  with this  Agreement
and  the  Employment  Agreement.  In  this  connection,  the  Committee  may correct any
defect  or  supply  any  omission,  or  reconcile  any  inconsistency  in  this
Agreement or in any related  agreements,  in  the  manner  and to the extent it shall
deem  necessary  or  expedient  to make  the  Plan  fully  effective.  All  decisions
and  determinations  by  the  Committee  in  the  exercise  of this  power  shall be
final and  binding  upon  the  Participating  Companies  and the Executive. 

		(c) 	 All
notices  hereunder  shall be in writing,  and if to  the  Company  or  the  Committee,
shall be  delivered  to the  Board or mailed  to its  principal  office,  addressed to
the  attention  of  the  Board;  and  if  to  the  Executive,  shall  be  delivered
personally  or mailed to the  Executive  at the  address  appearing  in the  records  of
the  Company.  Such  addresses  may be  changed at any time  by written  notice to the
other  party given  in accordance with this paragraph 4(c). 

		(d) 	 The
failure  of  the  Executive  or  the  Company  to insist  upon  strict  compliance  with
any  provision  of this  Agreement  or  the  Plan,  or  to  assert  any  right  the
Executive  or  the  Company,  respectively,  may have under this  Agreement  or the Plan,
shall  not be  deemed to be a waiver of such  provision  or right or any  other
provision  or right of this Agreement or the Plan. 

		(e) 	 Nothing
in this  Agreement  shall  confer on  the  Executive  any right to continue in the
employ or other  service  of the  Company or  its  Subsidiaries  or  interfere  in any
way  with  the  right  of  the  Company  or  its  Subsidiaries  and  its  stockholders
to  terminate  the  Executive’s  employment  or  other service at any time. 

		(f) 	 This
Agreement,  together  with  the  Employment  Agreement,  contain  the  entire  agreement
between the parties  with respect  to  the  subject  matter  hereof  and  supersedes  all
prior  agreements,  written  or  oral,  with  respect  thereto.  In  the  event of a
conflict  between  the  terms of  this  Agreement  or  the  Plan  with  the  Employment
Agreement,  the  terms  of  the  Employment Agreement shall control. 

     IN
WITNESS  WHEREOF,  the Company  and the  Executive  have  executed  this  Agreement  as
of the day and year  first  above written. 

	 	MFA MORTGAGE INVESTMENTS, INC.
	 	 	 
	 	By:	/s/
James
A.
Brodsky 
	 	 	

	 	Name:	James
A.
Brodsky
	 	Title:	Chairman,
Compensation
Committee
	 	 
	 	 	 
	 	 /s/
    Stewart Zimmerman 
	 	

	 	  Stewart
    Zimmerman

3EXHIBIT-10.1

 

THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES 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”). 

 

NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE “SUBSCRIPTION AGREEMENT”) 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, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE 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.

CONFIDENTIAL

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

(Subscribers Resident in British Columbia or Overseas)

	
            TO:
 	
            Service Air Group Inc. (the “Company”)
 

5455 Airport Road South

Richmond, British Columbia

V7B 1B5

Purchase of Shares

	
            1.
 	
            Subscription
 

1.1            On the basis of the representations and warranties and subject to the terms and conditions set forth herein, the undersigned (the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase 98,000 shares of common stock (the “Shares”) at a price per Share of US$1.00 (such subscription and agreement to purchase being the “Subscription”), for an aggregate purchase price of US$98,000 (the “Subscription Proceeds”). 

1.2            On the basis of the representations and warranties and subject to the terms and conditions set forth herein, the Company hereby irrevocably agrees to sell the Shares to the Subscriber.

1.3            Subject to the terms hereof, the Subscription will be effective upon its acceptance by the Company. The Subscriber acknowledges that the offering of Shares contemplated hereby is part of a private placement of Shares having an aggregate subscription level of US$625,000 (the “Offering”). The Offering is not subject to any minimum aggregate subscription level.

	
            2.
 	
