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CANADIAN (AND NON-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:                                                | _______________________________                               
|                                                     |                                                               
|                                                     | _______________________________                               
|                                                     |                                                               
|                                                     | _______________________________                               
|                                                     | (Postal or Zip Code)                                          
|email address: 
    ____________________________     |                                                               

|Note:The Purchaser must either be:
|----------------------------------
|                                  
|(a)                               
|                                  
|(b)                               

(i) a trust company or trust
corporation described in paragraph (15) of the definition of accredited
investor in Schedule A (other than a trust company or trust corporation
registered under the laws of Prince Edward Island that is not registered or
authorized under the Trust and Loan Companies Act (Canada) or under comparable
legislation in another jurisdiction of Canada) or

(ii) a person described in paragraph
(16) of the definition of accredited investor in Schedule A.

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)                 

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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:  | ___________________________________ |          | ___________________________________  
|               |                                     |          | (City, Province or State and Country)
|Telephone No.: | ___________________________________ |          | ___________________________________  
|               |                                     |          | (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.

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- 2 -

TO: PolyMet Mining Corp.

|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 in the
      provinces of British Columbia, Alberta and Ontario and the United States
      (the Offering).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | Definitions.In this Subscription Agreement,
      unless the context otherwise requires:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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- 3 -

| | (j) | Designated Provinces means each of the Provinces
      of British Columbia, Alberta and Ontario in which the Purchasers
      reside;                                                                                                                                                                                                                                                                                                                                                            
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (k) | Foreign Issuer means foreign issuer as defined
      in Regulation S;                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (l) | Information means all publicly available
      information regarding the Company filed under the Securities
  Laws;                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (m) | NI 45-106 means National Instrument 45-106
      (Prospectus and Registration Exemptions);                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (n) | 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;                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (o) | Province means the Province of British
      Columbia;                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (p) | Purchasers means all purchasers of the Units
      pursuant to the Offering, including the Purchaser;                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (q) | Regulation S means Regulation S under the U.S.
      Securities Act;                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (r) | Securities means the Common Shares, the Warrants
      and the Warrant Shares or any of them;                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (s) | Securities Commissions means the British
      Columbia Securities 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) | 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.

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- 4 -

|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.                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|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 with such legends as may be required
      under applicable securities laws.                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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- 5 -

power and authority to enter into,
execute and deliver each of the Agreements and to carry out the obligations
thereof thereunder;

| | (b) | Authorized Capital:The Company is
      authorized to issue, an unlimited number of Common Shares without par
      value, of which, as of March 15, 2007, 121,378,876 Common Shares were
      issued and outstanding as fully paid and non-assessable shares;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (c) | Listing: The Common Shares are, and at the
      time of issue of the Purchased Securities will be, listed on the TSX and
      the AMEX and the Warrant Shares will have been conditionally listed on the
      TSX and AMEX, and except as set forth on Schedule 8(c), the Company has
      not, in the 12 months preceding the date hereof, received notice from the
      TSX or AMEX to the effect that the Company is not in compliance with their
      respective listing or maintenance requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (d) | Certain Securities Law Matters:The
      Common Shares are listed only on the TSX and the AMEX, and the Company is
      a reporting issuer or the equivalent under the Securities Laws only in the
      provinces of British Columbia, Alberta and Ontario and the Common Shares
      are registered under Section 12(b) of the U.S. Exchange Act;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (e) | Resale of Securities in Canada: Under the
      Securities Laws presently in force, so long as the Company remains a
      reporting issuer or the equivalent under the Securities Laws, the
      Purchased Securities and the Warrant Shares will not be subject to a
      restricted period or statutory hold period under the Securities Laws or to
      any resale restriction under the policies of the TSX which extends beyond
      four months and one day after the Closing Date, subject to the provisions
      of the Securities Laws restricting resales by control persons and
      restricting a person wishing to resell the Purchased Securities and the
      Warrant Shares from: (i) making an unusual effort to prepare the market or
      to create a demand for such securities, (ii) paying an extraordinary
      commission or consideration to a person in respect of the trade and (iii)
      selling such securities at a time when the Purchaser is an insider or
      officer of the Company if, at the time of the trade, such person has
      reasonable grounds to believe that the Company is in default of securities
      legislation;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (f) | Rights Plan:The directors of the
      Company have adopted and the shareholders of the Company have confirmed
      the shareholder rights plan agreement dated as of December 4, 2003 between
      the Company and Pacific Corporate Trust Company and the Company and its
      board of directors have taken all necessary action, if any, in order to
      render inapplicable any control share acquisition, business combination,
      poison pill (including any distribution under a rights agreement) or other
      similar anti-takeover provision under the Companys charter documents or
      the laws of its jurisdiction of organization that is or 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 issue 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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- 6 -

| | (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: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 Purchase 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;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (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   

