Adira Energy Ltd. - Exhibit 4.7 - Filed by newsfilecorp.com






Exhibit 4.7


ADIRA ENERGY LTD. 

- AND - 

DS APEX MERGERS & ACQUISITIONS LTD. 

- AND - 

COMPUTERSHARE TRUST COMPANY OF CANADA

________________________________________

SUBSCRIPTION
RECEIPT AGREEMENT
________________________________________

Providing for the Issue of 
27,500,000 Subscription
Receipts


 

Dated November 22, 2010





TABLE OF CONTENTS 

	 	  		Page
	 	  		  
	Article 1 INTERPRETATION 	2 
		1.1 	Definitions 	2 
		1.2 	Gender and Number 	7 
		1.3 	Interpretation not Affected by Headings,
      etc. 	7 
		1.4 	Day not a Business Day 	7 
		1.5 	Time of the Essence 	7 
		1.6 	Currency 	8 
		1.7 	Severability 	8 
		1.8 	Conflicts 	8 
		1.9 	Meaning of “outstanding” for
      Certain Purposes 	8 
		1.10 	Applicable Law 	9 
	Article 2 ISSUE OF SUBSCRIPTION RECEIPTS
      	9 
		2.1 	Issue of Subscription Receipts 	9 
		2.2 	Description of the Subscription Receipts
      	9 
		2.3 	Subscription Receiptholder not a Shareholder 	10 
		2.4 	Subscription Receipts to Rank Pari Passu
      	11 
		2.5 	Signing of Subscription Receipt Certificates 	11 
		2.6 	Certification by the Subscription Receipt
      Agent 	11 
		2.7 	Register for Subscription Receipts 	11 
		2.8 	Registers Open for Inspection 	12 
		2.9 	Issue in Substitution for Subscription Receipt Certificates
      Lost, etc 	12 
		2.10 	Exchange of Subscription Receipt Certificates
      	12 
		2.11 	Charges for Exchange 	13 
		2.12 	Transfer and Ownership of Subscription
      Receipts 	13 
		2.13 	Global Subscription Receipt 	15 
		2.14 	U.S. Legend 	16 
		2.15 	Cancellation of Surrendered Subscription Receipt Certificates
      	20 
	Article 3 SATISFACTION OF AUTOMATIC ESCROW RELEASE
      CONDITIONS, ELECTIVE RELEASE OR PAYMENT UPON TERMINATION EVENT
      	20 
		3.1 	Notice of Satisfaction of Automatic Escrow Release Conditions
      	20 


-i- 




TABLE OF CONTENTS 

  (continued) 

	 	  		Page 
	 	  		  
	 	3.2 	Notice of Elective Release 	21 
		3.3 	Issue and Delivery of Common Shares and
      Common Share Purchase Warrants 	22 
	 	3.4 	Payment on Termination 	23 
	Article 4 ADJUSTMENT OF NUMBER OF COMMON SHARES
      	23 
	 	4.1 	Definitions 	23 
	 	4.2 	Adjustment of Entitlement Number 	23 
	 	4.3 	Entitlement Number Adjustment Rules 	27 
	 	4.4 	Postponement of Adjustment 	28 
	 	4.5 	Notice of Certain Events 	29 
	 	4.6 	Adjustment to Common Share Purchase Warrants
      	29 
	 	4.7 	Protection of Subscription Receipt Agent 	29 
	Article 5 RIGHTS AND COVENANTS OF THE COMPANY
      	30 
	 	5.1 	Optional Purchases by the Company 	30 
	 	5.2 	General Covenants of the Company 	30 
	 	5.3 	Subscription Receipt Agent’s Remuneration and Expenses
      	31 
	 	5.4 	Performance of Covenants by Subscription
      Receipt Agent 	31 
	Article 6 ESCROWED FUNDS 	31 
	 	6.1 	Acknowledgement of Escrowed Funds 	31 
	 	6.2 	Escrowed Funds 	32 
	 	6.3 	Qualified Investments 	32 
		6.4 	Release of Escrowed Funds Upon Receipt of Automatic Release
      Certificate or Elective Release Certificate 	33 
	 	6.5 	Release of Escrowed Funds on Termination
      Event 	33 
	 	6.6 	Direction 	34 
	 	6.7 	Early Termination of any Investment of
      the Escrowed Funds 	34 
	 	6.8 	Method of Disbursement and Delivery 	34 
	 	6.9 	Miscellaneous 	35 
	Article 7 ENFORCEMENT 	36 
	 	7.1 	Suits by holders 	36 


-ii- 




TABLE OF CONTENTS 

  (continued) 