            Payment
 

2.1            The Subscription Proceeds must accompany this Subscription and shall be paid by certified cheque or bank draft drawn on a Canadian chartered bank, or a bank in the United States reasonably acceptable to the Company, and made payable and delivered to the Company. Alternatively, the Subscription Proceeds may be wired to the Company or its lawyers pursuant to wiring instructions that will be provided to the Subscriber upon request. If the funds are wired to the Company’s lawyers, those lawyers are authorized to immediately deliver the funds to the Company.

2.2            The Subscriber acknowledges and agrees that this Subscription Agreement, the Subscription Proceeds and any other documents delivered in connection herewith will be held on behalf of the Company. In the event that this Subscription Agreement is not accepted by the Company for whatever reason, which the Company expressly reserves the right to do, within 30 days of the delivery of an executed Subscription Agreement by the Subscriber, this Subscription Agreement, the Subscription Proceeds (without interest thereon) and any other documents delivered in connection herewith will be returned to the Subscriber at the address of the Subscriber as set forth in this Subscription Agreement.

 

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2.3            Where the Subscription Proceeds are paid to the Company, the Company is entitled to treat such Subscription Proceeds as an interest free loan to the Company until such time as the Subscription is accepted and the certificates representing the Shares have been issued to the Subscriber.

	
            3.
 	
            Documents Required from Subscriber
 	
             

	
            3.1
 	
            The Subscriber must complete, sign and return to the Company:
 
	
             
	
            (a)
 	
            an executed copy of this Subscription Agreement; and
 	
             

					

	
            (b)
 	
            if the Subscriber is an “Accredited Investor”, as that term is defined in Multilateral Instrument 45-103, an Accredited Investor Questionnaire in the form attached as Exhibit A (the “Questionnaire”).
 

3.2            The Subscriber shall complete, sign and return to the Company as soon as possible, on request by the Company, any documents, questionnaires, notices and undertakings as may be required by regulatory authorities applicable law.

	
            4.
 	
            Closing
 

4.1            Closing of the offering of the Securities (the “Closing”) shall occur on or before May 31, 2006, or on such other date as may be determined by the Company (the “Closing Date”).

4.2            The Company may, at its discretion, elect to close the Offering in one or more closings, in which event the Company may agree with one or more subscribers (including the Subscriber hereunder) to complete delivery of the Shares to such subscriber(s) against payment therefor at any time on or prior to the Closing Date.

	
            5.
 	
            Acknowledgements of Subscriber
 	
             

	
            5.1
 	
            The Subscriber acknowledges and agrees that:
 

	
            (a)
 	
            none of the Shares have been registered under the 1933 Act, or under any state securities or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons, as that term is defined in Regulation S under the 1933 Act (“Regulation S”), except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act; 
 
	
            (b)
 	
            the Subscriber acknowledges that the Company has not undertaken, and will have no obligation, to register any of the Shares under the 1933 Act;
 
	
            (c)
 	
            by completing the Questionnaire, the Subscriber is representing and warranting that the Subscriber is an “Accredited Investor”, as the term is defined in Multilateral Instrument 45-103 adopted by the British Columbia Securities Commission;
 
	
            (d)
 	
            the decision to execute this Agreement and acquire the Shares hereunder has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Company, and such decision is based entirely upon a review of information (the receipt of which is hereby acknowledged) which has been filed by the Company in compliance, or intended compliance, with applicable securities legislation (collectively, the “Public Record”);
 
	
            (e)
 	
            if the Company has presented a business plan to the Subscriber, the Subscriber acknowledges that the business plan may not be achieved or be achievable;
 
	
            (f)
 	
            no securities commission or similar regulatory authority has reviewed or passed on the merits of the Shares;
 

	
            (g)
 	
            there is no government or other insurance covering the Shares;
 

 

 

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            (h)
 	
            there are risks associated with an investment in the Shares, as more fully described in certain information forming part of the Public Record;
 
	
            (i)
 	
            the Company has advised the Subscriber that the Company is relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell the Shares through a person registered to sell securities under the Securities Act (British Columbia) (the “B.C. Act”) and, as a consequence of acquiring the Shares pursuant to this exemption, certain protections, rights and remedies provided by the B.C. Act, including statutory rights of rescission or damages, will not be available to the Subscriber;
 
	
            (j)
 	
            the Subscriber has not acquired the Shares as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S under the 1933 Act) in the United States in respect of any of the Shares 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 any of the Shares; provided, however, that the Subscriber may sell or otherwise dispose of any of the Shares pursuant to registration thereof under the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements;
 