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- 7 -

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 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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- 8 -

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 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;                                                                                                                                                                                                                                                                                                                                                                                                  

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- 9 -

| | (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
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (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.

---

- 10 -

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

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- 11 -

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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | 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.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|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 from 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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- 12 -

authority to execute and deliver this
Subscription Agreement and to observe and perform its covenants and obligations
hereunder and has obtained all necessary approvals in respect thereof, and, in
either case, upon acceptance by the Company, this offer will constitute a legal,
valid and binding contract of the Purchaser enforceable against the Purchaser in
accordance with its terms and will not result in a violation of any of the
Purchasers constating documents or any agreement to which the Purchaser is a
party or by which it is bound;

| | (b) | No Conflicts. The execution, delivery and
      performance of the Agreement by the Purchaser and the consummation by the
      Purchaser of the transactions contemplated hereby do not and will not (i)
      conflict with or violate any provision of the Purchaser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 Purchaser 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
      to which the Purchaser is a party or by which any property or asset of the
      Purchaser 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 Purchaser is subject, or by which any property or asset of the
      Purchaser 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;   
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (c) | Residence. The Purchaser is a resident of
      the jurisdiction referred to under Name and Address of Purchaser set out
      on the face page hereof and has received and accepted the offer to
      purchase the Purchased Securities in such jurisdiction. In addition: (i)
      the Purchaser is not a U.S. Person and is not and will not be purchasing
      the Purchasers Purchased Securities for the account or benefit of any
      U.S. Person or a person in the United States; (ii) the Common Shares, the
      Warrants and the Warrant Shares have not been and will not be registered
      under the U.S. Securities Act or the securities laws of any state of the
      United States (and the Company has no obligation to register any such
      securities) and that the sale contemplated hereby is being, and the
      issuance of the Warrant Shares upon exercise of the Warrants will be, made
      in reliance on an exemption from registration available under Rule 903 of
      Regulation S; (iii) the Purchaser was not offered the Purchased Securities
      in the United States; (iv) at the time the Purchaser originated the buy
      order for the Purchasers Purchased Securities, the Purchaser was outside
      the United States; and (v) this Subscription Agreement was not executed or
      delivered in the United States;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (d) | Purchasing as Principal. The Purchaser is
      purchasing the Purchased Securities as principal, for its own account and
      not for the benefit of any other person, or is deemed to be purchasing as
      principal under applicable Securities Laws;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (e) | Purchasing for Investment Only.The
      Purchaser and each beneficial purchaser for whom it is purchasing is
      purchasing the Purchased Securities, and will acquire the Units for
      investment purposes only and not with a view to resale or
    distribution;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (f) | Purchaser has Benefit of Statutory
      Exemption. The Purchaser as the case may be is an Accredited
      Investor and it specifically represents and warrants that one or more of
      the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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- 13 -

categories set forth in the Accredited
Investor Status Certificate correctly, and in all respects, describes the
Purchaser and will describe the Purchaser at Closing, and the Purchaser has so
indicated by marking the box next to the category which so describes it and duly
executing and delivering the Accredited Investor Status Certificate
herewith;

| | (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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | (vi)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (h) | Company or Unincorporated Organization. If
      the Purchaser is a corporation or a partnership, syndicate, trust or other
      form of unincorporated organization, the 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 in the printed media of general and regular paid circulation,
      radio or television or any other form of advertisement 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 and
      the Information, which documents the Purchaser acknowledges do not,
      individually or collectively, constitute an offering memorandum or similar
      document;

