ADIRA ENERGY LTD. - AND - DS APEX MERGERS & ACQUISITIONS LTD. - AND - COMPUTERSHARE TRUST COMPANY OF CANADA ________________________________________ SUBSCRIPTION RECEIPT AGREEMENT ________________________________________ Providing for the Issue of...

pending the satisfaction of the Automatic Escrow Release Conditions, the Escrowed Funds are to be delivered to and held by the Subscription Receipt Agent, as escrow agent, and invested on behalf of the holders and the Company in the manner set forth herein;

if the Automatic Escrow Release Conditions are satisfied prior to the Automatic Escrow Release Deadline and the Escrowed Funds are released to the Company, holders are to receive, for no additional consideration and without further action, one Common Share and one-half of one Common Share Purchase Warrant for each Subscription Receipt, subject to adjustment as set forth in this Agreement; and

if the Automatic Escrow Release Conditions are not satisfied prior to the Automatic Escrow Release Deadline, holders are to either:

receive an amount equal to the sum of the Purchase Price of the Subscription Receipts held by the holder, less any applicable withholding taxes. The Company shall be responsible and liable for any shortfalls in the Purchase Price of the Subscription Receipts held by the holder; or

receive for no additional consideration and without further action, one Common Share and one-half of one Common Share Purchase Warrant in exchange for each Subscription Receipt, subject to adjustment as set forth in this Agreement.

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

“Agency Agreement” means the agency agreement dated November 22, 2010 between the Company and the Agents relating to the Offering;

“Agents’ Commission” means up to 7.0% of the Gross Proceeds, being the fee payable by the Company to the Agents pursuant to the terms of the Agency Agreement;

“Agreement” means this agreement, as amended, supplemented or otherwise modified from time to time;

“Applicable Legislation” means the provisions of any statute of Canada or a province thereof, and the regulations and rules under any such named or other statute, relating to agreements such as this Agreement or to the rights, duties and obligations of persons serving in a similar role as the Subscription Receipt Agent under this Agreement, to the extent that such provisions are at the time in force and applicable to this Agreement;

“Automatic Escrow Release Conditions” means the occurrence of each of the following events:

a confirmation in writing from the TSXV, that all conditions to the listing of the Listed Common Shares as stipulated in the TSXV Letter, other than customary post-closing conditions, shall have been obtained;

there shall have been no material adverse change in the financial condition, business, operations of the Company; and

the Company shall not be in breach or default of any of its covenants or obligations under the Agency Agreement, except those breaches or defaults that have been waived by the Agent;

“Automatic Escrow Release Deadline” means 5:00 p.m. (Toronto time) on November 26, 2010 or such other date as agreed to between the Agent and the Company;

“Automatic Release Certificate” means a certificate executed by the Company and by the Agent, substantially in the form attached as SCHEDULE C hereto and addressed to the Subscription Receipt Agent confirming that the Automatic Escrow Release Conditions have been satisfied or waived;

“Automatic Release Event” means the occurrence of the satisfaction or waiver of the Automatic Escrow Release Conditions prior to the Automatic Escrow Release Deadline;

“Book-Entry Only System” means the record entry securities transfer and pledge system administered by CDS in accordance with its operating rules and procedures in force from time to time, or any successor system;

“Broker Options” or “Broker Warrants” means the broker options for the purchase of Common Shares of the Company, issued to the Agent on automatic or elective exercise of the Subscription Receipts;

"Business Day" means a day which is not a Saturday, Sunday or any other day on which the principal chartered banks in the city of ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ are generally not open for business;

“CDS” means CDS Clearing Depository Services Inc. and its successors in interest;

“Closing” means the closing of the Offering;

“Closing Date” means November 22, 2010;

“Closing Time” means 10:00 a.m. (Toronto time) on the Closing Date or such other time as may be agreed to by the Company and the Agent;

“Common Share Purchase Warrant” means a whole common share purchase warrant entitling the holder to acquire one Common Share at a price of US$0.55 per share for a period of three years following the satisfaction of the Automatic Escrow Release Conditions;

“Common Shares” means the common shares in the capital of the Company, provided that if the exercise of the Subscription Receipts are adjusted or altered pursuant to Article 4, such term shall thereafter mean the shares or other securities that a Subscription Receiptholder is entitled to on adjustment or alteration;

“Commissions” means the provincial securities commission or other regulatory authority in each of the Jurisdictions;

“Company Condition Precedent Certificate” means a certificate executed by the Company in the form attached as SCHEDULE B hereto addressed to the Agent, confirming that the Automatic Escrow Release Conditions have been satisfied;

“Company’s Auditors” means the firm of chartered accountants duly appointed from time to time as auditors of the Company;

“Conversion Date” means the date the Automatic Release Certificate is delivered to the Subscription Receipt Agent in accordance with Section 3.1 hereof or the Elective Release Certificate is delivered in accordance with Section 3.2 hereof;

“Convertible Securities” means securities of the Company (other than the Subscription Receipts) convertible into or exchangeable for or otherwise carrying the right to acquire Common Shares;

“Counsel” means a barrister or solicitor or a firm of barristers and solicitors retained by the Subscription Receipt Agent or retained by the Company and acceptable to the Subscription Receipt Agent;

“Current Market Price” at any date, means the last closing price of the Common Shares immediately preceding the relevant date on the TSXV or if the Common Shares are not traded on any recognized market or exchange, the price as determined by the directors of the Company, acting reasonably;

“Designated Office” means the principal office of the Subscription Receipt Agent in the City of ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and/or such other place or places as may be designated in accordance with Subsection 2.10(b);

“Earned Interest” means the interest received on the investment of the Escrowed Funds between the receipt of Gross Proceeds by the Subscription Receipt Agent and the earlier to occur of the Conversion Date and the Automatic Escrow Release Deadline;

“Elective Release Certificate” means the certificate executed by the Company and by the Agent in the form attached as SCHEDULE A hereto addressed to the Subscription Receipt Agent confirming what funds should be released and what Subscription Receipt holders should receive Common Shares and Warrants;

“Entitlement Number” means, at any time, that number of Common Shares, and specifically excluding the number of Common Share Purchase Warrants, that holders are entitled to receive upon the conversion of each Subscription Receipt, held in accordance with the terms and conditions of this Agreement as such number may be adjusted pursuant to Article 4 hereof;

“Escrow Agent” means Computershare Trust Company of Canada, in its capacity hereunder and any lawful successors or permitted assigns hereto appointed hereunder from time to time;

“Escrowed Funds” means the Gross Proceeds, and all Earned Interest derived from time to time from holding the Gross Proceeds, if any;

“extraordinary resolution” has the meaning set forth in Section 8.11;

“Finder Fees” means the fee payable by the Company to certain entities in connection with the Offering;

“Global Subscription Receipt” means a Subscription Receipt Certificate that is issued to and registered in the name of CDS or its nominees pursuant to Section 2.13;

“Gross Proceeds” means the amount of $11,000,000, being the aggregate amount of the gross proceeds received from the issue of the Subscription Receipts, to be delivered to the Escrow Agent by ▇▇▇▇ & Berlis LLP;

“holders” or “Subscription Receiptholder” means the registered holders of Subscription Receipts;

“Initial Payment” means the payment by the Company on the Closing Date to the Agent in connection with the sale of Subscription Receipts representing the Agent’s legal counsel fees and applicable expenses (including disbursements and any taxes payable thereon) as agreed between the Company and the Agent in section 9.4 of the Agency Agreement;

“International Jurisdictions” means the jurisdictions outside of the Jurisdictions and the United States where any of the holders are resident;

“Jurisdictions” means the provinces of Canada where any of the holders are resident;

“Listed Common Shares” means the common shares in the capital of the Company, which shares are to be listed for trading on the TSXV;

“Offering” means the purchase and sale of the Subscription Receipts;

“person” means an individual, body corporate, partnership, trust, trustee, executor, administrator, legal representative or any unincorporated organization;

“Purchase Price” means US$0.40, being the purchase price of a Subscription Receipt;

“Securities Laws” means, as applicable, the securities laws, regulations, rules, rulings, published fees schedules, prescribed forms, policy statements, notices, blanket rulings, orders and other regulatory instruments in the provinces of Canada in which the Subscription Receipts were sold, the United States and each of its states, together with other applicable regulatory instruments of the securities regulatory authorities in such jurisdictions, and the rules of the TSXV;

“Shareholder” means a holder of record of one or more Common Shares;

“Subscription Receipts” means the subscription receipts issued and certified hereunder and from time to time outstanding, evidencing the rights set out in Subsection 2.2 hereof;

“Subscription Receipt Agent” means Computershare Trust Company of Canada, in its capacity hereunder and any lawful successors or permitted assigns hereto appointed hereunder from time to time;

