Form of Subscription Agreement for 16% Unsecured Convertible Debenture

Section III

ccredited

Investor

Questionnaire

(Pages 13-14)

o Accredited Investor Questionnaire to be completed by investors within the United States

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Section IV

Accredited

 Investor Income

Statement

(Page 15)

o Accredited Investor Income Statement for Accredited Investors relying on the income standard for Accredited Investor status in Section IV

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Section V

Patriot Act

Information

(Pages 16-17)

o The United States Patriot Act requires us to collect certain information on the sources of funds

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o Please complete Part 1 of this Section V, complete Part 2 of Section V, and add the documents requested in Part 3 of this Section V only if funds did not come from an approved country (United States is approved)

Section VI

Investor Notice

and Questionnaire

(Pages 18-19)

o This notice and questionnaire must also be completed by you, and will be used to determine if additional disclosure regarding you and your investment in the Company needs to be made in connection with the registration of the securities  underlying the Units.

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Section VII

Signatures

(Pages 20-23)

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o Please sign the Signature Page to the Subscription Agreement attached hereto

o Please sign the Signature Page to the Securities Purchase Agreement as is appropriate for you.

o There is a different counterpart signatures page for (1) each investor who is an entity and relying on Accredited Investor status, and (2) each investor who is an individual and relying on Accredited Investor status.  Please sign only one of the two counterpart signature pages that is appropriate for you.

o Please sign the Signature Page to the Appointment Letter which is included in the Securities Purchase Agreement.

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Your Subscription Agreement is comprised of Section I through IX of this Subscription Booklet and your signature page thereto is included as Section X of this Subscription Booklet.

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You as an individual or you on behalf of the subscribing entity are being asked to complete this Subscription Agreement so a determination can be made as to whether or not you (it) are qualified to purchase securities under applicable federal and state securities laws.

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Your answers will be kept strictly confidential; however, by signing this Subscription Agreement, you will be authorizing the Company to present a completed copy of this Subscription Agreement (and  any  completed  questionnaires  and  related  information  submitted  by  you  in  connection therewith) to such parties as they may deem appropriate in order to make certain that the offer and sale of the Units will not result in a violation of the Securities Act of 1933, as  amended (the “Securities Act”), or of the securities laws of any state or of any other jurisdiction.

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This Subscription Agreement does not constitute an offer to sell or a solicitation of an offer to buy Units or any other security.

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All questions must be answered. If the appropriate answer is “None” or “Not Applicable,” please state  so.  Please  print  or  type  your  answers  to  all  questions  and  attach  additional  sheets  if necessary to complete your answers to any item. Please initial any correction.

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If  the  Units subscribed for  are to  be  owned  by more than one person,  you  and  the  other co-subscriber must each complete a separate Subscription Agreement (except if  the co- subscriber is your spouse) and sign the Signature Page to this Subscription Agreement and the appropriate Signature Page to the Securities Purchase Agreement included as Section X. If your spouse is a co-subscriber, you must indicate his or her  name and social security number.

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I understand that investment in the Units is an illiquid investment. In particular, I recognize that: (i) I must bear the economic risk of investment in the Units for an indefinite period of time, since the Units have not been registered under the Securities Act and therefore cannot be sold unless either they are subsequently registered under the Securities Act or an exemption from such registration is available and a favorable opinion of counsel for the Company to that effect is obtained (if requested by the Company); and (ii) no established market will exist and it is possible that no public market for the Units, or any part thereof or any security underlying any part thereof, will  develop.  I  consent  to  the  affixing  by  the  Company  of  such  legends  on  certificates representing the Units (or any part thereof) as any applicable federal or state securities law or any securities law of any other applicable jurisdiction may require from time to time.

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I represent and warrant to the Company that: (i) The financial information provided in this Subscription Agreement is complete, true and correct in all material respects; (ii) I and my Investment Managers, if any, have carefully reviewed and understand the risks of, and other considerations relating to, a purchase of Units; (iii) I and my Investment Managers, if any, have been afforded the opportunity to obtain any information necessary to verify the accuracy of any representations or information set forth in the Commission Documents and have had all inquiries to the Company answered, and have been furnished all requested materials, relating to the Company and the offering and sale of the Units and anything set forth in the Commission Documents; (iv) neither I nor my Investment Managers, if any, have been furnished any offering literature by the Company or any of its affiliates, associates or agents other than the Transaction Documents, and the Agreements referenced therein; (v) I and my Investment Managers, if any, have  excellent  investment  knowledge;  and  (vi)  I  am  acquiring  the  Units  for  which  I  am subscribing for my own account, as principal, for investment and not with a view to the resale or distribution of all or any part of the Units.

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I represent that my investment objective is speculative in that I seek the maximum total return through an investment in a broad spectrum of securities, which involves a higher degree of risk than other investment styles and therefore my risk exposure is also speculative.

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I understand that the purchase price per Unit is exclusive of any costs incurred by me for legal, tax, accounting or financial advice, including fees paid to my purchaser representative, if any.

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The undersigned,  if  a  corporation,  partnership, trust or  other form of  business  entity,  (i)  is authorized and otherwise duly qualified to purchase and hold the Units, (ii) has obtained such additional tax and other advice that it has deemed necessary, (iii) has its principal place of business at its residence address set forth in this Subscription Agreement, and (iv) has not been formed for the specific purpose of acquiring the Units (although this may not necessarily disqualify the subscriber as a purchaser). The persons executing the Subscription Agreement, as well as all other Agreements related to the Offering, represent that they are duly authorized to execute all such Agreements on behalf of the entity. (If the undersigned is one of the aforementioned entities, it agrees to supply any additional written information that may be required.)