		  	  	Page 
		  	  	  
		7.2 	Limitation of Liability 	36 
	Article 8 MEETINGS OF SUBSCRIPTION RECEIPTHOLDERS
      	36 
		8.1 	Right to Convene Meetings 	36 
		8.2 	Notice 	37 
		8.3 	Chairman 	37 
		8.4 	Quorum 	37 
		8.5 	Power to Adjourn 	38 
		8.6 	Show of Hands 	38 
		8.7 	Poll and Voting 	38 
		8.8 	Regulations 	38 
		8.9 	Company and Subscription Receipt Agent May be Represented
      	39 
		8.10 	Powers Exercisable by Extraordinary Resolution 	39 
		8.11 	Meaning of Extraordinary Resolution 	40 
		8.12 	Powers Cumulative 	41 
		8.13 	Minutes 	41 
		8.14 	Instruments in Writing 	41 
		8.15 	Binding Effect of Resolutions 	42 
		8.16 	Holdings by Company Disregarded 	42 
	Article 9 SUPPLEMENTAL AGREEMENTS 	42 
		9.1 	Provision for Supplemental Agreements for Certain Purposes
      	42 
		9.2 	Successor Company 	43 
	Article 10 CONCERNING THE SUBSCRIPTION RECEIPT AGENT
      	44 
		10.1 	Applicable Legislation 	44 
		10.2 	Rights and Duties of Subscription Receipt Agent 	44 
		10.3 	Indemnification 	46 
		10.4 	Evidence, Experts and Advisers 	46 
		10.5 	Actions by Subscription Receipt Agent to Protect Interest
      	47 
		10.6 	Subscription Receipt Agent Not Required to Give Security
      	47 
		10.7 	Protection of Subscription Receipt Agent 	47 


-iii- 




TABLE OF CONTENTS 

  (continued) 

			  	Page
			  	  
		10.8 	Replacement of Subscription Receipt Agent; Successor by
      Merger 	48 
		10.9 	Conflict of Interest 	49 
		10.10 	Role and Capacity of Subscription Receipt Agent 	49 
		10.11 	Subscription Receipt Agent Not to be Appointed Receiver
      	49 
		10.12 	Documents, Moneys, etc. Held by Subscription Receipt Agent
      	49 
		10.13 	Books and Records 	49 
		10.14 	Not Bound to Act 	50 
		10.15 	Third Party Interests 	50 
		10.16 	Authorization to Carry on Business 	50 
	Article 11 GENERAL 	50 
		11.1 	Notice to the Company, the Subscription Receipt Agent and
      the Agents 	50 
		11.2 	Notice to holders 	52 
		11.3 	Calculation of Notice Period 	53 
		11.4 	Ownership of Subscription Receipts 	53 
		11.5 	Force Majeure 	53 
		11.6 	Counterparts 	53 
		11.7 	Satisfaction and Discharge of Agreement 	53 
		11.8 	Provisions of Agreement and Subscription Receipts for the
      Sole Benefit of Parties and holders 	54 
		11.9 	Subscription Receipts Owned by the Company or its Subsidiaries
      and Affiliates - Certificate to be Provided 	54 
	Article 12 PRIVACY LAWS 	54 
		12.1 	Privacy Laws 	54 
	SCHEDULE A 	1 
	SCHEDULE B 	1 
	SCHEDULE C 	1 
	SCHEDULE D 	1 
	SCHEDULE E 	1 


-iv- 




          THIS
SUBSCRIPTION RECEIPT AGREEMENT dated this 22nd day of
November, 2010.

A M O N G:


  
    
      
        ADIRA ENERGY LTD., a company existing under
          the federal laws of Canada 

        (the “Company”)

        AND:

        DS APEX MERGERS & ACQUISITIONS LTD.

        (the “Agent”)

        AND:

        COMPUTERSHARE TRUST COMPANY OF CANADA, a trust
          company incorporated under the laws of Canada 

        (the “Subscription Receipt Agent”
          or the “Escrow Agent”) 

      

    

  



          WHEREAS
the Company proposes to issue and sell 27,500,000 Subscription Receipts each
representing the right to acquire one Common Share and one-half of one Common
Share Purchase Warrant in the manner herein set forth; 

          AND
WHEREAS the Company and the Agent have agreed that:

	 	(a) 	
      pending the satisfaction of the Automatic Escrow Release
      Conditions, the Escrowed Funds are to be delivered to and held by the
      Subscription Receipt Agent, as escrow agent, and invested on behalf of the
      holders and the Company in the manner set forth herein;