	
            (k)
 	
            the Subscriber and the Subscriber’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from the Company in connection with the distribution of the Shares hereunder, and to obtain additional information, to the extent possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information about the Company;
 
	
            (l)
 	
            the books and records of the Company were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Subscriber during reasonable business hours at its principal place of business, and all documents, records and books in connection with the distribution of the Shares hereunder have been made available for inspection by the Subscriber, the Subscriber’s lawyer and/or advisor(s);
 
	
            (m)
 	
            the Subscriber will indemnify and hold harmless the Company and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Subscriber contained herein, the Questionnaire or in any document furnished by the Subscriber to the Company 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 to the Company in
connection therewith;
 
	
            (n)
 	
            none of the Shares are listed on any stock exchange or automated dealer quotation system and no representation has been made to the Subscriber that any of the Shares will become listed on any stock exchange or automated dealer quotation system; 
 
	
            (o)
 	
            in addition to resale restrictions imposed under U.S. securities laws, there are additional restrictions on the Subscriber’s ability to resell the Shares under the B.C. Act and Multilateral Instrument 45-102 adopted by the British Columbia Securities Commission;
 
	
            (p)
 	
            the Company will refuse to register any transfer of the Shares not made in accordance with the provisions of Regulation S, or pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act;
 
	
            (q)
 	
            the statutory and regulatory basis for the exemption claimed for the offer Shares, although in technical compliance with Regulation S, would not be available if the offering is part of a plan or scheme to evade the registration provisions of the 1933 Act; 
 
	
            (r)
 	
            the Subscriber has been advised to consult the Subscriber’s own legal, tax and other advisors with respect to the merits and risks of an investment in the Shares 
 

 

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and with respect to applicable resale restrictions, and it is solely responsible (and the Company is not in any way responsible) for compliance with:

	
            (i)
 	
            any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Shares hereunder, and
 

	
            (ii)
 	
            applicable resale restrictions; and
 

	
            (s)
 	
            this Subscription Agreement is not enforceable by the Subscriber unless it has been accepted by the Company.
 

	
            6.
 	
            Representations, Warranties and Covenants of the Subscriber
 

	
            (a)
 	
            The Subscriber hereby represents and warrants to and covenants with the Company (which representations, warranties and covenants shall survive the Closing) that:
 
	
            (b)
 	
            the Subscriber has the legal capacity and competence to enter into and execute this Subscription Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporation, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution and performance of this Subscription Agreement on behalf of the Subscriber;
 
	
            (c)
 	
            the entering into of this Subscription Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or the constating documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;
 
	
            (d)
 	
            the Subscriber has duly executed and delivered this Subscription Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber;
 
	
            (e)
 	
            if the Subscriber is resident in British Columbia and is not an Accredited Investor, the Subscriber is (check one or more of the following boxes):
 

 

	
             
	
            (A)
 	
            a director, officer, employee or control person of the Company
 	
            [   ]
 	
             

	
             
	
            (B)
 	
            a spouse, parent, grandparent, brother, sister or child of a director, senior officer or control person of the Company
 	
            [   ]
 	
             

	
             
	
            (C)
 	
            a close personal friend of a director, senior officer or control person of the Company
 	
            [ X ]
 	
             

	
             
	
            (D)
 	
            a close business associate of a director, senior officer or control person of the Company
 	
            [ X ]
 	
             

	
            (f)
 	
            if the Subscriber has checked one or more of boxes B, C or D in paragraph 6.1(d) above, the director(s), senior officer(s), or control person(s) of the Company with whom the Subscriber has the relationship is :
 
					

	
            Mahmood Mawji, VP-Finance
 

 

(Fill in the name of each director. senior officer and control person which you have the above-mentioned relationship with).

