Form of Debt Settlement and Subscription Agreement

issue to the Subscriber 2,500,000 fully paid and non-assessable shares of common stock of the Company, at a deemed price of $0.10 per Share, in settlement of $250,000 of the Outstanding Debt; and

issue to the Subscriber the New Note representing the balance of the Outstanding Debt of $50,000 plus accrued interest payable in connection with the Note in settlement of the balance of the Outstanding Debt,

none of the Shares have been or will be registered under the United States Securities Act of 1933, as amended (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, except 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 and in each case only in accordance with applicable state and provincial securities laws;

the Company has not undertaken, and will have no obligation, to register any of the Shares under the 1933 Act or any other securities legislation;

the Subscriber is an “accredited investor”, as the term is defined in Section 1.1 of National Instrument 45-106;

the Subscriber is an “Accredited Investor”, as the term is defined in Regulation D of the 1933 Act;

the Subscriber’s decision to execute this Agreement and acquire the Shares and the New Note is based solely on the representations, warranties and covenants of the Company expressly set forth in this Agreement and the Subscriber’s independent review of the Company SEC Reports (as defined in Section 8.2(d) below);

the Subscriber has had a reasonable opportunity to ask questions of and receive answers from the Company in connection with the issuance of the Shares and the New Note 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;

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 issuance of the Shares and the New Note hereunder have been made available for inspection by the Subscriber, the Subscriber’s lawyer and/or advisor(s);

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 in this Agreement 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;

all of the information which the Subscriber has provided to the Company is correct and complete as of the date this Agreement is signed, and if there should be any change in such information prior to this Agreement being executed by the Company, the Subscriber will immediately provide the Company with such information;

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;

the Company will refuse to register any transfer of the Shares not made in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act and in accordance with any other applicable securities laws;

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

any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Shares and the New Note hereunder, and

applicable resale restrictions;

neither the U.S. Securities and Exchange Commission (the “SEC”) nor any other securities commission or similar regulatory authority has reviewed or passed on the merits of the Shares or the New Note;

no documents in connection with the sale of the Shares or the New Note hereunder have been reviewed  by the SEC or any state securities administrators;

there is no government or other insurance covering any of the Shares or the New Note; and

this Agreement is not enforceable by the Subscriber unless it has been accepted by the Company.

the Subscriber is incorporated in the jurisdiction set out beside the Subscriber’s name on the cover page to this Agreement;

it has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto and is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals have been obtained to authorize execution and performance of this Agreement on behalf of the Subscriber;

the entering into of this 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 organizational 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;

the Subscriber has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber, subject only to the effect, if any, of (i) applicable bankruptcy and other similar laws affecting the rights of creditors generally and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

the Subscriber has received and carefully read this Agreement;

the Subscriber is acquiring the Shares and the New Note as principal for investment only and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or in part;

the Subscriber is aware that an investment in the Company is speculative and involves certain risks, including the possible loss of the entire investment;

the Subscriber has made an independent examination and investigation of an investment in the Shares and the Company and has relied solely on the results of such examination and investigation and on the advice of its legal and financial advisors in deciding to acquire the Shares and the New Note pursuant to this Agreement;

the Subscriber (i) has adequate net worth and means of providing for its current financial needs and possible personal contingencies, (ii) has no need for liquidity in this investment, and (iii) is able to bear the economic risks of an investment in the Shares and the New Note for an indefinite period of time;

the Subscriber understands and agrees that the Company and others will rely upon the truth and accuracy of the acknowledgements, representations and agreements contained in this Agreement and agrees that if any of such acknowledgements, representations and agreements are no longer accurate or have been breached, the Subscriber shall promptly notify the Company;

the Subscriber (i) is able to fend for him/her/itself in connection with the transactions contemplated by this Agreement; (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 the New Note; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;

the Subscriber understands and agrees that 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, except 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 and in each case only in accordance with applicable state and provincial securities laws;

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;

the Subscriber is not aware of any advertisement of any of the Shares and is not acquiring the Shares as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; and

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

that any person will resell or repurchase any of the Shares or the New Note;

as to the future price or value of any of the Shares or the New Note; or

that any of the Shares or the New Note 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 or the New Note on any stock exchange or automated dealer quotation system.

