Exhibit 10.4

 

SUBSCRIPTION AGREEMENT

 

A completed and originally executed copy of this Subscription Agreement, the
Confirmation of Status as U.S. “Accredited Investor” attached as Schedule ”A”
and if the Purchaser is a resident of any Canadian jurisdiction, the
Confirmation of Status as Canadian “Accredited Investor” attached as
Schedule ”B”, must be delivered by no later than 4:30 p.m. (Vancouver time) on
September 21, 2005 to:

 

Global Resource Investments Ltd.
7770 El Camino Real

Carlsbad, CA 92009

Attention:  Gretchen Carter
Fax:  (760) 943-3940

Phone:  (760) 943-3939

Issuer: Vista Gold Corp.

Issue:

Units, each unit consisting of one Share (as defined below) and one Warrant (as
defined below)

 

 

 

Price per Unit: U.S.$3.60

Total Subscription Price: U.S.$                  

 

 

Number of Units:

 

 

Name and Address of Purchaser:

 

Name:

Address:

 

 

 

 

(Street Address)

 

 

 

 

 

 

 

(City and State/Province or Country)

 

 

 

 

 

 

 

(Zip Code/Postal Code)

 

 

 

 

 

 

 

Alternate Registration Instructions for Certificates:  If other than in the name
of the Purchaser:

 

Name:

Address:

 

 

 

 

(Street Address)

 

 

 

 

 

 

 

(City and State/Province or Country)

 

 

 

 

 

 

 

(Zip Code/Postal Code)

 

 

Delivery Instructions:  The name and address (including contact name and
telephone number) of the person to whom the certificates representing the Shares
and Warrants are to be delivered, if other than the Purchaser:

 

Name:

Address:

 

 

 

 

(Street Address)

 

 

 

 

 

 

 

(City and State/Province or Country)

 

 

 

 

 

 

 

(Zip Code/Postal Code)

 

 

Number and type of securities of Vista Gold Corp. presently held directly and
indirectly:

 

Type of Security

 

Number

Common shares

 

 

Convertible security (including warrants)

 

 

 

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TO:                                                                         
VISTA GOLD CORP.

 

1.                                                                                      
Subscription.  The undersigned (the “Purchaser”) hereby tenders to Vista Gold
Corp. (the “Corporation”) this subscription offer which, upon acceptance by the
Corporation, will constitute an agreement (the “Subscription Agreement”) of the
Purchaser with the Corporation to purchase from the Corporation and, on the part
of the Corporation, to sell to the Purchaser, the Units (as defined below) set
out on the cover page hereof (the “Purchaser’s Units”) at the price of U.S.$3.60
per Unit (the “Purchase Price”), all on the terms and subject to the conditions
set forth in this Subscription Agreement.  Each Unit will consist of one Share
(as defined below) and one Warrant (as defined below).

 

2.                                                                                      
Acknowledgement.  The Purchaser acknowledges that the Purchaser’s Units will be
issued in connection with the creation and issuance of an aggregate of up to
2,168,812 Units for an aggregate subscription price of up to U.S.$7,807,723.20
to be sold by the Corporation by private placement (the “Offering”) and that the
Corporation has agreed to pay Global Resource Investments Ltd. a finder’s fee,
payable in cash, equal to 6% of the gross proceeds received by the Corporation
in connection with the Offering and pay Quest Securities Corporation (together
with Global Resource Investments Ltd., the “Finders”) a finder’s fee, payable in
broker’s warrants, equal to 10% of the number of Units issued as part of the
Offering, as consideration for the Finders introducing the Purchaser and other
Purchasers to the Corporation.  The Purchaser acknowledges that the Finders and
its related entities and their respective officers and directors, directly or
indirectly, hold Shares or securities convertible into or exercisable for Shares
of the Corporation.  In addition, the Purchaser acknowledges that the definitive
terms and conditions and form of the Warrants will be set forth in the Warrant
Indenture (as defined below).

 

3.                                                                                      
Definitions.  In this Subscription Agreement, unless the context otherwise
requires:

 

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

 

(b)                                 “1934 Act” means the Securities Exchange Act
of 1934, as amended, of the United States;

 

(c)                                  “affiliate”, “associate”, “distribution”
and “insider” have the respective meanings ascribed to them in the Securities
Act (British Columbia);

 

(d)                                 “Closing” means the completion of the issue
and sale by the Corporation, and the purchase by the Purchasers, of the Units;

 

(e)                                  “Closing Date” means September 23, 2005 or
such other date as the Corporation and the Finders may agree but in any event,
such date shall be no later than October 7, 2005 without approval from the
Toronto Stock Exchange;

 

(f)                                    “Closing Time” means 9:00 a.m. (Vancouver
time) on the Closing Date or such other time as the Corporation and the Finders
may agree;

 

(g)                                 “Exchanges” means the Toronto Stock Exchange
and the American Stock Exchange;

 

(h)                                 “Financial Statements” means the audited
annual financial statements of the Corporation as at and for the year ended
December 31, 2004 and the unaudited financial statements of the Corporation as
at and for the six month period ended June 30, 2005;

 

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(i)                                     “International Jurisdiction” means a
country other than Canada or the United States;

 

(j)                                     “International Securities Laws” means
any securities laws having application to the Purchaser and the purchase by the
Purchaser of the Purchaser’s Units other than the laws of Canada or the United
States, and all regulatory notices, orders, regulations, policies and other
instruments incidental thereto;

 

(k)                                  “MI 45-102” means Canadian Multilateral
Instrument 45-102 Resale of Securities;

 

(l)                                     “Public Record” means the prospectuses,
annual reports, quarterly reports, current reports, annual information forms,
offering memoranda, proxy statements, material change reports, press releases
and technical reports filed by or on behalf of the Corporation with the
Exchanges, any applicable Canadian securities regulatory authority and the SEC
during the 12 months preceding the date hereof;

 

(m)                               “Purchasers” means all purchasers of the
Units, including the Purchaser hereunder;

 

(n)                                 “Registration Statement” means a
registration statement under the 1933 Act relating to the Shares and the Warrant
Shares;

 

(o)                                 “Regulation S” means Regulation S under the
1933 Act;

 

(p)                                 “Reporting Provinces” means the Provinces of
British Columbia and Ontario;

 

(q)                                 “SEC” means the United States Securities and
Exchange Commission;

 

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

 

(s)                                  “Shares” means common shares without par
value in the capital of the Corporation;

 

(t)                                    “Trustee” means Computershare Trust
Company of Canada;

 

(u)                                 “Underlying Securities” means collectively,
the Shares, the Warrants and the Warrant Shares;

 

(v)                                 “Unit” means one Share and one Warrant;

 

(w)                               “United States” means the United States as
that term is defined in Regulation S;

 

(x)                                   “U.S. Person” means a U.S. person as that
term is defined in Regulation S;

 

(y)                                 “Warrant Indenture” means the indenture to
be dated as of the Closing Date, and to be entered into between the Corporation
and the Trustee pursuant to which the Warrants will be issued;

 

(z)                                   “Warrant Shares” means the Shares issuable
upon exercise of the Warrants in accordance with their terms; and

 

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(aa)                            “Warrants” means the common share purchase
warrants of the Corporation comprising part of the Units to be issued by the
Corporation hereunder and having the characteristics described in section 4
below.