	
            (g)
 	
            the Subscriber is not a U.S. Person;
 

	
            (h)
 	
            the Subscriber is not acquiring the Shares for the account or benefit of, directly or indirectly, any U.S. Person;
 
	
            (i)
 	
            the Subscriber is resident in the jurisdiction set out under the heading “Name and Address of Subscriber” on the signature page of this Subscription Agreement;
 

 

 

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            (j)
 	
            the sale of the Shares to the Subscriber as contemplated in this Subscription Agreement complies with or is exempt from the applicable securities legislation of the jurisdiction of residence of the Subscriber;
 
	
            (k)
 	
            the Subscriber is acquiring the Shares for investment only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Shares in the United States or to U.S. Persons; 
 
	
            (l)
 	
            
the Subscriber is outside the United States when receiving and executing this
Subscription Agreement and is acquiring the Shares as principal for the
Subscriber’s own account (except for the circumstances outlined in
paragraph 6(o)), for investment purposes only, and not with a view to, or
for, resale, distribution or fractionalisation thereof, in whole or in part, and
no other person has a direct or indirect beneficial interest in such
Shares;
 
	
            (m)
 	
            the Subscriber is not an underwriter of, or dealer in, the common shares of the Company, nor is the Subscriber participating, pursuant to a contractual agreement or otherwise, in the distribution of the Shares;
 
	
            (n)
 	
            the Subscriber (i) is able to fend for him/her/itself in the Subscription; (ii) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the Shares; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;
 
	
            (o)
 	
            if the Subscriber is acquiring the Shares as a fiduciary or agent for one or more investor accounts:
 
	
             
	
            (i)
 	
            the Subscriber has sole investment discretion with respect to each such account and it has full power to make the foregoing acknowledgements, representations and agreements on behalf of such account, and
 
	
             
	
            (ii)
 	
            the investor accounts for which the Subscriber acts as a fiduciary or agent satisfy the definition of an “Accredited Investor”, as the term is defined Multilateral Instrument 45-103 adopted by the British Columbia Securities Commission;
 
	
            (p)
 	
            the Subscriber acknowledges that the Subscriber has not acquired the Shares as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S under the 1933 Act) in the United States in respect of any of the Shares 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 any of the Shares; provided, however, that the Subscriber may sell or otherwise dispose of any of the Shares pursuant to registration of any of the Shares pursuant to the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements and as otherwise provided herein;
 

	
            (q)
 	
            the Subscriber is not aware of any advertisement of any of the Shares; and
 	
             

	
            (r)
 	
            no person has made to the Subscriber any written or oral representations:
 	
             

	
             
	
            (i)
 	
            that any person will resell or repurchase any of the Shares;
 	
             

	
             
	
            (ii)
 	
            that any person will refund the purchase price of any of the Shares;
 
	
             
	
            (iii)
 	
            as to the future price or value of any of the Shares; or
 	
             

							

	
            (iv)
 	
            that any of the Shares will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the Shares of the Company on any stock exchange or automated dealer quotation system.
 

 

 

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            7.
 	
            Acknowledgement and Waiver
 

7.1            The Subscriber has acknowledged that the decision to purchase the Shares was solely made on the basis of publicly available information contained in the Public Record. The Subscriber hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to which the Subscriber might be entitled in connection with the distribution of any of the Shares.

	
            8.
 	
            Legending of Subject Shares
 

8.1            The Subscriber hereby acknowledges that that upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates representing any of the Shares will bear legends in substantially the following form:

“THESE SHARES 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 SHARES 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 SHARES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.”

“Unless permitted under securities legislation, the holder of the securities shall not trade the securities before the earlier of (i) the date that is 12 months and a day after the date the issuer first becomes a reporting issuer in any of Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Quebec and Saskatchewan, if the issuer is a SEDAR filer; and (ii) the date that is 12 months and a day after the later of (A) the distribution date, and (B) the date the issuer became a reporting issuer in the local jurisdiction of the purchaser of the securities that are the subject of the trade.”

 

8.2            The Subscriber hereby acknowledges and agrees to the Company making a notation on its records or giving instructions to the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described in this Subscription Agreement.

	
            9.
 	
            Costs
 

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

	
            10.
 	
            Governing Law
 

10.1           This Subscription Agreement is governed by the laws of the Province of British Columbia. The Subscriber, in its personal or corporate capacity and, if applicable, on behalf of each beneficial purchaser for whom it is acting, irrevocably attorns to the jurisdiction of the courts of the Province of British Columbia.

	
            11.
 	