	 	 	 	 
	 	(b) 	
      if the Automatic Escrow Release Conditions are satisfied
      prior to the Automatic Escrow Release Deadline and the Escrowed Funds are
      released to the Company, holders are to receive, for no additional
      consideration and without further action, one Common Share and one-half of
      one Common Share Purchase Warrant for each Subscription Receipt, subject
      to adjustment as set forth in this Agreement; and

	 	 	 	 
	 	(c) 	
      if the Automatic Escrow Release Conditions are not
      satisfied prior to the Automatic Escrow Release Deadline, holders are to
      either:

	 	 	 	 
	 		(i) 	 receive an amount equal to the sum of the Purchase Price
        of the Subscription Receipts held by the holder, less any applicable withholding
        taxes. The Company shall be responsible and liable for any shortfalls
        in the Purchase Price of the Subscription Receipts held by the holder;
        or 







- 2 -

	 	(ii) 	
      receive for no additional consideration and without
      further action, one Common Share and one-half of one Common Share Purchase
      Warrant in exchange for each Subscription Receipt, subject to adjustment
      as set forth in this Agreement.



          AND
WHEREAS the Subscription Receipt Agent has agreed to act as registrar and
transfer agent for the Subscription Receipts, and to receive and hold the
Escrowed Funds as escrow agent; 

          AND
WHEREAS all acts and deeds necessary have been done and performed to make
the Subscription Receipts, when countersigned by the Subscription Receipt Agent
and issued as provided in this Agreement, legal, valid and binding obligations
of the Company with the benefits of and subject to the terms of this Agreement;


          AND
WHEREAS the foregoing recitals are made as statements of fact by the Company
and not by the Subscription Receipt Agent. 

          NOW
THEREFORE, in consideration of the premises and the covenants of the parties
it is hereby agreed and declared as follows: 

ARTICLE 1 

  INTERPRETATION

1.1    Definitions

In this Agreement, including the recitals and schedules hereto,
and in all agreements supplemental hereto: 

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

	 	 	 
	 	(b) 	
      “Agency Agreement” means the agency agreement
      dated November 22, 2010 between the Company and the Agents relating to the
      Offering;

	 	 	 
	 	(c) 	
      “Agents’ Commission” means up to 7.0% of the Gross
      Proceeds, being the fee payable by the Company to the Agents pursuant to
      the terms of the Agency Agreement;

	 	 	 
	 	(d) 	
      “Agreement” means this agreement, as amended,
      supplemented or otherwise modified from time to time;

	 	 	 
	 	(e) 	 “Applicable Legislation” means the
        provisions of any statute of Canada or a province thereof, and the regulations
        and rules under any such named or other statute, relating to agreements
        such as this Agreement or to the rights, duties and obligations of persons
        serving in a similar role as the Subscription Receipt Agent under this
        Agreement, to the extent that such provisions are at the time in force
        and applicable to this Agreement; 







- 3 -

	 	(f) 	
      “Automatic Escrow Release Conditions” means the
      occurrence of each of the following events:

	 	 	 	 
	 		(i) 	
      a confirmation in writing from the TSXV, that all
      conditions to the listing of the Listed Common Shares as stipulated in the
      TSXV Letter, other than customary post-closing conditions, shall have been
      obtained;

	 	 	 	 
	 		(ii) 	
      there shall have been no material adverse change in the
      financial condition, business, operations of the Company; and

	 	 	 	 
	 		(iii) 	
      the Company shall not be in breach or default of any of
      its covenants or obligations under the Agency Agreement, except those
      breaches or defaults that have been waived by the Agent;

	 	 	 	 
	 	(g) 	
      “Automatic Escrow Release Deadline” means 5:00
      p.m. (Toronto time) on November 26, 2010 or such other date as agreed to
      between the Agent and the Company;

	 	 	 	 
	 	(h) 	
      “Automatic Release Certificate” means a
      certificate executed by the Company and by the Agent, substantially in the
      form attached as SCHEDULE C hereto and addressed to the Subscription
      Receipt Agent confirming that the Automatic Escrow Release Conditions have
      been satisfied or waived;

	 	 	 	 
	 	(i) 	
      “Automatic Release Event” means the occurrence of
      the satisfaction or waiver of the Automatic Escrow Release Conditions
      prior to the Automatic Escrow Release Deadline;

	 	 	 	 
	 	(j) 	
      “Book-Entry Only System” means the record entry
      securities transfer and pledge system administered by CDS in accordance
      with its operating rules and procedures in force from time to time, or any
      successor system;

	 	 	 	 
	 	(k) 	
      “Broker Options” or “Broker Warrants” means
      the broker options for the purchase of Common Shares of the Company,
      issued to the Agent on automatic or elective exercise of the Subscription
      Receipts;