“Subscription Receipt Certificate” means a certificate issued to evidence one or more Subscription Receipts, substantially in the form of SCHEDULE B hereto;

“Subscription Receiptholder’s Escrowed Funds” means, in respect of each Subscription Receiptholder, at any time, the aggregate Purchase Price of the Subscription Receipts then held by it, together with such holder’s pro rata share of the Earned Interest, if any, less any applicable withholding taxes;

“Subscription Receiptholder’s Request” means an instrument signed in one or more counterparts by holders holding in the aggregate not less than 662/3% of the aggregate number of Subscription Receipts then outstanding, requesting the Subscription Receipt Agent to take some action or proceeding specified therein;

“Termination Event” means the failure of the Company to satisfy the Automatic Escrow Release Conditions or deliver a Notice of Elective Release within 22 days of the Automatic Escrow Release Deadline;

“Termination Notice” means the notice to be provided by the Company to the Subscription Receipt Agent and to the Agent on its own behalf and on behalf of the holders forthwith following a Termination Event pursuant to Section 6.5;

“TSXV” means the TSX Venture Exchange;

“TSXV Letter” means the written conditional approval by the TSXV for the listing of the Listed Common Shares, including the Listed Common Shares issuable upon exercise of the Warrants Shares dated November 17, 2010;

“United States” means the United States of America, its territories or possessions, any State of the United States and the District of Columbia;

“U.S. Person” means a “U.S. person” as that term is defined in Regulation S promulgated under the 1933 Act;

“U.S. Purchaser” means any purchaser of Subscription Receipts who is a U.S. Person, a person in the United States or a person purchasing the Subscription Receipts for the account or benefit of a U.S. Person;

“Warrant Share” means the Common Share into which the Common Share Purchase Warrant is exercisable; and

“written direction of the Company”, “written order of the Company”, “written request of the Company”, “written consent of the Company” and “certificate of the Company” mean, respectively, a written order, request, consent and certificate signed in the name of the Company by its Chief Executive Officer or Chief Financial Officer, or a Director, and may consist of one or more instruments so executed.

a Subscription Receipt Certificate that has been partially exercised shall be deemed to be outstanding only to the extent of the unexercised part of the Subscription Receipts evidenced thereby;

where a Subscription Receipt Certificate has been issued in substitution for a Subscription Receipt Certificate which has been lost, stolen or destroyed, only the Subscription Receipt Certificate so issued in substitution shall be counted for the purpose of determining the number of Subscription Receipts outstanding; and

for the purpose of any provision of this Agreement entitling holders of outstanding Subscription Receipts to vote, sign consents, requests or other instruments or take any other action under this Agreement, Subscription Receipts owned legally or equitably by the Company or any subsidiary of the Company or any partnership to which the Company may be directly or indirectly a party shall be disregarded, except that:

for the purpose of determining whether the Subscription Receipt Agent shall be protected in relying on any vote, consent, request or other instrument or other action, only the Subscription Receipts of which the Subscription Receipt Agent has notice that they are so owned shall be disregarded; and

Subscription Receipts so owned that have been pledged in good faith other than to the Company or any subsidiary of the Company or any partnership to which the Company may be directly or indirectly a party shall not be so disregarded if the pledgee establishes to the satisfaction of the Subscription Receipt Agent, by providing the Subscription Receipt Agent with a legal opinion of Counsel, the pledgee’s right to vote the Subscription Receipts in the pledgee’s discretion free from the control of the Company or any subsidiary of the Company or any partnership to which the Company may be directly or indirectly a party to pursuant to the terms of the pledge.

Description of the Subscription Receipts

The Subscription Receipts entitle the respective holders thereof to receive:

if the Automatic Escrow Release Conditions are satisfied at or prior to the Automatic Escrow Release Deadline and for no additional consideration and without further action, one Common Share (issued as fully paid and non-assessable) and one-half of one Common Share Purchase Warrant for each Subscription Receipt held, subject to adjustment as set forth in this Agreement;

if the Automatic Escrow Release Conditions are not satisfied at or prior to the Automatic Escrow Release Deadline, to receive either:

an amount equal to such holder’s Subscription Receiptholder’s Escrowed Funds and such holder’s pro rata share of the Earned Interest less any applicable withholding taxes, all in the manner and on the terms and conditions set out in this Agreement; or

for no additional consideration and without further action, one Common Share (issued as fully paid and non-assessable) and one- half of one Common Share Purchase Warrant for eachSubscription Receipt held, subject to adjustment as set forth in this Agreement;

The Subscription Receipt Certificates shall be in the English language and, shall be in the form of a Global Subscription Receipt registered in the name of CDS substantially in the form attached hereto as SCHEDULE A, shall bear such distinguishing letters and numbers as the Company may, with the approval of the Subscription Receipt Agent, and CDS prescribe, and shall be issuable in whole number denominations.

Subscription Receipt Certificates issuable to U.S. Purchasers shall be substantially in the form attached hereto as SCHEDULE A, with such modifications as may be necessary to include the U.S. Legend (as defined under Section 2.14) and to give effect to the fact that such certificates are not being issued in the form of a Global Subscription Receipt.

Subscription Receipts shall be evidenced by Subscription Receipt Certificates with appropriate insertions, omissions, substitutions and variations as may be required or permitted by the terms of this Agreement and certification of the Subscription Receipt Certificates by the Subscription Receipt Agent shall be conclusive evidence of approval by the Company and the Subscription Receipt Agent of any such insertion, omission, substitution and variation. The Subscription Receipt Certificates shall be dated as of the date hereof.

Subject to Section 2.2(a), the Subscription Receipts shall only be deemed converted, for no additional consideration and without further action by the holders of the Subscription Receipts, into Common Shares and Common Share Purchase Warrants upon delivery of the fully executed Automatic Escrow Release Certificate to the Subscription Receipt Agent on or before the Automatic Escrow Release Deadline or deliver of the Elective Release Certificate after the Automatic Escrow Release Deadline.

No fractional Subscription Receipts shall be issued or otherwise provided for hereunder.

No Subscription Receipt Certificate shall be issued or, if issued, shall be valid for any purpose, exercisable or entitle the holder to the benefits hereof until it has been certified by manual signature by or on behalf of the Subscription Receipt Agent and such certification by the Subscription Receipt Agent upon any Subscription Receipt Certificate shall be conclusive evidence as against the Company that the Subscription Receipt Certificate so certified has been duly issued hereunder and that the holder is entitled to the benefits hereof.

The certification of the Subscription Receipt Agent on Subscription Receipt Certificates issued hereunder shall not be construed as a representation or warranty by the Subscription Receipt Agent as to the validity of this Agreement or the Subscription Receipt Certificates (except the due certification thereof by the Subscription Receipt Agent) and the Subscription Receipt Agent shall in no respect be liable for the use made of the Subscription Receipt Certificate or any of them or of the consideration therefor except as otherwise specified herein.

If any Subscription Receipt Certificate becomes mutilated or is lost, destroyed or stolen, the Company shall issue and thereupon the Subscription Receipt Agent shall certify and deliver, a new Subscription Receipt Certificate of like tenor and bearing the same legends as the one mutilated, lost, destroyed or stolen in exchange for and in place of and upon cancellation of such mutilated Subscription Receipt Certificate, or in lieu of and in substitution for such lost, destroyed or stolen Subscription Receipt Certificate, and the substituted Subscription Receipt Certificate shall be in a form approved by the Subscription Receipt Agent and the Subscription Receipts evidenced thereby shall be entitled to the benefits hereof and shall rank equally in accordance with its terms with all other Subscription Receipts issued or to be issued hereunder by the Company.

The applicant for the issue of a new Subscription Receipt Certificate pursuant to this Section 2.9 shall bear the reasonable cost of the issue thereof and in case of loss, destruction or theft, shall, as a condition precedent to the issue thereof, furnish to the Company and to the Subscription Receipt Agent such evidence of ownership and of the loss, destruction or theft of the Subscription Receipt Certificate so lost, destroyed or stolen as shall be satisfactory to the Company and to the Subscription Receipt Agent, in their sole discretion acting reasonably, and such applicant may also be required to furnish an indemnity and a surety bond in amount and form satisfactory to the Company and the Subscription Receipt Agent, in their sole discretion acting reasonably, and shall pay the reasonable charges of the Company and the Subscription Receipt Agent in connection therewith.

Subscription Receipt Certificates may, upon compliance with the reasonable requirements of the Subscription Receipt Agent, be exchanged for one or more other Subscription Receipt Certificates, bearing the same legends, representing the same aggregate number of Subscription Receipts as represented by the Subscription Receipt Certificate or Subscription Receipt Certificates so exchanged;

Subscription Receipt Certificates may be exchanged only at the Designated Office or at any other place that is designated by the Company with the approval of the Subscription Receipt Agent;

Subscription Receipt Certificates issued in exchange for Subscription Receipt Certificates in accordance with this section shall bear the legends set forth in Subsections 2.13 and 2.14(b), as applicable; and

any Subscription Receipt Certificate tendered for exchange shall be cancelled by the Subscription Receipt Agent.

Subject to Sections 2.12(d), 2.13 and 2.14, there are no restrictions on the transfer of the Subscription Receipts. However, the Subscription Receipts may only be transferred on the register kept by the Subscription Receipt Agent at the Designated Office or branch registers of transfers by the holder or his legal representatives or attorney duly appointed by an instrument in writing. Upon surrender for registration of transfer of Subscription Receipts at the Designated Office and upon compliance with Sections 2.13 and 2.14, the Company shall issue and thereupon the Subscription Receipt Agent shall certify and deliver a new Subscription Receipt Certificate of like tenor in the name of the designated transferee and register such transfer in accordance with Section 2.7 hereof. If less than all the Subscription Receipts evidenced by the Subscription Receipt Certificate(s) so surrendered are transferred, the transferor shall be entitled to receive, in the same manner, a new Subscription Receipt Certificate registered in its name evidencing the Subscription Receipts not transferred. However, notwithstanding the foregoing, Subscription Receipts shall only be transferred upon:

payment to the Subscription Receipt Agent of a reasonable sum for each new Subscription Receipt Certificate issued upon such transfer, and reimbursement of the Subscription Receipt Agent or the Company for any and all stamp taxes or governmental or other charges required to be paid in respect of such transfer;

compliance with all requirements of any legends affixed to a Subscription Receipt Certificate; and

such reasonable requirements as the Subscription Receipt Agent may prescribe (which shall include surrender of the original Subscription Receipt Certificate, and a duly completed Transfer Form/Instrument of Transfer),

The Company and the Subscription Receipt Agent and their respective agents may deem and treat the holder of any Subscription Receipt Certificate as the absolute owner of that Subscription Receipts represented thereby for all purposes and the Company and the Subscription Receipt Agent and their respective agents shall not be affected by any knowledge to the contrary. The holder of any Subscription Receipt shall be entitled to the rights evidenced by that Subscription Receipt free from all equities or rights of set-off or counterclaim between the Company and the original or any intermediate holder thereof and all persons may act accordingly and the receipt from any holder for the Common Shares, or monies obtainable pursuant thereto shall be a good discharge to the Company and the Subscription Receipt Agent for the same and neither the Company nor the Subscription Receipt Agent shall be bound to inquire into the title of any holder.

The transfer register in respect of Subscription Receipts shall be closed at 5:00 p.m. (Toronto time) at the Designated Office or branch registers of transfers, on the earlier to occur of the Conversion Date and the Automatic Escrow Release Deadline.

The Subscription Receipt Agent shall promptly advise the Company of any requested transfer of Subscription Receipts. The Company shall be entitled, and may direct the Subscription Receipt Agent, to refuse to recognize any transfer, or enter the name of any transferee, of any Subscription Receipts on the registers referred to in this Article, if such transfer would constitute a violation of the securities laws of any jurisdiction or the rules, regulations or policies of any regulatory authority having jurisdiction.

Subject to the provisions of this Agreement and Applicable Legislation, a Subscription Receiptholder shall be entitled to rights and privileges attaching to the Subscription Receipts and neither the Company nor the Subscription Receipt Agent shall be bound to inquire into the title of a Receiptholder or a transferee of Subscription Receipts who surrenders a Subscription Receipt Certificate.

Global Subscription Receipt

Unless the Book-Entry Only System ceases to exist, Subscription Receipts will be issued to certain Receiptholders in the form of a Global Subscription Receipt Certificate, which will be registered in the name of and deposited with CDS or its nominee.

Beneficial interests in the Global Subscription Receipt will be represented only through the Book-Entry Only System. Transfers of Subscription Receipts between CDS participants shall occur in accordance with CDS’ rules and procedures. The Company shall not have any responsibility or liability for any aspects of the records relating to or payments made by CDS, or its nominee, on account of the beneficial interests in the Subscription Receipts. Nothing herein shall prevent the owners of beneficial interests in the Subscription Receipts from voting such Subscription Receipts using duly executed proxies.

Subscription Receipt Certificates originally issued, as well as all certificates issued in exchange for or in substitution of the Subscription Receipt Certificates, shall bear the following legends:

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER NOVEMBER 22, 2010.

UNLESS THE CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO ADIRA ENERGY LTD. (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE.”

provided that if, at any time, in the opinion of Counsel, either of such legends are no longer necessary or advisable under applicable Securities Laws, or the holder of any such legended certificate, at the holder’s expense, provides the Company with evidence satisfactory in form and substance to the Company (which may include an opinion of Counsel satisfactory to the Company) to the effect that such legend are not required, such legended certificate may thereafter be surrendered to the Company in exchange for a certificate which does not bear such legend.

All references herein to actions by, notices given or payments made to Subscription Receiptholders shall, where Subscription Receipts are held through CDS, refer to actions taken by, or notices given or payments made to, CDS upon instruction from the CDS participants in accordance with its rules and procedures. For the purposes of any provision hereof requiring or permitting actions with the consent of or at the direction of Subscription Receiptholders evidencing a specified percentage of the aggregate Subscription Receipts outstanding, such direction or consent may be given by holders acting through CDS and the CDS participants owning Subscription Receipts evidencing the requisite percentage of the Subscription Receipts. The rights of a Subscription Receiptholder whose Subscription Receipts are held through CDS shall be exercised only through CDS and the CDS participants and shall be limited to those established by law and agreements between such holders and CDS and the CDS participants upon instructions from the CDS participants. Each of the Subscription Receipt Agent and the Company may deal with CDS for all purposes (including the making of payments) as the authorized representative of the respective Subscription Receiptholders and such dealing with CDS shall constitute satisfaction or performance, as applicable, of their respective obligations hereunder.

For so long as Subscription Receipts are held through CDS, if any notice or other communication is required to be given to Subscription Receiptholders, the Subscription Receipt Agent will give such notices and communications to CDS.

If the Company or CDS advises the Subscription Receipt Agent that CDS will discontinue the eligibility of Subscription Receipts, with or without cause, and the Company is unable to locate a qualified successor depositary, CDS ceases to be a recognized clearing agency under applicable Securities Laws or otherwise ceases to be eligible to be a depositary and a successor depositary is not appointed, or the Company gives notice to CDS that it is unwilling or unable to continue to have CDS hold the Subscription Receipts in the Book-Entry Only System or that it desires or has processed an entitlement requiring a withdrawal of Subscription Receipts, CDS shall surrender the Global Subscription Receipt to the Subscription Receipt Agent with instructions for registration of Subscription Receipts in the name and in the amount specified by CDS and the Company shall issue, and the Subscription Receipt Agent shall certify and deliver, the aggregate number of Subscription Receipts then outstanding in the form of definitive Subscription Receipt Certificates representing such Subscription Receipts.

U.S. Legend

The Subscription Receipt Agent understands and acknowledges that the Subscription Receipts, the Common Shares and the Common Share Purchase Warrants issuable upon conversion of the Subscription Receipts, as well as the Listed Common Shares, have not been and will not be registered under the 1933 Act or any state securities laws; provided, however, that such understanding and acknowledgement shall not detract from or in any way lessen or diminish the obligations of the holders thereof, and the transferors and transferees of such securities to comply with all applicable laws with respect to the transfer, trade, disposition, sale or acquisition of such securities.

Each Subscription Receipt Certificate originally issued to a U.S. Purchaser, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable state securities laws and regulations, certificates representing the Subscription Receipts and all certificates issued in exchange therefor or in substitution thereof, shall bear the following legend (the “U.S. Legend”):

the Company shall forthwith deliver to the Agent, the Company Condition Precedent Certificate;

the Agent and the Company shall forthwith execute and deliver to the Subscription Receipt Agent the Automatic Release Certificate. Notwithstanding paragraph 3.1(a) above, the Company shall act and rely solely and absolutely on the Automatic Release Certificate in issuing the Common Shares and the Common Share Purchase Warrants pursuant to paragraph 3.1(f) below, and the Subscription Receipt Agent shall act and rely solely and absolutely on the Automatic Release Certificate in releasing the Escrowed Funds pursuant to paragraphs 3.1(e) below and issuing and delivering the Common Shares and the Common Share Purchase Warrants pursuant to paragraph 3.1(f) below;

the Finder’s Fees shall be paid to certain finders as directed by the Company;

the Agent’s Commission, any unpaid portion of the Initial Payment and Broker Options shall be issued to the Agent, as directed;

the Escrowed Funds, less the amount contemplated in subsection (c) and (d) above, shall be paid to the Company, as directed; and

the Company shall issue or cause to be issued: (i) as evidenced by entry on the register of members of the Company the Common Shares issuable pursuant to the conversion of the Subscription Receipts in accordance with Section 3.3; and (ii) as evidenced by entry on the warrant register of the Company, the Common Share Purchase Warrants issuable pursuant to the conversion of the Subscription Receipts in accordance with Section 3.3.

Upon receipt of the Elective Release Certificate, the Subscription Receipt Agent shall act and rely solely and absolutely on the Elective Release Certificate in releasing the Funds and issuing and delivering the Common Shares and Common Share Purchase Warrants as set out below;

the Agent’s Commission and any unpaid portion of the Initial Payment shall be paid to the Agent and Broker Options shall be issued to the Agent, as directed in the Elective Release Certificate;

the Finder’s Fees shall be paid to certain finders as directed in the Elective Release Certificate;

certain of the Escrowed Funds to be returned to Subscription Receiptholders shall be paid directly to the refunding Subscription Receiptholders as directed in the Elective Release Certificate (and if any additional funds are required to refunds each Subscription Receiptholder for the cost of US$0.40 per Subscription Receipt the Company shall provide additional funds to the Escrow Agent for disbursement to the Subscription Receiptholders );

the Escrowed Funds, less the amount contemplated in subsections (b), (c) and (d) above, shall be paid to the Company as directed in the Elective Release Certificate; and

the Company shall issue or cause to be issued: (i) as evidenced by entry on the register of members of the Company the Common Shares issuable pursuant to the conversion of the Subscription Receipts in accordance with Section 3.3; and (ii) as evidenced by entry on the warrant register of the Company, the Common Share Purchase Warrants issuable pursuant to the conversion of the Subscription Receipts as directed in the Elective Release Certificate in accordance with Section 3.3.

Issue and Delivery of Common Shares and Common Share Purchase Warrants

If the events set out in sections 3.1 or 3.2 have occurred, all or certain of the Subscription Receipts shall be automatically converted on the Conversion Date for no additional consideration and without further action on the part of the Subscription Receiptholder, and the Common Shares and Common Share Purchase Warrants shall be issued to the holders on the Conversion Date upon, in the case of the Common Shares, the updating of the register of members of the Company reflecting the issue of the Common Shares in accordance with the rights of such holders as described in Section 2.2(a) hereof and such Common Shares and Common Share Purchase Warrants shall be issued on the Conversion Date, notwithstanding that a certificate therefore may not yet have been issued or entered, as the case may be. The persons to whom such Common Shares and Common Share Purchase Warrants are to be issued in accordance with the terms of this Agreement shall become the holders of record of such Common Shares and Common Share Purchase Warrants on the Conversion Date.

Effective immediately after the Common Shares and Common Share Purchase Warrants have been issued as contemplated in this Section 3.3 and, in the case of the Elective Release Certificate, the Escrow Funds having been dispersed in accordance with the instructions in the Elective Release Certificate, the Subscription Receipts relating thereto shall be void and of no value or effect.

The holders hereby irrevocably authorize and direct the Subscription Receipt Agent to take all required action to effect the conversion of the Subscription Receipts pursuant to Subsection 3.3(a) hereof.

If, in the opinion of Counsel, any instrument is required to be filed with, or any permission, order or ruling is required to be obtained from, any securities administrator, regulatory agency or governmental authority in Canada or any other step is required under any federal or provincial law of Canada or any federal or state law of the United States or under the laws of any International Jurisdictions before the Common Shares and Common Share Purchase Warrants issuable upon the conversion of the Subscription Receipts may be issued or delivered to a Subscription Receiptholder, the Company covenants that it will use its commercially reasonable efforts to file such instrument, obtain such permission, order or ruling or take all such other actions, at its expense, as is required or appropriate in the circumstances.

The Company or, if required by the Company, the Subscription Receipt Agent will give written notice of the issue of the Common Shares and Common Share Purchase Warrants issuable upon the conversion of the Subscription Receipts in such detail as may be required, to each Regulatory Authority or government authority in Canada in each jurisdiction in which there is legislation requiring the giving of any such notice.

Under no circumstances shall the Company be obliged to issue any fractional Common Shares or Common Share Purchase Warrants or make any payment of cash or other consideration in lieu thereof upon the conversion of one or more Subscription Receipts. To the extent that the holder of one or more Subscription Receipts would otherwise have been entitled to receive on the conversion thereof a fraction of a Common Share and a Common Share Purchase Warrant, such fraction shall be rounded down to the nearest whole number.

the Company shall forthwith notify the Subscription Receipt Agent thereof in writing;

each Subscription Receipt shall be automatically terminated and cancelled without further action on the part of the Subscription Receiptholder and each Subscription Receiptholder shall be entitled from and after the Automatic Escrow Release Deadline to a payment in the aggregate amount of the Subscription Receiptholder’s Escrowed Funds;

the register of holders in respect of the Subscription Receipts shall be closed at 5:00 p.m. (Toronto time) on the Automatic Escrow Release Deadline; and

the Subscription Receipt Agent shall make the payments, within three business days, contemplated by Section 6.5 hereof.

If after the Closing Date and prior to the Conversion Date the Company shall:

issue to all or substantially all the holders of the Common Shares, by way of a share distribution, share dividend or otherwise, Common Shares or Convertible Securities; or

subdivide its outstanding Common Shares into a greater number of Common Shares; or

combine or consolidate its outstanding Common Shares into a smaller number of Common Shares,

(any of these events being herein called a “Securities Reorganization”),

the Entitlement Number shall be adjusted effective immediately after the record date at which the holders of Common Shares are determined for the purposes of the Securities Reorganization to a number that is the product of (1) the Entitlement Number and (2) a fraction:

the numerator of which shall be the number of Common Shares outstanding after giving effect to the Securities Reorganization; and

the denominator of which shall be the number of Common Shares outstanding on the record date before giving effect to the Securities Reorganization.

For the purposes of determining the number of Common Shares outstanding at any particular time for the purpose of this Subsection 4.2(a), there shall be included that number of Common Shares which would have resulted from the conversion at that time of all outstanding Convertible Securities.

If after the Closing Date and prior to the Conversion Date the Company shall issue or distribute to all or substantially all the holders of Common Shares (i) shares of any class other than Common Shares, or (ii) rights, options or warrants, or (iii) evidences of indebtedness, or (iv) any other assets (excluding any cash distributions resulting from a release of Escrowed Funds on the occurrence of a Termination Event pursuant to Section 6.5, and that issuance or distribution does not constitute a Securities Reorganization or a Rights Offering (as hereinafter defined) (any of those events being herein called a “Special Distribution”), the Entitlement Number shall be adjusted effective immediately after the record date at which the holders of Common Shares are determined for purposes of the Special Distribution to an Entitlement Number that is the product of (1) the Entitlement Number in effect on the record date and (2) a fraction:

the numerator of which shall be the product of (i) the sum of the number of Common Shares outstanding on the record date and (ii) the Current Market Price thereof on that date; and

the denominator of which shall be:

the product of (A) the sum of the number of Common Shares outstanding on the record date and (B) the Current Market Price thereof on that date; less,

the aggregate fair market value, as determined by the directors, whose determination shall, absent manifest error, be conclusive, of the shares, rights, options, warrants, evidences of indebtedness or other assets issued or distributed in the Special Distribution;

If after the Closing Date and prior to the Conversion Date there is (i) a reorganization of the Company; (ii) or a consolidation or merger or amalgamation of the Company with or into another entity including a transaction whereby all or substantially all of the Company’s undertaking and assets become the property of any other entity (any such event being herein called a “Capital Reorganization”) each holder of a Subscription Receipt shall be entitled to receive and shall accept, upon the conversion of the Subscription Receipts for Common Shares at any time after the effective date of the Capital Reorganization, in lieu of the number of Common Shares (and any other securities or properties to which holders are entitled upon the conversion of the Subscription Receipts) to which it, he or she was theretofore entitled upon the conversion of the Subscription Receipt, the aggregate number of Common Shares or other securities or property of the Company, or the continuing, successor or purchasing person, as the case may be, under the Capital Reorganization that the holder would have been entitled to receive as a result of the Capital Reorganization if, on the effective date thereof, it, he or she had been the holder of the number of Common Shares (and any other securities to which holders are entitled upon the conversion of the Subscription Receipts) to which immediately before the transaction he or she was entitled upon the conversion of the Subscription Receipts. No Capital Reorganization shall be completed unless all necessary steps shall have been taken so that the holders shall thereafter be entitled to receive the number of Common Shares or other securities or property of the Company or of the continuing, successor or purchasing person, as the case may be, under the Capital Reorganization, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this Section 4.2.