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- 14 -

| | (j) | Material Information.The Purchaser is not
      purchasing the Purchased Securities with knowledge of material information
      concerning the Company which has not been generally disclosed;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (k) | 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 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (l) | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (m) | 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 Agent with respect thereto and with respect
      to all costs reasonably incurred in the defence thereof;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (n) | 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 U.S.
      Securities and Exchange Commission announcing the transactions
      contemplated hereby;

---

- 15 -

| | (o) | Purchasers in Jurisdictions other than
      Canada. If the Purchaser is a resident of or otherwise subject to
      the securities legislation of a jurisdiction other than Canada, the
      purchase of the Purchased Securities by such Purchaser does not contravene
      the applicable securities legislation in the jurisdiction in which it is
      resident or to which it is subject and does not trigger any obligation to
      prepare and file a prospectus, registration statement or similar document,
      or any other report with respect to such purchase, or any registration or
      other obligation on the part of the Company;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (p) | Absence of Certain Representations. No
      Person has made to the Purchaser any written or oral
  representation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (q) | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|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

---

- 16 -

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.

For purposes of complying with the U.S.
Securities Act and applicable state securities laws, the Purchaser understands
and acknowledges that the certificates representing the Common Shares and the
Warrants will provide, and the Purchaser acknowledges and agrees, that if the
Warrants are exercised outside the United States and not by or on behalf of a
U.S. Person or a person in the United States, at a time when the Company is not
a Foreign Issuer, the Warrant Shares issued upon such conversion or exercise
will be restricted securities as defined in Rule 144 under the U.S. Securities
Act, that such securities may not be offered or sold by the holder thereof
without registration under the U.S. Securities Act, except to the Company,
outside the United States in compliance with Rule 903 or 904 of Regulation S, or
within the United States in compliance with Rule 144 under the U.S. Securities
Act or another exemption from registration under the U.S. Securities Act and
applicable state securities laws, and that the certificates representing any
such Warrant Shares will bear a legend to such effect and will bear a legend to
such effect in the case of a sale in compliance with Rule 903 or 904 of
Regulation S. The Purchaser further understands and acknowledges that the
Company (i) is not obligated to remain a Foreign Issuer, (ii) may not, at the
time the Warrants are to be exercised, or Warrant Shares are to be sold, 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, and, (iv)
that the Company will not be a Foreign Issuer at any time that it fails to
satisfy the definition of foreign private issuer set forth in Schedule C
hereto.

|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,
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 17 -

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 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

---

- 18 -

|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.                                                                                                                                                                                                                                                                                                                                                                                               

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- 19 -

|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 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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- 20 -

A C C E P T A N C E

The foregoing is acknowledged,
  accepted and agreed to this ____ day of __________, 2007.

| | POLYMET MINING CORP.
| | --------------------
| |                     
| | Per:                
| |                     

---

SCHEDULE A

ACCREDITED INVESTOR STATUS CERTIFICATE

The undersigned Purchaser, a resident of, or otherwise subject
to the securities laws of, the Province of British Columbia, Alberta and Ontario
hereby represents, warrants and certifies, as an integral part of the attached
Subscription Agreement, that he, she or it is and at Closing will be, correctly
and in all respects described by the category or categories set forth directly
next to which the Purchaser has marked below.

[MARK BELOW THE CATEGORY OR CATEGORIES WHICH DESCRIBES YOU]

|[   ] | (1) | a Canadian financial institution, or a Schedule
        III bank.                                                      
|----- | --- | -----------------------------------------------------------------------------------------------------------------------
|      |    
|[   ] | (2) | the Business Development Bank of Canada incorporated
        under the Business Development Bank of Canada Act(Canada).