	 	 	 	 
	 	(l) 	
      "Business Day" means a day which is not a
      Saturday, Sunday or any other day on which the principal chartered banks
      in the city of Vancouver, B.C. or Toronto, Ontario are generally not open
      for business;

	 	 	 	 
	 	(m) 	
      “CDS” means CDS Clearing Depository Services Inc.
      and its successors in interest;

	 	 	 	 
	 	(n) 	
      “Closing” means the closing of the
  Offering;

	 	 	 	 
	 	(o) 	
      “Closing Date” means November 22,
  2010;







- 4 -

	 	(p) 	
      “Closing Time” means 10:00 a.m. (Toronto time) on
      the Closing Date or such other time as may be agreed to by the Company and
      the Agent;

	 	 	 
	 	(q) 	
      “Common Share Purchase Warrant” means a whole
      common share purchase warrant entitling the holder to acquire one Common
      Share at a price of US$0.55 per share for a period of three years
      following the satisfaction of the Automatic Escrow Release
    Conditions;

	 	 	 
	 	(r) 	
      “Common Shares” means the common shares in the
      capital of the Company, provided that if the exercise of the Subscription
      Receipts are adjusted or altered pursuant to Article 4, such term shall
      thereafter mean the shares or other securities that a Subscription
      Receiptholder is entitled to on adjustment or alteration;

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

	 	 	 
	 	(t) 	
      “Company Condition Precedent Certificate” means a
      certificate executed by the Company in the form attached as SCHEDULE B
      hereto addressed to the Agent, confirming that the Automatic Escrow
      Release Conditions have been satisfied;

	 	 	 
	 	(u) 	
      “Company’s Auditors” means the firm of chartered
      accountants duly appointed from time to time as auditors of the
      Company;

	 	 	 
	 	(v) 	
      “Conversion Date” means the date the Automatic
      Release Certificate is delivered to the Subscription Receipt Agent in
      accordance with Section 3.1 hereof or the Elective Release Certificate is
      delivered in accordance with Section 3.2 hereof;

	 	 	 
	 	(w) 	
      “Convertible Securities” means securities of the
      Company (other than the Subscription Receipts) convertible into or
      exchangeable for or otherwise carrying the right to acquire Common
      Shares;

	 	 	 
	 	(x) 	
      “Counsel” means a barrister or solicitor or a firm
      of barristers and solicitors retained by the Subscription Receipt Agent or
      retained by the Company and acceptable to the Subscription Receipt
      Agent;

	 	 	 
	 	(y) 	
      “Current Market Price” at any date, means the last
      closing price of the Common Shares immediately preceding the relevant date
      on the TSXV or if the Common Shares are not traded on any recognized
      market or exchange, the price as determined by the directors of the
      Company, acting reasonably;

	 	 	 
	 	(z) 	
      “Designated Office” means the principal office of
      the Subscription Receipt Agent in the City of Vancouver, B.C. or Toronto,
      Ontario and/or such other place or places as may be designated in
      accordance with Subsection 2.10(b);

	 	 	 
	 	(aa) 	 “Earned Interest” means the interest
        received on the investment of the Escrowed Funds between the receipt of
        Gross Proceeds by the Subscription Receipt Agent and the earlier to occur
        of the Conversion Date and the Automatic Escrow Release Deadline; 







- 5 - 

	 	(bb) 	
      “Elective Release Certificate” means the
      certificate executed by the Company and by the Agent in the form attached
      as SCHEDULE A hereto addressed to the Subscription Receipt Agent
      confirming what funds should be released and what Subscription Receipt
      holders should receive Common Shares and Warrants;

	 	 	 
	 	(cc) 	
      “Entitlement Number” means, at any time, that
      number of Common Shares, and specifically excluding the number of Common
      Share Purchase Warrants, that holders are entitled to receive upon the
      conversion of each Subscription Receipt, held in accordance with the terms
      and conditions of this Agreement as such number may be adjusted pursuant
      to Article 4 hereof;

	 	 	 
	 	(dd) 	
      “Escrow Agent” means Computershare Trust Company
      of Canada, in its capacity hereunder and any lawful successors or
      permitted assigns hereto appointed hereunder from time to time;

	 	 	 
	 	(ee) 	
      “Escrowed Funds” means the Gross Proceeds, and all
      Earned Interest derived from time to time from holding the Gross Proceeds,
      if any;

	 	 	 
	 	(ff) 	
      “extraordinary resolution” has the meaning set
      forth in Section 8.11;

	 	 	 
	 	(gg) 	
      “Finder Fees” means the fee payable by the Company
      to certain entities in connection with the Offering;

	 	 	 
	 	(hh) 	
      “Global Subscription Receipt” means a Subscription
      Receipt Certificate that is issued to and registered in the name of CDS or
      its nominees pursuant to Section 2.13;

	 	 	 
	 	(ii) 	
      “Gross Proceeds” means the amount of $11,000,000,
      being the aggregate amount of the gross proceeds received from the issue
      of the Subscription Receipts, to be delivered to the Escrow Agent by Aird
      & Berlis LLP;

	 	 	 
	 	(jj) 	
      “holders” or “Subscription Receiptholder”
      means the registered holders of Subscription Receipts;

	 	 	 
	 	(kk) 	
      “Initial Payment” means the payment by the Company
      on the Closing Date to the Agent in connection with the sale of
      Subscription Receipts representing the Agent’s legal counsel fees and
      applicable expenses (including disbursements and any taxes payable
      thereon) as agreed between the Company and the Agent in section 9.4 of the
      Agency Agreement;

	 	 	 
	 	(ll) 	
      “International Jurisdictions” means the
      jurisdictions outside of the Jurisdictions and the United States where any
      of the holders are resident;

	 	 	 
	 	(mm) 	
      “Jurisdictions” means the provinces of Canada
      where any of the holders are resident;







- 6 -

	 	(nn) 	
      “Listed Common Shares” means the common shares in
      the capital of the Company, which shares are to be listed for trading on
      the TSXV;

	 	 	 
	 	(oo) 	
      “Offering” means the purchase and sale of the
      Subscription Receipts;

	 	 	 
	 	(pp) 	
      “person” means an individual, body corporate,
      partnership, trust, trustee, executor, administrator, legal representative
      or any unincorporated organization;

	 	 	 
	 	(qq) 	
      “Purchase Price” means US$0.40, being the purchase
      price of a Subscription Receipt;

	 	 	 
	 	(rr) 	
      “Securities Laws” means, as applicable, the
      securities laws, regulations, rules, rulings, published fees schedules,
      prescribed forms, policy statements, notices, blanket rulings, orders and
      other regulatory instruments in the provinces of Canada in which the
      Subscription Receipts were sold, the United States and each of its states,
      together with other applicable regulatory instruments of the securities
      regulatory authorities in such jurisdictions, and the rules of the
      TSXV;

	 	 	 
	 	(ss) 	
      “Shareholder” means a holder of record of one or
      more Common Shares;

	 	 	 
	 	(tt) 	
      “Subscription Receipts” means the subscription
      receipts issued and certified hereunder and from time to time outstanding,
      evidencing the rights set out in Subsection 2.2 hereof;

	 	 	 
	 	(uu) 	
      “Subscription Receipt Agent” means Computershare
      Trust Company of Canada, in its capacity hereunder and any lawful
      successors or permitted assigns hereto appointed hereunder from time to
      time;

	 	 	 
	 	(vv) 	
      “Subscription Receipt Certificate” means a
      certificate issued to evidence one or more Subscription Receipts,
      substantially in the form of SCHEDULE B hereto;

	 	 	 
	 	(ww) 	
      “Subscription Receiptholder’s Escrowed Funds”
      means, in respect of each Subscription Receiptholder, at any time, the
      aggregate Purchase Price of the Subscription Receipts then held by it,
      together with such holder’s pro rata share of the Earned Interest,
      if any, less any applicable withholding taxes;

	 	 	 
	 	(xx) 	
      “Subscription Receiptholder’s Request” means an
      instrument signed in one or more counterparts by holders holding in the
      aggregate not less than 662/3% of the aggregate number of Subscription
      Receipts then outstanding, requesting the Subscription Receipt Agent to
      take some action or proceeding specified therein;

	 	 	 
	 	(yy) 	
      “Termination Event” means the failure of the
      Company to satisfy the Automatic Escrow Release Conditions or deliver a
      Notice of Elective Release within 22 days of the Automatic Escrow Release
      Deadline;

	 	 	 
	 	(zz) 	
      “Termination Notice” means the notice to be
      provided by the Company to the Subscription Receipt Agent and to the Agent
      on its own behalf and on behalf of the holders forthwith following a
      Termination Event pursuant to Section 6.5;







- 7 -

	 	(aaa) 	
      “TSXV” means the TSX Venture Exchange;

	 	 	 
	 	(bbb) 	
      “TSXV Letter” means the written conditional
      approval by the TSXV for the listing of the Listed Common Shares,
      including the Listed Common Shares issuable upon exercise of the Warrants
      Shares dated November 17, 2010;

	 	 	 
	 	(ccc) 	
      “United States” means the United States of
      America, its territories or possessions, any State of the United States
      and the District of Columbia;