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All of the information which I have furnished to the Company and which is set forth in the Subscription Agreement is correct and complete in all material respects as of the date of the Subscription Agreement. If any material change in this information should occur prior to my subscription being accepted, I will immediately furnish the revised or corrected information. I further agree to be bound by all of the terms and conditions of the Offering described in the Securities Purchase Agreement and the other documents and agreements related thereto. I am the only person with a direct or indirect interest in the Units subscribed for by this Subscription Agreement. I agree to indemnify and hold harmless the Company and its officers, directors and affiliates  from  and  against  all  damages,  losses,  costs  and  expenses  (including  reasonable attorneys' fees) that they may incur by reason of the failure of the undersigned to fulfill any of the terms or conditions of this Subscription Agreement or by reason of any breach of the representations and warranties made by the undersigned herein or in any Agreement provided by the undersigned to the Company. This subscription is not transferable or assignable by me without the written consent of the Company. If more than one person is executing this Agreement, the obligations of each shall be joint and several and the representations and warranties contained in this Subscription Agreement shall be deemed to be made by, and be binding upon, each of these  persons and his or her heirs, executors,  administrators, successors and assigns. This subscription, upon acceptance by the Company, shall be binding upon my heirs, executors, administrators, successors and assigns. This Subscription Agreement shall be construed in accordance with and governed in all respects by the laws of the State of New York.

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Under penalties of perjury, I certify that (1) my taxpayer identification number shown in this Subscription Agreement is correct and (2) I am not subject to backup withholding because (a) I have not been notified that I am subject to backup withholding as a result of a failure to report all interest and dividends or (b) the Internal Revenue Service has notified me that I am no longer subject to backup withholding. (If you have been notified that you are subject to backup withholding and the Internal Revenue Service has not advised you that backup withholding has been terminated, strike out item (2) in the sentence directly above.)

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The acceptance of my application together with the appropriate remittance will not breach any applicable money laundering rules and regulations and I undertake to provide verification of my identity reasonably satisfactory (on a confidential basis) to the Company promptly on request. I acknowledge that due to money laundering requirements operating within their respective jurisdictions, the Company may require further identification of me/us before applications can be processed. The Company shall be held harmless and indemnified by me against any loss arising from the failure to process this application if such information as has been reasonably required from me has not been provided by me.

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I understand that the Subscription Agreement and the Securities Purchase Agreement relating to the Offering will be irrevocable, and unless the subscription is rejected or withdrawn, I will become an investor in this Offering.  I understand that the Company or the Placement Agent may reject subscriptions for failure to conform to the requirements of the Offering, insufficient documentation, oversubscription of the Offering, or any other reason whatsoever, as the Company and the Placement Agent, in their sole discretion, may determine.

Individual Account

_______

Joint Account

_______

 

1.

The Company is required to verify the source of funds.  Summarize the underlying source of the funds remitted to us (for example, where subscription monies were the profits of business (and if so please specify type of business), investment income, savings, etc).

 

Source of Funds:

 

 

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2.

In the space provided below, please provide details of where monies were transferred from to the Company in relation to your subscription for the Units.

 

 

 

 

Argentina

Germany

Liechtenstein

Spain

Australia

Gibralter

Luxembourg

Switzerland

Bermuda

Guernsey

Mexico

Turkey

Belgium

Hong Kong

Netherlands

United Kingdom

Brazil

Iceland

New Zealand

United States

British Virgin Islands

Ireland

Norway

Canada

Isle of Man

Panama

Denmark

Italy

Portugal

Finland

Japan

Singapore

France

Jersey

Sweden

 

(i)

A clear copy of individual’s passport or valid form of government issued identification (e.g. driver’s license) providing evidence of name, signature, date of birth and photographic identification;

 

(ii)

evidence of permanent address; and

 

(iii)

Where possible, a reference from a bank with whom the individual maintains a current relationship and has maintained such relationship for at least two years.

 

(b)

Please provide the legal name of the registered holder of the Debentures and the Warrants comprising the Units (if not the same as (a) above):

 

(c)

Please provide the full legal name of the natural control person (Which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this questionnaire):

 

 

 

 

 

Note:

If yes, the staff of the Securities and Exchange Commission has indicated that you should be identified as an underwriter in the Registration Statement.

 

(b)

If you are an affiliate of a broker-dealer, do you certify that you bought the Units in the ordinary course of business, and at the time of the purchase of the Units (the securities underlying which will be registrable under the Registration Rights Agreement (the “Registrable Securities”), you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

 

Note:

If your response to the foregoing question is “No”, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement relating to the Registrable Securities.

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Please Date, Print Name and Sign;

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Fill in Investment Authorization and Signing Capacity if applicable

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Appointment Letter - Exhibit M to the Securities Purchase Agreement

Print name of individual subscriber, custodian, corporation, person, trustee

Signature of individual subscriber, authorized person, authorized trustee

 

 

Print name of co-subscriber, authorized person, co-trustee if required by trust instrument

Signature of co-subscriber, authorized person, co-trustee if required by trust instrument

 

 

1)

Enter into Securities Escrow Agreement in substantially form of Exhibit E (The “Securities Escrow Agreement”) with Wilmington Trust, N.A. and the Company on behalf of the Purchasers;

2)

Receive from the Company audited financial statements as at December 31, 2010 and for the fiscal year then ended and the unaudited financial statements as at September 30, 2011 and for the nine months then ended, all prepared in accordance with US GAAP.

3)

Any other responsibility imposed on TPGE as the Purchaser Representative in the Securities Escrow Agreement.

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Print Name of Purchaser:

Date: