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UNITED STATES SUBSCRIPTION AGREEMENT

|Issuer:PolyMet Mining Corp. (the Company) | Issue: | Up to 15,000,000 units (Units) at a
      price
|------------------------------------------- | ------ | -------------------------------------------------
|                                            |        | of US$2.75 per Unit for an aggregate             
|                                            |        | amount of up to US$41,250,000                    

|Total Principal                       |                                                 
|------------------------------------- | ------------------------------------------------
|Amount of Units                       |                                                 
|Purchased: US$ ______________________ | No. of Units Purchased: ________________________

|Name and Address of Purchaser: |                                               |         
|------------------------------ | --------------------------------------------- | --------
|                               |                                               |         
|Name:                          |                                               | Address:
|                               |                                               |         
|                               |                                               |         
|                               |                                               |         
|                               |                                               |         
|                               |                                               |         
|                               |                                               |         
|                               |                                               |         
|                               | email address: ______________________________ |         

Alternate Registration Instructions for Certificates:The name and address of the person to whom the certificates representing the
securities purchased hereunder (the Certificates) are to be registered,
if other than the Purchaser:

|Name: |  | Address: |                                      
|----- |  | -------- | -------------------------------------
|      |  |          | (Street Address)                     
|      |  |          |                                      
|      |  |          |                                      
|      |  |          | (City, Province or State and Country)
|      |  |          |                                      
|      |  |          |                                      
|      |  |          | (Postal or Zip Code)                 

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

|Name:          |  | Address: |                                      
|-------------- |  | -------- | -------------------------------------
|               |  |          | (Street Address)                     
|Contact Name:  |  |          |                                      
|               |  |          |                                      
|Telephone No.: |  |          | (City, Province or State and Country)
|               |  |          |                                      
|               |  |          |                                      
|               |  |          | (Postal or Zip Code)                 

Note: Purchasers who have requested that the
Certificates be registered or delivered in the name of someone other than the
Purchaser may do so only for safekeeping or pursuant to a bare trusteeship with
respect to such Certificates, in accordance with normal business practices.

These securities have not been and will not be registered
under the United States Securities Act of 1933, as amended (the U.S. Securities
Act) and may not be offered or sold in the United States or to or for the
account or benefit of a U.S. person (as defined in Regulation S under the U.S.
Securities Act) unless an exemption from registration is available.

TO: PolyMet Mining Corp.

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|1. | Subscription.The undersigned (the Purchaser)
        hereby tenders to PolyMet Mining Corp. (the Company)
        this subscription offer which, upon acceptance by the Company, will constitute
        an agreement (the Subscription Agreement) of the Purchaser
        with the Company to purchase from the Company and, on the part of the
        Company, to sell to the Purchaser, _______________ units (the Units)
        of the Company whereby each Unit consists of one common share in the capital
        of the Company (Common Share) and one-half (1/2) of
        one non-transferable common share purchase warrant (Warrant),
        with each whole Warrant entitling the holder to purchase one Common Share
        at a price of US$4.00 per Common Share for a period of 18 months from
        the Closing Date (the Units, including the Common Shares and the Warrants
        collectively referred to herein as the Purchased Securities)
        at an aggregate purchase price of US$ _______________ (the Purchase
        Price), all on the terms and subject to the conditions set forth
        in this Subscription Agreement.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | The Offering.The Purchaser acknowledges that the Purchased Securities will be issued in connection with the issuance of up to 15,000,000 Units in the aggregate principal amount of up to US$41,250,000 to be sold by the
Company pursuant to offerings outside of the United States pursuant to Regulation S under the U.S. Securities Act (the Regulation S Offering) and inside the United States and to U.S. Persons solely to Accredited Investors (the
U.S. Offering and, together with the Regulation S Offering, the Offering).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3. | Definitions.In this Subscription Agreement, unless the context otherwise requires:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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| | (k) | Material Adverse Effectmeans a material adverse
      effect on the results of operations, assets, business, prospects or
      financial condition of the Company and its subsidiaries, taken as a
      whole;                                                                                                                                                                                                                                                                                 
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (l) | Person means an individual, a corporation, a
      partnership, a government or any department or agency thereof, a trustee
      or an unincorporated organization, and pronouns have a similarly extended
      meaning;                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (m) | Province means the Province of British
      Columbia;                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (n) | Purchasers means all purchasers of the Units
      pursuant to the Offering, including the Purchaser;                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (o) | Regulation D means Regulation D under the U.S.
      Securities Act;                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (p) | Regulation S means Regulation S under the U.S.
      Securities Act;                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (q) | Securities means the Common Shares, the Warrants
      and the Warrant Shares or any of them;                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (r) | Securities Commissions means the British
      Columbia Securities Commission;                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (s) | SEC means the U.S. Securities Exchange
      Commission;                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (t) | Securities Laws means, collectively, the
      applicable securities laws of each of the provinces of British Columbia,
      Alberta, and Ontario, and the respective regulations and rules made and
      forms prescribed thereunder together with all applicable published policy
      statements, blanket orders, rulings and notices of the securities
      commissions or other securities regulatory authority in each of the
      provinces of British Columbia, Alberta and Ontario;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (u) | TSX means the Toronto Stock Exchange;                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (v) | U.S. Accredited Investor Status Certificate
      means the accredited investor status certificate required to be completed
      by the Purchaser, in the form of Schedule A attached hereto;                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (w) | U.S. Person means a U.S. Person as that term is
      defined in Regulation S under the U.S. Securities Act;                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (x) | U.S. Securities Act means the United States
      Securities Act of 1933, as amended; and                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (y) | U.S. Exchange Act means the United States
      Securities Exchange Act of 1934, as amended;                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (z) | Warrant Shares means the Common Shares issuable
      upon exercise of the Warrants.                                                                                                                                                                                                                                                                                                                                                                                                              

All monetary amounts referenced in this
Subscription Agreement are in U.S. dollars.