	 	 	 
	 	(ddd) 	
      “U.S. Person” means a “U.S. person” as that
      term is defined in Regulation S promulgated under the 1933 Act;

	 	 	 
	 	(eee) 	
      “U.S. Purchaser” means any purchaser of
      Subscription Receipts who is a U.S. Person, a person in the United States
      or a person purchasing the Subscription Receipts for the account or
      benefit of a U.S. Person;

	 	 	 
	 	(fff) 	
      “Warrant Share” means the Common Share into which
      the Common Share Purchase Warrant is exercisable; and

	 	 	 
	 	(ggg) 	
      “written direction of the Company”, “written
      order of the Company”, “written request of the Company”,
      “written consent of the Company” and “certificate of the
      Company” mean, respectively, a written order, request, consent and
      certificate signed in the name of the Company by its Chief Executive
      Officer or Chief Financial Officer, or a Director, and may consist of one
      or more instruments so executed.



1.2     Gender and Number

Unless herein otherwise expressly provided or unless the
context otherwise requires, words importing the singular include the plural and
vice versa and words importing gender include all genders. 

1.3    Interpretation not
Affected by Headings, etc. 

The division of this Agreement into Articles, Sections,
Subsections and paragraphs, the provision of a table of contents and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement. 

1.4    Day not a Business Day

In the event that any day on or before which any action is
required to be taken hereunder is not a Business Day, then such action shall be
required to be taken at or before the requisite time on the next succeeding day
that is a Business Day. 

1.5    Time of the Essence

Time shall be of the essence in all respects in this Agreement
and the Subscription Receipt Certificates. 




- 8 -

1.6    Currency

Except as otherwise stated, all dollar amounts herein are
expressed in Canadian dollars.

1.7    Severability

In the event that any provision hereof shall be determined to
be invalid or unenforceable in any respect, such determination shall not affect
such provision in any other respect or any other provision hereof, all of which
shall remain in full force and effect. 

1.8    Conflicts

In the event of any conflict between the provisions of this
Agreement and the Subscription Receipt Certificates, the provisions of this
Agreement will govern. 

1.9    Meaning of “outstanding”
for Certain Purposes 

Every Subscription Receipt Certificate certified and delivered
by the Subscription Receipt Agent hereunder shall be deemed to be outstanding
until the earlier of the Conversion Date and the Automatic Escrow Release
Deadline, provided however that: 

	 	(a) 	
      a Subscription Receipt Certificate that has been
      partially exercised shall be deemed to be outstanding only to the extent
      of the unexercised part of the Subscription Receipts evidenced
    thereby;

	 	 	 	 
	 	(b) 	
      where a Subscription Receipt Certificate has been issued
      in substitution for a Subscription Receipt Certificate which has been
      lost, stolen or destroyed, only the Subscription Receipt Certificate so
      issued in substitution shall be counted for the purpose of determining the
      number of Subscription Receipts outstanding; and

	 	 	 	 
	 	(c) 	
      for the purpose of any provision of this Agreement
      entitling holders of outstanding Subscription Receipts to vote, sign
      consents, requests or other instruments or take any other action under
      this Agreement, Subscription Receipts owned legally or equitably by the
      Company or any subsidiary of the Company or any partnership to which the
      Company may be directly or indirectly a party shall be disregarded, except
      that:

	 	 	 	 
	 		(i) 	
      for the purpose of determining whether the Subscription
      Receipt Agent shall be protected in relying on any vote, consent, request
      or other instrument or other action, only the Subscription Receipts of
      which the Subscription Receipt Agent has notice that they are so owned
      shall be disregarded; and

	 	 	 	 
	 		(ii) 	 Subscription Receipts so owned that have been pledged
        in good faith other than to the Company or any subsidiary of the Company
        or any partnership to which the Company may be directly or indirectly
        a party shall not be so disregarded if the pledgee establishes to the
        satisfaction of the Subscription Receipt Agent, by providing the Subscription
        Receipt Agent with a legal opinion of Counsel, the pledgee’s right
        to vote the Subscription Receipts in the pledgee’s discretion free
        from the control of the Company or any subsidiary of the Company or any
        partnership to which the Company may be directly or indirectly a party
        to pursuant to the terms of the pledge. 







- 9 -

1.10  Applicable Law

This Agreement, the Subscription Receipts and the Subscription
Receipt Certificates shall be construed and enforced in accordance with the laws
of the Province of Ontario and the federal laws applicable therein and shall be
treated in all respects as Ontario contracts. 