If after the Closing Date and prior to the Conversion Date the Company shall issue rights, options or warrants to all or substantially all the holders of the Common Shares pursuant to which those holders are entitled to subscribe for, purchase or otherwise acquire Common Shares or Convertible Securities within a period of 45 days from the date of issue thereof at a price, or at a conversion price, of less than 95% of the Current Market Price at the record date for such distribution (any such issuance being herein called a “Rights Offering” and Common Shares that may be acquired in exercise of the Rights Offering or upon conversion of the Convertible Securities offered by the Rights Offering being herein called the “Offered Securities”), the Entitlement Number shall be adjusted effective immediately after the record date at which holders of Common Shares are determined for the purposes of the Rights Offering to an Entitlement Number that is the product of (1) the Entitlement Number in effect on the record date and (2) a fraction:

the numerator of which shall be the sum of: (i) the number of Common Shares outstanding on the record date plus; (ii) the number of Offered Securities offered pursuant to the Rights Offering or the maximum number of Offered Securities into which the Convertible Securities so offered pursuant to the Rights Offering may be converted, as the case may be; and

the denominator of which shall be the sum of:

the number of Common Shares outstanding on the record date for the Rights Offering; and

the number arrived at when (A) either the product of (1) the number of Offered Securities so offered and (2) the price at which those Common Shares are offered, or the product of (3) the conversion price thereof and (4) the maximum number of Offered Securities for or into which the Convertible Securities so offered pursuant to the Rights Offering may be converted, as the case may be, is divided by (B) the Current Market Price of the Common Shares on the record date.

If the Company shall reclassify or otherwise change the outstanding Common Shares, the Entitlement Number shall be adjusted effective immediately upon the reclassification becoming effective so that holders shall be entitled to receive Common Shares as they would have received had the Subscription Receipts been converted immediately prior to the effective date, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this Section 4.2.

the adjustments and readjustments provided for in Section 4.2 are cumulative and shall apply (without duplication) to successive issues, subdivisions, combinations, consolidations, distributions and any other events that require adjustment of the number of Common Shares to be issued or the number or kind of securities that can be acquired hereunder.

No adjustment in the number of Common Shares to be issued shall be required unless the adjustment would result in a change of at least 1% of the number of Common Shares to be issued, provided, however, that any adjustments that, except for the provisions of this subsection would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment.

No adjustment in the number of Common Shares to be issued shall be made in respect of any events described in Section 4.2 if the holders are entitled to participate in the events on the same terms, mutatis mutandis, as if their Subscription Receipts had been converted immediately prior to the effective date or record date of the events.

If a dispute shall at any time arise with respect to adjustments of the number of Common Shares to be issued the dispute shall be conclusively determined by the Company’s Auditors or, if they are unable or unwilling to act, by such firm of independent chartered accountants as may be selected by the directors and any such determination shall, absent manifest error, be binding upon the Company, the Subscription Receipt Agent and all holders.

If the Company shall set a record date to determine the holders of Common Shares for the purpose of entitling them to receive any distribution or any subscription or purchase rights in accordance with Section 4.2 and shall, thereafter, legally abandon its plans to pay or deliver the distribution or subscription or purchase rights, then no adjustment in the number of Common Shares to be issued shall be required by reason of the setting of the record date.

If and whenever at any time prior to the Conversion Date, the Company shall take any action affecting or relating to the Common Shares, other than any action described in this Section, which in the opinion of the directors of the Company would prejudicially affect the rights of any holders, the number of Common Shares to be issued will be adjusted by the directors of the Company in such manner, if any, and at such time, as the directors of the Company, may in their sole discretion, subject to the approval of any stock exchange on which the Common Shares are then listed and posted for trading, reasonably determine to be equitable in the circumstances to such holders.

As a condition precedent to the taking of any action which would require an adjustment in any of the rights under the Subscription Receipts, the Company will use its best efforts to take any action which, in the opinion of Counsel to the Company, may be necessary in order that the Company, or any successor to the Company or successor to the undertaking or assets of the Company will be obligated to, and may validly and legally, issue all the Common Shares which the holders would be entitled to receive thereafter upon the conversion of such Subscription Receipts in accordance with the provisions hereof.

Notwithstanding anything to the contrary in this Agreement, there shall be no adjustment of the Entitlement Number as a result of any transaction, reorganization, transfer, conveyance or action in respect of the Common Shares and Common Share Purchase Warrants pursuant to the Definitive Agreement.

Notice of Certain Events

Promptly upon the occurrence of the earlier of the effective date of or the record date for any event referred to in Sections 4.2 or 4.3 that requires an adjustment in the Entitlement Number, the Company shall:

file with the Subscription Receipt Agent a certificate of the Company specifying the particulars of the event and, if determinable, the adjustment and computation of the adjustment and the Subscription Receipt Agent may act and rely absolutely on such certificate of the Company; and

give notice to the holders and to the Agent, of the particulars of the event and, if determinable, the adjustment.

If notice has been given under Subsection 4.5(a) and the adjustment is not then determinable, the Company shall promptly, after the adjustment is determinable:

file with the Subscription Receipt Agent a computation of the adjustment; and

give notice to the holders and to the Agent, of the adjustment.

shall not at any time be under any duty or responsibility to any Subscription Receiptholder to determine whether any facts exist which may require any adjustment when made, or with respect to the method employed in making the same;

shall not be accountable with respect to the validity or value (or kind or amount) of any Common Shares, Common Share Purchase Warrants or other securities or property which may at any time be issued or delivered upon the exercise of the rights attaching to any Subscription Receipt; and

shall be entitled to act and rely on any adjustment calculation of the Company, its directors or the Company’s Auditors.

it will cause the Common Shares issuable pursuant to the conversion of the Subscription Receipts to be duly issued in accordance with the Subscription Receipt Certificates and the terms hereof;

all Common Shares issuable upon the conversion of the Subscription Receipts (in accordance with the terms hereof and of the Subscription Receipt Certificates) shall be credited as fully paid-up;

it will cause the Common Share Purchase Warrants issuable pursuant to the conversion of the Subscription Receipts to be duly issued in accordance with the Subscription Receipt Certificates and the terms hereof;

all Warrant Shares issuable upon the due exercise of the Common Share Purchase Warrants in accordance with the terms and conditions of the certificates representing such Common Share Purchase Warrants shall be credited as fully paid-up;

it will use reasonable commercial efforts to maintain its corporate existence;

generally, it will well and truly perform and carry out all of the acts or things to be done by it as provided in this Agreement and it will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances in law as the Subscription Receipt Agent may reasonably require for the better accomplishing and effecting the intentions and provisions of this Agreement; and

upon becoming aware of the same, it will promptly advise the Subscription Receipt Agent in writing of any default by the Company of the terms of this Agreement; and

SEC Matters: The Company confirms that as at the date of execution of this Indenture it (i) does not have a class of securities registered pursuant to Section 12 of the Exchange Act or have a reporting obligation pursuant to Section 15(d) of the Exchange Act; and (ii) is exempt from the reporting requirements of the Exchange Act pursuant to Rule 12g3-2(b) under the Exchange Act.

Acknowledgement of Escrowed Funds

The Subscription Receipt Agent shall acknowledge receipt from the Agent, and the Company, respectively, or legal counsel on behalf of same, of wire transfers in the aggregate amount of the Escrowed Funds on the Closing Date and will confirm that such funds have been deposited in a segregated account and, will retain such amount in accordance with the terms of this Agreement.

The Company hereby:

acknowledges that the amounts received by the Subscription Receipt Agent pursuant to paragraph 6.1(a) represents payment in full of the Purchase Price for the Subscription Receipts; and

irrevocably directs the Subscription Receipt Agent to retain such amounts in accordance with the terms of this Agreement pending payment of such amounts in accordance with the terms of this Agreement.

Release of Escrowed Funds Upon Receipt of Automatic Release Certificate or Elective Release Certificate

liquidate any investment of the Escrowed Funds; and

pay the Escrowed Funds in the manner set forth in the Automatic or Release Certificate (including account information if payment is to be made by wire transfer).

Method of Disbursement and Delivery

All disbursements of money made in accordance with the provisions of this Article 6 may be made by wire transfer as may be directed by the holders, the Company or the Agents, and if not so directed, by cheque drawn upon a Canadian Schedule I chartered bank or by official cheque drawn upon the account of the Subscription Receipt Agent made payable to or to the order of the persons entitled to disbursement and in the correct amount (less all amounts required to be withheld by the Company by law, including without limitation, under the Income Tax Act (Canada) based on an opinion of Counsel).