 

4.                                                                                      
Warrant Indenture.  The Warrants will be represented and governed by the Warrant
Indenture.  The Warrant Indenture will contain provisions to the following
effect:

 

(a)                                  Right to Shares - Each whole Warrant will
be exercisable to acquire, subject to adjustment as set out in the Warrant
Indenture, one Warrant Share at any time from the Closing Date until 4:30 p.m.
(Vancouver time) on the day which is 24 months after the Closing Date at the
price of U.S.$4.10 per Warrant Share (in this Section 4, the “Exercise Price”),
subject to the Warrant Trigger (as defined below).

 

If at any time after the date that is six months after the date that the
Registration Statement is declared effective by the SEC, the closing trading
price of the Shares on the American Stock Exchange is U.S.$5.40 or greater for a
period of 20 consecutive trading days (in this Section 4, such event the
“Warrant Trigger”), the Corporation will have the option for a period of 15
business days after the end of such period to request that the Warrants be
exercised within 15 business days of the date the Corporation provides notice
that the Warrant Trigger has occurred.  If the Warrants are not exercised within
15 business days following this notice, the Warrants will expire.

 

(b)                                 Adjustment Provisions - The number of
Warrant Shares issuable on the exercise of a Warrant and the Exercise Price will
be subject to adjustment in certain events, including the subdivision,
consolidation, change or reclassification of Shares, the issue of the Shares by
way of stock dividends other than dividends paid in the ordinary course, and the
distribution to all or substantially all the holders of the Shares of rights
entitling them to subscribe for or purchase Shares at a price that is less than
95% of the then current market price of the Shares.

 

(c)                                  Amendment of Warrant Indenture - The
Corporation and the Trustee may amend or correct the Warrant Indenture or any
supplemental indenture or the rights of the holders of the Warrants in certain
ways which, in general, do not affect the substance thereof or do not prejudice
the holders of Warrants.  Otherwise, the Corporation and the Trustee may only
amend the Warrant Indenture or any supplemental indenture or the rights of the
holders of the Warrants with approval of the holders of the Warrants given by
resolution passed at a meeting at which a quorum is present pursuant to the
terms of the Warrant Indenture by the affirmative votes of holders of 66.67% of
the Warrants voted at the meeting or consented to in writing by the holders of
66.67% of the Warrants then outstanding.

 

(d)                                 Dividends - Warrants that are exercised will
not be entitled to any cash or stock dividends or any other distributions paid
or declared but unpaid on the Shares during the period from the Closing Date to
the time of such exercise.

 

(e)                                  Other Provisions - The provisions of the
Warrant Indenture and the attributes and characteristics of the Warrants
represented thereby will be substantially as described herein.

 

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5.                                                                                      
Delivery and Payment.  The Purchaser agrees that the following shall be
delivered to the Finders, care of Global Resource Investments Ltd. at the
address and by the date and time set out on the cover page hereof, or such other
place, date or time as the Finders may advise:

 

(a)                                  a completed and duly signed copy of this
Subscription Agreement;

 

(b)                                 a completed and duly signed copy of the
Confirmation of Status as U.S. “Accredited Investor” attached hereto as
Schedule ”A”;

 

(c)                                  if the Purchaser is a resident of any
Canadian jurisdiction, a completed and duly signed copy of the Confirmation of
Status as Canadian “Accredited Investor” attached hereto as Schedule ”B”;

 

(d)                                 all other documentation as may be required
by applicable securities laws; and

 

(e)                                  a wire transfer in United States currency
made payable to the Corporation in accordance with the instructions provided by
the Finders, representing the aggregate Purchase Price for the Purchaser’s
Units, or such other method of payment against delivery of the Units as the
Corporation may accept.

 

The Purchaser acknowledges and agrees that such undertakings, questionnaires and
other documents, when executed and delivered by the Purchaser, will form part of
and will be incorporated into this Subscription Agreement with the same effect
as if each constituted a representation and warranty or covenant of the
Purchaser hereunder in favour of the Corporation.  The Purchaser consents to the
filing of such undertakings, questionnaires and other documents and personal
information as may be required to be filed with any stock exchange or securities
regulatory authority in connection with the transactions contemplated hereby.

 

6.                                                                                      
Closing.  The transactions contemplated hereby will be completed at the Closing
at the offices of Borden Ladner Gervais LLP in Vancouver, British Columbia,
Canada or at such other location as determined by the Corporation.  The
Purchaser acknowledges that the Purchaser’s Units will be available for delivery
to it at the Closing against payment of the amount of the aggregate Purchase
Price for the Purchaser’s Units.

 

7.                                                                                      
Representations and Warranties of the Corporation.  By accepting this offer, the
Corporation represents and warrants to the Purchaser as follows:

 

(a)                                  the Corporation has been duly incorporated
and is validly subsisting and in good standing under the Business Corporations
Act (Yukon Territory), and has all requisite corporate power and capacity to
enter into and carry out its obligations under this Subscription Agreement;

 

(b)                                 on the Closing Date, the Corporation will
have taken all corporate steps and proceedings necessary to approve the
transactions contemplated hereby, including the execution and delivery of this
Subscription Agreement;

 

(c)                                  the outstanding Shares are listed and
posted for trading on the Exchanges;

 

(d)                                 no order ceasing or suspending trading in
the securities of the Corporation nor prohibiting the sale of such securities
has been issued to the Corporation or its directors,

 

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officers or promoters and, to the best of the knowledge of the Corporation, no
investigations or proceedings for such purposes are pending or threatened;

 

(e)                                  prior to the Closing Date, the Corporation
will have obtained all required approvals from the Exchanges in order to permit
the completion of the transactions contemplated hereby;

 

(f)                                    the Corporation is a reporting issuer in
good standing under the securities laws of the Reporting Provinces and is a
reporting company under the 1934 Act, and no material change relating to the
Corporation has occurred with respect to which the requisite material change
report has not been filed under any applicable securities laws in the Reporting
Provinces and no such disclosure has been made on a confidential basis;

 

(g)                                 the Corporation has full corporate power and
authority to undertake the Offering, to issue the Securities, and at the Closing
Time, the Shares and the Warrants will be duly and validly created, authorized
and issued, and all Warrant Shares issuable upon exercise of the Warrants will
be duly and validly authorized, allotted and reserved for issuance upon exercise
of the Warrants and will, upon exercise of the Warrants be issued as fully-paid
and non-assessable Shares;

 

(H)                                   THE CORPORATION AND ITS SUBSIDIARIES ARE
THE BENEFICIAL OWNERS OF OR HAVE THE RIGHT TO ACQUIRE THE INTERESTS IN THE
PROPERTIES, BUSINESS AND ASSETS REFERRED TO IN THE PUBLIC RECORD, AND ANY AND
ALL AGREEMENTS PURSUANT TO WHICH THE CORPORATION OR ITS SUBSIDIARIES HOLDS OR
WILL HOLD ANY SUCH INTERESTS IN PROPERTIES, BUSINESS OR ASSETS ARE IN GOOD
STANDING IN ALL MATERIAL RESPECTS ACCORDING TO THEIR TERMS, AND THE PROPERTIES
ARE IN GOOD STANDING IN ALL MATERIAL RESPECTS UNDER THE APPLICABLE STATUTES AND
REGULATIONS OF THE JURISDICTIONS IN WHICH THEY ARE SITUATED;

 

(i)                                     the Public Record is in all material
respects accurate and omits no facts, the omission of which makes the Public
Record or any particulars therein, misleading or incorrect;

 

(j)                                     except as disclosed in the Public
Record, no actions, suits, inquiries or proceedings are pending or, to the
knowledge of the Corporation, are contemplated or threatened to which the
Corporation or its subsidiaries is a party or to which the property of the
Corporation or its subsidiaries is subject that would result individually or in
the aggregate in any material adverse change in the operations, business or
condition (financial or otherwise) of the Corporation or its subsidiaries;

 

(k)                                  the Financial Statements present fairly, in
all material respects, the financial position of the Corporation and its
subsidiaries on a consolidated basis as at the dates set out therein and the
results of their operations and the changes in their financial position for the
periods then ended, in accordance with Canadian generally accepted accounting
principles;

 

(l)                                     except as disclosed in the Public
Record, there has not been any material change in the assets, liabilities or
obligations (absolute, accrued, contingent or otherwise) of the Corporation or
its subsidiaries, as set forth in the Financial Statements, and there has not
been any material adverse change in the business, operations or condition
(financial or otherwise) or results of the operations of the Corporation or its
subsidiaries, since June 30, 2005 and since that date there have been no
material facts, transactions, events

 

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or occurrences which could materially adversely affect the business of the
Corporation or its subsidiaries;

 

(m)                               the Corporation and its subsidiaries have
conducted and are conducting their businesses in material compliance with all
applicable laws, by-laws, rules and regulations of each jurisdiction in which
their businesses are carried on and hold all licences, registrations, permits,
consents or qualifications (whether governmental, regulatory or otherwise)
required in order to enable their businesses to be carried on as now conducted
or as proposed to be conducted, and all such licences, registrations, permits,
consents and qualifications are valid and subsisting and in good standing and
neither the Corporation nor its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such license,
registration, permit, consent or qualification which, if the subject of an
unfavourable decision, ruling or finding, would materially adversely affect the
conduct of the business, operations, condition (financial or otherwise) or
income of the Corporation or its subsidiaries;

 

(n)                                 the Corporation has taken or will take all
steps as may be necessary for it to comply with the requirements of the
applicable securities laws of the Reporting Provinces, the United States and
such other jurisdictions in which the Units are sold, and the Corporation is
entitled to avail itself of the applicable prospectus and registration
exemptions available under the applicable securities laws of the Reporting
Provinces and the United States in respect of the offer and sale of the Units;
and

 

(o)                                the Corporation has filed all documents that
it is required to file under the continuous disclosure provisions of applicable
securities laws in Canada and the United States, including annual and interim
financial information and annual reports, press releases disclosing material
changes and material change reports, and all periodic reports  required by
Section 13(a) of the 1934 Act and the rules and regulations thereunder.

 

8.                                                                                      
Covenants of the Corporation.  The Corporation covenants and agrees with the
Purchaser as follows:

 

(a)                                  the Corporation will use commercially
reasonable efforts to have the Registration Statement declared effective by the
SEC within six months from the Closing Date, provided that the Corporation will
in no way be liable or responsible to the Purchaser if notwithstanding such
efforts such declaration does not occur within the foregoing time period or at
all;

 

(b)                                 the Corporation will comply with all filing
and other disclosure requirements under all applicable securities laws;

 

(c)                                  the Corporation will use commercially
reasonable efforts to maintain the listing of the Shares on the Exchanges until
the expiry date of the Warrants and for a period of 12 months thereafter; and

 

(d)                                 the Corporation will use commercially
reasonable efforts to maintain its status as a reporting issuer under applicable
securities legislation in the Reporting Provinces and as a reporting company
with the SEC, from the date hereof until the expiry date of the Warrants and for
a period of 12 months thereafter.

 

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9.                                                                                      
Conditions for the Benefit of the Purchaser.  The obligations of the Purchaser
to complete the purchase of the Purchaser’s Units as contemplated hereby shall
be conditional upon the fulfilment at or before the Closing Time, for the
exclusive benefit of the Purchaser, of each of the following conditions:

 

(a)                                  the representations and warranties of the
Corporation will be true and correct in all material respects as at the Closing
Date with the same force and effect as if such representations and warranties
had been made at and as of the Closing Date;

 

(b)                                 the Corporation will have, in all material
respects, performed and complied with all covenants and agreements contained in
this Subscription Agreement to be performed or complied with, or caused to be
performed or complied with, by the Corporation at or prior to the Closing;

 

(c)                                  all necessary corporate action will have
been taken by the Corporation to authorize the execution and delivery of this
Subscription Agreement, and to consummate the transactions contemplated by this
Subscription Agreement; and

 

(d)                                 the Purchaser shall have received an opinion
of legal counsel to the Corporation addressing matters related to this
Subscription Agreement and the transactions contemplated thereby, in such form
as is acceptable to the Finders or their counsel acting reasonably.

 

10.                                                                                
Conditions for the Benefit of the Corporation.  The acceptance of this offer and
the obligation of the Corporation to complete the issue and sale of the
Purchaser’s Units as contemplated hereby shall be conditional upon the
fulfilment at or before the Closing Time, for the exclusive benefit of the
Corporation, of each of the following conditions:

 

(a)                                  the representations and warranties of the
Purchaser will be true and correct in all material respects as at the Closing
Date with the same force and effect as if such representations and warranties
had been made at and as of the Closing Date;

 

(b)                                 the Purchaser will have, in all material
respects, performed and complied with all covenants and agreements contained in
this Subscription Agreement to be performed or complied with, or caused to be
performed or complied with, by the Purchaser at or prior to the Closing; and

 

(c)                                  all necessary corporate action, if any,
will have been taken by the Purchaser to authorize the execution and delivery of
this Subscription Agreement and to consummate the transactions contemplated by
this Subscription Agreement.

 

11.                                                                                
Acceptance or Rejection.  The Corporation will have the right to accept or
reject this offer at any time at or prior to the Closing Time.  The Purchaser
acknowledges and agrees that the acceptance of this offer will be conditional
upon the sale of the Purchaser’s Units to the Purchaser being exempt from any
prospectus or offering memorandum requirements of all applicable securities
laws.  The Corporation will be deemed to have accepted this offer upon the
Corporation’s execution of the acceptance form at the end of this Subscription
Agreement and the delivery at the Closing of the certificates representing
Shares and Warrants to, or upon the direction of, the Purchaser.

 

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12.                                                                                
Appointment of Finders.  The Purchaser (and if applicable, any others for whom
the Purchaser is contracting hereunder) hereby irrevocably authorizes the
Finders or the Finders’ representative:

 

(a)                                  to complete and correct any information
contained in this Subscription Agreement, and any other document prepared by the
Purchaser in connection with the Offering, which may require completion or
correction;

 

(b)                                 to negotiate and settle the form of the
Warrant Indenture and any other agreement entered into or to be entered into in
connection with this transaction;

 

(c)                                  to negotiate and waive, in whole or in
part, or extend the time for compliance with, any of the Corporation’s
representations, warranties or covenants, or any of the closing conditions,
given or made by the Corporation for the benefit of the Purchaser, all in such
manner and on such terms and conditions as the Finders may determine, acting
reasonably, without in any way affecting the Purchaser’s obligations or the
obligations of such others hereunder;

 

(d)                                 to accept delivery of documents and
securities at the Closing on behalf of the Purchaser and to execute and deliver
receipts therefor; and

 

(e)                                  to terminate this Subscription Agreement on
behalf of the Purchaser in the event that any condition precedent to the Closing
has not been satisfied by the date set therefor.

 

Although the Finders may have introduced the Purchaser to the Corporation, the
Purchaser acknowledges and agrees with, and for the benefit of, the Finders,
such acknowledgments and agreements to survive the Closing, that:

 

(a)                                  the Finders and their respective directors,
officers, employees, agents and representatives have no responsibility or
liability of any nature whatsoever for the accuracy, adequacy or completeness of
any Public Record or other publicly available information concerning the
Corporation, or as to whether all information concerning the Corporation that is
required to be publicly disclosed by it has been generally disclosed;

 

(b)                                 the Finders have not conducted any due
diligence or otherwise engaged in any independent verification or investigation
with respect to the information contained in the Public Record or any other
information regarding the Corporation, whether public or private, including the
representations and warranties of the Corporation herein;

 

(c)                                  the Purchaser (or if applicable, any others
for whom the Purchaser is contracting hereunder) has not received or been
provided with a prospectus, offering memorandum (within the meaning of the
securities laws of the Reporting Provinces, the United States and such other
jurisdictions in which the Units are being offered for sale) or similar document
and that the Purchaser’s decision, or, if applicable, the decision of others for
whom the Purchaser is contracting hereunder, to enter into this Subscription
Agreement and to purchase the Units from the Corporation is based entirely upon
the Public Record, and not upon any other verbal or written representation as to
fact or otherwise made by or on behalf of the Finders;

 

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(d)                                 legal counsel retained by the Finders are
acting as counsel to the Finders and not as counsel to the Purchaser, and the
Purchaser may not rely upon such counsel in any respect and the Purchaser should
obtain independent legal advice with respect to the investment in the Units; and

 

(e)                                  the Finders are entitled to rely on the
respective representations, statements, covenants and answers of the Purchaser
and the Corporation contained in this Subscription Agreement, and that the
Purchaser will hold harmless the Finders and the Corporation from any loss or
damage they may suffer whatsoever as a result of the Purchaser’s failure to
accurately complete any of the information required to be completed by the
Purchaser herein.

 

13.                                                                                
Purchaser’s Acknowledgements. The Purchaser acknowledges and agrees that as the
sale of the Purchaser’s Units will not be qualified by a prospectus, such sale
is subject to the condition that the Purchaser (or, if applicable, any others
for whom the Purchaser is contracting hereunder) sign and return to the
Corporation all relevant documentation required by applicable Canadian and
United States securities laws and the rules, regulations and policies of the
Exchanges.  The Purchaser acknowledges and agrees that the Corporation may be
required to provide to applicable securities regulatory authorities or the
Exchanges the identities of the beneficial purchasers of the Units and the
identities of all persons having a greater than a 10% beneficial interest in the
Purchaser.  Notwithstanding that the Purchaser may be purchasing Units as an
agent on behalf of an undisclosed principal, the Purchaser agrees to provide, on
request, particulars as to the identity of such undisclosed principal as may be
required by the Corporation in order to comply with the foregoing or any other
applicable laws, rules, regulations or policies.

 

In addition, the Purchaser acknowledges:

 

(a)                                  no securities commission or other
regulatory authority has reviewed or passed upon the merits of the Securities;

 

(b)                                 there is no government or other insurance
covering the Securities;

 

(c)                                  there are risks, including those set forth
in the Public Record, associated with the purchase of the Securities;

 

(d)                                 there are restrictions on the Purchaser’s
ability to resell the Securities and it is the responsibility of the Purchaser
to find out what those restrictions (whether U.S., Canadian or otherwise) are
and to comply with them before selling the Securities;

 

(e)                                  the Corporation has advised the Purchaser
that it is relying on an exemption from the requirements under applicable
securities laws to provide the Purchaser with a prospectus and to sell the
Securities through a person registered to sell securities under the applicable
securities laws, and other applicable legislation, and that as a consequence of
acquiring these securities pursuant to these exemptions, certain protections,
including statutory rights of rescission or damages, will not be available to
the Purchaser;

 

(f)                                 none of the Securities to be issued and
delivered to the Purchaser hereunder have been registered under the 1933 Act,
and accordingly the Securities are subject to restrictions on transferability
and resale and may not be offered, sold, gifted, pledged, hypothecated,
transferred, assigned or otherwise disposed of unless registered under the 1933
Act or

 

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pursuant to an exemption from the registration requirements of the 1933 Act. 
The certificates representing the Warrants shall bear the following legend,
which legend shall remain on the said certificates until compliance with the
terms thereof:

 

“UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS FOUR MONTHS
AND ONE DAY AFTER THE CLOSING DATE].

 

NEITHER THIS CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY NOR ANY
SECURITIES ISSUABLE UPON THE EXERCISE OF SUCH SECURITIES, NOR ANY INTEREST IN OR
RIGHTS UNDER SAME, HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE, AND
NEITHER THIS CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY NOR ANY
SECURITIES ISSUABLE UPON THE EXERCISE OF SUCH SECURITIES, NOR ANY INTEREST IN OR
RIGHTS UNDER SAME, MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE UNITED STATES STATE SECURITIES LAWS
COVERING ANY SUCH TRANSACTION, (B) RECEIPT BY THE CORPORATION OF AN ACCEPTABLE
LEGAL OPINION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR
(C) THE CORPORATION OTHERWISE SATISFYING ITSELF THAT SUCH TRANSACTION IS EXEMPT
FROM REGISTRATION .”,

 

and the certificates representing the Shares and the Warrant Shares shall bear
the following legend, which legend shall remain on the said certificates until
compliance with the terms thereof, provided that if Warrant Shares are not
issued within four months of the Closing Date the first and second paragraphs of
the following legend shall not appear on the certificates representing the
Warrant Shares:

 

“UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS FOUR MONTHS
AND ONE DAY AFTER THE CLOSING DATE].

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE
FACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF
TRANSACTIONS ON THE TSX.

 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES

 

10

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SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW.  NO
INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE UNITED STATES STATE SECURITIES LAWS
COVERING ANY SUCH TRANSACTION, (B) RECEIPT BY THE CORPORATION OF AN ACCEPTABLE
LEGAL OPINION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR
(C) THE CORPORATION OTHERWISE SATISFYING ITSELF THAT SUCH TRANSACTION IS EXEMPT
FROM REGISTRATION.”;

 

(g)                                 the first trade in any Canadian
jurisdiction, with the exception of Quebec, of the Securities acquired by the
Purchaser may only be made in accordance with the following rules:

 

(i)                                     the Corporation is and has been a
reporting issuer in a jurisdiction of Canada for the four months immediately
preceding the trade;

 

(ii)                                  at least four months have elapsed from the
distribution date of the Units;

 

(iii)                               the certificates representing the Securities
were issued carrying the legend as required in section 2.5(2)3(a) of MI 45-102;

 

(iv)                              the trade is not a “control distribution”
within the meaning of MI 45-102;

 

(v)                                 no unusual effort is made to prepare the
market or to create a demand for the Securities;

 

(vi)                              no extraordinary commission or other
consideration is paid in respect of the trade, and

 

(vii)                           if the Purchaser is an insider of the
Corporation, the Purchaser has no reasonable grounds to believe that the
Purchaser is in default of any securities laws.

