CARDERO RESOURCE CORP. SUBSCRIPTION AGREEMENT (UNITS – NON-BROKERED) INSTRUCTIONS

Complete and sign pages i and ii of the Subscription Agreement.

If you are an “Accredited Investor”, complete and sign the Accredited Investor Certificate – Schedule A.

If you are not an “Accredited Investor” but are resident in any province of Canada (other than Ontario) and are purchasing the Units pursuant to the “Family, Friends and Business Associates” exemption, complete section (1) of the Canadian Exemption Certificate and sign the Canadian Exemption Certificate – Schedule B.

If you are not an “Accredited Investor” but are resident in Ontario and are purchasing the Units pursuant to the “Founder, control person and family – Ontario” exemption, complete section (2) of the Canadian Exemption Certificate and sign the Canadian Exemption Certificate – Schedule B.

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

“Acceleration Provision” has the meaning ascribed to that term in Section 3 of this Agreement;

“Accredited Investor” has the meaning ascribed to such term in National Instrument 45-106;

“Agreement” means this subscription agreement and includes all schedules and appendices attached hereto, in each case, as the same may be amended, supplemented or restated from time to time;

“Business Day” means a day on which Canadian chartered banks are open for the transaction of regular business in the City of Vancouver, British Columbia;

“Closing” means the closing of the purchase and sale of the Offered Securities;

“Closing Date” means the date of the Closing, such date to be a date following receipt by the Corporation of all required regulatory acceptances/approvals and as determined by the Corporation;

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

“Common Shares” means the common shares of the Corporation as constituted on the date hereof;

“Corporation” means Cardero Resource Corp., a corporation existing under the Business Corporations Act (British Columbia) and includes any successor corporation thereto;

“Disclosed Purchaser” means the Person on whose behalf the Subscriber, as agent, is purchasing hereunder;

“Dollars” or “$” means lawful money of Canada, unless otherwise indicated;

“Insider” means (i) a director or senior officer of the Corporation, (ii) a director or senior officer of a company that is an Insider or subsidiary of the Corporation, and (iii) a Person that beneficially owns or controls, directly or indirectly, more than 10% of the outstanding Common Shares of the Corporation;

“National Instrument 45-106” means National Instrument 45-106 “Prospectus and Registration Exemptions” of the Canadian Securities Administrators;

“Offered Securities” means the up to 8,029,669 Units offered for sale by the Corporation pursuant to the Offering;

“Offering” means the offering of the Offered Securities on a private placement basis;

“Offering Jurisdictions” means collectively all of the provinces of Canada, the United States and such other overseas jurisdictions as may be agreed to by the Corporation;

“Person” means an individual, a firm, a corporation, a syndicate, a partnership, a trust, an association, an unincorporated organization, a joint venture, an investment club, a government or an agency or political subdivision thereof and every other form of legal or business entity of whatsoever nature or kind;

“Personal Information” means any personal information as that term is defined under applicable privacy legislation, including, without limitation, the Personal Information Protection and Electronic Documents Act (Canada) and any other applicable similar, replacement or supplemental provincial or federal legislation or laws in effect from time to time and without limiting the foregoing, but for greater clarity in this Agreement, means information about an identifiable individual, including but not limited to any information about the Subscriber and, if applicable, any Disclosed Purchaser, and includes information provided by the Subscriber in this Agreement;

“Purchase Price” means $0.95 per Unit;

“Purchased Securities” means the Units which the Subscriber has agreed to purchase under this Agreement;

“Regulation D” means Regulation D under the 1933 Act;

“Regulation S” means Regulation S under the 1933 Act;

“Regulatory Authorities” means the Commissions and the Stock Exchanges;

“Securities” means collectively, the Units, the Shares, the Warrants and the Warrant Shares;

“Securities Laws” means the securities legislation and regulations of, and the instruments, policies, rules, orders, codes, notices and interpretation notes of each of the Commissions;

“Shares” means the previously unissued Common Shares of the Corporation forming part of the Units;

“Stock Exchanges” means the Toronto Stock Exchange and NYSE Amex LLC;

“Subscriber” means the Person purchasing the Purchased Securities and whose name appears on the execution page hereof and who has signed this Agreement;

“Subscription Proceeds” means the aggregate Purchase Price paid by the Subscriber for the Purchased Securities;

“U.S. Accredited Investor” means an “accredited investor” as defined in Rule 501(a) under the 1933 Act, as amended by the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act, and without limiting the foregoing, but for greater clarity in this Agreement, which satisfies the conditions of the U.S. Accredited Investor Certificate;

“U.S. Accredited Investor Certificate” means the certificate attached as Schedule C to this Agreement to be executed by Persons that are in the United States, U.S. Persons or purchasing the Purchased Securities for the account or benefit of Persons that are in the United States or U.S. Persons;

“U.S. Person” has the meaning ascribed to it in Regulation S. Without limiting the foregoing, but for greater clarity in this Agreement, a U.S. Person includes, subject to the exclusions set forth in Regulation S, (i) any natural Person resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States, (iii) any estate or trust of which any executor, administrator or trustee is a U.S. Person, (iv) any agency or branch of a foreign entity located in the United States, (v) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person, (vi) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States, and (vii) any partnership or corporation organized or incorporated under the laws of any non-U.S. jurisdiction which is formed by a U.S. Person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by U.S. Accredited Investors who are not natural Persons, estates or trusts;

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

“Units” means the units of the Corporation being offered for sale by the Corporation, each Unit consisting of one Share and one-half of one Warrant;

“Warrant Shares” means the previously unissued Common Shares which will be issued upon the exercise of the Warrants; and

“Warrants” means the transferable common share purchase warrants of the Corporation forming part of the Units; subject to the Acceleration Provision, each Warrant entitles the Subscriber to purchase a Warrant Share for a period of 12 months from the Closing Date at a price of $1.25 per Warrant Share.

this Agreement, duly completed and executed;

a certified cheque, bank draft or wire transfer or other acceptable form of payment to the Corporation, as applicable, for the total Purchase Price of the Purchased Securities payable to the Corporation or, if applicable, confirmation of “Delivery Against Payment” arrangements;

if you are, or, if applicable, the Disclosed Purchaser is, a resident of Canada, and if you are an “Accredited Investor”, a duly executed and completed Accredited Investor Certificate, attached as Schedule A hereto;

if you are not, or, if applicable, the Disclosed Purchaser is not, an “Accredited Investor” but are resident in any province of Canada (other than Ontario) and are purchasing the Units pursuant to the “Family, Friends and Business Associates” exemption, a duly executed and completed Canadian Exemption Certificate, attached as Schedule B hereto;

if you are not, or, if applicable, the Disclosed Purchaser is not, an “Accredited Investor” but are resident in Ontario and are purchasing the Units pursuant to the “Founder, control person and family” exemption, a duly executed and completed Canadian Exemption Certificate, attached as Schedule B hereto;

if you are, or, if applicable, the Disclosed Purchaser is, in the United States or a U.S. Person or otherwise subject to United States securities laws, a fully executed and completed U.S. Accredited Investor Certificate, attached as Schedule C hereto; and

any further documentation as required under the Securities Laws or by the policies of the Stock Exchanges or other Regulatory Authorities.

you execute and return all documents required by the Securities Laws and the policies of the Stock Exchanges for delivery on your behalf, including the forms set out in Schedules A, B and C attached hereto, as applicable, to the Corporation as the sale of the Purchased Securities by the Corporation to you will not be qualified by a prospectus;

the representations and warranties made by you on your own behalf or, if applicable, on behalf of the Disclosed Purchaser (including representations and warranties made in any Schedule attached hereto, as applicable) herein are true and correct when made and are true and correct on the Closing Date with the same force and effect as if they had been made on and as of such date;

all covenants, agreements and conditions contained in this Agreement to be performed by you or, if applicable, the Disclosed Purchaser on or prior to the Closing Date shall have been performed or complied with in all material respects;

the Corporation receives conditional acceptance of notice of the Offering and conditional approval for the listing of the Shares and Warrant Shares from the TSX and approval for the listing of the Shares and Warrant Shares from the Amex; and

all other necessary regulatory approvals are obtained prior to the Closing Date.

the Corporation has advised you that the Corporation is relying on exemptions from the requirements under the Securities Laws to provide you with a prospectus or registration statement, and no prospectus or registration statement has been filed by the Corporation with any of the Commissions in connection with the issuance of the Purchased Securities, and as a consequence:

you are restricted from using most of the civil remedies available under the Securities Laws and certain protections, rights and remedies provided by the Securities Laws, including statutory rights of rescission or damages, will not be available to you;

you may not receive information that would otherwise be required to be provided to you under the Securities Laws; and

the Corporation is relieved from certain obligations that would otherwise apply under the Securities Laws;

you are resident in the jurisdiction set out under “Subscriber’s Residential or Head Office Address” on the first page of this Agreement or under “Disclosed Purchaser’s Residential or Head Office Address” on the second page of this Agreement (as applicable), which address is your residence or principal place of business of the Person indicated, and such address was not obtained or used solely for the purpose of acquiring the Purchased Securities;

you are:

purchasing the Purchased Securities as principal for your own account or, in the case of section 5(d)(i) below, are deemed under the applicable Securities Laws to be purchasing as principal, and not for the benefit of any other Person; or

purchasing the Purchased Securities as agent for the Disclosed Purchaser and the Disclosed Purchaser for whom you are acting is purchasing the Purchased Securities as principal for its own account and not for the benefit of any other Person;

if you are resident in any province or territory in Canada you:

are an Accredited Investor, by virtue of the fact that you fall within one or more of the subparagraphs of the definition of Accredited Investor set out in the Accredited Investor Certificate attached as Schedule A and you have completed the Accredited Investor Certificate attached as Schedule A, you confirm the truth and accuracy of all statements in such schedule as of the date of this Agreement and the Closing Date, and you were not created or used solely to purchase securities as an Accredited Investor as described in paragraph (m) of the definition of Accredited Investor set out in Schedule A; or