If the Subscription Receipt Agent delivers any such wire transfer or cheque as required under Subsection 6.8(a), the Subscription Receipt Agent shall have no further obligation or liability for the amount represented thereby, unless any such cheque is not paid on due presentation; provided that in the event of the non- receipt of such wire transfer or cheque by the payee, or the loss or destruction of such cheque, the Subscription Receipt Agent, upon being furnished with reasonable evidence of such non-receipt, loss or destruction and funding and indemnity reasonably satisfactory to it, shall initiate a new wire transfer or issue to such payee a replacement cheque for the amount of such wire transfer or cheque.

Miscellaneous

The Subscription Receipt Agent will disburse monies according to this Agreement only to the extent that monies have been deposited with it. The Subscription Receipt Agent shall not, under any circumstances, be required to disburse funds in excess of the amounts on deposit with it at the time of such disbursement.

The Subscription Receipt Agent shall not be responsible for any losses which may occur as a result of the investment of the Escrowed Funds where the Escrowed Funds have been invested in accordance with the terms of this Agreement.

In addition to the other rights granted to holders in this Agreement, until the release of the Escrowed Funds pursuant to the terms of this Agreement, each holder of Subscription Receipts has a claim against the Subscription Receiptholder’s Escrowed Funds, which claim shall subsist until such time as the Common Shares and Common Share Purchase Warrants issuable upon the conversion of the Subscription Receipts are issued or such amount is paid in full. In the event that, prior to the release of the Escrowed Funds in accordance with the terms of this Agreement, the Company: (i) makes a general assignment for the benefit of creditors or any proceeding is instituted by the Company seeking relief on behalf thereof as a debtor, or to adjudicate the Company a bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment or composition of the Company or the debts of the Company under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, receiver and manager, trustee, custodian or similar official for the Company or any substantial part of the property and assets of the Company or the Company takes any corporate action to authorize any of the actions set forth above; or (ii) the Company shall be declared insolvent, or a receiver, receiver and manager, trustee, custodian or similar official is appointed for the Company or any substantial part of its property and assets of the Company or an encumbrancer shall legally take possession of any substantial part of the property or assets of the Company or a distress or execution or any similar process is levied or enforced against such property and assets and remains unsatisfied for such period as would permit such property or such part thereof to be sold thereunder, the right of each holder of Subscription Receipts to be issued Common Shares and Common Share Purchase Warrants upon the conversion of the Subscription Receipts of such holder will terminate and such holder will be entitled to assert a claim against the Escrowed Funds held in escrow and the Company in an amount equal to the Subscription Receiptholder’s Escrowed Funds less any withholding tax or charges required to be withheld in respect thereof.

In the event that the Subscription Receipt Agent shall hold any amount of interest or other distributable amount which is unclaimed or which cannot be paid for any reason other than the gross negligence or wilful misconduct or fraud of the Subscription Receipt Agent, the Subscription Receipt Agent shall be under no obligation to invest or reinvest the same but shall only be obligated to hold the same on behalf of the person or persons entitled thereto in a current or other non-interest bearing account pending payment to the person or persons entitled thereto. The Subscription Receipt Agent shall, as and when required by law, and may at any time prior to such required time, pay all or part of such interest or other distributable amount so held to an appropriate official or agency of the Province of Ontario, whose receipt shall be good discharge and release of the Subscription Receipt Agent for such amounts.

The Subscription Receipt Agent shall be entitled to act and rely absolutely on the Automatic Release Certificate in releasing the Escrowed Funds upon the receipt of the Automatic Release Certificate as provided for in this Agreement.

the setting of a record date for a meeting for the purpose of determining the holders entitled to receive notice of and to vote at the meeting;

the form of the instrument of proxy;

for the deposit of instruments appointing proxies at such place and time as the Subscription Receipt Agent, the Company or the holders convening the meeting, as the case may be, may in the notice convening the meeting direct, which shall entitle the persons named therein to be present and vote at the meeting and at any adjournment thereof in the same manner and with the same effect as though the persons so named in the proxy were the actual holders specified therein;

for the deposit of instruments appointing proxies at some approved place or places other than the place at which the meeting is to be held and enabling particulars of the instruments appointing proxies to be sent by mail, facsimile or other means of prepaid, transmitted, recorded communication before the meeting to the Company or to the Subscription Receipt Agent at the place where the same is to be held and for the voting of proxies so deposited as though the instruments themselves were produced at the meeting; and

generally for the calling of meetings of holders and the conduct of business thereat.

to agree to any modification, abrogation, alteration, compromise or arrangement of the rights of holders or the Subscription Receipt Agent (in the case of the rights of the Subscription Receipt Agent, subject to the prior consent of the Subscription Receipt Agent) or on behalf of the holders against the Company whether such rights arise under this Agreement or the Subscription Receipt Certificates or otherwise;

to amend, alter or repeal any extraordinary resolution previously passed or sanctioned by the holders;

to direct or to authorize the Subscription Receipt Agent to enforce any of the covenants on the part of the Company contained in this Agreement or the Subscription Receipt Certificates or to enforce any of the rights of the holders in any manner specified in such extraordinary resolution or to refrain from enforcing any such covenant or right:

to waive, and to direct the Subscription Receipt Agent to waive, any default on the part of the Company in complying with any provisions of this Agreement or the Subscription Receipt Certificates either unconditionally or upon any conditions specified in such extraordinary resolution;

to restrain any Subscription Receiptholder from taking or instituting any suit, action or proceeding against the Company for the enforcement of any of the covenants on the part of the Company in this Agreement or the Subscription Receipt Certificates or to enforce any of the rights of the holders;

to direct any Subscription Receiptholder who, as such, has brought any suit, action or proceeding to stay or to discontinue or otherwise to deal with the same upon payment of the costs, charges and expenses reasonably and properly incurred by such Subscription Receiptholder in connection therewith;

to assent to any change in or omission from the provisions contained in the Subscription Receipt Certificates and this Agreement or any ancillary or supplemental instrument which may be agreed to by the Company, and to authorize the Subscription Receipt Agent to concur in and execute any ancillary or supplemental agreement embodying the change or omission;

with the consent of the Company, not to be unreasonably withheld, to remove the Subscription Receipt Agent or its successor in office and to appoint a new trustee or trustees to take the place of the Subscription Receipt Agent so removed;

to assent to any compromise or arrangement with any creditor or creditors or any class or classes of creditors, whether secured or otherwise, and with holders of any shares or other securities of the Company; and

in the event that the Automatic Release Event has not occurred on or prior to the Automatic Escrow Release Deadline, to extend the Automatic Escrow Release Deadline.

Meaning of Extraordinary Resolution

The expression “extraordinary resolution” when used in this Agreement means, subject as hereinafter provided in this Section 8.11 and in Section 8.14, a resolution proposed at a meeting of holders duly convened for that purpose and held in accordance with the provisions of this Article 8 at which there are present in person or by proxy holders representing not less than 20% of the then outstanding Subscription Receipts and passed by the affirmative votes of holders representing not less than 662/3% of the aggregate number of the then outstanding Subscription Receipts represented at the meeting and voted on the poll upon such resolution.

If, at the meeting at which an extraordinary resolution is to be considered, holders representing at least 20% of the then outstanding Subscription Receipts are not present in person or by proxy within 30 minutes after the time appointed for the meeting, then the meeting, if convened by holders or on a Subscription Receiptholder’s Request, shall be dissolved; but in any other case it shall stand adjourned to such day, being not less than 30 or more than 45 days later, and to such place and time as may be appointed by the chairman. Not less than 10 Business Days’ prior notice shall be given of the time and place of such adjourned meeting in the manner provided for in Section 11.2. Such notice shall state that at the adjourned meeting the holders present in person or by proxy shall form a quorum but it shall not be necessary to set forth the purposes for which the meeting, was originally called or any other particulars. At the adjourned meeting the holders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened and a resolution proposed at such adjourned meeting and passed by the requisite vote as provided in Subsection 8.11(a) shall be an extraordinary resolution within the meaning of this Agreement notwithstanding that holders holding at least 20% of the aggregate number of the then outstanding Subscription Receipts are not present in person or by proxy at such adjourned meeting.