The Company has not disclosed to the Subscriber any material non-public information regarding the Company or its securities.

The Company is, and has been for a period of at least 90 days immediately before the Closing Date, subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and has (i) filed all required reports under Section 13 or 15(d) of the Exchange Act, as applicable, during the 12 months preceding the Closing Date (or for such shorter period that the Company was required to file such reports), other than Form 8-K reports; and (ii) submitted electronically and posted on its corporate Web site, if any, every Interactive Data File (as defined in Rule 11 of Regulation S-T) required to be submitted and posted pursuant to Rule 405 of Regulation S-T, during the 12 months preceding the Closing Date (or for such shorter period that the Company was required to submit and post such files).

The Company is not, and has never been previously, an issuer described in paragraph (i)(1) of Rule 144.

The Company has filed all forms, statements, schedules, reports and documents (including items incorporated by reference) required to be filed by the Company with the SEC. All such required forms, statements, schedules, reports and documents (including those that the Company may file subsequent to the date of this Agreement) are referred to herein as the “Company SEC Reports.” As of their respective dates, the Company SEC Reports (i) complied as to form in all material respects with the requirements of the 1933 Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Company SEC Reports and (ii) did not at the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

The Company will indemnify and hold harmless the Subscriber 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 Company contained in this Agreement or in any document furnished by the Company to the Subscriber in connection herewith being untrue in any material respect or any breach or failure by the Company to comply with any covenant or agreement made by the Company to the Subscriber in connection therewith.

pursuant to British Columbia Instrument 51-509 – Issuers Quoted in the U.S. Over–the-Counter Markets (“BCI 51-509”), as adopted by the BCSC, a subsequent trade in the Shares in or from British Columbia will be a distribution subject to the prospectus and registration requirements of applicable Canadian securities legislation (including the BC Act) unless certain conditions are met, which conditions include, among others, a requirement that any certificate representing the Shares (or ownership statement issued under a direct registration system or other book entry system) bear the restrictive legend (the “BC Legend”) specified in BCI 51-509;

the Subscriber is not a resident of British Columbia and undertakes not to trade or resell any of the Shares in or from British Columbia unless the trade or resale is made in accordance with BCI 51-509. The Subscriber understands and agrees that the Company and others will rely upon the truth and accuracy of these representations and warranties made in this Section 12.3 and agrees that if such representations and warranties are no longer accurate or have been breached, the Subscriber shall immediately notify the Company;

by executing and delivering this Agreement and as a consequence of the representations and warranties made by the Subscriber in this Section 12.3, the Subscriber will have directed the Company not to include the BC Legend on any certificates representing the Shares to be issued to the Subscriber. As a consequence, the Subscriber will not be able to rely on the resale provisions of BCI 51-509, and any subsequent trade in any of the Shares in or from British Columbia will be a distribution subject to the prospectus and registration requirements of the BC Act; and

if the Subscriber wishes to trade or resell any of the Shares in or from British Columbia, the Subscriber agrees and undertakes to return, prior to any such trade or resale, any certificate representing the Shares to the Company’s transfer agent to have the BC Legend imprinted on such certificate or to instruct the Company’s transfer agent to include the BC Legend on any ownership statement issued under a direct registration system or other book entry system.

the Company may deliver to a provincial securities commission and/or the SEC certain personal information pertaining to the Subscriber, including such Subscriber’s full name, residential address and telephone number, the number of shares or other securities of the Company owned by the Subscriber, the number of Shares acquired by the Subscriber and the total consideration given for such Shares, the prospectus exemption relied on by the Company and the date of distribution of the Shares,

such information is being collected indirectly by the provincial securities commission under the authority granted to it in securities legislation, and

such information is being collected for the purposes of the administration and enforcement of the securities legislation of Canada.