|4. | Offering.Up to an aggregate of 15,000,000 Units
      may be issued pursuant to the Offering. The Company reserves the right to
      close the Offering in multiple tranches, so that one or more Closings may
      occur after the initial Closing.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|5. | Warrants.Each whole Warrant entitles
        the Purchaser upon exercise in accordance with the provisions thereof
        to purchase one Common Share at any time during the period commencing
        on the Closing Date and ending on the date that is 18 months following
        the Closing Date, at an exercise price of US$4.00 per Common Share. If
        the volume weighted average price of the Common Shares during any 20 day
        trading period averages more than US$6.00 per Common Share, the Company
        shall have the right to accelerate the warrant exercise period as set
        forth in the Warrant. No fractional Warrants will be issued.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The terms and conditions which will govern
        the Warrants will be set out in a Warrant certificate that will contain,
        among other things, provisions for the appropriate adjustment in the class,
        number and price of the Warrant Shares to be issued on the exercise of
        the Warrants upon the occurrence of certain events, such as a subdivision,
        consolidation or reclassification of the Common Shares.                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|6. | Delivery and Payment.The Purchaser
        agrees that the following shall be delivered to the Company on or before
        the Closing Time:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Purchaser consents to the filing of
        such documents as may be required to be filed with the TSX, the AMEX,
        or any other securities regulatory authority in connection with the transactions
        contemplated hereby.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|7. | Closing.The transactions contemplated
        hereby will take place within 10 business days of acceptance by the Company
        of this Subscription Agreement. On the Closing, the Company will send
        to the Purchaser, by regular mail, a fully signed copy of this Agreement
        and the certificates representing the Purchased Securities. The Purchaser
        acknowledges that the Company will be required to endorse the certificates
        representing the Purchased Securities the following legend:                                                                                                                                                 

THE SECURITIES REPRESENTED HEREBY
[AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF] HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE U.S. SECURITIES
ACT), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER
HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE ISSUER THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY: (A) TO THE
ISSUER, (B) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE
WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) INSIDE THE UNITED STATES IN A
TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR
ANY APPLICABLE UNITED STATES FEDERAL OR STATE SECURITIES LAWS, AFTER PROVIDING
AN OPINION OF COUNSEL OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE
ISSUER TO THAT EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE

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GOOD DELIVERY IN SETTLEMENT OF
TRANSACTIONS OF STOCK EXCHANGES IN CANADA.

|8. | Representations and Warranties of the Company.The
      Company represents and warrants to the Purchaser, 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)                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                  
|   | (b)                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                  
|   | (c)                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                  
|   | (d)                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                  
|   | (e)                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                  
|   | (f)                                                                                                                                                                                                                                              

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| |     | could become applicable to the Purchaser as a result of
      the Purchaser and the Company fulfilling their obligations or exercising
      their rights under the Agreements, including without limitation the
      Companys issuance of the Purchased Securities and the Purchasers
      ownership of the Purchased Securities;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (g) | No Pre-emptive Rights:The issuance
      of the Purchased Securities will not be subject to any pre-emptive right
      or other contractual right to purchase securities granted by the Company
      or to which the Company is subject. Upon exercise of the Warrant in
      accordance with its terms, the issuance of the Warrant Shares will not be
      subject to any pre-emptive right or other contractual right to purchase
      securities granted by the Company or to which the Company is
    subject.                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (h) | The Offering:Assuming the
      representations and warranties of the Purchaser contained herein are true
      and correct at the Closing Date, the execution of this Subscription
      Agreement and the issue by the Company to the Purchaser of the Purchased
      Securities will be exempt from the registration and prospectus
      requirements of the Securities Laws and from the registration requirements
      of the U.S. Securities Act;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (i) | Issue of Purchased Securities and Warrant
      Shares:All necessary corporate action has been taken to
      authorize the issue and sale of, and the delivery of certificates
      representing, the Purchased Securities, and upon exercise of the Warrant
      in accordance with its terms, the Warrant Shares, and, upon payment of the
      requisite consideration therefor, the Purchased Securities will be validly
      issued, fully paid and non-assessable and upon exercise of the Warrant in
      accordance with its terms, the Warrant Shares will be validly issued,
      fully paid and non-assessable. ;                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (j) | Timely Disclosure:There has not
      occurred any material change in the business, operations or capital of the
      Company which has not been publicly disclosed;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (k) | No Cease Trade Order:No order
      preventing, ceasing or suspending trading in any securities of the Company
      or prohibiting the issue and sale of securities by the Company has been
      issued and no proceedings for either of such purposes have been instituted
      or, to the best of the knowledge of the Company, are pending, contemplated
      or threatened;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (l) | Foreign Issuer:The Company is a Foreign
      Issuer which does not have a substantial U.S. market interest (as such
      terms are defined in Regulation S);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (m) | Authority and Authorization:The
      Company has full corporate power and authority to enter into each of the
      Agreements and to do all acts and things and execute and deliver all
      documents as are required hereunder to be done, observed, performed or
      executed and delivered by it in accordance with the terms thereof and the
      Company has taken all necessary corporate action to authorize the
      execution, delivery and performance of each of the Agreements and to
      observe and perform the provisions of each of the Agreements in accordance
      with the provisions thereof including, without limitation, the issuance of
      the Purchased Securities, and the reservation for issuance and the
      issuance of the Warrant Shares upon exercise of the Warrant in accordance
      with its terms, to the Purchaser for the consideration and upon the terms
      and conditions set forth therein; and
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (n) | Validity and Enforceability: Each of the
      Agreements has been authorized, executed and delivered by the Company and
      constitutes a valid and legally binding obligation of the Company
      enforceable against the Company in accordance with its
  terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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| | (o) | No Conflicts. The execution, delivery and
      performance of the Agreements by the Company and the consummation by the
      Company of the transactions contemplated thereby (including, without
      limitation, the issuance of the Purchased Securities, and reservation for
      issuance and issuance upon exercise of the Warrant of the Warrant Shares)
      do not and will not (i) conflict with or violate any provision of the
      Companys or any subsidiarys organizational or charter documents, or (ii)
      conflict with, or constitute a default (or an event that with notice or
      lapse of time or both would become a default) under, result in the
      creation of any lien upon any of the properties or assets of the Company
      or any subsidiary, or give to others any rights of termination, amendment,
      acceleration or cancellation (with or without notice, lapse of time or
      both) of, any agreement, credit facility, debt or other instrument
      (evidencing a Company or subsidiary debt or otherwise) to which the
      Company or any subsidiary is a party or by which any property or asset of
      the Company or any subsidiary is bound or affected, or (iii) conflict with
      or result in a violation of any law, rule, regulation, order, judgment,
      injunction, decree or other restriction of any court or governmental
      authority to which the Company or a subsidiary is subject (including
      United States federal and state securities laws, the Securities Laws and
      regulations and regulations of TSX and AMEX), or by which any property or
      asset of the Company or a subsidiary is bound or affected; except in the
      case of each of clauses (ii) and (iii), such as could not have or
      reasonably be expected to result in a Material Adverse Effect;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (p) | Filings, Consents and Approvals.Except for the filing of a Form 6-K with the SEC describing the terms
      of the transactions contemplated hereby, the filing of Form D, any filings
      required to be made under state or blue sky securities laws, and any
      required filings or notifications regarding the issuance or listing of
      additional securities with the TSX and AMEX, the Company is not required
      to obtain any consent, waiver, authorization or order of, give any notice
      to, or make any filing or registration with, any court or other federal,
      state, local or other governmental authority or other person in connection
      with the execution, delivery and performance by the Company of the
      Agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (q) | Securities Laws Reports.All reports
      and other documents required to be filed pursuant to the United States
      federal securities laws and the Securities Laws (collectively, Public
      Filings) made since January 1, 2005, complied as to form in all
      material respects with the requirements of such laws, and as of their
      respective filing dates, did not contain any untrue statement of a
      material fact or omit to state any material fact necessary in order to
      make the statements made therein, in the light of the circumstances under
      which they were made, not misleading. The Public Filings made since
      January 1, 2005, are the only public filings required of the Company
      pursuant to the United States federal securities laws and the Securities
      Laws since January 1, 2005. The financial statements included in the
      Public Filings present fairly and accurately in all material respects the
      financial position of the Company as of the dates shown and its results of
      operations and cash flows for the periods shown, and such financial
      statements have been prepared in conformity with generally accepted
      accounting principles in Canada applied on a consistent basis and
      reconciled to U.S. generally accepted accounting principles in accordance
      with Item 17 of Form 20-F (except (i) as may be otherwise indicated in
      such financial statements or the notes thereto, or (ii) in the case of
      unaudited interim statements, to the extent they may exclude footnotes or
      may be condensed or summary statements). Except as set forth in the
      financial statements of the Company included in the Public Filings filed
      prior to the date hereof, the Company has no liabilities,
  contingent                     