            Survival
 

11.1           This Subscription Agreement, including without limitation the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties hereto notwithstanding the completion of the purchase of the Shares by the Subscriber pursuant hereto.

	
            12.
 	
            Assignment
 	
             

	
            12.1
 	
            This Subscription Agreement is not transferable or assignable.
 

 

 

- 8 -

 

 

	
            13.
 	
            Severability
 

13.1           The invalidity or unenforceability of any particular provision of this Subscription Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Subscription Agreement.

	
            14.
 	
            Entire Agreement
 

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

	
            15.
 	
            Notices
 

15.1           All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Subscriber shall be directed to the address on page Error! Bookmark not defined. and notices to the Company shall be directed to it at Service Air Group Inc., 5455 Airport Road South, Richmond, British Columbia, V7B 1B5 Attention:  Jag Dilon, Fax No. (604) 233-7030.

	
            16.
 	
            Counterparts and Electronic Means
 

This Subscription Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall constitute an original and all of which together shall constitute one instrument. Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the date hereinafter set forth.

	
            17.
 	
            Delivery Instructions
 	
             

	
            17.1
 	
            The Subscriber hereby directs the Company to deliver the Share Certificates to:
 
	
             
	
            ***As per item 17.3
 	
             

				

(name)

 

(address)

17.2           The Subscriber hereby directs the Company to cause the Shares to be registered on the books of   the Company as follows:

	
            ***As per item 17.3
 

(name)

 

(address)

17.3    Schedule of Subscriber(s), Full Legal Name, Address, Number of shares subscribed for and purchase price :

 

	
            Subscriber Name
 	
            Subscriber Address 
 	
            Number of Shares
 	
            Purchase Price
 
	
            Bebi Abadeen
 	
            #303-4181 Norfolk St Burnaby B.C. V5G 1E8
 	
            5,000
 	
            $5,000
 
	
            Billy Lo
 	
            7322 Goleta Place Burnaby B.C. V5A 1S9
 	
            2,000
 	
            $2,000
 
	
            Dave Evans
 	
            4807 47A Ave Delta B.C. V4K1T2
 	
            5,000
 	
            $5,000
 
	
            Michael Whatley
 	
            1603-1033 Marinaside Cr Vancouver B.C. V6Z 3A3
 	
            1,000
 	
            $1,000
 
	
            Stanley Van Eyk
 	
            10615 238th st Maple Ridge B.C. V2W 1E4
 	
            1,000
 	
            $1,000
 
	
            Selina Van Eyk
 	
            10615 238th st Maple Ridge B.C. V2W 1E4
 	
            1,000
 	
            $1,000
 
	
            Kin Wing Cheung
 	
            5665 College St Vancouver   B.C. V5R  3Z6
 	
            5,000
 	
            $5,000
 
	
            Quang Tu Tran
 	
            9920 Bates Rd  Richmond B.C.    V7A 1E4
 	
            3,000
 	
            $3,000
 
	
            Larry Popil
 	
            9842 Waller Court  Richmond B.C. V7E5S9
 	
            2,000
 	
            $2,000
 
	
            Minh Tu Tran
 	
            9920 Bates Rd  Richmond B.C.    V7A 1E4
 	
            1,000
 	
            $1,000
 
	
            Nasirdin Mohamed
 	
            9542 Dawson Cr Delta B.C. V4C 5H1
 	
            2,000
 	
            $2,000
 

 

 

- 9 -

 

 