ARTICLE 2 

  ISSUE OF SUBSCRIPTION RECEIPTS

2.1    Issue of Subscription
  Receipts

The creation by the Company of up to 27,500,000 Subscription
Receipts, and the issuance of each of such securities at the Purchase Price is
hereby authorized. Subscription Receipt Certificates evidencing Subscription
Receipts shall be executed by the Company in accordance with Section 2.5 hereof
and, upon the written direction of the Company, shall be certified by or on
behalf of the Subscription Receipt Agent and delivered by the Subscription
Receipt Agent to the Company in accordance with such written direction of the
Company for no additional consideration and without further action. 

	2.2 	
      Description of the Subscription Receipts

	 	 	 	 	 
		(a) 	
      The Subscription Receipts entitle the respective holders
      thereof to receive:

	 	 	 	 	 
			(i) 	
      if the Automatic Escrow Release Conditions are satisfied
      at or prior to the Automatic Escrow Release Deadline and for no additional
      consideration and without further action, one Common Share (issued as
      fully paid and non-assessable) and one-half of one Common Share Purchase
      Warrant for each Subscription Receipt held, subject to adjustment as set
      forth in this Agreement;

	 	 	 	 	 
			(ii) 	
      if the Automatic Escrow Release Conditions are not
      satisfied at or prior to the Automatic Escrow Release Deadline, to receive
      either:

	 	 	 	 	 
				(A) 	
      an amount equal to such holder’s Subscription
      Receiptholder’s Escrowed Funds and such holder’s pro rata share of the
      Earned Interest less any applicable withholding taxes, all in the manner
      and on the terms and conditions set out in this Agreement; or

	 	 	 	 	 
				(B) 	 for no additional consideration and without further
        action, one Common Share (issued as fully paid and non-assessable) and
        one- half of one Common Share Purchase Warrant for eachSubscription Receipt
        held, subject to adjustment as set forth in this Agreement; 







- 10 -

based on the Subscription
Receiptholders election which will be delivered to the Agent within 10 days of
the Subscription Receiptholders’ receipt of notice that the Automatic Escrow
Release Conditions have not been met, and if notice of the Subscription
Receiptholders election to exercise is not received by the Agent or Company (as
applicable) within such time period, the Subscription Receiptholders
Subscription Receipts will automatically be redeemed in accordance with section
2.2(a)(ii)(A) hereof.

	 	(b) 	
      The Subscription Receipt Certificates shall be in the
      English language and, shall be in the form of a Global Subscription
      Receipt registered in the name of CDS substantially in the form attached
      hereto as SCHEDULE A, shall bear such distinguishing letters and numbers
      as the Company may, with the approval of the Subscription Receipt Agent,
      and CDS prescribe, and shall be issuable in whole number
    denominations.

	 	 	 
	 	(c) 	
      Subscription Receipt Certificates issuable to U.S.
      Purchasers shall be substantially in the form attached hereto as SCHEDULE
      A, with such modifications as may be necessary to include the U.S. Legend
      (as defined under Section 2.14) and to give effect to the fact that such
      certificates are not being issued in the form of a Global Subscription
      Receipt.

	 	 	 
	 	(d) 	
      Subscription Receipts shall be evidenced by Subscription
      Receipt Certificates with appropriate insertions, omissions, substitutions
      and variations as may be required or permitted by the terms of this
      Agreement and certification of the Subscription Receipt Certificates by
      the Subscription Receipt Agent shall be conclusive evidence of approval by
      the Company and the Subscription Receipt Agent of any such insertion,
      omission, substitution and variation. The Subscription Receipt
      Certificates shall be dated as of the date hereof.

	 	 	 
	 	(e) 	
      Subject to Section 2.2(a), the Subscription Receipts
      shall only be deemed converted, for no additional consideration and
      without further action by the holders of the Subscription Receipts, into
      Common Shares and Common Share Purchase Warrants upon delivery of the
      fully executed Automatic Escrow Release Certificate to the Subscription
      Receipt Agent on or before the Automatic Escrow Release Deadline or
      deliver of the Elective Release Certificate after the Automatic Escrow
      Release Deadline.

	 	 	 
	 	(f) 	
      No fractional Subscription Receipts shall be issued or
      otherwise provided for hereunder.



2.3    Subscription
Receiptholder not a Shareholder 

Nothing in this Agreement or in the holding of a Subscription
  Receipt evidenced by a Subscription Receipt Certificate or otherwise, shall
  confer or be construed as conferring upon a Subscription Receiptholder any right
  or interest whatsoever as a Shareholder or as any other security holder of the
  Company, including, but not limited to, the right to vote at, to receive notice
  of, or to attend, meetings of Shareholders or any other proceedings of the Company
  or the right to receive dividends and other distributions of shareholders. 