are purchasing sufficient Offered Securities so that the aggregate acquisition cost of the Purchased Securities is not less than $150,000 and, if you are not an individual, you were not created solely to purchase or hold securities in reliance on section 2.10 of National Instrument 45-106; or

are a resident in any province of Canada other than Ontario and are purchasing the Offered Securities pursuant to the “Family, Friends and Business Associates” prospectus and registration exemption contained in section 2.5 of National Instrument 45-106 and have completed section (1) of the Canadian Exemption Certificate attached as Schedule B; or

are a resident in Ontario and are purchasing the Offered Securities pursuant to the “Founder, control person and family – Ontario” exemption contained in section 2.7 of National Instrument 45-106 and have completed section (2) of the Canadian Exemption Certificate attached as Schedule B;

if you are not an individual, you pre-existed the offering of the Offered Securities and you have a bona fide business purpose other than the investment in the Offered Securities and you were not created, formed or established solely or primarily to acquire Offered Securities, or to permit purchases of securities without a prospectus, in reliance on an exemption from the prospectus requirements of applicable Securities Laws;

unless you have completed and delivered the U.S. Accredited Investor Certificate attached as Schedule C hereto (in which case you make the representations, warranties and covenants therein and confirm the truth and accuracy of all statements in such schedule as of the date of this Agreement and as of the Closing Date):

you are not a U.S. Person,

the Offered Securities were not offered to you in the United States and at the time your buy order was made, you were outside the United States,

this Agreement was delivered to, executed and delivered by, you (or your authorized signatory) outside the United States,

you are not, and will not be, purchasing the Purchased Securities for the account or benefit of any U.S. Person or Person in the United States,

the current structure of this transaction and all transactions and activities contemplated hereunder is not a scheme to avoid the registration requirements of the 1933 Act,

you have no intention to distribute either directly or indirectly any of the Purchased Securities in the United States, except in compliance with the 1933 Act and applicable state securities laws,

you understand that the Securities have not been registered under the 1933 Act or the securities laws of any state of the United States, the Securities may not be offered or sold, directly or indirectly, in the United States except pursuant to registration under the 1933 Act and the securities laws of all applicable states or available exemptions therefrom, and the Corporation has no obligation or present intention of filing a registration statement under the 1933 Act in respect of any of the Securities,

you have not purchased the Purchased Securities as a result of any form of directed selling efforts (as such term is used in Regulation S) or general solicitation or general advertising (as such terms are used under Rule 502(c) of Regulation D), and the sale of the Purchased Securities was not accompanied by any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over radio, television or telecommunications, including electronic display and the Internet or any seminar or meeting whose attendees have been invited by general solicitation or general advertising, and

the Warrants may not be exercised by or on behalf of a U.S. Person or a Person in the United States unless an exemption is available from the registration requirements of the 1933 Act and the securities laws of all applicable states, and the holder has furnished an opinion of counsel satisfactory to the Corporation to such effect;

if you are resident outside of Canada and the United States, you:

are knowledgeable of, or have been independently advised as to the applicable securities laws of the securities regulatory authorities (the “Authorities”) having application in the jurisdiction in which you are resident (the “International Jurisdiction”) which would apply to the acquisition of the Purchased Securities, if any,

are purchasing the Purchased Securities pursuant to exemptions from the prospectus and registration requirements under the applicable securities laws of the Authorities in the International Jurisdiction or, if such is not applicable, you are permitted to purchase the Purchased Securities under the applicable securities laws of the Authorities in the International Jurisdiction without the need to rely on any exemption,

confirm that, to your knowledge, the purchase of the Purchased Securities does not contravene any applicable securities laws of the Authorities in the International Jurisdiction and does not require the Corporation to make any filings or seek any approvals of any nature whatsoever from any Authority of any kind whatsoever in the International Jurisdiction in connection with the issue and sale or resale of the Purchased Securities, and

confirm that, to your knowledge, the purchase of the Purchased Securities by you does not trigger:

an obligation by the Corporation or any other Person to prepare and file a registration statement, prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction, or

continuous disclosure reporting obligations of the Corporation in the International Jurisdiction, and

you acknowledge that no agency, stock exchange or governmental agency, securities commission or similar regulatory authority or other entity has reviewed or passed on or made any finding or determination as to the merits of or made any recommendation or endorsement with respect to the Securities;

you acknowledge that:

no securities commission or similar regulatory authority has reviewed or passed on the merits of the Securities,

there is no government or other insurance covering the Securities,

there are risks associated with the purchase of the Purchased Securities and you are aware of the risks and other characteristics of the Purchased Securities,

there are restrictions on your ability to resell the Securities and it is your responsibility to find out what those restrictions are and to comply with them before selling the Securities, and

the Corporation has advised you that it is relying on an exemption from the requirements to provide you with a prospectus and to sell securities through a Person registered to sell securities under the Securities Act (British Columbia) and, as a consequence of acquiring securities pursuant to this exemption, certain protections, rights and remedies provided by the Securities Act (British Columbia), including statutory rights of rescission or damages, will not be available to you;