	
            Bashir Hirjee
 	
            5751 Minoru Blvd Richmond B.C. V6X 2B1
 	
            2,000
 	
            $2,000
 
	
            Deborah Leroux
 	
            #536-202nd Street Langley B.C. V2Z 1V7
 	
            5,000
 	
            $5,000
 
	
            Parmjit Rai
 	
            733 East 54th ave Vancouver B.C. V5X 1L8
 	
            2,300
 	
            $2,300
 
	
            Winkie Investments Ltd
 	
            4149 Cypress St Vancouver B.C. V6J 3P7
 	
            1,000
 	
            $1,000
 
	
            Ajmal Gundhra
 	
            7219 124A street Surrey B.C.  V3W 0S9
 	
            20,000
 	
            $20,000
 
	
            Timothy Tucker
 	
            11692 Summit Cr. Delta B.C. V4E 2Z5
 	
            3,000
 	
            $3,000
 
	
            Lloyd Ratsoy
 	
            2441 139th Street  Surrey B.C. V4P 1S2
 	
            5,000
 	
            $5,000
 
	
            Avtar Randhawa
 	
            #116-5880 Dover Cr Richmond B.C. V7C 5P5
 	
            3,500
 	
            $3,500
 
	
            Farouk Mohamed
 	
            1329 Guildford Town Cenre Surrey B.C. V3R 7B7
 	
            3,000
 	
            $3,000
 
	
            David Martino
 	
            9897 Rathburn Dr Burnaby B.C. V3J 7J4
 	
            1,200
 	
            $1,200
 
	
            Chantel Conkin
 	
            6775 eustace Rd Sooke B.C. V0S 1N0
 	
            2,000
 	
            $2,000
 
	
            Andrew Horsfall
 	
            10612 238th St Maple Ridge B.C. V2W 1E4
 	
            1,000
 	
            $1,000
 
	
            Shelley Horsfall
 	
            10612 238th St Maple Ridge B.C. V2W 1E4
 	
            1,000
 	
            $1,000
 
	
            Jolanta Radomski
 	
            6093 Sprott St Burnaby B.C. V5G 1T9
 	
            10,000
 	
            $10,000
 
	
            Nicole Marie Anaka
 	
            4807 47A Ave Delta B.C. V4K1T2
 	
            10,000
 	
            $10,000
 
	
            Total:
 	
             
 	
            98,000
 	
            $98,000
 

 

IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement as of the date of acceptance by the Company.

 

	
            Subscriber Name
 	
            Signature(s)
 
	
            Bebi Abadeen
 	
            /s/ Bebi Abadeen
 
	
            Billy Lo
 	
            /s/ Billy Lo
 
	
            Dave Evans
 	
            /s/ Dave Evans
 
	
            Michael Whatley
 	
            /s/ Michael Whatley
 
	
            Stanley Van Eyk
 	
            /s/ Stanley Van Eyk
 
	
            Selina Van Eyk
 	
            /s/ Selina Van Eyk
 
	
            Kin Wing Cheung
 	
            /s/ Kin Wing Cheung
 
	
            Quang Tu Tran
 	
            /s/ Quang Tu Tran
 
	
            Larry Popil
 	
            /s/ Larry Popil
 
	
            Minh Tu Tran
 	
            /s/ Minh Tu Tran
 
	
            Nasirdin Mohamed
 	
            /s/ Nasirdin Mohamed
 
	
            Bashir Hirjee
 	
            /s/ Bashir Hirjee
 
	
            Deborah Leroux
 	
            /s/ Deborah Leroux
 
	
            Parmjit Rai
 	
            /s/ Parmjit Rai
 
	
            Winkie Investments Ltd.
 	
            /s/ Brad R. Jefferson 
 
	
            Ajmal Gundhra
 	
            /s/ Ajmal Gundhra
 
	
            Timothy Tucker
 	
            /s/ Timothy Tucker
 
	
            Lloyd Ratsoy
 	
            /s/ Lloyd Ratsoy
 
	
            Avtar Randhawa
 	
            /s/ Avtar Randhawa
 
	
            Farouk Mohamed
 	
            /s/ Farouk Mohamed
 
	
            David Martino
 	
            /s/ David Martino
 
	
            Chantel Conkin
 	
            /s/ Chantel Conkin
 
	
            Andrew Horsfall
 	
            /s/ Andrew Horsfall
 
	
            Shelley Horsfall
 	
            /s/ Shelley Horsfall
 
	
            Jolanta Radomski
 	
            /s/ Jolanta Radomski
 
	
            Nicole Marie Anaka
 	
            /s/ Nicole Marie Anaka
 

 

A C C E P T A N C E

The above-mentioned Subscription Agreement in respect of the Shares is hereby accepted by SERVICE AIR GROUP INC.

DATED at, Richmond, the 21st day of March, 2006

 

- 10 -

 

SERVICE AIR GROUP INC.

	
            Per:
 	
            /s/ Mohammad Sultan (CFO)
 
	
             
	
            Authorized Signatory
 	
             

 

 

- 11 -

 

EXHIBIT A

MULTILATERAL INSTRUMENT 45-103

ACCREDITED INVESTOR QUESTIONNAIRE

The purpose of this Questionnaire is to assure the Company that the undersigned (the “Subscriber”) will meet certain requirements for the registration and prospectus exemptions provided for under Multilateral Instrument 45-103 (“MI 45-103”), as adopted by the British Columbia Securities Commission and the Alberta Securities Commission, in respect of a proposed private placement of securities by the Company (the “Transaction”). The Company will rely on the information contained in this Questionnaire for the purposes of such determination.

The undersigned Subscriber covenants, represents and warrants to the Company that:

	
            1.
 	
            the Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the Transaction and the Subscriber is able to bear the economic risk of loss arising from such Transaction;
 
	
            2.
 	
            the Subscriber satisfies one or more of the categories of “accredited investor” (as that term is defined in MI 45-103) indicated below (please check the appropriate box):
 
	
             
	
            o
 	
            an individual who beneficially owns, or who together with a spouse beneficially own, financial assets (as defined in MI 45-103) having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds CDN.$1,000,000;
 
	
             
	
            o
 	
            an individual whose net income before taxes exceeded CDN.$200,000 in each of the two more recent years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of those years and who, in either case, has a reasonable expectation of exceeding the same net income level in the current year;
 
	
             
	
            o
 	
            an individual registered or formerly registered under the Securities Act (British Columbia), or under securities legislation in another jurisdiction of Canada, as a representative of a person or company registered under the Securities Act (British Columbia), or under securities legislation in another jurisdiction of Canada, as an adviser or dealer, other than a limited market dealer registered under the Securities Act (Ontario); 
 
	
             
	
            o
 	
            a Canadian financial institution as defined in National Instrument 14-101, or an authorized foreign bank listed in Schedule III of the Bank Act (Canada);
 
	
             
	
            o
 	
            the Business Development Bank of Canada incorporated under the Business Development Bank Act (Canada);
 
	
             
	
            o
 	
            an association under the Cooperative Credit Associations Act (Canada) located in Canada;
 
	
             
	
            o
 	
            a subsidiary of any company referred to in any of the foregoing categories, where the company 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
 	
            a person or company registered under the Securities Act (British Columbia), or under securities legislation of another jurisdiction of Canada, as an adviser or dealer, other than a limited market dealer registered under the Securities Act (Ontario);
 
	
             
	
            o
 	
            a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a provincial pension commission or similar regulatory authority;
 

 

 

- 12 -

 

 

	
            o
 	
            an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in any of the foregoing categories in form and function;
 
	
            o
 	
            the government of Canada or a province, or any crown corporation or agency of the government of Canada or a province;
 

	
            o
 	
            a municipality, public board or commission in Canada;
 

	
            o
 	
            a national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency thereof;
 

	
            o
 	
            a registered charity under the Income Tax Act (Canada);
 

	
            o
 	
            a corporation, limited partnership, limited liability partnership, trust or estate, other than a mutual fund or non-redeemable investment fund, that had net assets of at least CDN.$5,000,000 as reflected on its most recently prepared financial statements;
 
	
            o
 	
            a mutual fund or non-redeemable investment fund that, in British Columbia, distributes it securities only to persons or companies that are accredited investors;
 
	
            o
 	
            a mutual fund or non-redeemable investment fund that, in British Columbia, distributes its securities under a prospectus for which a receipt has been issued by the executive director of the British Columbia Securities Commission; or
 
	
            o
 	
            a person or company in respect of which all of the owners of interests, direct or indirect, legal or beneficial, are persons or companies that are accredited investors.
 

The Subscriber acknowledges and agrees that the Subscriber may be required by the Company to provide such additional documentation as may be reasonably required by the Company and its legal counsel in determining the Subscriber’s eligibility to acquire the Shares under relevant Legislation.

IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the ________ day of __________________, 2006.

 

 

	
            If a Corporation, Partnership or Other Entity:
 	
            If an Individual:
 

 

 

 

	
            Print or Type Name of Entity
 	
            Signature
 

 

 

	
            Signature of Authorized Signatory
 	
            Print or Type Name
 

 

 

Type of Entity

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