|[   ] | (3)  | a subsidiary of any person
        referred to in paragraphs (1) or (2), if the person owns all of the voting
        securities of the subsidiary, except the voting securities re[ ]uired
        by law to be owned by directors of that subsidiary.                                                                                                                                  
|----- | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |      |                                                                                                                                                                                                                                                                                                                                                                                          
|[   ] | (4)  | a person registered under
        the securities legislation of a jurisdiction of Canada as an adviser or
        dealer, other than a person registered solely as a limited market dealer
        under one or both of the Securities Act(Ontario) or the Securities
        Act(Newfoundland and Labrador).                                                                            
|      |      |                                                                                                                                                                                                                                                                                                                                                                                          
|[   ] | (5)  | an individual registered or
        formerly registered under the securities legislation of a jurisdiction
        of Canada as a representative of a person referred to in paragraph (4).                                                                                                                                                                                               
|      |      |                                                                                                                                                                                                                                                                                                                                                                                          
|[   ] | (6)  | the Government of Canada or
        a jurisdiction of Canada, or any crown corporation, agency or wholly owned
        entity of the Government of Canada or a jurisdiction of Canada.                                                                                                                                                                                                   
|      |      |                                                                                                                                                                                                                                                                                                                                                                                          
|[   ] | (7)  | any national, federal, state,
        provincial, territorial or municipal government of or in any foreign jurisdiction,
        or any agency of that government.                                                                                                                                                                                                                       
|      |      |                                                                                                                                                                                                                                                                                                                                                                                          
|[   ] | (8)  | a pension fund that is regulated
        by either the Office of the Superintendent of Financial Institutions (Canada)
        or a pension commission or similar regulatory authority of a jurisdiction
        of Canada.                                                                                                                                                              
|      |      |                                                                                                                                                                                                                                                                                                                                                                                          
|[   ] | (9)  | an individual who, either
        alone or with a spouse, beneficially owns, directly or indirectly, financial
        assets having an aggregate realizable value that before taxes, but net
        of any related liabilities, exceeds $1,000,000.                                                                                                                                    
|      |      |                                                                                                                                                                                                                                                                                                                                                                                          
|[   ] | (10) | an individual whose net income
        before taxes exceeded $200,000 in each of the 2 most recent calendar years
        or whose net income before taxes combined with that of a spouse exceeded
        $300,000 in each of the 2 most recent calendar years and who, in either
        case, reasonably expects to exceed that net income level in the current
        calendar year.

|[   ] | (11) | an individual who, either alone or with a spouse, has net assets
      of at least $5,000,000.                                                                                
|----- | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |     
|[   ] | (12) | a person, other than an individual or investment
        fund, that has net assets of at least $5,000,000 as shown on its most
        recently prepared financial statements.

|[   ] | (13) | an investment fund that distributes or has distributed
      its securities only to
|----- | ---- | -----------------------------------------------------------------------------------
|      |     
|      |      | (a)                                                                                

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- 2 -

| | (b) | a person that acquires or acquired securities in the
        circumstances referred to in sections 2.10 [Minimum amount investment],
        and 2.19 [Additional investment in investment funds] of NI 45-106,
        or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                           
| | (c) | a person described in paragraph (i) or (ii) that acquires
        or acquired securities under section 2.18 [Investment fund reinvestment]
        of NI 45-106.                                                          

|[   ] | (14) | an investment fund that distributes or
        has distributed securities under a prospectus in a jurisdiction of Canada
        for which the regulator has issued a receipt.                                                                                                                                                                                                     
|----- | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |     
|[   ] | (15) | a trust company or trust corporation registered
        or authorized to carry on business under the Trust and Loan
        Companies Act(Canada) or under comparable legislation in a jurisdiction
        of Canada or a foreign jurisdiction, acting on behalf of a fully managed
        account managed by the trust company or trust corporation, as the case
        may be.
|      |     
|[   ] | (16) | a person acting on behalf of a fully managed account managed
      by that person, if that person                                                                                                                                                                                                                                                                                  

| | (a) | is registered or authorized to carry on business as an
      adviser or the equivalent under the securities legislation of a
      jurisdiction of Canada or a foreign jurisdiction, and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                         
| | (b) | in Ontario, is purchasing a security that is not a
      security of an investment fund.                                                                                                

|[   ] | (17) | a registered charity under the Income Tax Act(Canada) that, in regard to the trade, has obtained advice from an
        eligibility adviser or an adviser registered under the securities legislation
        of the jurisdiction of the registered charity to give advice on the securities
        being traded.
|----- | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |     
|[   ] | (18) | an entity organized in a foreign jurisdiction that
        is analogous to any of the entities referred to in paragraphs (1) to (4)
        or paragraph (9) in form and function.                                                                                                                                
|      |     
|[   ] | (19) | a person in respect of which all of the owners of
        interests, direct, indirect or beneficial, except the voting securities
        required by law to be owned by directors, are persons that are accredited
        investors.                                                                            
|      |     
|[   ] | (20) | an investment fund that is advised by a person registered
        as an adviser or a person that is exempt from registration as an adviser.                                                                                                                                                                       
|      |     
|[   ] | (21) | a person that is recognized or designated by the
        securities regulatory authority or, except in Ontario, the regulator as                                                                                                                                                                                  