you acknowledge and consent to the fact that the Corporation is collecting Personal Information of the Subscriber and Disclosed Purchaser, if any, for the purpose of completing this Agreement; you acknowledge and consent to the Corporation retaining such Personal Information for as long as permitted or required by law or business practices; you agree and acknowledge that the Corporation may use and disclose such Personal Information: (i) for internal use with respect to managing the relationships between and contractual obligations of the Corporation and the Subscriber and Disclosed Purchaser, if any; (ii) for use and disclosure for income tax-related purposes, including, without limitation, where required by law, disclosure to the Canada Revenue Agency; (iii) disclosure to professional advisers of the Corporation; (iv) disclosure to securities regulatory authorities and other regulatory bodies with jurisdiction with respect to reports of trade or similar regulatory filings; (v) disclosure to a governmental or other authority to which the disclosure is required by court order or subpoena compelling such disclosure and where there is no reasonable alternative to such disclosure; (vi) disclosure to any Person where such disclosure is necessary for legitimate business reasons and is made with your prior written consent; (vii) disclosure to a court determining the rights of the parties under this Agreement; and (viii) for use and disclosure as otherwise required or permitted by law; in addition, you further acknowledge and consent to the fact that the Corporation may be required to provide any one or more of the Canadian securities regulators, stock exchanges, the Investment Industry Regulatory Organization of Canada, other regulatory agencies or the Corporation’s registrar and transfer agent with any Personal Information provided by the Subscriber and Disclosed Purchaser, if any, in this Agreement, and may make any other filings of Personal Information as the Corporation’s counsel deems appropriate, and you acknowledge receipt of notification of the disclosure of Personal Information by the Corporation to the Stock Exchanges and the Subscriber and Disclosed Purchaser, if any, hereby consent to and authorize the foregoing use and disclosure of such Personal Information and agree to provide, on request, all particulars required by the Corporation in order to comply with the foregoing;

you further acknowledge and expressly consent to:

the disclosure of Personal Information by the Corporation to the Stock Exchanges and other applicable regulatory authorities, as required, and

the collection, use and disclosure of Personal Information by the Stock Exchanges for such purposes as may be identified by the Stock Exchanges, from time to time;

if you are a resident of Ontario you authorize the indirect collection of Personal Information by the Ontario Securities Commission and confirm that you have been notified by the Corporation:

that the Corporation will be delivering the Personal Information to the Ontario Securities Commission,

that such Personal Information is being collected indirectly by the Ontario Securities Commission under the authority granted to it in applicable Securities Laws,

that such Personal Information is being collected for the purpose of the administration and enforcement of applicable Securities Laws, and

that the title, business address and business telephone number of the public official in the Province of Ontario, who can answer questions about the Ontario Securities Commission’s indirect collection of the Personal Information is as follows:

the funds representing the aggregate Purchase Price in respect of the Purchased Securities which will be advanced by the Subscriber to the Corporation hereunder will not represent proceeds of crime for the purpose of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLTF Act”) and you acknowledge that the Corporation may in the future be required by law to disclose the Subscriber’s or Disclosed Purchaser’s name and other information relating to this Agreement and the Subscriber’s subscription hereunder, on a confidential basis, pursuant to the PCMLTF Act; to the best of your knowledge, none of the subscription funds to be provided hereunder (i) have been or will be obtained or derived, directly or indirectly, from or related to any activity that is deemed illegal under the laws of Canada or the United States or any other jurisdiction, or (ii) are being tendered on behalf of a Person or entity who has not been identified to you; you shall promptly notify the Corporation if you discover that any such representation ceases to be true, and shall provide the Corporation with appropriate information in connection therewith;

you have been advised to consult your own legal advisors with respect to the applicable hold periods imposed in respect of the Securities by the applicable Securities Laws and confirm that no representation by the Corporation has been made respecting the hold periods applicable to the Securities and you are solely responsible (and the Corporation is not responsible) for compliance with the applicable resale restrictions;

no Person has made to you any written or oral representations:

that any Person will resell or repurchase any of the Securities,

that any Person will refund the Purchase Price,

as to the future price or value of any of the Securities, or

that any of the Securities will be listed and posted for trading on a stock exchange or that application has been made to list and post any of the Securities for trading on a stock exchange;

you acknowledge that you have not received an offering memorandum, prospectus or other disclosure document in respect of the Purchased Securities or the Corporation describing the business and affairs of the Corporation in order to assist you in making an investment decision in respect of the Purchased Securities, that you have had access to the Corporation’s public filings on the Internet at ▇▇▇.▇▇▇▇▇.▇▇▇ and that you have not become aware of any advertisement in printed media of general and regular paid circulation, radio or television with respect to the distribution of the Purchased Securities;

you have no knowledge of a “material fact” or “material change” (as those terms are defined in the Securities Laws) in the affairs of the Corporation that has not been generally disclosed to the public;

your decision to purchase the Purchased Securities has not been made as a result of any verbal or written representation as to fact or otherwise made by or on behalf of the Corporation or any other Person and is based entirely upon the representations, warranties and covenants of the Corporation provided to the Subscriber in this Agreement and on currently available public information concerning the Corporation;

this subscription is irrevocable subject to the Subscriber’s right to withdraw and to terminate the obligations as set out in this Agreement and requires acceptance by the Corporation and acceptance of the Stock Exchanges;