Votes on an extraordinary resolution shall always be given on a poll and no demand for a poll on an extraordinary resolution shall be necessary.

providing for the issuance of additional Subscription Receipts hereunder and any consequential amendments hereto as may be required by the Subscription Receipt Agent, relying on the advice of Counsel;

adding to the provisions hereof such additional covenants and enforcement provisions as, in the opinion of Counsel are necessary or advisable, provided that the same are not in the opinion of the Subscription Receipt Agent, based on the advice of Counsel, prejudicial to the interests of the holders;

giving effect to any resolution or extraordinary resolution passed as provided in Article 8;

making such provisions not inconsistent with this Agreement as may be necessary or desirable with respect to matters or questions arising hereunder, provided that such provisions are not, in the opinion of the Subscription Receipt Agent, based on the advice of Counsel, prejudicial to the interests of the holders;

adding to or altering the provisions hereof in respect of the transfer of Subscription Receipts, making provision for the exchange of Subscription Receipt Certificates, and making any modification in the form of the Subscription Receipt Certificates which does not affect the substance thereof;

modifying any of the provisions of this Agreement, including relieving the Company from any of the obligations, conditions or restrictions herein contained, provided that such modification or relief shall be or become operative or effective only if, in the opinion of the Subscription Receipt Agent, based on the opinion of Counsel, such modification or relief in no way prejudices any of the rights of the holders or of the Subscription Receipt Agent, and provided further that the Subscription Receipt Agent may in its sole discretion decline to enter into any such supplemental agreement which in its opinion, based on the advice of Counsel, may not afford adequate protection to the Subscription Receipt Agent when the same shall become operative; and

for any other purpose not inconsistent with the terms of this Agreement, including the correction or rectification of any ambiguities, defective or inconsistent provisions, errors, mistakes or omissions herein, provided that in the opinion of the Subscription Receipt Agent, based on the advice of Counsel, the rights of the Subscription Receipt Agent and of the holders are in no way prejudiced thereby,

Applicable Legislation

If and to the extent that any provision of this Agreement limits, qualifies or conflicts with a mandatory requirement of the Applicable Legislation, such mandatory requirement shall prevail.

The Company and the Subscription Receipt Agent agree that each will, at all times in relation to this Agreement and any action to be taken hereunder, observe and comply with and be entitled to the benefits of the Applicable Legislation.

Rights and Duties of Subscription Receipt Agent

The Subscription Receipt Agent shall have no duties except those which are expressly set forth herein, and it shall not be bound by any notice of a claim or demand with respect to, or any waiver, modification, amendment, termination or rescission of this Agreement, unless received by it in writing, and signed by the parties hereto and if its duties herein are affected, unless it shall have given its prior written consent thereto.

The Subscription Receipt Agent shall retain the right not to act and shall not be held liable for refusing to act unless it has received clear and reasonable instructions in writing which comply with the terms of this Agreement. Such documentation must not require the exercise of any discretion or independent judgment.

Any certificate of a party referred to herein, unless otherwise specified, shall, in the case of the Company, refer to a certificate signed in the name of the Company by any officer or director of the Company, and, in the case of any other party, refer to a certificate of an authorized officer of such party.

In the exercise of the rights and duties prescribed or conferred by the terms of this Agreement, the Subscription Receipt Agent shall exercise that degree of care, diligence and skill that a reasonably prudent Subscription Receipt Agent would exercise in comparable circumstances.

The obligation of the Subscription Receipt Agent to commence or continue any act, action or proceeding for the purpose of enforcing any rights of the Subscription Receipt Agent or the holders hereunder shall be conditional upon the holders furnishing, when required by notice by the Subscription Receipt Agent, sufficient funds to commence or to continue such act, action or proceeding and an indemnity reasonably satisfactory to the Subscription Receipt Agent to protect and to hold harmless the Subscription Receipt Agent against the costs, charges and expenses and liabilities to be incurred thereby and any loss and damage it may suffer by reason thereof. None of the provisions contained in this Agreement shall require the Subscription Receipt Agent to expend or to risk its own funds or otherwise to incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers unless indemnified and funded as aforesaid.

The Subscription Receipt Agent may, before commencing or at any time during the continuance of any such act, action or proceeding, require the holders at whose instance it is acting to deposit with the Subscription Receipt Agent the Subscription Receipts held by them, for which Subscription Receipts the Subscription Receipt Agent shall issue receipts.

Every provision of this Agreement that by its terms relieves the Subscription Receipt Agent of liability or entitles it to rely upon any evidence submitted to it is subject to the provisions of the Applicable Legislation, of this Section 10.2 and of Sections 10.3 and 10.4.

The Subscription Receipt Agent shall not be liable for any error in judgment or for any act done or step taken or omitted by it in good faith or for any mistake, in fact or law, or for anything which it may do or refrain from doing in connection therewith, except arising out of its own gross negligence or wilful misconduct or fraud.

In the event of any disagreement arising regarding the terms of this Agreement, the Subscription Receipt Agent shall be entitled, at its option, to refuse to comply with any or all demands whatsoever until the dispute is settled, either by agreement amongst the various parties or by a court of competent jurisdiction.

The Subscription Receipt Agent shall not be bound to do or give any notice or take any act, action, proceeding for the enforcement of any of the obligations of the Company under this Agreement unless and until it shall have received a Subscription Receiptholder’s Request specifying the act, action or proceeding which the Subscription Receipt Agent is requested to take, nor shall the Subscription Receipt Agent be required to take notice of any default hereunder, unless and until notified in writing of such default, which notice shall distinctly specify the default desired to be brought to the attention of the Subscription Receipt Agent and, in the absence of any such notice, the Subscription Receipt Agent may for all purposes of this Agreement conclusively assume that no default has been made in the observance or performance of any of the representations, warranties, covenants, agreements, or conditions contained herein.

The Subscription Receipt Agent shall not incur any liability or responsibility whatsoever or be in any way responsible for the consequence of any breach on the part of the Company of any of the covenants herein contained or of any acts of any directors, officers, employees, agents or servants of the Company.

Evidence, Experts and Advisers

In addition to the reports, certificates, opinions and other evidence required by this Agreement and the Company shall furnish to the Subscription Receipt Agent such additional evidence of compliance with any provision hereof, and in such form, as may be prescribed by Applicable Legislation or as the Subscription Receipt Agent may reasonably require by written notice to the Company.

In the exercise of its rights and duties hereunder, the Subscription Receipt Agent may, if it is acting in good faith, rely as to the truth of the statements and the accuracy of the opinions expressed in statutory declarations, opinions, reports, written requests, consents, or orders of the Company, certificates of the Company or other evidence furnished to the Subscription Receipt Agent pursuant to a request of the Subscription Receipt Agent.

Whenever it is provided in this Agreement or under Applicable Legislation that the Company shall deposit with the Subscription Receipt Agent resolutions, certificates, reports, opinions, requests, orders or other documents, it is intended that the truth and accuracy thereof be conditions precedent to the right of the Company to have the Subscription Receipt Agent take the action to be based thereon.

The Subscription Receipt Agent may employ or retain such Counsel, accountants, appraisers or other experts or advisers as it may reasonably require for the purpose of discharging its duties hereunder and may pay reasonable remuneration for all services so performed by any of them, without taxation of costs of any Counsel, and shall not be responsible for any misconduct or negligence on the part of any such experts or advisers who have been appointed with due care by the Subscription Receipt Agent.

Whenever Applicable Legislation requires that evidence referred to in Subsection 10.4(a) be in the form of a statutory declaration, the Subscription Receipt Agent may accept such statutory declaration in lieu of a certificate of the Company required by any provision hereof. Any such statutory declaration may be made by one or more of the Chief Executive Officer or Chief Financial Officer or Company Secretary of the Company.

Proof of the execution of an instrument in writing, including a Subscription Receiptholder’s Request, by any Subscription Receiptholder may be made by the certificate of a notary, solicitor or commissioner for oaths, or other officer with similar powers, that the person signing such instrument acknowledged to him the execution thereof, or by an affidavit of a witness to such execution or in any other manner which the Subscription Receipt Agent may consider adequate and in respect of a corporate Subscription Receiptholder, shall include a certificate of incumbency of such Subscription Receiptholder together with a certified resolution authorizing the person who signs such instrument to sign such instrument.

the Subscription Receipt Agent shall not be liable for or by reason of any statements of fact or recitals in this Agreement or in the Subscription Receipt Certificates (except the representation contained in Section 10.9 or in the certificate of the Subscription Receipt Agent on the Subscription Receipt Certificates) or be required to verify the same, but all such statements or recitals are and shall be deemed to be made by the Company;

nothing herein contained shall impose any obligation on the Subscription Receipt Agent to see to or to require evidence of the registration or filing (or renewal thereof) of this Agreement or any instrument ancillary or supplemental hereto;

the Subscription Receipt Agent shall not be bound to give notice to any person or persons of the execution hereof; and

the Subscription Receipt Agent shall be protected in acting upon any written notice, request, waiver, consent, certificate, receipt, statutory declaration or other paper or document furnished to it hereunder, not only as to its due execution and the validity and the effectiveness of its provisions but also as to the truth and acceptability of any information therein contained which it in good faith believes to be genuine and what it purports to be.

