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(WELLINGTON WEST LOGO) LVFH 
Form 20-F 2004Exhibit 1.1* April 20, 2005 STRICTLY CONFIDENTIAL Las Vegas From Home.com Entertainment Inc.
1199 West Hastings Street, 6th Floor
Vancouver, BC V6E 3T5 Attention: Mr. Bedo H. Kalpakian, Chairman Dear Sirs:  Re:
    
    Bought Deal Private Placement of Subscription Receipts Wellington West Capital Markets Inc. (Wellington) on its own behalf or on behalf of a syndicate
of underwriters to be named (collectively, the Underwriters), hereby agrees to purchase for
resale, on a bought deal underwritten basis, subject to reconfirmation and the rights of
termination set forth herein, an aggregate of 12,308,000 subscription receipts (the Offered
Subscription Receipts) of Las Vegas From Home.com Entertainment Inc. (the Corporation) at a
price of $0.65 per Subscription Receipt (the Issue Price) for aggregate gross proceeds of
$8,000,200. Pursuant to the terms hereof, the Underwriters will also have the option (the
Underwriters Option), exercisable, in whole or in part, prior to the Closing Date (as
hereinafter defined) to purchase for resale up to an additional 3,077,000 subscription receipts of
the Corporation (the Additional Subscription Receipts and, together with the Offered Subscription
Receipts, the Subscription Receipts) at any time prior to the closing of the Offering at the
Issue Price for aggregate gross proceeds of up to $2,000,050. For the purposes hereof, the
issuance and sale of the Offered Subscription Receipts and any Additional Subscription Receipts
issued upon exercise of the Underwriters Option shall be referred to as the Offering. Each Subscription Receipt shall be exercisable to acquire, for no additional consideration, one
unit of the Corporation (a Unit), subject to adjustment in certain events. Each Unit shall be
comprised of one common share of the Corporation (a Common Share) and one-half of one common
share purchase warrant (each whole common share purchase warrant, a Warrant). Each Warrant will
entitle the holder thereof to purchase one Common Share (a Warrant Share) at an exercise price of
$1.00 per Warrant Share at any time on or before 5:00 p.m. (Toronto time) on the date that is 24
months following the Closing Date (as hereinafter defined), subject to adjustment in certain
events. The completion of the Offering shall be subject, among other things, to the receipt of all
necessary regulatory, stock exchange and shareholder approvals as are appropriate in the
circumstances, including the approval of the TSX Venture Exchange (the TSXV) prior to closing.
Certain terms and conditions of the Offering and the fees and other consideration to be paid to the
Underwriters are as set out in the term sheet (the Term Sheet) attached hereto as Schedule A.
The definitive terms of the Offering shall be subject to the provisions of a formal underwriting
agreement (the Agreement) to be entered 1




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into between the Corporation and the Underwriters, which Agreement shall include, without
limitation, those provisions listed below:  1.
    
    The parties acknowledge that the Underwriters will offer the Subscription Receipts for
sale by way of private placement exemptions in each province of Canada, the Unites States
and in those jurisdictions outside of Canada and the United States that are agreed to by
the Corporation and Wellington; provided it is understood that no offering memorandum (as
defined under applicable securities laws) shall be delivered to prospective investors.2.
    
    Wellington will be lead manager and sole book runner of the Offering. Wellington will
form and manage an underwriting syndicate (collectively referred to as the Underwriters)
agreeable to the Corporation.3.
    
    The gross proceeds of the Offering, exclusive of the net proceeds from the sale of
approximately 2,497,100 Subscription Receipts (the Class A Subscription Receipts)
representing the number of Units issuable before the Corporation reaches the maximum number
of 100,000,000 Common Shares outstanding) and exclusive of the Commission (as hereinafter
defined) and all of the Underwriters out-of-pocket costs and expenses specified below (the
Escrowed Funds), will be held in escrow on behalf of the purchasers of all of the
Subscription Receipts other than the Class A Subscription Receipts (the Class B
Subscription Receipts) by an escrow agent acceptable to the Corporation and the
Underwriters, in an interest bearing account, pending the receipt of the certificate of
articles of amendment of the Corporation providing for an increase in the authorized
capital of the Corporation to a number of Common Shares sufficient to permit the issuance
of all of the Common Shares (including any Warrant Share issuable upon exercise of the
Warrants) issuable upon exercise of the Class B Subscription Receipts (the Escrow Releases
Condition). In the event that the Escrow Release Condition is satisfied prior to 5:00
p.m. (Toronto time) on July 14, 2005 (the Expiry Time), the Escrowed Funds, plus accrued
interest, shall be released to the Corporation and each Class B Subscription Receipt will
be automatically exercised to acquire one Unit. In the event that the Escrow Release
Condition is not satisfied before the Expiry Time, the Escrowed Funds, plus accrued
interest, shall be used by the Corporation to repurchase the Class B Subscription Receipts
for cancellation at a redemption price per Class B Subscription Receipt equal to the Issue
Price. To the extent that the Escrowed Funds are not sufficient to repurchase all of the
Class B Subscription Receipts, the Corporation hereby agrees to contribute such amounts as
are necessary to satisfy any shortfall. For greater certainty, the Class A Subscription
Receipts shall be exercised automatically at closing into Units and shall not be
repurchased for cancellation in the event that the Corporation fails to satisfy the Escrow
Release Condition on or before the Expiry Time.4.
    
    It shall be a condition of completion of the Offering that the Subscription Receipts,
the Common Shares and Warrants comprising the Units and the Warrant Shares issuable upon
exercise of the Warrants be subject to a restricted period of not more than four months
and one day from the Closing Date pursuant to Multilateral Instrument 45-102  Resale of
Securities(MI 45-102).The Underwriters may offer Subscription Receipts for sale in the United States but only
pursuant to an applicable exemption from the registration requirements of the United States
Securities Act of 1933, as amended (the US Securities Act) and any applicable state
securities laws (the U.S. Blue Sky Laws). The Underwriters acknowledge that the Common
Shares and Warrants comprising the Units and the Warrant Shares issuable upon exercise of
the Warrants have not been and will not be registered under the US Securities Act or U.S.
Blue Sky Laws and 2




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the Underwriters will not offer or sell any of the Units except in accordance with
applicable rules. In order to comply with applicable U.S. securities laws, no press release
will be issued in the United States by the Corporation concerning the Offering, and any
press release issued by the Corporation concerning the Offering will be marked at the top of
the press release, as follows:This news release does not constitute an offer to sell or a solicitation of an offer to buy
any of the securities in the United States. The securities have not been and will not be
registered under the United States Securities Act of 1933, as amended (the U.S. Securities
Act) or any state securities laws and may not be offered or sold within the United States
or to U.S. Persons unless registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is available.Units issued in the United States will have the status of restricted securities, as
defined in Rule 144 under the U.S. Securities Act, and will bear a legend setting forth the
relevant restrictions on transfer in the United States.5.
    
    The Underwriters will be entitled to terminate their commitment to purchase the
Subscription Receipts if prior to the Closing Date (i) there should be discovered any
material fact which existed as of the date hereof but which has not been publicly disclosed
which, in the sole opinion of the Underwriters, acting reasonably, has or would be expected
to have a significant adverse effect on the market price or value of the securities of the
Corporation; (ii) there is, in the sole opinion of the Underwriters, acting reasonably, a
material change or a change in any material fact or new material fact shall arise which
would be expected to have a significant adverse effect on the business, affairs, capital or
profitability of the Corporation or on the market price or the value of the securities of
the Corporation; (iii) there should develop, occur or come into effect any event of any
nature, including without limitation, terrorism, accident, or new or change in governmental
law or regulation or other condition or financial occurrence of national or international
consequence, which, in the sole opinion of the Underwriters, acting reasonably, has or
would be expected to have a significant adverse effect on the national or international
financial markets generally or the business, affairs, operations or profitability of the
Corporation or its subsidiaries or the market price or value of the securities of the
Corporation; (iv) any inquiry, action, suit, proceeding or investigation (whether formal or
informal) (including matters of regulatory transgression or unlawful conduct), is
commenced, announced or threatened in relation to the Corporation or any one of the
officers or directors of the Corporation or any of its principal shareholders which, in the
sole opinion of the Underwriters, acting reasonably, has or would be expected to have a
significant adverse effect on the market price or value of the securities of the
Corporation; (v) any order to cease trading in securities of the Corporation is made or
threatened by a securities regulatory authority; or (vi) the Corporation is in breach of
any material term, condition or covenant of this letter or the Agreement or any material
representation or warranty given by the Corporation in the Agreement becomes or is false.6.
    
    The Corporation covenants with the Underwriters that the Corporation will not issue or
announce the issuance of any Common Shares or any securities convertible into or
exchangeable for or exercisable to acquire Common Shares during a period commencing on the
date of execution of this letter and for a period of 120 days following the Closing Date
without the written consent of Wellington, and such consent shall not be unreasonably
withheld, other than pursuant to: (i) the grant or exercise of stock options and other
similar issuances pursuant to the existing share incentive plan of the Corporation and
other existing share compensation arrangements, and (ii) outstanding share purchase
warrants. Provided that the Offering 3




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contemplated hereby is completed, the directors and officers of the Corporation shall
execute and deliver written undertakings in favour of the Underwriters agreeing not to sell,
transfer, assign, pledge or otherwise dispose of any securities of the Corporation owned,
directly or indirectly, by such directors or officers for a period of 120 days following the
Closing Date, without the prior written consent of Wellington, and such consent shall not be
unreasonably withheld.7.
    
    The Corporation will pay all expenses and fees in connection with the Offering,
including, without limitation, all reasonable expenses of or incidental to the creation,
issue, sale or distribution of the Common Shares and Warrants comprising the Units; all
costs incurred in connection with the preparation of documents or certificates relating to
the Offering; all fees incurred by the Underwriters, which shall include the reasonable
fees and disbursements of the Underwriters counsel (such legal expenses to a maximum of
$60,000 exclusive of disbursements and GST). All fees and expenses incurred by the
Underwriters or on their behalf shall be payable by the Corporation immediately upon
receiving an invoice therefor from the Underwriters and shall be payable whether or not the
Offering or the Agreement is completed. The reasonable out-of-pocket costs and expenses
(other than legal expenses) of the Underwriters will not exceed $10,000 without the prior
written consent of the Corporation.8.
    
    The Corporation shall pay to the Underwriters a commission (the Commission) equal to
6.75% of the gross proceeds from the sale of the Subscription Receipts. The gross proceeds
of the sale of the Subscription Receipts, less an amount equal to the Commission and the
Underwriters other costs and expenses, as provided for in Section 7, shall be paid by the
Underwriters to the Corporation on the Closing Date. As additional compensation, the
Underwriters shall be granted compensation options (the Compensation Options) entitling
the Underwriters to subscribe for that number of Units as is equal to 6.75% of the total
number of the Subscription Receipts sold pursuant to the Offering. The Compensation Options
will be exercisable at an exercise price equal to the Issue Price for a period of 18 months
from the Closing Date. Notwithstanding anything to the contrary contained herein, it is
acknowledged and agreed that in the event the Corporation fails to satisfy the Escrow
Release Condition on or before the Expiry Time, the Underwriters shall pay to the
Corporation an amount equal to 6.75% of the gross proceeds raised in respect of the sale of
the Class B Subscription Receipts less $150,000 (the Escrow Failure Amount), which Escrow
Failure Amount will be used by the Corporation to repurchase the Class B Subscription
Receipts for cancellation.9.
    
    The Underwriters shall be entitled to appoint a soliciting dealer group consisting of
other registered dealers acceptable to the Corporation for the purposes of arranging for
substituted purchasers of the Subscription Receipts.10.
    
    The Corporation will make available to the Underwriters and the Underwriters counsel
such financial, business and other information, in written form and in oral form,
concerning the Corporation and its business as the Underwriters may reasonably request for
the purpose of enabling the Underwriters to carry out their due diligence investigations.11.
    
    The sale of the Subscription Receipts shall occur on or about May 12, 2005 or such
other date as the Corporation and Wellington may agree (the Closing Date).12.
    
    The parties covenant to finalize the Agreement, which shall be negotiated bona fideand
in good faith, shall contain those representations, warranties, conditions, as well as
indemnities, contribution provisions, and other relevant terms as are usual in such
agreements. The parties agree that in the event that such Agreement is not finalized on or
before the Closing Date, this 4




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letter shall be null and void without liability on either party, except as provided in
sections 7 and 13 hereof.13.
    
    The Corporation covenants and agrees to indemnify the Underwriters as provided for in
Schedule B attached hereto.14.
    
    The Underwriters understand that the Corporation is considering entering into certain
agreements with each of Jake H. Kalpakian and Bedo H. Kalpakian (collectively, the
Officers), the Corporations President and Chief Executive Officer and Chairman and Chief
Financial Officer, respectively, whereby upon the termination of the Officers employment
with the Corporation pursuant to the change of control of the Corporation or otherwise, the
Corporation will be obligated to pay the Officers certain cash sums and will cause all
outstanding stock options of the Officers, both vested and unvested, to be exercised by the
Corporation and the shares delivered gratis to the Officers. For the purposes of paragraph
5 of this agreement and the termination provisions of the Agreement, the Underwriters
hereby acknowledge and agree that the execution and delivery of such agreements by the
Officers and the Corporation will not, in and of itself, enable the Underwriters to
terminate their obligations to acquire the Subscription Receipts.15.
    
    The Corporation agrees that any press release issued in respect of the Offering shall
be released in Canada only and shall be in form and substance satisfactory Wellington,
acting reasonably. The Corporation further agrees to use its best efforts to have trading
in the Common Shares of the Corporation halted on the TSXV for approximately one hour or as
the TSXV may otherwise require to permit the dissemination of any press release announcing
the Offering.16.
    
    The Corporation will use its commercially reasonable best efforts to obtain the
necessary approvals to list the Common Shares (including any Warrant Shares issuable upon
exercise of the Warrants) on the TSXV, which listing shall be conditionally approved prior
to the Closing Date.17.
    
    If one or more provisions contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this letter agreement, but this
letter agreement shall be construed as if such invalid, illegal or unenforceable provision
or provisions had never been contained herein.18.
    
    The parties hereto hereby acknowledge that they have specifically requested and are
satisfied that this agreement and all related documents be drawn up in the English
language. Par les présentes, les parties reconnaissent quelles ont exigé que la présente
convention et tous documents qui sy rattachent soient rédigés et exécutés en anglais et
sen déclarent satisfaites19.
    
    This letter agreement shall be governed in accordance with the laws of the Province of
Ontario and the laws of Canada applicable therein.20.
    
    This letter agreement may be executed by facsimile signature in one or more
counterparts, which, together, shall constitute one and the same agreement. 5




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If this letter accurately reflects your understanding of the terms of our agreement and you agree
to be legally bound thereby, please execute this letter (in counterparts, if necessary) where
indicated below and return a copy thereof to Wellington West Capital Markets Inc. (Attention: Paul
Rajchgod) on or before 8:00 p.m. (Toronto time) on April 20, 2005, whereupon, subject to
reconfirmation by Wellington West Capital Markets Inc. by no later than 8:00 a.m. (Toronto time) on
April 21, 2005, this letter shall become a binding agreement between us, failing which the terms of
this letter shall be null and void. Yours very truly, WELLINGTON WEST CAPITAL MARKETS INC.  
 
 The foregoing accurately reflects the terms of the transaction, which we hereby agree to enter into
and the undersigned agrees to be legally bound hereby. Accepted this 20th day of April, 2005. LAS VEGAS FROM HOME.COM ENTERTAINMENT INC.  
 
 Reconfirmed this ___ day of April, 2005. WELLINGTON WEST CAPITAL MARKETS INC.  
 
 6




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SCHEDULE A  TERM SHEET LAS VEGAS FROM HOME.COM ENTERTAINMENT INC. 
 Issuer:
    
    Las Vegas From Home.com Entertainment Inc. (the Corporation).Offering:
    
    Private placement offering of Subscription Receipts (the Offering).Type of Offering:
    
    Bought deal, subject to the provisions of a definitive underwriting
agreement. The Subscription Receipts will be sold by private
placement without an offering memorandum.Issued Securities:
    
    Subscription receipts (Subscription Receipts), each exercisable to
acquire, for no additional consideration, one unit (a Unit), each
comprised of one common share of the Corporation (a Common Share)
and one-half of one common share purchase warrant (each whole common
share purchase warrant, a Warrant).Size of Issue:
    
    $8,000,200 (12,308,000 Subscription Receipts) plus Underwriters
Option (see below).Issue Price:
    
    $0.65 per Subscription Receipt (the Issue Price).Warrants:
    
    Each whole Warrant will entitle the holder to acquire one Common
Share at an exercise price of $1.00 per share, at any time during a
twenty-four (24) month period following the closing of the Offering.Escrow:
    
    The gross proceeds of the Offering, exclusive of the net proceeds
from the sale of approximately 2,497,100 Subscription Receipts (the
Class A Subscription Receipts) representing the number of Units
issuable before the Corporation reaches the maximum number of
100,000,000 Common Shares outstanding, the precise figure to be
provided by the Corporation) and exclusive of the Commission (as
hereinafter defined) and all of the Underwriters out-of-pocket
costs and expenses (the Escrowed Funds), will be held in escrow on
behalf of the purchasers of all of the Subscription Receipts other
than the Class A Subscription Receipts (the Class B Subscription
Receipts) by an escrow agent acceptable to the Corporation and the
Underwriters, in an interest bearing account, pending the receipt of
the certificate of articles of amendment of the Corporation
providing for an increase in the authorized capital of the
Corporation to a number of Common Shares sufficient to permit the
issuance of all of the Common Shares (including any Common Share
issuable upon exercise of the Warrants) issuable upon exercise of
the Class B Subscription Receipts (the Escrow Releases Condition).
In the event that the Escrow Release Condition is satisfied prior
to 5:00 p.m. (Toronto time) on July 14, 2005 (the Expiry Time),
the Escrowed Funds, plus accrued interest, shall be released to the
Corporation and each Class B Subscription Receipt will be
automatically exercised to acquire one Unit. In the event that the
Escrow Release Condition is not satisfied before the Expiry Time,
the Escrowed Funds, plus accrued interest, shall be used by the
Corporation to repurchase the Class B Subscription Receipts for
cancellation at a redemption price per Class B Subscription Receipt
equal to the Issue Price. To the extent that the Escrowed Funds are
not sufficient to repurchase all of the Class
 7




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B Subscription Receipts, the Corporation will contribute such amounts as are
necessary to satisfy any shortfall. For greater certainty, the Class
A Subscription Receipts shall be exercised automatically at Closing
into Units and shall not be repurchased for cancellation in the
event that the Corporation fails to satisfy the Escrow Release
Condition on or before the Expiry Time.Use of Proceeds:
    
    The net proceeds from the Offering will be used to fund the
Corporations continued growth, for potential acquisitions by the
Corporation, to expand sales and marketing initiatives, and for
general working capital purposes.Offering
Jurisdictions:
    
    All provinces and territories in Canada. U.S. sales by private
placement via Rule 144A.Closing Date:
    
    May 12, 2005, or such other date as the Corporation and the
Underwriters (as hereinafter defined) mutually agree (the Closing
Date).Underwriters:
    
    Wellington West Capital Markets Inc. (Wellington) will be Lead
Manager and sole book runner of a syndicate of underwriters
(collectively, the Underwriters) satisfactory to the Corporation
and Wellington, including CIBC World Markets, GMP Securities Ltd.,
and Sprott Securities Inc.Underwriters
Option:
    
    The Underwriters shall have an option (the Option) to sell up to
an additional 3,077,000 Subscription Receipts at any time prior to
closing of the Offering, for additional gross proceeds of up to
$2,000,050.Underwriters
Commission:
    
    6.75% of the gross proceeds of the Offering. The Corporation will
also pay all expenses relating to the Offering whether or not it is
completed.Underwriters
Compensation
Options:
    
    The Underwriters shall be granted compensation options (the
Compensation Options) exercisable for that number of Units
(Compensation Units) equal to 6.75% of the number of Subscription
Receipts issued pursuant to the Offering. The Compensation Units
shall be exercisable at any time up to 18 months following Closing
and shall each be comprised of one Common Share and one-half of one
Warrant.Listing:
    
    The Corporation will obtain the necessary approvals to list the
underlying Common Shares (including any Common Shares issuable upon
exercise of the Warrants) comprising the Units on the TSX Venture
Exchange, which listing shall be conditionally approved prior to the
Closing Date.Resale and Hold
Period:
    
    The Common Shares and Warrants comprising the Units and any Common
Shares issued on exercise of the Warrants will be subject to a
statutory hold or restricted period of four months and one day after
the Closing Date.Minimum
Subscription:
    
    Minimum investment amount in all Jurisdictions of $10,000.
 8




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SCHEDULE B INDEMNITY Las Vegas From Home.com Entertainment Inc. (the Indemnitor or, the Corporation) hereby agrees
to indemnify and hold Wellington West Capital Markets Inc. and other members of the syndicate
formed in connection with the Offering and/or any of their respective affiliates (hereinafter
referred to as the Underwriter) and the directors, officers, employees and shareholders of the
Underwriter (hereinafter referred to as the Personnel) harmless from and against any and all
expenses, losses (other than loss of profits), claims, actions, damages or liabilities, whether
joint or several (including the aggregate amount paid in reasonable settlement of any actions,
suits, proceedings or claims), and the reasonable fees and expenses of its counsel that may be
incurred in advising with respect to and/or defending any claim that may be made against the
Underwriter, to which the Underwriter and/or its Personnel may become subject or otherwise involved
in any capacity under any statute or common law or otherwise insofar as such expenses, losses,
claims, damages, liabilities or actions arise out of or are based, directly or indirectly, upon the
performance of professional services rendered to the Indemnitor by the Underwriter and its
Personnel hereunder or otherwise in connection with the matters referred to in the letter to which
this indemnity is attached, provided, however, that this indemnity shall not apply to the extent
that a court of competent jurisdiction in a final judgment that has become non-appealable shall
determine that:  (i)
    
    the Underwriter or its Personnel have been negligent or dishonest or have
committed any fraudulent act in the course of such performance; and(ii)
    
    the expenses, losses, claims, damages or liabilities, as to which
indemnification is claimed, were directly caused by the negligence, dishonesty or fraud
referred to in (i). If for any reason (other than the occurrence of any of the events itemized in (i) and (ii) above),
the foregoing indemnification is unavailable to the Underwriter or insufficient to hold it
harmless, then the Indemnitor shall contribute to the amount paid or payable by the Underwriter as
a result of such expense, loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by the Indemnitor on the one hand and the
Underwriter on the other hand but also the relative fault of the Indemnitor and the Underwriter, as
well as any relevant equitable considerations; provided that the Indemnitor shall, in any event,
contribute to the amount paid or payable by the Underwriter as a result of such expense, loss,
claim, damage or liability, any excess of such amount over the amount of the fees received by the
Underwriter hereunder pursuant to the letter agreement to which this indemnity is attached. The Indemnitor agrees that in case any legal proceeding shall be brought against the Indemnitor
and/or the Underwriter by any governmental commission or regulatory authority or any stock exchange
or other entity having regulatory authority, either domestic or foreign, shall investigate the
Indemnitor and/or the Underwriter and any Personnel of the Underwriter shall be required to testify
in connection therewith or shall be required to respond to procedures designed to discover
information regarding, in connection with, or by reason of the performance of professional services
rendered to the Indemnitor by the Underwriter, the Underwriter shall have the right to employ its
own counsel in connection therewith, and the reasonable fees and expenses of such counsel as well
as the reasonable costs (including an amount to reimburse the Underwriter for time spent by its
Personnel in connection therewith) and out-of-pocket expenses incurred by its Personnel in
connection therewith shall be paid by the Indemnitor as they occur. Promptly after receipt of notice of the commencement of any legal proceeding against the
Underwriter or any of its Personnel or after receipt of notice of the commencement of any
investigation, which is based, directly or indirectly, upon any matter in respect of which
indemnification may be sought from the 9




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Indemnitor, the Underwriter will notify the Indemnitor in writing of the commencement thereof and,
throughout the course thereof, will provide copies of all relevant documentation to the Indemnitor,
will keep the Indemnitor advised of the progress thereof and will discuss with the Indemnitor all
significant actions proposed. The omission so to notify the Indemnitor shall not relieve the
Indemnitor of any liability which the Indemnitor may have to the Underwriter except only to the
extent that any such delay in giving or failure to give notice as herein required materially
prejudices the defence of such action, suit, proceeding, claim or investigation or results in any
material increase in the liability which the Indemnitor would otherwise have under this indemnity
had the Underwriter not so delayed in giving or failed to give the notice required hereunder. The Indemnitor shall be entitled, at its own expense, to participate in and, to the extent it may
wish to do so, assume the defence thereof, provided such defence is conducted by experienced and
competent counsel. Upon the Indemnitor notifying the Underwriter in writing of its election to
assume the defence and retaining counsel, the Indemnitor shall not be liable to the Underwriter for
any legal expenses subsequently incurred by them in connection with such defence. If such defence
is assumed by the Indemnitor, the Indemnitor throughout the course thereof will provide copies of
all relevant documentation to the Underwriter, will keep the Underwriter advised of the progress
thereof and will discuss with the Underwriter all significant actions proposed. Notwithstanding the foregoing paragraph, the Underwriter shall have the right, at the Indemnitors
expense, to employ counsel of the Underwriters choice, in respect of the defence of any action,
suit, proceeding, claim or investigation if: (i) the employment of such counsel has been authorized
by the Indemnitor; or (ii) the Indemnitor has not assumed the defence and employed counsel therefor
within a reasonable time after receiving notice of such action, suit, proceeding, claim or
investigation; or (iii) counsel retained by the Corporation or the Underwriter has advised the
Indemnified Party that representation of both parties by the same counsel would be inappropriate
for any reason, including without limitation because there may be legal defences available to the
Underwriter which are different from or in addition to those available to the Underwriter (in which
event and to that extent, the Corporation shall not have the right to assume or direct the defence
on the Underwriters behalf) or that there is a conflict of interest between the Indemnitor and the
Underwriter or the subject matter of the action, suit, proceeding, claim or investigation may not
fall within the indemnity set forth herein (in either of which events the Underwriter shall not
have the right to assume or direct the defence on the Indemnified Partys behalf). No admission of liability and no settlement of any action, suit, proceeding, claim or investigation
shall be made without the consent of the Underwriter affected. No admission of liability shall be
made and the Indemnitor shall not be liable for any settlement of any action, suit, proceeding,
claim or investigation made without its consent. The indemnity and contribution obligations of the Indemnitor shall be in addition to any liability
which the Indemnitor may otherwise have, shall extend upon the same terms and conditions to the
Personnel of the Underwriter and shall be binding upon and enure to the benefit of any successors,
assigns, heirs and personal representatives of the Indemnitor, the Underwriter and any of the
Personnel of the Underwriter. The foregoing provisions shall survive the completion of
professional services rendered under the letter to which this is attached or any termination of the
authorization given by the letter to which this is attached. This indemnity agreement (i) shall not be assignable by any party hereto without the prior written
consent of each other party hereto; and (ii) shall be governed by and construed in accordance with
the laws of the Province of Ontario and the federal law of Canada applicable therein and the
parties hereto hereby irrevocably attorn to the jurisdiction of the court of the Province of
Ontario. No waiver, amendment or other modification of this indemnity agreement shall be effective
unless in writing and signed by each of 10




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the parties hereto. Any notice or other communication required or permitted to be given under this
indemnity agreement shall be so given in accordance with the attached letter agreement. 11