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- 8 -

| |     | or otherwise, except those which individually or in the
      aggregate would not have a Material Adverse Effect;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (r) | Litigation.Except as set forth on
      Schedule 8(r), there is no action, suit, inquiry, notice of
      violation, proceeding or investigation pending or, to the knowledge of the
      Company, threatened against or affecting the securities of the Company,
      any subsidiary or any of their respective officers, directors or
      properties before or by any court, arbitrator, governmental or
      administrative agency, regulatory authority or the TSX or AMEX
      (collectively, an Action)which (i) adversely affects or
      challenges the legality, validity or enforceability of any of the
      Agreements or the Purchased Securities or (ii) could, if there were an
      unfavorable decision, have or reasonably be expected to result in a
      Material Adverse Effect. Neither the Company nor any subsidiary, nor any
      director or officer thereof, is or has been the subject of any Action
      involving a claim of violation of or liability under United States
      securities laws or the Securities Laws or a claim of breach of fiduciary
      duty. Except as set forth on Schedule 8(r), there has not been, and
      to the knowledge of the Company, there is not pending or contemplated, any
      investigation by any securities regulatory authority involving the Company
      or any current or former director or officer of the Company. No securities
      regulatory authority has issued any stop order or other order suspending
      the effectiveness of any registration statement filed by the
    Company;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (s) | Compliance.Neither the Company nor
      any subsidiary (i) is in default under or in violation of (and no event
      has occurred that has not been waived that, with notice or lapse of time
      or both, would result in a default by the Company or any subsidiary
      under), nor has the Company or any subsidiary received notice of a claim
      that it is in default under or that it is in violation of, any indenture,
      loan or credit agreement or any other agreement or instrument to which it
      is a party or by which it or any of its properties is bound (whether or
      not such default or violation has been waived), (ii) is in violation of
      any order of any court, arbitrator or governmental body, or (iii) is or
      has been in violation of any statute, rule or regulation of any
      governmental authority, including without limitation all foreign, federal,
      state and local laws applicable to its business except in the case of (i),
      (ii) and (iii) as could not reasonably be expected to result in a Material
      Adverse Effect;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (t) | Regulatory Permits. The Company and each of
      its subsidiaries possess all certificates, authorizations and permits
      issued by the appropriate governmental regulatory authorities necessary to
      conduct their respective, except where the failure to possess such permits
      could not have or reasonably be expected to result in a Material Adverse
      Effect (Material Permits), and neither the Company nor any subsidiary
      has received any notice of proceedings relating to the revocation or
      modification of any Material Permit;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (u) | Title to Assets.The Company and its
      subsidiaries have good and marketable title in fee simple to all real
      property owned by them that is material to the business of the Company and
      its subsidiaries and good and marketable title in all personal property
      owned by them that is material to the business of the Company and its
      subsidiaries, in each case free and clear of all liens, except for liens
      as do not materially affect the value of such property and do not
      materially interfere with the use made and proposed to be made of such
      property by the Company and its subsidiaries and liens for the payment of
      taxes, the payment of which is neither delinquent nor subject to
      penalties. All real property and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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- 9 -

| |     | facilities held under lease by the Company and the
      subsidiaries are held by them under valid, subsisting and enforceable
      leases of which the Company and its subsidiaries are in
  compliance;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (v) | Insurance.The Company and its
      subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are
      prudent and customary in the businesses in which the Company and its
      subsidiaries are engaged, including, but not limited to, directors and
      officers insurance coverage. Neither the Company nor any subsidiary has
      any reason to believe that it will not be able to renew its existing
      insurance coverage as and when such coverage expires or to obtain similar
      coverage from similar insurers as may be necessary to continue its
      business without a significant increase in cost;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (w) | Placement Agent's Fees. Except as set forth
      on Schedule 8(w), no brokerage or finder's fee or commission are or
      will be payable to any Person with respect to the transactions
      contemplated by the Agreements based upon arrangements made by the Company
      or any of its affiliates. The Company agrees that it shall be responsible
      for the payment of any placement agent's fees, financial advisory fees, or
      brokers' commissions (other than for persons engaged by Purchaser)
      relating to or arising out of the transactions contemplated hereby. The
      Company shall pay, and hold the Purchaser harmless against, any liability,
      loss or expense (including, without limitation, attorney's fees and
      out-of-pocket expenses) arising in connection with any claim for any such
      fees or commissions;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (x) | Investment Company.The Company is
      not, and immediately after receipt of payment for the Securities will not
      be, an investment company, an affiliated person of, promoter for or
      principal underwriter for, or an entity controlled by an investment
      company, within the meaning of the United States Investment Company Act
      of 1940, as amended;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (y) | Environmental Laws.The Company and
      each of its subsidiaries (a) are in compliance with any and all
      Environmental Laws (as hereinafter defined), (b) have received all
      permits, licenses or other approvals required of them under applicable
      Environmental Laws to conduct their respective businesses and (c) are in
      compliance with all terms and conditions of any such permit, license or
      approval where, in each of the foregoing clauses (a), (b) and (c), the
      failure to so comply could be reasonably expected to have, individually or
      in the aggregate, a Material Adverse Effect. The term Environmental Laws
      means all laws relating to pollution or protection of human health or the
      environment (including, without limitation, ambient air, surface water,
      groundwater, land surface or subsurface strata), including, without
      limitation, laws relating to emissions, discharges, releases or threatened
      releases of chemicals, pollutants, contaminants, or toxic or hazardous
      substances or wastes (collectively, Hazardous Materials) into the
      environment, or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Hazardous Materials, as well as all authorizations, codes, decrees,
      demands or demand letters, injunctions, judgments, licenses, notices or
      notice letters, orders, permits, plans or regulations issued, entered,
      promulgated or approved thereunder; and

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- 10 -

| | (z) | Disclosure.All disclosure provided
      to the Purchaser regarding the Company, its business and the transactions
      contemplated hereby, including the Schedules to this Agreement, furnished
      by or on behalf of the Company are true and correct and do not contain any
      untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not
misleading.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company agrees that by delivering
the Purchased Securities to the Purchaser on the Closing Date, it shall 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 Company at the Closing Time and that they shall
survive the purchase by the Purchaser of the Purchased Securities and shall
continue in full force and effect notwithstanding any subsequent disposition by
the Purchaser of the Purchased Securities. The Company undertakes to notify the
Purchaser immediately of any change in any representation, warranty or other
information relating to the Company set forth herein which takes place prior to
the Closing Time.

|9. | Covenants of the Company.The Company hereby
      covenants and agrees with the Purchaser as follows:
|-- | -----------------------------------------------------------------------------------------------------
|   |                                                                                                      
|   | (a)                                                                                                  
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   | (b)                                                                                                  
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      
|   |                                                                                                      

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- 11 -

|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Use of Proceeds:The Company will use the net proceeds from the sale of the Purchased Securities for:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Directed Selling Efforts and General Advertising: Prior to the completion of the Offering, the Company will not engage in any directed selling efforts as defined in Regulation S or any general
solicitation or general advertising as those terms are used in Regulation D with respect to the Purchased Securities and while the Warrants are outstanding, the Company will not engage in any directed selling efforts or
any general solicitation or general advertising with respect to the Warrant Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Disclosure of Transactions and Other Material Information. On the first business day following the date of the this Agreement, the Company shall issue a press release and file a report on Form 6-K describing the
terms of the transactions contemplated hereby in the form required by the U.S. Exchange Act and attaching the material documents (including, without limitation, this Agreement and the form of the Warrant) as exhibits to such filing (including all
attachments, the "6-K Filing"). The Company shall not, and shall cause its officers, directors, employees and agents, not to, provide the Purchaser with any material, nonpublic information regarding the Company from and after the filing of
the 6-K Filing with the SEC without the express written consent of the Purchaser. If a Purchaser has, or believes it has, received any such material, nonpublic information regarding the Company, it shall provide the Company with written notice
thereof.
|10. | Conditions of Closing.The obligations of the Purchaser and the Company to complete the purchase and sale of the Purchased Securities as contemplated hereby shall be conditional upon:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the receipt of all regulatory approvals in connection with the purchase and sale of the Purchased Securities, including the approval of the TSX and the AMEX and the additional listing of the Common Shares and the Warrant Shares;
and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the receipt, if necessary, of any waivers under the shareholder rights plan agreement dated as of December 4, 2003 between the Company and Pacific Corporate Trust Company so as to ensure that the Offering does not trigger the
application of such plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The Purchaser acknowledges and agrees that the sale of the Purchased Securities 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
Company all relevant documentation required by applicable Securities Laws and the rules, regulations and policies of the TSX and the AMEX. The Purchaser acknowledges and agrees that the Company will be required to provide to the applicable
securities regulatory authorities a list setting forth, among other things, the identities of the Purchasers of the Purchased Securities. Notwithstanding that the Purchaser may be purchasing the Purchased Securities as an agent on behalf of an
undisclosed principal, the Purchaser has provided particulars as to the identity of such undisclosed principal on the face page hereof in accordance with the instructions thereon.

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- 12 -

|    | In addition, the Purchaser acknowledges that none of the Common Shares or Warrant Shares will be or have been registered under the U.S. Securities Act or any applicable U.S. state securities laws and that the offer and sale of
such securities will be made in reliance on the exemption from registration available to the Company for offers and sales to Accredited Investors under Rule 506 of Regulation D.                                                                                                                                                                                                                                                                     
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|11. | Acceptance or Rejection.The Purchaser acknowledges and agrees that the acceptance of this offer will be conditional upon the sale of the Purchased Securities to the Purchaser (and if the Purchaser acts as agent for a
beneficial purchaser, to the beneficial purchaser) being exempt from any prospectus or offering memorandum requirements of all applicable Securities Laws in the Province and the registration requirements of the U.S. Securities Act and the obtaining
by the Company of approval from the TSX and AMEX. The Company will be deemed to have accepted this offer upon the Companys execution of the acceptance form at the end of this Subscription Agreement.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|12. | Purchasers Representations and Warranties.The Purchaser represents and warrants to the Company, 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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- 13 -

| |     | Purchased Securities in the jurisdiction set forth under
      Name and Address of Purchaser on the first page of this Subscription
      Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (d) | Accredited Investor. The Purchaser is an
      Accredited Investor that has completed and delivered the U.S. Accredited
      Investor Status Certificate and it is acquiring the Purchased Securities
      for its own account and not on behalf of any other Person;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (e) | No Public Sale or Distribution.The
      Purchaser and each beneficial purchaser for whom it is purchasing is
      purchasing the Purchased Securities, and will acquire the Units for its
      own account and not with a view to resale, distribution or other
      disposition in violation of United States federal or state securities
      laws; provided, however, that by making the representations herein, such
      Purchaser does not agree to hold any of the Purchased Securities for any
      minimum or other specific term and reserves the right to dispose of the
      Purchased Securities at any time in accordance with or pursuant to
      applicable United States federal or state securities laws. The Purchaser
      is acquiring the Purchased Securities hereunder in the ordinary course of
      its business. The Purchaser does not presently have any agreement or
      understanding, directly or indirectly, with any individual, corporation
      (including any non-profit corporation), general or limited partnership,
      limited liability company, joint venture, estate, trust, association,
      organization, labor union, or other entity or governmental e to distribute
      any of the Purchased Securities
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (f) | Purchasing as Agent or Trustee. In the case
      of the purchase by the Purchaser of the Purchased Securities as agent or
      trustee (including for greater certainty, a portfolio manager or
      comparable advisor) for any other Person, 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, to
      execute and deliver the Subscription Agreement and all other documentation
      in connection with such subscription on behalf of each such principal
      person, each of whom is subscribing as principal for its own account, not
      for the benefit of any other person and not with a view to the resale or
      distribution of the Purchased Securities, and the Subscription Agreement
      has been duly authorized, executed and delivered by or on behalf of and
      constitutes a legal, valid and binding agreement of, such principal, and
      the Purchaser acknowledges that the Company may be required by law to
      disclose the identity of each principal for whom the Purchaser is
      acting;                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (g) | British Columbia Securities Law Matters.The Purchaser, if not a resident of British Columbia, certifies
      that it is not resident in British Columbia and acknowledges
  that:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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- 14 -

to sell securities through a person
registered to sell securities under the Actand, as a consequence of
acquiring Purchased Securities pursuant to this exemption, certain protections,
rights and remedies provided by the Act, including statutory rights of
rescission or damages, will not be available to the Purchaser;

| | (h) | Company or Unincorporated Organization. If
      the Purchaser, or any beneficial purchaser referred to in subparagraph (e)
      above, is a corporation or a partnership, syndicate, trust or other form
      of unincorporated organization, the Purchaser or such beneficial purchaser
      was not incorporated or created solely, nor is it being used primarily to
      permit purchases without a prospectus or registration statement under
      applicable law;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (i) | Absence of Offering Memorandum. The
      Purchaser was not provided with, has not requested, and does not need to
      receive an offering memorandum or a prospectus as defined in applicable
      Securities Laws. The offering and sale of the Purchased Securities to the
      Purchaser were not made as a result of any general solicitation or general
      advertising (as those terms are used in Regulation D), including any
      advertisements, articles, notices or other communications published in any
      newspaper, magazine or similar media or broadcast over radio or
      television, or any seminar or meeting whose attendees have been invited by
      general solicitation or general advertising and, except for this
      Subscription Agreement, the only documents, if any, delivered or otherwise
      furnished to the Purchaser in connection with such offering and sale were
      a term sheet, copies of news releases issued by the Company, information
      prepared by the Company and provided to the Purchaser and the information,
      which documents the Purchaser acknowledges do not, individually or
      collectively, constitute an offering memorandum or similar
  document;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (j) | No Trading Market; Liquidity. The Purchaser
      acknowledges that while the Common Shares and the Warrant Shares will be
      conditionally listed on the TSX and the AMEX, there is no trading market
      for the Warrants, and no such market is expected to develop; that the
      Purchaser has no present need for liquidity in its or his investment in
      the Company, and is in a financial position to bear the economic risk of
      the Purchased Securities for an indefinite period of time and to withstand
      a complete loss of its or his investment in the Purchased Securities; and
      that the Company is not obligated to file and has no present intention
      registering its Purchased Securities under the U.S. Securities Act or any
      applicable state securities laws and that the contemplated sale is being
      made in reliance on a private placement exemption to Accredited
      Investors;                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (k) | Investment Suitability.The Purchaser has
      obtained, to the extent it or he deems necessary, its own professional
      advice with respect to the risks inherent in the investment in the
      Purchased Securities, and the suitability of the investment in the
      Purchased Securities in light of its financial condition and investment
      needs and those of any other beneficial purchaser referred to in
      subparagraph (e) above; and the Purchaser, and any beneficial purchaser
      referred to in subparagraph (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 Purchased Securities
      and is able to bear the economic risk of loss of such
investment;                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (l) | Brokers and Finders.There is no person
      acting or purporting to act on behalf of the Purchaser in connection with
      the transactions contemplated herein who is entitled to any brokerage or
      finders fee. If any person establishes a claim that any fee or other
      compensation is payable in connection with this subscription for the
      Purchased Securities, the Purchaser covenants to indemnify and hold
      harmless the Company and the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

---

- 15 -

Agent with respect thereto and with
respect to all costs reasonably incurred in the defence thereof;

| | (m) | Prohibited Transactions.Since the time
      when the Purchaser was first contacted by the Company regarding the
      transactions contemplated hereby, neither the Purchaser nor any Affiliate
      of the Purchaser nor any person acting on behalf of or pursuant to any
      understanding with the Purchaser (collectively, Trading
      Affiliates) has, directly or indirectly, effected or agreed to effect
      any short sale, whether or not against the box, established any put
      equivalent position (as defined in Rule 16a-1(h) under the U.S.
      Securities Exchange Act of 1934, as amended) with respect to Common
      Shares, granted any other right (including without limitation, any put or
      call option) with respect to the Common Shares or with respect to any
      security that includes, relates to or derived any significant part of its
      value from the Common Stock or otherwise sought to hedge its position in
      the Common Shares (each, a Prohibited Transaction), and neither
      the Purchaser nor its Trading Affiliates will enter into a Prohibited
      Transaction after the date hereof until the transactions contemplated
      hereby are announced pursuant to the filing of a Form 6-K with the SEC
      announcing the transactions contemplated hereby;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (n) | Absence of Certain Representations. No
      Person has made to the Purchaser any written or oral
  representation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (i) that any Person will resell or repurchase any of the
      Securities;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (ii) that any Person will refund the purchase price of
      any of the Securities; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (iii) as to the future price or value of the Securities;
      and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (o) | Compliance.If required by
      applicable United States federal or state securities laws of the Company,
      the Purchaser will execute, deliver and file or assist the Company in
      filing such reports, undertakings and other documents with respect to the
      issue of the Purchased Securities as may be required by any securities
      commission, stock exchange or other regulatory
authority.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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 Purchased Securities under relevant securities
legislation. The Purchaser further agrees that by accepting delivery of the
Purchased Securities on the Closing Date, it shall 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 Closing Time and that they shall survive the
purchase by the Purchaser of the Purchased Securities and shall continue in full
force and effect notwithstanding any subsequent disposition by the Purchaser of
the Purchased Securities. The Purchaser undertakes to notify the Company
immediately of any change in any representation, warranty or other information
relating to the Purchaser set forth herein which takes place prior to the
Closing Time.

|13. | Purchasers Expenses.The Purchaser acknowledges
      and agrees that all costs and expenses incurred by the Purchaser
      (including any fees and disbursements of special counsel retained by the
      Purchaser) relating to the purchase of the Purchased Securities shall be
      borne by the Purchaser.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 16 -

|14. | Resale Restrictions.Notwithstanding any other
      provision of this Agreement, including section 8(e), the Purchaser
      understands and acknowledges that the Purchased Securities will be subject
      to certain resale restrictions under applicable Securities Laws and the
      U.S. Securities Act 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 the Company is not in
      any manner responsible) for complying with such restrictions. Without
      limiting the foregoing, the Purchaser acknowledges and agrees that none of
      the Securities may be offered, sold or otherwise transferred in the United
      States or to or for the account or benefit of a U.S. Person or a person in
      the United States, unless registered under the U.S. Securities Act and
      applicable state securities laws, or an exemption from registration is
      available. The Purchaser further understands and acknowledges that the
      exercise of the Warrants will be subject to certain restrictions under the
      U.S. Securities Act, and these Securities may not be converted or
      exercised by or on behalf of any U.S. Person or person in the United
      States, unless registered under the U.S. Securities Act and applicable
      state securities laws or an exemption from such registration is available
      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 such restrictions on exercise and that it is
      solely responsible (and the Company is not in any manner responsible) for
      complying with such restrictions.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | For purposes of complying with applicable Securities
      Laws, the Purchaser understands and acknowledges that all of the
      certificates representing the Common Shares, the Warrants, and the Warrant
      Shares shall bear the following legend:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

UNLESS PERMITTED UNDER SECURITIES
  LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE
  •.,

with the • completed
  to reflect a date that is four months plus one day following the Closing Date.

The Purchaser acknowledges that the
Common Shares, the Warrants and the Warrant Shares are restricted securities
as defined in Rule 144 of the US Securities Act, and the rules of the SEC
provide in substance that the Purchaser may dispose of the Common Shares, the
Warrants and the Warrant Shares only pursuant to an effective registration
statement under the US Securities Act or an exemption therefrom, and the
Purchaser understands that, except as otherwise provided herein, the Company has
no obligation or intention to register under the US Securities Act any of the
Common Shares, the Warrants and the Warrant Shares purchased by the Purchaser
hereunder. As a consequence, the Purchaser understands that a legend in
substantially the following form will be placed on the certificates representing
the Common Shares, the Warrants, and the Warrant Shares issued in connection
with the U.S. Offering:

THE SECURITIES REPRESENTED HEREBY
[AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF] HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE U.S. SECURITIES
ACT), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER
HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE ISSUER THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY: (A) TO THE
ISSUER, (B) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE
WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) INSIDE THE UNITED STATES IN A
TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S.

---

- 17 -

SECURITIES ACT OR ANY APPLICABLE
UNITED STATES FEDERAL OR STATE SECURITIES LAWS, AFTER PROVIDING AN OPINION OF
COUNSEL OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE ISSUER TO THAT
EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE GOOD DELIVERY IN
SETTLEMENT OF TRANSACTIONS OF STOCK EXCHANGES IN CANADA.

provided, however, that if the
securities are being sold in compliance with the requirements of Rule 904 of
Regulation S under the U.S. Securities Act at the time when the Company is a
Foreign Issuer, the foregoing U.S. legend may be removed by providing a
declaration to the Companys registrar and transfer agent, as set forth in
Schedule B hereto (or such other evidence of the availability of an exemption as
the Company or its registrar and transfer agent may prescribe from time to time
which may include a requirement for an opinion of counsel);

provided, that,if any of the
Common Shares, the Warrants or the Warrant Shares are being sold pursuant to
Rule 144 of the U.S. Securities Act, the legend may be removed by delivery to
the Companys transfer agent of an opinion of counsel of recognized standing in
form and substance satisfactory to the Company, to the effect that the legend is
no longer required under applicable requirements of the U.S. Securities Act or
state securities laws.

In addition, for purposes of complying
with the U.S. Securities Act and applicable U.S. state securities laws, the
Purchaser understands and acknowledges that all the certificates representing
the Warrants and, until such time as is no longer required under applicable
requirements of the U.S. Securities Act or applicable U.S. state securities
laws, as well as all certificates issued in exchange for or in substitution of
such securities, shall bear the following additional U.S. legend:

NEITHER THE SECURITIES REPRESENTED
HEREBY NOR THE COMMON SHARES TO BE ISSUED UPON THEIR EXERCISE HAVE BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE U.S.
SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
THESE SECURITIES MAY NOT BE EXCERCISED IN THE UNITED STATES BY OR ON BEHALF OF A
U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT) OR A
PERSON IN THE UNITED STATES UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE U.S. SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION
UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE,
AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OF RECOGNIZED STANDING
REASONABLY SATISFACTORY TO THE ISSUER TO THAT EFFECT.

The Purchaser hereby consents to the
Company making a notation on its records or giving instructions to any transfer
agent of the securities to implement the restrictions on transfer set forth and
described herein.

The Purchaser further understands and
acknowledges that the Company (i) is, subject to section 9(b)(vi), not obligated
to remain a Foreign Issuer, (ii) may not, at the time the securities are resold
by the undersigned or at any other time, be a Foreign Issuer, and (iii) may
engage in one or more transactions that could cause the Company not to be a
Foreign Issuer. The Purchaser further understands and acknowledges that the loss
of the Companys Foreign Issuer status would impede the ability of the Purchaser
to remove the restrictive U.S. legends from its securities in connection with a
resale outside the United States.

---

- 18 -

|15. | Legal and Tax Advice.The Purchaser acknowledges and agrees that it is solely responsible for obtaining such legal advice and tax advice as it considers appropriate in connection with the execution, delivery and performance
by it of this Subscription Agreement and the completion of the transactions contemplated hereby. Without limiting the generality of the foregoing, the Purchaser acknowledges that purchasing, holding and disposing of the Purchased Securities may have
tax consequences under the laws of both Canada and the United States, and that it is solely responsible for determining the tax consequences applicable to its particular circumstances and that the Purchaser has been advised by the Company to consult
its own tax advisors concerning investment in the Purchased Securities. The Purchaser acknowledges and agrees that Farris, Vaughan, Wills & Murphy LLP and Troutman Saunders, LLP have acted as counsel only to the Company, and that such firms are
not protecting the rights and interests of the Purchaser.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|16. | No Revocation.The Purchaser agrees that this offer is made for valuable consideration and, upon acceptance by the Company in accordance with the provisions hereof, may not be withdrawn, cancelled, terminated or revoked by
the Purchaser without the consent of the Company. Further, the Purchaser expressly waives and releases the Company from all rights of withdrawal or rescission to which the Purchaser might otherwise be entitled pursuant to the Securities Laws.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|17. | No Review.The Purchaser acknowledges that no securities commission, agency, governmental authority, regulatory body, stock exchange or other regulatory body (including, without limitation, the SEC or any state securities
commission) has reviewed or passed on the merits of the Common Shares, the Warrants or the Warrant Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|18. | Indemnity.The Purchaser agrees to indemnify and hold harmless the Company and its 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 Company 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 Company in connection herewith.                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Company agrees to defend, indemnify and hold harmless the Purchaser and shall reimburse the Purchaser for, from and against each claim, loss, liability, cost and expense (including without limitation, interest, penalties,
costs of preparation and investigation, and the reasonable fees, disbursements and expenses of attorneys, accountants and other professional advisors) (collectively, Losses) directly or indirectly relating to, resulting from or arising
out of any untrue representation, misrepresentation, breach of warranty or non-fulfillment of any covenant, agreement or other obligation by or of the Company contained in the this Agreement or in any certificate, document, or instrument delivered
to the Purchaser pursuant hereto.                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|19. | Finders Fee.The Company may pay a finders fee to certain parties that the Company believes have provided material services in connection with one or more subscriptions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|20. | Collection of Personal Information.The Purchaser acknowledges and consents to the fact that the Company is collecting the Purchasers personal information for the purposes of completing the transactions contemplated
hereby, including registering the Purchaser as a warrantholder and/or shareholder of the Company, as the case may be, and communicating with the Purchaser as a warrantholder and/or shareholder. The Purchaser further acknowledges and consents to the
fact that the Company may be required to provide securities regulatory authorities, stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

---

- 19 -

|    | exchanges or markets on which the Securities of the
        Company are listed or other regulatory agencies pursuant to the Proceeds
        of Crime (Money Laundering) and Terrorist Financing Act(Canada) with
        any such personal information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|21. | Modification.Subject to the terms hereof,
        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 against whom any waiver, change, discharge
        or termination is sought.                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|22. | Assignment.The terms and provisions of this
        Subscription Agreement shall be binding upon and enure to the benefit
        of the Purchaser, the Company and their respective successors and assigns;
        provided that this Subscription Agreement shall not be assignable by any
        party without the prior written consent of the other party.                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|23. | Miscellaneous.All representations, warranties,
        agreements and covenants made or deemed to be made by the Purchaser and
        the Company 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 or other electronic form, shall be deemed to be
        an original and all of which together shall constitute one and the same
        document.                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|24. | 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.                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|25. | Facsimile Subscriptions.The Company 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 Company of such facsimile copy shall be legally
        effective to create a valid and binding agreement between the Purchaser
        and the Company in accordance with the terms hereof.                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|26. | 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.                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|27. | Time of Essence. Time shall be of the essence
        of this Subscription Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|29. | Independent Nature of Purchasers Obligations
        and Rights.Contemporaneously with this execution and delivery of
        this Agreement, the Company will execute and deliver one or more Subscription
        Agreements (the "Other Subscription Agreements") with other Purchasers
        (the "Other Purchasers). The obligations of the Purchaser
        under this Agreement is several and not joint with the obligations of
        the Other Purchasers under the Other Subscription Agreements, and the
        Purchaser shall not be responsible in any way for the performance of the
        obligations of any Other Purchaser under the Other Subscription Agreements.
        Nothing contained herein or in any

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- 20 -

Other Subscription Agreement, and no
action taken by the Purchaser pursuant hereto and the Other Purchasers pursuant
thereto, shall be deemed to constitute the Purchaser and the Other Purchasers as
a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchaser and the Other Purchasers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or the Other Subscription
Agreements. The Purchaser confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors.