the acceptance of this subscription will be conditional upon the sale of the Purchased Securities to you being exempt from the prospectus and registration requirements under applicable Securities Laws;

if you are:

a corporation, you are duly incorporated and are validly subsisting under the laws of your jurisdiction of incorporation and have all requisite legal and corporate power and authority to execute and deliver this Agreement, to subscribe for the Purchased Securities as contemplated herein and to carry out and perform your covenants and obligations under the terms of this Agreement and the entering into of this Agreement and the transactions contemplated hereby will not result in the violation of any of the terms and provisions of any law applicable to, or the constating documents of, you or any agreement, written or oral, to which you may be a party or by which you are or may be bound,

a partnership, syndicate or other form of unincorporated organization, you have the necessary legal capacity and authority to execute and deliver this Agreement and to observe and perform your covenants and obligations hereunder and have obtained all necessary approvals in respect thereof, or

an individual, you are of full age of majority and have the legal capacity and competence to enter into and to execute this Agreement and to observe and perform your covenants and obligations hereunder;

this Agreement has been duly executed and delivered by you and constitutes a legal, valid and binding obligation of you enforceable against you in accordance with the terms hereof;

if required by applicable Securities Laws, policy or order or by any Commission, stock exchange or other Regulatory Authority, you will execute, deliver, file and otherwise assist the Corporation in filing, such reports, undertakings and other documents with respect to the issue of the Purchased Securities as may be required;

the Purchased Securities are highly speculative in nature and you have such sophistication and experience in business and financial matters as to be capable of evaluating the merits and risks of this investment and you are able to bear the economic risk of loss of this investment;

this subscription is not enforceable by you unless it has been accepted by the Corporation and you waive any requirement on the Corporation’s behalf to immediately communicate its acceptance of this subscription to you;

in connection with your subscription, you have not relied upon the Corporation for investment, legal, tax advice or other professional advice, and have in all cases sought or elected not to seek the advice of your own personal investment advisers, legal counsel and tax advisers and you are able, without impairing your financial condition, to bear the economic risk of, and withstand a complete loss of, the investment and you can otherwise be reasonably assumed to have the capacity to protect your own interest in connection with your investment and you acknowledge that legal counsel retained by the Corporation is acting as counsel to the Corporation and not as counsel to you and you may not rely upon such counsel in any respect;

all costs and expenses incurred by you (including any fees and disbursements of any special counsel or other advisors retained by you) relating to the purchase of the Purchased Securities shall be borne by you;

you are not a “control person” of the Corporation as defined in the Securities Act (British Columbia) and will not become a “control person” by virtue of the purchase of any of the Purchased Securities and do not intend to act in concert with any other Person to form a control group of the Corporation;

this Agreement has been duly executed and delivered and, when accepted by the Corporation, will constitute your legal, valid and binding obligation enforceable against you in accordance with the terms hereof and, if you are acting on behalf of a Disclosed Purchaser, will constitute a legal, valid and binding obligation against such Disclosed Purchaser in accordance with the terms hereof;

the Subscriber acknowledges, represents, warrants, covenants and certifies to and with the Corporation that, if the Subscriber is a trust governed by a registered retirement savings plan, registered retirement income fund, deferred profit sharing plan, tax-free savings account, registered disability savings plan or registered education savings plan as defined in the Income Tax Act (Canada) (a “Plan”), then (a) each Person who is an annuitant, a beneficiary, an employer or a subscriber under such Plan deals at arm’s length with the Corporation at all relevant times, and (b) the specific provisions of the Plan permit the investment in the Purchased Securities; and

the above representations, warranties, covenants and acknowledgements in this section will be true and correct both as of the execution of this subscription and as of the Closing Date.

the Corporation is a valid and subsisting company and in good standing under the laws of the Province of British Columbia;

the Corporation is duly registered and licensed to carry on business in each jurisdiction in which it carries on business or owns property where required under the laws of that jurisdiction;

all financial statements, information circulars, press releases, material change reports and other documents filed by or on behalf of the Corporation within the past 12 months with the Stock Exchanges and any of the Commissions (the “Disclosure Record”) were true and correct in all material respects and did not contain any misrepresentation (as defined in the Securities Act (British Columbia)) as at the respective dates of such filings;

except as qualified by the disclosure in the Disclosure Record, the Corporation is the beneficial owner of the business and assets or the interests in the properties, business or assets referred to in the Disclosure Record;

the financial statements of the Corporation contained in the Disclosure Record, filed with any of the Commissions have all been prepared in accordance with Canadian generally accepted accounting principles, accurately reflect the financial position and all known material liabilities (accrued, absolute, contingent or otherwise) of the Corporation in all material respects as of the date thereof, and no adverse material changes in the financial position of the Corporation have taken place since the date thereof other than has been subsequently disclosed in the Disclosure Record;

the Corporation has complied and will comply fully with the requirements of all applicable corporate and securities laws and administrative policies and directions, including, without limitation, the Securities Laws and the Business Corporations Act (British Columbia) in relation to the issue and trading of its securities and in all matters relating to the private placement of the Offered Securities;