 

14.                                                                                
Purchaser’s Representations and Warranties.  The Purchaser represents and
warrants to the Corporation, as representations and warranties that are true as
of the date of this offer and will be true as of the Closing Date, that:

 

(a)                                  Authorization and Effectiveness - if the
Purchaser is a corporation, the Purchaser is a valid and subsisting corporation,
has the necessary corporate capacity and authority to execute and deliver this
offer and to observe and perform its covenants and obligations hereunder and has
taken all necessary corporate action in respect thereof, or, if the Purchaser is
a partnership, syndicate or other form of unincorporated organization, the
Purchaser has the necessary legal capacity and authority to execute and deliver
this offer and to observe and perform its covenants and obligations hereunder
and has obtained all necessary approvals in respect thereof, and, in either
case, upon acceptance by the Corporation, this offer will constitute a legal,
valid and binding contract of the Purchaser enforceable against the Purchaser in
accordance with its terms;

 

11

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(b)                                 Residence - the Purchaser is a resident of
the jurisdiction referred to under “Name and Address of Purchaser” on the cover
page hereof;

 

(c)                                  Purchasing as Principal - except to the
extent contemplated in paragraph (e) below, the Purchaser is purchasing the
Purchaser’s Units as principal (as defined in all applicable securities laws)
for its own account and not for the benefit of any other person;

 

(d)                                 Purchasing for Investment Only - except to
the extent contemplated in paragraph (e) below, the Purchaser is purchasing the
Purchaser’s Units for investment only and not with a view to any resale,
distribution or other disposition in violation of Canadian, United States
federal or state, or other securities laws;

 

(e)                                  Purchasing as Agent or Trustee - in the
case of the purchase by the Purchaser of the Purchaser’s Units as agent or
trustee for any principal, each beneficial purchaser of the Purchaser’s Units
for whom the Purchaser is acting, is purchasing its Purchaser’s Units as
principal for its own account, and not for the benefit of any other person, for
investment only and not with a view to any resale, distribution or other
disposition, and the Purchaser has due and proper authority to act as agent or
trustee for and on behalf of such beneficial purchaser in connection with the
transactions contemplated hereby;

 

(f)                                    Purchaser Has Benefit of Statutory or
Other Exemptions - the Purchaser, and any beneficial purchaser referred to in
paragraph (e) above, is an “accredited investor” within the meaning of
Rule 501(a) of Regulation D under the 1933 Act (and has initialled and executed
Schedule ”A” hereto to confirm its representation and warranty regarding the
specific category or categories under which it so qualifies), and

 

(i)                                     if resident in any Canadian
jurisdiction, is an “accredited investor” within the meaning of National
Instrument 45-106 Registration and Prospectus Exemptions (and has completed and
duly signed Schedule ”B” hereto to confirm its representation and warranty
regarding the specific category or categories under which it so qualifies), and
has not been created, and is not being used, solely to purchase or hold
securities as an “accredited investor”, or

 

(ii)                                  if resident in an International
Jurisdiction

 

(A)                              is knowledgeable of, or has been independently
advised as to, the International Securities Laws, if any, which apply to the
Purchaser and the purchase by the Purchaser of the Purchaser’s Units (and the
issuance of the Underlying Securities),

 

(B)                                is purchasing the Purchaser’s Units pursuant
to an exemption from any prospectus, registration or similar requirements under
International Securities Laws, or, if such is not applicable, the Purchaser is
permitted to purchase the Purchaser’s Units under International Securities Laws
without the need to rely on exemptions,

 

(C)                                International Securities Laws do not (or will
not) require the Corporation to make any filings or seek any approvals of any
kind whatsoever from any regulatory authority of any kind whatsoever in the
International Jurisdiction with respect to the purchase by the Purchaser of the

 

12

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Purchaser’s Units (or the issuance to the Purchaser of the Purchaser’s Units or
the Underlying Securities), and

 

(D)                               the distribution of the Units (and the
Underlying Securities) to the Purchaser by the Corporation complies (or will
comply) with all International Securities Laws, or

 

(iii)                                 has status as an exempt purchaser or the
equivalent under the securities legislation applicable to it, which status has
the effect of eliminating any requirement for a prospectus (or equivalent
document) in respect of the purchase of Units by the Purchaser and has provided
the Corporation with a copy of the document evidencing or confirming such
status, or

 

(iv)                              is purchasing pursuant to a statutory,
regulatory or other exemption, or an exemption order permitting such purchase,
which exemption or order has the effect of eliminating any requirement for a
prospectus (or equivalent document) or the involvement of a registrant in
respect of the purchase of Units by the Purchaser and has provided the
Corporation with a copy of the document evidencing such exemption or exemption
order;

 

(g)                                 Corporation or Unincorporated Organization -
if the Purchaser, or any beneficial purchaser referred to in
paragraph (e) above, is a corporation or a partnership, syndicate, trust or
other form of unincorporated organization and resident in any Canadian
jurisdiction, each member thereof is an “accredited investor” within the meaning
of National Instrument 45-106 Registration and Prospectus Exemptions;

 

(h)                                 Absence of Advertising - the offering and
sale of the Purchaser’s Units to the Purchaser were not made or solicited
through, and the Purchaser is not aware of, any advertisement of the Units in
printed public media, radio, television or telecommunications, including
electronic display (such as the Internet), or any other advertisement or general
solicitation with respect to the Units including any as contemplated under
Rule 502(c) under the 1933 Act;

 

(i)                                     No Undisclosed Information - the
Purchaser’s Units are not being purchased by the Purchaser as a result of any
material information concerning the Corporation that has not been publicly
disclosed and the Purchaser’s decision to tender this offer and acquire the
Purchaser’s Units has not been made as a result of any oral or written
representation as to fact or otherwise made by or on behalf of the Corporation,
the Finders or any other person and is based entirely upon currently available
public information concerning the Corporation;

 

(j)                                     Opportunity to Ask Questions – the
Purchaser, and any beneficial purchaser referred to in paragraph (e) above, has
been afforded by the Corporation the opportunity to ask questions and receive
answers concerning the terms and conditions of the Offering and verification of
the accuracy of the currently available public information concerning the
Corporation;

 

(k)                                  Investment Suitability - the Purchaser, and
any beneficial purchaser referred to in paragraph (e) above, has such knowledge
and experience in financial and business affairs as to be capable of evaluating
the merits and risks of the investment hereunder in the

 

13

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Purchaser’s Units (and the Underlying Securities) and is able to bear the
economic risk of loss of such investment;

 

(l)                                     Purchaser at Arm’s Length to Corporation
– the Purchaser, and any beneficial purchaser referred to in paragraph
(e) above, is not a director or officer of the Corporation or any affiliate or
associate thereof, does not beneficially own, directly or indirectly, more than
10% of the Shares of the Corporation or any affiliate or associate thereof, and
is otherwise at arm’s length to the Corporation and its affiliates and
associates;

 

(m)                               Source of Subscription Funds –

 

(i)                                     to the best of the Purchaser’s
knowledge, none of the subscription funds used for the purchase of the
Purchaser’s Units (in this Section 14, the “Subscription Funds”) (A) will
represent proceeds of crime for the purposes of the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act (Canada), (B) have been or will be
derived from or related to any activity that is deemed criminal under the laws
of Canada, the United States or any other jurisdiction, or (C) are being
tendered on behalf of a person or entity who has not been identified to the
Purchaser, and

 

(ii)                                  the Purchaser shall promptly notify the
Corporation if the Purchaser discovers that any of the representations in
paragraph (m)(i) above ceases to be true, and to provide the Corporation with
appropriate information in connection therewith; and

 

(n)                                 Compliance with Anti-Money Laundering
Legislation – if the Purchaser is a financial institution (including, without
limitation, broker-dealers and investment companies such as United States and
offshore unregistered hedge funds, funds-of-funds, commodity pools, private
equity funds and venture capital funds):

 

(i)                                     it seeks to comply with all applicable
laws concerning money laundering and related activities, including without
limitation, the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 of the United States
(popularly known as the “USA Patriot Act”),

 

(ii)                                  in furtherance of such efforts, to the
best of its knowledge based on appropriate diligence and investigation, none of
the Subscription Funds has been or will be derived from or related to any
activity that is deemed criminal under the laws of Canada or the United States,
and

 

(iii)                               it will promptly notify the Corporation if
the Purchaser discovers that any of the representations in this paragraph (n)
ceases to be true, and to provide the Corporation with appropriate information
in connection therewith.