Replacement of Subscription Receipt Agent; Successor by Merger

The Subscription Receipt Agent may resign from its duties and be discharged from all further duties and liabilities hereunder, subject to this Section 10.8, by giving to the Company not less than 60 days’ prior notice in writing or such shorter prior notice as the Company may accept as sufficient. The holders by extraordinary resolution shall have power at any time to remove the person then appointed as “Subscription Receipt Agent” hereunder (the “Existing Agent” or once removed or resigned, the “Predecessor Agent”) and to appoint a new person in its stead (the “Successor Agent”). In the event of the Existing Agent resigning or being removed as aforesaid or being dissolved, becoming bankrupt, going into liquidation or otherwise becoming incapable of acting hereunder, the Company shall forthwith appoint a Successor Agent unless a Successor Agent has already been appointed by the holders; failing such appointment by the Company, the Existing Agent or any Subscription Receiptholder may apply to a justice of the Supreme Court of Ontario (the “Court”) on such notice as such justice may direct, for the appointment of a Successor Agent; but any Successor Agent so appointed by the Company, or by the Court shall be subject to removal as aforesaid by the holders. Any Successor Agent appointed under any provision of this Section 10.8 shall be a corporation authorized to carry on the business of a trust company in the Province of Ontario and, if required by the Applicable Legislation for any other provinces, in such other provinces. On any such appointment the Successor Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as the “Subscription Receipt Agent” hereunder.

Upon the appointment of a Successor Agent, the Company shall promptly notify the holders thereof in the manner provided for in Section 11.2 hereof.

Any corporation into or with which the Subscription Receipt Agent may be merged or consolidated or amalgamated, or any corporation resulting therefrom to which the Subscription Receipt Agent shall be a party, or any corporation succeeding to the trust business of the Subscription Receipt Agent shall be the successor to the Subscription Receipt Agent hereunder without any further act on its part or any of the parties hereto, provided that such corporation would be eligible for appointment as a Successor Agent under Subsection 10.8(a).

Any Subscription Receipt Certificates certified but not delivered by a Predecessor Agent may be certified by the Successor Agent in the name of the Predecessor Agent or Successor Agent.

Conflict of Interest

The Subscription Receipt Agent represents to the Company and the Agent, that at the time of execution and delivery hereof no material conflict of interest exists between its role hereunder and its role in any other capacity and agrees that in the event of a material conflict of interest arising hereafter it will, within 30 days after ascertaining that it has such material conflict of interest, either eliminate the same or assign its appointment hereunder to a Successor Agent approved by the Company and meeting the requirements set forth in Subsection 10.8(a). Notwithstanding the foregoing provisions of this Subsection 10.9, if any such material conflict of interest exists or hereafter shall exist, the validity and enforceability of this Agreement and the Subscription Receipt Certificate shall not be affected in any manner whatsoever by reason thereof.

Subject to Subsection 10.9(a), the Subscription Receipt Agent and its affiliates, in its personal or any other capacity, may buy, lend upon and deal in securities of the Company and generally may contract and enter into financial transactions with the Company or any subsidiary of the Company without being liable to account for any profit made thereby.

Notice to the Company, the Subscription Receipt Agent and the Agents

Unless herein otherwise expressly provided, any notice to be given hereunder to the Company, the Subscription Receipt Agent or the Agents shall be deemed to be validly given if delivered, sent by registered letter, postage prepaid or facsimile:

and any such notice delivered in accordance with the foregoing shall be deemed to have been received on the date of delivery if that day is a Business Day or, if mailed, on the fifth Business Day following the date of the postmark on such notice or, if sent by facsimile, on the next Business Day following the date of transmission provided that its contents are transmitted and received completely and accurately.

The Company, the Subscription Receipt Agent or the Agents, as the case may be, may from time to time notify the other in the manner provided in Subsection 11.1(a) of a change of address which, from the effective date of such notice and until changed by like notice, shall be the address of the Company, the Subscription Receipt Agent or the Agents, as the case may be, for all purposes of this Agreement.

If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving postal employees, any notice to be given to the Subscription Receipt Agent, the Company or the Agents hereunder could reasonably be considered unlikely to reach its destination, such notice shall be valid and effective only if it is delivered to the named officer of the party to which it is addressed or, if it is delivered to such party at the appropriate address provided in Subsection 11.1(a), by facsimile or other means of prepaid, transmitted and recorded communication.

Notice to holders

Unless otherwise expressly provided herein, any notice to be given hereunder to holders shall be deemed to be validly given if the notice is sent by first class mail, postage prepaid, addressed to the holders or delivered by hand (or so mailed to certain holders and so delivered to other holders), including, without limitation, CDS, at their respective addresses appearing on the register maintained by the Subscription Receipt Agent. Any notice so given shall be deemed to have been given on the day of delivery by hand or on the third Business Day following the date of the postmark if delivered by mail.

If, by reason of strike, lockout or other work stoppage, actual or threatened, involving postal employees, any notice to be given to the holders could reasonably be considered unlikely to reach its destination, the notice may be published or distributed once in the Report on Business section of the national edition of The Globe and Mail newspaper and the Marketplace section of the Wall Street Journal or, in the event of a disruption in the circular of that newspaper, once in a daily newspaper in the English language of general circulation in the City of Toronto, Ontario and the City of New York, as the case may be; provided that in the case of a notice convening a meeting of the holders, the Subscription Receipt Agent may require such additional publications of that notice, in the same or in other cities or both, as it may deem necessary for the reasonable protection of the holders or to comply with any applicable requirement of law or any stock exchange. Any notice so given shall be deemed to have been given on the day on which it has been published in all of the cities in which publication was required (or first published in a city if more than one publication in that city is required).

Accidental error or omissions in giving notice or accidental failure to mail notice to any Subscription Receiptholder will not invalidate any action or proceeding founded thereon.

the names of the registered holders which, to the knowledge of the Company, are owned by or held for the account of the Company or any subsidiary or affiliate of the Company; and

the number of Subscription Receipts owned legally or beneficially by the Company or any subsidiary or affiliate of the Company,

if the Automatic Escrow Release Conditions are satisfied prior to the Automatic Escrow Release Deadline and the Automatic Release Certificate is delivered to the Subscription Receipt Agent, to receive, for no additional consideration and without further action, one Common Share and one-half of one Common Share Purchase Warrant, subject to adjustment as set forth in the Agreement; and

if the Automatic Escrow Release Conditions are not satisfied prior to the Automatic Escrow Release Deadline, either:

to receive an amount equal to the Subscription Receiptholder’s Escrowed Funds, less any applicable withholding taxes, all in the manner and on the terms and conditions set out in the Agreement; or

receive for no additional consideration and without further action, one Common Share and one-half of one Common Share Purchase Warrant for each Subscription Receipt exercised, as directed in the Elective Release Certificate, subject to adjustment as set forth in this Agreement.

a confirmation in writing from the TSXV, that all conditions to the listing of the Listed Common Shares, other than customary post-closing conditions, shall have been obtained;

there shall have been no material adverse change in the financial condition, business, operations of the Company; and

the Company shall not be in breach or default of any of its covenants or obligations under the Agency Agreement, except those breaches or defaults that have been waived by the Agent.

pay the amount of $<*>, representing the Agents’ Commission and any unpaid portion of the Initial Payment, in the following manner: <*>;

pay the amount of $<*> representing the Finder Fees payable by the Company to <*>, in the following manner: <*>;

pay the amount of $<*>, representing the balance of Escrowed Proceeds after deduction of the amounts contemplated in (i) and (ii) above to the Company, in the following manner: <*> pay the amount of $<*>, representing the balance of Escrowed Funds after deduction of the amounts contemplated in (i) and (ii) above, to the Company, in the following manner: <*>; and

issue and deliver the Common Shares and Common Share Purchase Warrants to the holders of the Subscription Receipts as set out in the Agreement.

pay the amount of $<*>, representing the Agents’ Commission and any unpaid portion of the Initial Payment in the following manner: <*>;

pay the amount of $<*> representing the Finder Fees payable by the Company to <*>, in the following manner: <*>;

pay the aggregate amount of $<*> to the Subscription Receiptholders as set out in Schedule “A”;

pay the amount of $<*>, representing the balance of Escrowed Proceeds after deduction of the amounts contemplated in (i), (ii) and (iii) above to the Company, in the following manner: <*>; and

issue and deliver the Common Shares and Common Share Purchase Warrants to the holders to the Subscription Receiptholders as set out in Schedule “B” hereto.