there is not presently any material change, as defined in the Securities Laws, relating to the Corporation or change in any material fact, as defined in the Securities Laws, relating to any of the Purchased Securities, which has not been fully disclosed in accordance with the requirements of the Securities Laws and the policies of the Stock Exchanges;

the issue and sale of the Offered Securities by the Corporation does not and will not conflict with, and does not and will not result in a material breach of, any of the terms of the Corporation’s constating documents or any agreement or instrument to which the Corporation is a party or by which it is bound;

the Corporation is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Corporation’s knowledge, no such actions, suits or proceedings are contemplated or have been threatened;

there are no judgments against the Corporation which are unsatisfied, nor is the Corporation subject to any consent decrees or injunctions;

this Agreement has been or will be at the Closing Date duly authorized by all necessary corporate action on the part of the Corporation, and the Corporation has full corporate power and authority to undertake the Offering;

to the Corporation’s knowledge, it is not in material default of any of the requirements of the Securities Laws or any of the administrative policies or notices of the Stock Exchanges;

to the Corporation’s knowledge, no order ceasing or suspending trading in securities of the Corporation nor prohibiting the sale of such securities has been issued to and is outstanding against the Corporation or its directors, officers or promoters; and

except for as provided in the Disclosure Record, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Corporation, or any other security convertible into or exchangeable for any such shares, or to require the Corporation to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital.

Finder’s Fee

The Subscriber and, if applicable, the Disclosed Purchaser through the Subscriber acting as its agent, understands and acknowledges that upon Closing of the Offering, the Corporation may pay a finder’s fee to certain third parties payable in cash or through the issuance of securities of the Corporation or a combination thereof, in connection with proceeds received by the Corporation from the sale of Units to Subscribers, other than any insiders, introduced to the Corporation by such third party. All payments and issuances of securities to any third party are subject to acceptance by the Stock Exchanges, as applicable.

General

Headings: The division of this Agreement into articles and sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The terms “this Agreement,” “hereof,” “hereunder”, “herein” and similar expressions refer to this Agreement and not to any particular article, section or other portion hereof and include any agreement supplemental thereto and any exhibits attached hereto. Unless something in the subject matter or context is inconsistent therewith, reference herein to articles, sections and paragraphs are to articles, sections, subsections and paragraphs of this Agreement.

Number and Gender: Words importing the singular number only shall include the plural and vice versa, words importing the masculine gender shall include the feminine gender and neuter and vice versa.

Severability: If one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality or enforceability of the remaining provisions hereof shall not be affected or impaired thereby. Each of the provisions of this Agreement is hereby declared to be separate and distinct.

Notices: All notices or other communications to be given hereunder shall be delivered by hand or by facsimile, and if delivered by hand, shall be deemed to have been given on the date of delivery or, if sent by facsimile, on the date of transmission if sent before 5:00 p.m. and such day is a Business Day or, if not, on the first Business Day following the date of transmission.

Notices to the Corporation shall be addressed to:

Notices to the Subscriber shall be addressed to the address of the Subscriber set out on the execution page hereof.

Either the Corporation or the Subscriber may change its address for service aforesaid by notice in writing to the other party hereto specifying its new address for service hereunder.

Further Assurances: Each party hereto shall from time to time at the request of the other party hereto do such further acts and execute and deliver such further instruments, deeds and documents as shall be reasonably required in order to fully perform and carry out the provisions of this Agreement. The parties hereto agree to act honestly and in good faith in the performance of their respective obligations hereunder.

Successors and Assigns: Except as otherwise provided, this Agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.

Assignment: This Agreement is not assignable or transferable by the parties hereto without the express written consent of the other party to this Agreement.

Notification of Changes: The parties hereby covenant and agree to notify the other party upon the occurrence of any event prior to the Closing which would cause any party’s representations, warranties or covenants contained in this Agreement to be false or incorrect in any material respect.

Entire Agreement: The terms of this Agreement express and constitute the entire agreement between the parties hereto with respect to the subject matter hereof and no implied term or liability of any kind is created or shall arise by reason of anything in this Agreement.

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

Amendments: The provisions of this Agreement may only be amended with the written consent of all of the parties hereto.

Survival: Notwithstanding any other provision of this Agreement, the representations, warranties, covenants and indemnities of or by the Corporation, the Subscriber and the Disclosed Purchaser contained herein or in any certificate, document or instrument delivered pursuant hereto shall survive the completion of the transactions contemplated by this Agreement.

Governing Law and Venue: The contract arising out of this Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein, governing contracts made and to be performed wholly therein, and without reference to its principles governing the choice or conflict of laws. The parties hereto irrevocably attorn and submit to the exclusive jurisdiction of the courts of the Province of British Columbia, sitting in the City of Vancouver, with respect to any dispute related to or arising from this Agreement.

Counterparts and Delivery: This Agreement may be executed in two or more counterparts which when taken together shall constitute one and the same agreement. Delivery of counterparts may be effected by facsimile or other electronic transmission thereof.