 

14

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The Purchaser acknowledges and agrees that the foregoing representations and
warranties are made by it with the intention that they may be relied upon in
determining its eligibility or (if applicable) the eligibility of others on
whose behalf it is contracting hereunder to purchase the Purchaser’s Units under
relevant securities legislation.  The Purchaser further agrees that by accepting
delivery of the Purchaser’s Units on the Closing Date, it will be representing
and warranting that the foregoing representations and warranties are true and
correct as at the Closing Date with the same force and effect as if they had
been made by the Purchaser at the time of the Closing and that they will survive
the purchase by the Purchaser of the Purchaser’s Units and will continue in full
force and effect notwithstanding any subsequent disposition by the Purchaser of
the Purchaser’s Units.

 

15.                                                                                
No Investigation by Finders.  The Purchaser acknowledges and agrees that the
Finders assume no responsibility or liability of any nature whatsoever for the
accuracy, adequacy or completeness of any publicly available information
concerning the Corporation or as to whether all information concerning the
Corporation required to be disclosed by the Corporation has been generally
disclosed.  The Purchaser further acknowledges and agrees that the Finders have
not engaged in or conducted any independent investigation with respect to the
Corporation or any such information.

 

16.                                                                                
Resale Restrictions.  The Purchaser understands and acknowledges that the
Purchaser’s Units and Underlying Securities will be subject to certain resale
restrictions under applicable securities laws and the Purchaser agrees to comply
with such restrictions.  The Purchaser also acknowledges that it has been
advised to consult its own legal advisors with respect to applicable resale
restrictions and that it is solely responsible (and neither the Corporation nor
the Finders are in any manner responsible) for complying with such restrictions.
 Without limiting the foregoing, in particular, the Purchaser (or if applicable,
any others for whom the Purchaser is contracting hereunder) acknowledges that
the Purchaser has been independently advised as to or is aware of the
restrictions with respect to trading in, and the restricted period or statutory
hold period applicable to, the Shares, the Warrants and the Warrant Shares
imposed by the securities laws of the jurisdiction in which the Purchaser
resides or to which the Purchaser is subject and by the rules, regulations and
policies of the Exchanges, that a suitable legend or legends will be placed on
the certificates representing the Shares, the Warrants and, if necessary, the
Warrant Shares to reflect the applicable restricted period and statutory hold
period to which the Shares, the Warrants and, if applicable, the Warrant Shares
are subject, and that the Purchaser is hereby advised that during such period,
as applicable, such securities cannot be traded through the facilities of the
Exchanges as such securities are not freely transferable and consequently
delivery of the certificate representing such securities will not constitute
“good delivery” in settlement of transactions on either Exchange and that the
Exchanges will deem the Purchaser to be responsible for any loss incurred on a
sale made by the Purchaser in such securities.

 

17.                                                                                
No Revocation.  The Purchaser agrees that this offer is made for valuable
consideration and may not be withdrawn, cancelled, terminated or revoked by the
Purchaser.

 

18.                                                                                
Indemnity.  The Purchaser agrees to indemnify and hold harmless the Corporation
and the Finders and their directors, officers, employees, agents, advisers and
shareholders from and against any and all loss, liability, claim, damage and
expense whatsoever (including, but not limited to, any and all fees, costs and
expenses whatsoever reasonably incurred in investigating, preparing or defending
against any claim, law suit, administrative proceeding or investigation whether
commenced or threatened) arising out of or based upon any representation or
warranty of the Purchaser contained herein or in any document furnished by the
Purchaser to the Corporation or the Finders in connection herewith being untrue
in any material respect or any breach or failure by the Purchaser to comply with
any covenant or agreement made by the Purchaser herein or in any document
furnished by the Purchaser to the Corporation or the Finders in connection
herewith.

 

15

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19.                                                                                
COLLECTION OF PERSONAL INFORMATION.  THE PURCHASER ACKNOWLEDGES AND CONSENTS TO
THE FACT THAT THE CORPORATION IS COLLECTING THE PURCHASER’S 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, FEDERAL OR STATE LEGISLATION OR LAWS IN EFFECT IN CANADA OR THE
UNITED STATES FROM TIME TO TIME), (OR IF APPLICABLE, ANY OTHERS FOR WHOM THE
PURCHASER IS CONTRACTING HEREUNDER) FOR THE PURPOSES OF FULFILLING THE
TRANSACTIONS CONTEMPLATED HEREBY.  THE PURCHASER FURTHER ACKNOWLEDGES AND
CONSENTS TO THE FACT THAT THE CORPORATION MAY BE REQUIRED BY LAW TO PROVIDE
SECURITIES REGULATORY AUTHORITIES OR OTHER REGULATORY AGENCIES PURSUANT TO THE
PROCEEDS OF CRIME (MONEY LAUNDERING) AND TERRORIST FINANCING ACT (CANADA) WITH
ANY SUCH PERSONAL INFORMATION.  THE PURCHASER, AND IF APPLICABLE, ANY OTHERS FOR
WHOM THE PURCHASER IS CONTRACTING HEREUNDER ACKNOWLEDGES AND CONSENTS TO THE
CORPORATION AND THE FINDERS RETAINING SUCH PERSONAL INFORMATION FOR AS LONG AS
PERMITTED OR REQUIRED BY LAW OR BUSINESS PRACTICES.  THE PURCHASER AND, IF
APPLICABLE, ANY OTHERS FOR WHOM IT IS CONTRACTING HEREUNDER, FURTHER
ACKNOWLEDGES AND CONSENTS TO THE FACT THAT THE CORPORATION OR THE FINDERS MAY BE
REQUIRED BY APPLICABLE SECURITIES LAWS, THE RULES, REGULATIONS AND POLICIES OF
ANY STOCK EXCHANGE, SECURITIES REGULATORY AUTHORITY OR OTHER REGULATORY BODY, OR
THE RULES OF THE INVESTMENT DEALERS ASSOCIATION OF CANADA TO PROVIDE REGULATORY
AUTHORITIES WITH ANY PERSONAL INFORMATION PROVIDED BY THE PURCHASER IN THIS
SUBSCRIPTION AGREEMENT.  THE PURCHASER REPRESENTS AND WARRANTS THAT IT HAS THE
AUTHORITY TO PROVIDE THE CONSENTS AND ACKNOWLEDGEMENTS SET OUT IN THIS
SECTION ON BEHALF OF ANY OTHERS FOR WHOM IT IS CONTRACTING HEREUNDER.  IN
ADDITION TO THE FOREGOING, THE PURCHASER AGREES AND ACKNOWLEDGES THAT THE
CORPORATION OR THE FINDERS, AS THE CASE MAY BE, MAY USE AND DISCLOSE THE
PURCHASER’S PERSONAL INFORMATION, OR THAT OF ANY OTHERS FOR WHOM THE PURCHASER
IS CONTRACTING HEREUNDER, AS FOLLOWS:

 

(A)                                  FOR INTERNAL USE WITH RESPECT TO MANAGING
THE RELATIONSHIPS BETWEEN AND CONTRACTUAL OBLIGATIONS OF THE CORPORATION, THE
FINDERS AND THE PURCHASER OR ANY BENEFICIAL PURCHASER FOR WHOM IT IS CONTRACTING
HEREUNDER;

 

(B)                                 FOR USE AND DISCLOSURE FOR INCOME TAX
RELATED PURPOSES, INCLUDING WITHOUT LIMITATION, WHERE REQUIRED BY LAW,
DISCLOSURE TO CANADA REVENUE AGENCY;

 

(C)                                  DISCLOSURE TO SECURITIES REGULATORY
AUTHORITIES AND OTHER REGULATORY BODIES WITH JURISDICTION WITH RESPECT TO
REPORTS OF TRADES AND SIMILAR REGULATORY FILINGS;

 

(D)                                 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;

 

(E)                                  DISCLOSURE TO PROFESSIONAL ADVISERS OF THE
CORPORATION OR THE FINDERS IN CONNECTION WITH THE PERFORMANCE OF THEIR
PROFESSIONAL SERVICES;

 

(F)                                    DISCLOSURE TO ANY PERSON WHERE SUCH
DISCLOSURE IS NECESSARY FOR LEGITIMATE BUSINESS REASONS AND IS MADE WITH THE
PURCHASER’S PRIOR WRITTEN CONSENT;

 

(G)                                 DISCLOSURE TO A COURT DETERMINING THE RIGHTS
OF THE PARTIES UNDER THIS SUBSCRIPTION AGREEMENT; AND

 

(H)                                 FOR USE AND DISCLOSURE AS OTHERWISE REQUIRED
OR PERMITTED BY LAW.

 

20.                                                                                
Modification. Neither this Subscription Agreement nor any provision hereof shall
be modified, changed, discharged or terminated except by an instrument in
writing signed by the party

 

16

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against whom any waiver, change, discharge or termination is sought. 
Notwithstanding the foregoing, the Purchaser hereby constitutes the Corporation
as its agent to correct, on behalf of the Purchaser, any manifest errors or
typographical errors contained herein.

 

21.                                                                                
Assignment.  The terms and provisions of this Subscription Agreement shall be
binding upon and enure to the benefit of the Purchaser, the Corporation and
their respective successors and assigns; provided that, except as herein
provided, this Subscription Agreement shall not be assignable by any party
without the prior written consent of the other parties.  The benefit and
obligations of this Subscription Agreement insofar as they apply to the
Purchaser, shall pass with any assignment or transfer of the Shares and Warrants
in accordance with their terms.

 

22.                                                                                
Miscellaneous.  All representations, warranties, agreements and covenants made
or deemed to be made by the Purchaser herein will survive the execution and
delivery, and acceptance, of this offer and the Closing. This Subscription
Agreement may be executed in any number of counterparts, each of which when
delivered, either in original or facsimile form, shall be deemed to be an
original and all of which together shall constitute one and the same document.

 

23.                                                                                
Governing Law.  This Subscription Agreement shall be governed by and construed
in accordance with the laws of the Province of British Columbia and the federal
laws of Canada applicable therein.  The Purchaser on its own behalf and, if
applicable, on behalf of others for whom it is contracting hereunder, hereby
irrevocably attorns to the jurisdiction of the courts of the Province of British
Columbia with respect to any matters arising out of this Subscription Agreement.

 

24.                                                                                
Facsimile Subscriptions.  The Corporation shall be entitled to rely on delivery
by facsimile machine of an executed copy of this Subscription Agreement,
including the completed schedules hereto, and acceptance by the Corporation of
such facsimile copy shall be legally effective to create a valid and binding
agreement between the Purchaser and the Corporation in accordance with the terms
hereof.

 

25.                                                                                
Entire Agreement and Headings.  This Subscription Agreement (including the
schedules hereto) contains the entire agreement of the parties hereto relating
to the subject matter hereof and there are no representations, covenants or
other agreements relating to the subject matter hereof except as stated or
referred to herein.  This Subscription Agreement may be amended or modified in
any respect by written instrument only.  The headings contained herein are for
convenience only and shall not affect the meanings or interpretation hereof.

 

26.                                                                                
Time of Essence.  Time shall be of the essence of this Subscription Agreement.

 

27.                                                                                
Language.  The Purchaser acknowledges its consent and requests that all
documents evidencing or relating in any way to its purchase of the Purchaser’s
Units be drawn up in the English language only.  Nous reconnaissons par les
présentes avoir consenti et demandé que tous les documents faisant foi ou se
rapportant de quelque manière à notre achat soient rédigés en anglais seulement.

 

17

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28.                                                                                
Effective Date.  This Subscription Agreement is intended to and shall take
effect on the Closing Date, notwithstanding its actual date of execution or
delivery by any of the parties.

 

IN WITNESS WHEREOF the undersigned has executed this Subscription Agreement on
the            day of                                   , 2005.

 

 

 

 

 

Signature of Purchaser (if an individual)

Name of Purchaser (if not an individual)

 

 

 

 

Per:

 

 

Name of Purchaser (if an individual)

 

Authorized Signatory

 

 

Name:

 

 

Title:

 

 

ACCEPTANCE

 

The foregoing is acknowledged, accepted and agreed to this          day of
                       , 2005.

 

 

VISTA GOLD CORP.

 

 

 

Per:

 

 

 

 

Name:

 

 

Title:

 

18

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Schedule ”A”

 

- Confirmation of Status as U.S. “Accredited Investor”
(within the meaning of Rule 501(a) of Regulation D under the United States
Securities Act of 1933)

 

By initialling where indicated below, the Purchaser is confirming its
representation and warranty regarding the category or categories under which it
qualifies as an “accredited investor” within the meaning of Rule 501(a) of
Regulation D under the United States Securities Act of 1933:

 

[MARK BELOW THE CATEGORY OR CATEGORIES WHICH DESCRIBES YOU]

 

(a)

 

Natural Person — Net Worth Test. The Purchaser is a natural person whose total
personal net worth, either individually or jointly with such person’s spouse, at
the time of his purchase, exceeds U.S.$1,000,000.

 

o

 

 

 

 

 

(b)

 

Natural Person — Income Test. The Purchaser is a natural person who had
individual income in excess of U.S.$200,000, or joint income with the person’s
spouse in excess of U.S.$300,000, in each of the two most recent years and
reasonably expects to reach the same income level in the current year.

 

o

 

 

 

 

 

(c)

 

Business and Non-profit Entities. The Purchaser is 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, none of which has been
formed for the specific purpose of acquiring the Units, and each having total
assets in excess of U.S.$5,000,000.

 

o

 

 

 

 

 

(d)

 

Bank. The Purchaser is a bank as defined in section 3(a)(2) of the United States
Securities Act of 1933 or a savings and loan association or other institution
specified in section 3(a)(5)A of the United States Securities Act of 1933
whether acting in its individual or fiduciary capacity.