IN WITNESS WHEREOF the undersigned
  has executed this Subscription Agreement on the ____ day of March, 2007.



|Signature of Purchaser
      (if an individual) |  | Name of Purchaser
      (if not an individual)
|----------------------------------------------- |  | ----------------------------------------------
|                                                |  |                                               
|                                                |  | Per:  _____________________________________   
|Name of Purchaser (if an individual)            |  |                                               
|                                                |  | Title:   ____________________________________ 

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- 21 -

ACCEPTANCE

The foregoing is acknowledged, accepted and agreed to this
  11 day of April, 2007.

| | POLYMET MINING CORP.
| | --------------------



---

A-1

SCHEDULE AU.S. ACCREDITED INVESTOR STATUS
CERTIFICATE

In connection with the purchase of Purchased Securities of the
Company by the undersigned Purchaser, as an integral part of the attached
subscription agreement, the undersigned hereby represents and warrants to the
Company that the undersigned satisfies one or more of the following categories
of Accredited Investor:

|__ | (1) | Any bank as defined in Section 3(a)(2) of the U.S.
      Securities Act of 1933, as amended (the U.S. Securities Act) or any
      savings and loan association or other institution as defined in Section
      3(a)(5)(A) of the U.S. Securities Act whether acting in its individual or
      fiduciary capacity; any broker or dealer registered pursuant to Section 15
      of the U.S. Securities Exchange Act of 1934 or any insurance company as
      defined in Section 2(13) of the U.S. Securities Act; any investment
      company registered under the U.S. Investment Company Act of 1940 or a
      business development company as defined in Section 2(a)(48) of that Act;
      any Small Business Investment Company licensed by the U.S. Small Business
      Administration under Section 301(c) or (d) of the U.S. Small Business
      Investment Act of 1958; any 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 US$5,000,000; any employee benefit plan
      within the meaning of the U.S. 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 US$5,000,000, or,
      if a self-directed plan, with investment decisions made solely by persons
      that are accredited investors (as such term in defined in Rule 501 of
      Regulation D of the U.S. Securities Act);
|-- | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|__ | (2) | Any private business development company as defined in
      Section 202(a)(22) of the U.S. Investment Advisers Act of 1940;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|__ | (3) | Any organization described in Section 501(c)(3) of the
      U.S. Internal Revenue Code, corporation, Massachusetts or similar business
      trust, or partnership, not formed for the specific purpose of acquiring
      the securities offered, with total assets in excess of
  US$5,000,000;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|__ | (4) | Any trust with total assets in excess of US$5,000,000,
      not formed for the specific purpose of acquiring the securities offered,
      whose purchase is directed by a sophisticated person (being defined as a
      person who has such knowledge and experience in financial and business
      matters that he or she is capable of evaluating the merits and risks of
      the prospective investment);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|__ | (5) | Any natural person whose individual net worth, or joint
      net worth with that persons spouse, at the time of his purchase exceeds
      US$1,000,000;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|__ | (6) | Any natural person who had an individual income in excess
      of US$200,000 in each of the two most recent years or joint income with
      that persons spouse in excess of US$300,000 in each of those years and
      has a reasonable expectation of reaching the same income level in the
      current year;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|__ | (7) | Any director or executive officer of the Company;
    or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|__ | (8) | Any entity in which all of the equity owners are
      Accredited Investors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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A-2

DATED _________________, 2007

| |                        
| | -----------------------
| | Signature of Purchaser 
| |                        
| | Name of
      Purchaser
| |                        
| | Address of Purchaser   

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SCHEDULE BFORM OF DECLARATION FOR REMOVAL OF LEGEND

|TO: | Pacific Corporate Trust Company
|--- | -------------------------------
|TO: | PolyMet Mining Corp.           

The undersigned:

(1) acknowledges that the sale of the securities of PolyMet
Mining Corp. (PolyMet) to which this declaration relates is being made in
reliance on Rule 904 of Regulation S under the United States Securities Act of
1933, as amended (the Securities Act), and

(2) certifies that:

| | (a) | the undersigned is not an affiliate of PolyMet (as that
      term is defined in Rule 405 under the Securities Act);                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (b) | the offer of such securities was not made to a person in
      the United States and either (i) at the time the buy order was originated,
      the buyer was outside the United States, or the seller and any person
      acting on its behalf reasonably believed that the buyer was outside the
      United States, or (ii) the transaction was executed on or through the
      facilities of the Toronto Stock Exchange, and neither the seller nor any
      person acting on its behalf knows that the transaction has been
      prearranged with a buyer in the United States;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (c) | neither the seller nor any person acting on any of their
      behalf has engaged or will engage in any directed selling efforts (as
      that term is defined in Regulation S under the Securities Act) in
      connection with the offer and sale of such securities;                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (d) | the sale is bona fide and not for the purpose of washing
      off the resale restrictions imposed because the securities are
      restricted securities (as that terms is defined in Rule 144(a)(3) under
      the Securities Act);                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (e) | the seller does not intend to replace such securities
      sold in reliance on Rule 904 of Regulation S with fungible unrestricted
      securities; and                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (f) | the contemplated sale is not a transaction, or part of a
      series of transactions, which, although in technical compliance with
      Regulation S under the Securities Act, is part of a plan or scheme to
      evade the registration requirements of the Securities
  Act.                                                                                                                                                                                                                                                                                                       

Dated:______________________

| | By: ___________________________________  
| | -----------------------------------------
| |                                          
| | Name: _________________________________  
| |                                          
| | Title: __________________________________

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SCHEDULE 8(c)

On
  January 10, 2007, PolyMet Mining Corp. (the Company) received a
  warning letter from the American Stock Exchange (AMEX)
  stating that the Company was not in compliance with AMEX rules regarding the
  listing of additional shares. Specifically, on December 20, 2006, the Company
  issued 2,000,000 shares of its common stock to Cleveland-Cliffs, Inc. (Cliffs)
  in connection with the Companys acquisition of property and associated
  rights from Cliffs Erie L.L.C., a wholly-owned subsidiary of Cliffs, prior to
  obtaining AMEXs approval of such issuance, as is required by Section 301
  of the AMEX Company Guide. The Company submitted the required application on
  January 10, 2007 for the listing of such additional securities, and approval
  was granted on March 20, 2007.

* * * *

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SCHEDULE 3(r)

On
  January 10, 2007, PolyMet Mining Corp. (the Company) received a
  warning letter from the American Stock Exchange (AMEX)
  stating that the Company was not in compliance with AMEX rules regarding the
  listing of additional shares. Specifically, on December 20, 2006, the Company
  issued 2,000,000 shares of its common stock to Cleveland-Cliffs, Inc. (Cliffs)
  in connection with the Companys acquisition of property and associated
  rights from Cliffs Erie L.L.C., a wholly-owned subsidiary of Cliffs, prior to
  obtaining AMEXs approval of such issuance, as is required by Section 301
  of the AMEX Company Guide. The Company submitted the required application on
  January 10, 2007 for the listing of such additional securities, and approval
  was granted on March 20, 2007.

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SCHEDULE 8(w)

[PLACEMENT AGENT FEES]

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