Facsimile or Electronic Copies: The Corporation shall be entitled to rely on a facsimile or other form of electronic copy of an executed Agreement and acceptance by the Corporation of such facsimile or electronic copy of the Agreement shall be legally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms thereof. If less than a complete copy of this Agreement is delivered to the Corporation at Closing, the Corporation and its advisors are entitled to assume that the Subscriber accepts and agrees to all of the terms and conditions of the pages not delivered at Closing unaltered.

Regulatory Approval/Acceptance: Without limitation, this Agreement and the transactions contemplated hereby are conditional upon receipt by the Corporation of the conditional acceptance from the TSX and approval from the Amex to the Offering.

Language: The Subscriber acknowledges that the Subscriber has consented to and requested that all documents evidencing or relating in any way to the issuance of the securities be drawn up in the English language only. Le soussigne reconnait par les presentes avoir consenti et exige que tous les documents faisant foi ou se rapportant de quelque maniere a la vente des titres offerts soient rediges en anglais seulement.

a Canadian financial institution, or a Schedule III of the Bank Act (Canada);

the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada);

a subsidiary of any Person referred to in paragraphs (a) to (b), if the Person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary;

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

an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a Person referred to in paragraph (d);

the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada;

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

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

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

an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000;

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

an individual who, either alone or with a spouse, has net assets of at least $5,000,000;

a Person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements;

an investment fund that distributes or has distributed its securities only to:

a Person that is or was an accredited investor at the time of the distribution;

(ii)

a Person that acquires or acquired securities in the circumstances referred to in sections 2.10 Minimum amount investment; or2.19 Additional investment in investment funds of NI 45-106; or

a Person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 Investment fund reinvestment of NI 45-106;

an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt;

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

a Person acting on behalf of a fully-managed account managed by that Person, if that Person:

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

in Ontario, is purchasing a security that is not a security of an investment fund;

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

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

a Person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are Persons that are accredited investors;

an investment fund that is advised by a Person registered as an adviser or a Person that is exempt from registration as an adviser; or

a Person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor.

one of them is the subsidiary of the other, or

each of them is controlled by the same Person;

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

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

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

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

a Person that is registered as an investment dealer and authorized to give advice with respect to the type of security being distributed; and

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

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

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

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

that does not invest;

for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund; or

for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund; and

that is not a mutual fund;

liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets; or

liabilities that are secured by financial assets;

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

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

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

a founder of the Corporation; or

an affiliate of a founder of the Corporation; or

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

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it is purchasing the Purchased Securities for its own account, or for the account of the Disclosed Purchaser named on page ii of the Subscription Agreement in a transaction in which the Subscriber is exercising sole investment discretion with respect to the purchase of the Purchased Securities and, in any case, the Purchased Securities are being purchased for investment purposes only and not with a view to resale or distribution or for the account or benefit of anyone other than the Subscriber and the Disclosed Purchaser named in the Subscription Agreement, if any. Neither the Subscriber nor the Disclosed Purchaser has any intention to distribute either directly or indirectly any of the Purchased Securities in the United States; provided, however, that this paragraph shall not restrict the Subscriber or the Disclosed Purchaser from selling or otherwise disposing of any of the Purchased Securities pursuant to registration thereof pursuant to the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements;

the Subscriber and the Disclosed Purchaser for whose account it is purchasing the Purchased Securities, if any, is a U.S. Accredited Investor that satisfies one or more of the categories of U.S. Accredited Investor as indicated below (the Subscriber must initial on the appropriate line(s) and, if there is a Disclosed Purchaser, the Subscriber must ▇▇▇▇ “S” beside the category applicable to the Subscriber and “DP” beside the category applicable to the Disclosed Purchaser):

A bank, as defined in Section 3(a)(2) of the 1933 Act, whether acting in its individual or fiduciary capacity; or

A savings and loan association or other institution as defined in Section 3(a)(5)(A) of the 1933 Act, whether acting in its individual or fiduciary capacity; or

A broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934, as amended; or

An insurance company as defined in Section 2(a)(13) of the 1933 Act; or

An investment company registered under the United States Investment Company Act of 1940; or

A business development company as defined in Section 2(a)(48) of the United States Investment Company Act of 1940; or

A small business investment company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the United States Small Business Investment Act of 1958; or

A plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, with total assets in excess of U.S. $5,000,000; or

An employee benefit plan within the meaning of the United States Employee Retirement Income Security Act of 1974 in which the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or an employee benefit plan with total assets in excess of U.S. $5,000,000 or, if a self-directed plan, with investment decisions made solely by Persons who are U.S. Accredited Investors; or

A private business development company as defined in Section 202(a)(22) of the United States Investment Advisers Act of 1940; or

An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of U.S. $5,000,000; or

A trust, with total assets in excess of U.S. $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated Person as described in Rule 506(b)(2)(ii) under the 1933 Act which, without restricting the generality of the foregoing, but for clarity in this Agreement, means a Person who has such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of an investment in these securities;

Any director or executive officer of the Corporation; or

Any natural Person whose individual net worth (excluding the net value of the primary residence of the natural Person, with such value being net of any mortgage or other indebtedness secured by the natural Person’s primary residence), or joint net worth with that Person’s spouse, at the time of his or her purchase exceeds U.S. $1,000,000; or