 

o

 

 

 

 

 

(e)

 

Broker or Dealer. The Purchaser is a broker or dealer registered pursuant to
section 15 of the United States Securities Exchange Act of 1934.

 

o

 

 

 

 

 

(f)

 

Public Employee Plan. The Purchaser is 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, if such plan
has total assets in excess of U.S.$5,000,000.

 

o

 

 

 

 

 

(g)

 

Employee Benefit Plan. The Purchaser is an employee benefit plan within the
meaning of Title I of the United States Employee Retirement Income Security Act
of 1974, if 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 if the employee benefit
plan has total assets in excess of U.S.$5,000,000 or, if a self-directed plan,
with investment decisions made solely by persons that are accredited investors.

 

o

 

 

 

 

 

(h)

 

Trust. The Purchaser is 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) of Regulation D under the United States Securities Act of
1933.

 

o

 

 

 

 

 

(i)

 

Insurance Company. The Purchaser is an insurance company as defined in
section 2(13) of the United States Securities Act of 1933.

 

o

 

A-1

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(j)

 

Investment Company. The Purchaser is 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 that Act.

 

o

 

 

 

 

 

(k)

 

SBIC. The Purchaser is a Small Business Investment Company licensed by the U.S.
Small Business Administration under section 301(c) or (d) of the Small Business
Investment Act of 1958.

 

o

 

 

 

 

 

(l)

 

Private Business Development Company. The Purchaser is a private business
development company as defined in section 202(a)(22) of the United States
Investment Advisers Act of 1940.

 

o

 

 

 

 

 

(m)

 

Director or Officer. The Purchaser is a director or an executive officer of the
Corporation.

 

o

 

 

 

 

 

(n)

 

Entity Owned by Accredited Investors. The Purchaser is an entity in which all of
the equity owners are accredited investors and described in one or more of the
categories set forth in paragraphs (a) through (m) above.

 

o

 

DATED

 

, 2005

 

 

 

 

 

 

 

Signature of Purchaser

 

 

 

 

 

 

 

 

Name of Purchaser

 

 

 

 

 

 

 

 

Address of Purchaser

 

 

A-2

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Schedule ”B”

 

- Confirmation of Status as Canadian “Accredited Investor”
(within the meaning of National Instrument 45-106 Prospectus and Registration
Exemptions)

 

By initialling where indicated below, the Purchaser is confirming its
representation and warranty regarding the category or categories under which it
qualifies as an “accredited investor” within the meaning of National Instrument
45-106 Prospectus and Registration Exemptions:

 

[MARK BELOW THE CATEGORY OR CATEGORIES WHICH DESCRIBES YOU]

 

(a)

 

a Canadian financial institution, or a Schedule III bank;

 

o

 

 

 

 

 

(b)

 

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

 

o

 

 

 

 

 

(c)

 

a subsidiary of any person referred to in paragraphs (a) or (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;

 

o

 

 

 

 

 

(d)

 

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);

 

o

 

 

 

 

 

(e)

 

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);

 

o

 

 

 

 

 

(f)

 

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;

 

o

 

 

 

 

 

(g)

 

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;

 

o

 

 

 

 

 

(h)

 

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

 

o

 

 

 

 

 

(i)

 

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;

 

o

 

 

 

 

 

(j)

 

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

 

o

 

 

 

 

 

(k)

 

an individual whose net income before taxes exceeded Cdn$200,000 in each of the
2 most recent calendar years or whose net income before taxes combined with that
of a spouse exceeded Cdn$300,000 in each of the 2 most recent calendar

 

o

 

B-1

--------------------------------------------------------------------------------

 

 

 

years and who, in either case, reasonably expects to exceed that net income
level in the current calendar year;

 

 

 

 

 

 

 

(l)

 

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

 

o

 

 

 

 

 

(m)

 

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

 

o

 

 

 

 

 

(n)

 

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

 

o

 

 

 

 

 

 

 

(i)

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

 

 

 

 

 

 

 

 

 

 

(ii)

a person that acquires or acquired securities under certain minimum purchase and
additional invesment exemptions specified in the Instrument; or

 

 

 

 

 

 

 

 

 

 

(iii)

a person described in paragraph (i) or (ii) that acquires or acquired securities
under the investment fund reinvestment exemption specified in the Instrument;

 

 

 

 

 

 

 

(o)

 

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;

 

o

 

 

 

 

 

(p)

 

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;

 

o

 

 

 

 

 

(q)

 

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

 

o

 

 

 

 

 

 

 

(i)

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

 

 

 

 

 

 

 

 

 

 

(ii)

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

 

 

 

 

 

 

 

(r)

 

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;

 

o

 

 

 

 

 

(s)

 

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

 

o

 

B-2

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(t)

 

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;

 

o

 

 

 

 

 

(u)

 

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

 

o

 

 

 

 

 

(v)

 

a person that is recognized or designated by the securities regulatory authority
or, except in Ontario and Québec, the regulator as:

 

o

 

 

 

 

 

 

 

(i)

an accredited investor; or

 

 

 

 

 

 

 

 

 

 

(ii)

an exempt purchaser in Alberta or British Columbia after September 14, 2005.

 

 

 

Note: A summary of the meanings of certain of the terms used in this certificate
follows the signature block below.

 

DATED

 

, 2005

 

 

 

 

 

 

 

Signature of Purchaser

 

 

 

 

 

 

 

 

Name of Purchaser

 

 

 

 

 

 

 

 

Address of Purchaser

 

 

For the purposes of this certificate, the following definitions are included for
convenience:

 

“Canadian financial institution” means

 

(a)                                  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

 

(b)                                 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;

 

“financial assets” means

 

(a)                                  cash;

 

(b)                                 securities; or

 

(c)                                  a contract of insurance, a deposit or an
evidence of a deposit that is not a security for the purposes of securities
legislation;

 

“foreign jurisdiction” means a country other than Canada or a political
subdivision of a country other than Canada;

 

“fully managed account” means an account of a client for which a person makes
the investment decisions if that person has full discretion to trade in
securities for the account without requiring the client’s express consent to a
transaction;

 

B-3

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“Instrument” means National Instrument 45-106 Prospectus and Registration
Exemption;

 

“jurisdiction” means a province or territory of Canada except when used in the
term foreign jurisdiction;

 

“investment fund” means a mutual fund or a non-redeemable investment fund, and,
for greater certainty in British Columbia, includes certain employee venture
capital corporations and venture capital corporations mentioned in National
Instrument 81-106 Investment Fund Continuous Disclosure;

 

“non-redeemable investment fund” means an issuer

 

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

 

(b)                                 that does not invest;

 

(i)                                     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

 

(ii)                                  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

 

(c)                                  that is not a mutual fund;

 

“person” includes

 

(a)                                  an individual;

 

(b)                                 a corporation;

 

(c)                                  a partnership, trust, fund and an
association, syndicate, organization or other organized group of persons,
whether incorporated or not; and

 

(d)                                 an individual or other person in that
person’s capacity as a trustee, executor, administrator or personal or other
legal representative;

 

“related liabilities” means

 

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

 

(b)                                 liabilities that are secured by financial
assets;

 

“Schedule III bank” means an authorized foreign bank named in Schedule III of
the Bank Act (Canada);

 

“spouse” means, an individual who

 

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

 

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

 

(c)                                  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

 

“subsidiary” means an issuer that is controlled directly or indirectly by
another issuer and includes a subsidiary of that subsidiary.

 

B-4

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