| | (c) | an accredited investor, or                                                                
| | --- | ------------------------------------------------------------------------------------------
| |     |                                                                                           
| | (d) | an exempt purchaser in Alberta or British Columbia after
      NI 45-106 comes into force.

---

- 3 -

Note: A summary of the meanings of some of the terms used
in this Accredited Investor Status Certificate follows the signature block
below.

DATED _______________, 2007

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

---

- 4 -

For the purposes of this Accredited Investor Status
Certificate, the following definitions are included for convenience:

| | (e) | affiliate means that an issuer is an affiliate of
      another issuer if:                                                                                                                                                                                       
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                    
| |     | (i)                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                    
| |     | (ii)                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                    
| | (f) | company means any corporation, incorporated
      association, incorporated syndicate or other incorporated
    organization;                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| | (g) | control person means:                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                    
| |     | (i)                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     | (ii)                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                    
| | (h) | entity means a company, syndicate, partnership, trust
      or unincorporated organization;                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                    
| | (i) | financial assets means cash, securities, or any
      contract of insurance or deposit or evidence thereof that is not a
      security for the purposes of the securities legislation;                                                                          
| |     |                                                                                                                                                                                                                                                                    
| | (j) | fully managed account means an account of a client for
      which a person makes the investment decisions if that person has full
      discretion to trade in securities for the account without requiring the
      clients express consent to a transaction;

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- 5 -

| | (k) | mutual fund means:                                     
| | --- | ---------------------------------------------------------
| |     |                                                          
| |     | (i)                                                      
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     | (ii)                                                     
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     |                                                          
| |     | (iii)                                                    
| |     |                                                          
| | (l) | non-redeemable investment fund
        means an issuer:
| |     |                                                          
| |     | (i)                                                      
| |     |                                                          
| |     | (ii)                                                     
| |     |                                                          
| |     |                                                          

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- 6 -

| |       | (B)                        | for the purpose of being actively involved in the
      management of any issuer in which it invests, other than an issuer that is
      a mutual fund or a non-redeemable investment fund, and
| | ----- | -------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                            |                                                                                                                                                                                                
| | (iii) | that is not a mutual fund;

| | (m) | person includes                                                                                                                                                                                                   
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                     
| |     | (i)                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                     
| |     | (ii)                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                     
| |     | (iii)                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                     
| |     | (iv)                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                     
| | (n) | portfolio adviser means:                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                     
| |     | (i)                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                     
| |     | (ii)                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                     
| | (o) | related liabilities means liabilities incurred or
      assumed for the purpose of financing the acquisition or ownership of
      financial assets or liabilities that are secured by financial assets;
      and
| |     |                                                                                                                                                                                                                     
| | (p) | spouse means an individual who:                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                     
| |     | (i)                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                     
| |     | (ii)                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                     
| |     | (iii)                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                     
| | (q) | subsidiary means an issuer that is controlled directly
      or indirectly by another issuer and includes a subsidiary of that
      subsidiary.                                                                  

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- 7 -

SCHEDULE B

DEFINITION OF FOREIGN PRIVATE ISSUER

Foreign private issuer.
The term foreign private issuer means any issuer incorporated or organized
under the laws of any country other than the United States, except an issuer
meeting the following conditions:

| | (1) | More than 50 percent of the outstanding voting securities
      of such issuer are directly or indirectly owned of record by residents of
      the United States; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                       
| | (2) | Any of the following:                                                                                                                                                 
| |     |                                                                                                                                                                       
| |     | (i)                                                                                                                                                                   
| |     |                                                                                                                                                                       
| |     | (ii)                                                                                                                                                                  
| |     |                                                                                                                                                                       
| |     | (iii)                                                                                                                                                                 

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- 8 -

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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