A natural Person who had an individual income in excess of U.S. $200,000 in each of the two most recent years or joint income with that Person’s spouse in excess of U.S. $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or

An entity in which all of the equity owners are U.S. Accredited Investors.

it understands that upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. state securities laws and regulations, the certificates representing the Securities, and all securities issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form:

provided, that if the Securities are being sold under clause (B) above, at a time when the Corporation is a “foreign issuer” as defined in Rule 902 of Regulation S under the 1933 Act, the legend set forth above may be removed by providing a declaration to the Corporation and its registrar and transfer agent in the form attached hereto as Appendix 1 or such other evidence of exemption as the Corporation or its registrar and transfer agent may from time to time prescribe (which may include an opinion satisfactory to the Corporation and its registrar and transfer agent), to the effect that the sale of the Securities is being made in compliance with Rule 904 of Regulation S under the 1933 Act; provided further, that if any of the Securities are being sold pursuant to Rule 144 of the 1933 Act and in compliance with any applicable state securities laws, the legend may be removed by delivery to the Corporation’s registrar and transfer agent of an opinion satisfactory to the Corporation and its registrar and transfer agent to the effect that the legend is no longer required under applicable requirements of the 1933 Act or state securities laws;

it understands that none of the Securities to be issued and delivered to the Subscriber hereunder have been or will be registered under the 1933 Act or under any state securities laws and, accordingly, the Securities are subject to restrictions on transferability and resale, and it agrees not to offer, sell or otherwise transfer any of the Securities except as permitted by paragraph (c) above and the legend included therein;

it has had the opportunity to ask questions of and receive answers from the Corporation regarding the investment, and has received all the information regarding the Corporation that it has requested;

it consents to the Corporation making a notation on its records or giving instruction to the registrar and transfer agent of the Corporation in order to implement the restrictions on transfer with respect to the Securities set forth and described herein;

it understands and acknowledges that the Corporation has no obligation or present intention of filing with the United States Securities and Exchange Commission or with any state securities administrator any registration statement in respect of resales of the Securities in the United States;

the office or other address of the Subscriber at which the Subscriber received and accepted the offer to purchase the Units is the address listed as the “Subscriber’s Residential or Head Office Address” on the first page of the Subscription Agreement;

it understands and agrees that there may be material tax consequences to the Subscriber and the Disclosed Purchaser, if any, of an acquisition, disposition or exercise, as applicable, of the Shares, Warrants and Warrant Shares; the Corporation gives no opinion and makes no representation with respect to the tax status of the Corporation or the consequences to the Subscriber or the Disclosed Purchaser under United States, state, local or foreign tax law of the Subscriber’s acquisition or disposition or exercise, as applicable, of the Securities, including whether the Corporation will at any given time be deemed a “passive foreign investment company” within the meaning of Section 1297 of the United States Internal Revenue Code;

it understands and acknowledges that the Corporation is not obligated to remain a “foreign issuer” as defined in Rule 902 under the 1933 Act;

it understands that (i) the Corporation may be deemed to be an issuer that is, or that has been at any time previously, an issuer with no or nominal operations and no or nominal assets other than cash and cash equivalents (a “Shell Company”), (ii) if the Corporation is deemed to be, or to have been at any time previously, a Shell Company, Rule 144 under the 1933 Act may not be available for resales of the Securities, and (iii) the Corporation is not obligated to make Rule 144 under the 1933 Act available for resales of the Securities;

it understands and agrees that the financial statements of the Corporation have been prepared in accordance with Canadian generally accepted accounting principles, which differ in some respects from United States generally accepted accounting principles, and thus may not be comparable to financial statements of United States companies;

it understands and agrees that the certificates representing the Warrants, and all certificates issued in exchange therefor or in substitution thereof, shall bear the following legend:

it understands and agrees that the Warrants may not be exercised by or on behalf of a U.S. Person or a Person in the United States unless an exemption is available from the registration requirements of the 1933 Act and the securities laws of all applicable states, and the holder has furnished an opinion of counsel satisfactory to the Corporation to such effect; provided, however, that the Subscriber will not be required to furnish an opinion of counsel in connection with its exercise of the Warrants solely for its own account or for the account of the Disclosed Purchaser named on page ii of this Subscription Agreement, if any, at a time when it remains and such Disclosed Purchaser, if any, remains a U.S. Accredited Investor;

it has not purchased the Units as a result of any form of general solicitation or general advertising (as such terms are used under Rule 502(c) of Regulation D), including any advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, television or internet or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; and

it acknowledges that the representations, warranties and covenants contained in this Schedule are made by it with the intent that they may be relied upon by the Corporation in determining its eligibility and the eligibility of the Disclosed Purchaser, if any, to purchase Units. It agrees that by accepting Units it shall be representing and warranting that the representations and warranties above are true as at the Closing with the same force and effect as if they had been made by it at the Closing and that they shall survive the purchase by it of Units and shall continue in full force and effect notwithstanding any subsequent disposition by it of the Securities.