- 11 -

2.4    Subscription Receipts
  to Rank Pari Passu

All Subscription Receipts shall rank pari passu with all
other Subscription Receipts whatever may be the actual date of issue of the
Subscription Receipt Certificates that evidence same. 

2.5     Signing of
Subscription Receipt Certificates 

The Subscription Receipt Certificates shall be signed by any
one of the directors or officers of the Company and need not be under the seal
of the Company. The signatures of any such director or officer may be
mechanically reproduced electronically and Subscription Receipt Certificates
bearing such electronic signatures shall be binding upon the Company as if they
had been manually signed by such director or officer. Notwithstanding that any
person whose manual or electronic signature appears on any Subscription Receipt
Certificate as a director or officer may no longer hold office at the date of
such Subscription Receipt Certificate or at the date of certification or
delivery thereof, any Subscription Receipt Certificate signed as aforesaid
shall, subject to Section 2.6, be valid and binding upon the Company and the
holder thereof shall be entitled to the benefits of this Agreement or the
Subscription Receipt Certificates in question. 

2.6    Certification by the
Subscription Receipt Agent 

	 	(a) 	
      No Subscription Receipt Certificate shall be issued or,
      if issued, shall be valid for any purpose, exercisable or entitle the
      holder to the benefits hereof until it has been certified by manual
      signature by or on behalf of the Subscription Receipt Agent and such
      certification by the Subscription Receipt Agent upon any Subscription
      Receipt Certificate shall be conclusive evidence as against the Company
      that the Subscription Receipt Certificate so certified has been duly
      issued hereunder and that the holder is entitled to the benefits
      hereof.

	 	 	 
	 	(b) 	
      The certification of the Subscription Receipt Agent on
      Subscription Receipt Certificates issued hereunder shall not be construed
      as a representation or warranty by the Subscription Receipt Agent as to
      the validity of this Agreement or the Subscription Receipt Certificates
      (except the due certification thereof by the Subscription Receipt Agent)
      and the Subscription Receipt Agent shall in no respect be liable for the
      use made of the Subscription Receipt Certificate or any of them or of the
      consideration therefor except as otherwise specified
  herein.



2.7    Register for
Subscription Receipts 

The Company hereby appoints the Subscription Receipt Agent as
registrar of the Subscription Receipts, and the Company shall cause to be kept
by the Subscription Receipt Agent at the Designated Office, a securities
register in which shall be entered the names and addresses of holders and the
other particulars, prescribed by law, of the Subscription Receipts held by
them.




- 12 -

The Company shall also cause to be kept by the Subscription
Receipt Agent at the Designated Office the register of transfers, and may also
cause to be kept by the Subscription Receipt Agent, branch registers of
transfers in which shall be recorded the particulars of the transfers of
Subscription Receipts registered in that branch register of transfers. 

2.8    Registers Open for Inspection

The registers hereinbefore referred to shall be open at all
reasonable times during regular business hours of the Subscription Receipt Agent
on a Business Day for inspection by the Company, the Subscription Receipt Agent
or any Subscription Receiptholder. The Subscription Receipt Agent shall from
time to time, when requested to do so by the Company, furnish the Company with a
list of the names and addresses of holders entered in the registers kept by the
Subscription Receipt Agent and showing the number of Subscription Receipts held
by each such holder. 

2.9    Issue in Substitution
for Subscription Receipt Certificates Lost, etc. 

	 	(a) 	
      If any Subscription Receipt Certificate becomes mutilated
      or is lost, destroyed or stolen, the Company shall issue and thereupon the
      Subscription Receipt Agent shall certify and deliver, a new Subscription
      Receipt Certificate of like tenor and bearing the same legends as the one
      mutilated, lost, destroyed or stolen in exchange for and in place of and
      upon cancellation of such mutilated Subscription Receipt Certificate, or
      in lieu of and in substitution for such lost, destroyed or stolen
      Subscription Receipt Certificate, and the substituted Subscription Receipt
      Certificate shall be in a form approved by the Subscription Receipt Agent
      and the Subscription Receipts evidenced thereby shall be entitled to the
      benefits hereof and shall rank equally in accordance with its terms with
      all other Subscription Receipts issued or to be issued hereunder by the
      Company.

	 	 	 
	 	(b) 	
      The applicant for the issue of a new Subscription Receipt
      Certificate pursuant to this Section 2.9 shall bear the reasonable cost of
      the issue thereof and in case of loss, destruction or theft, shall, as a
      condition precedent to the issue thereof, furnish to the Company and to
      the Subscription Receipt Agent such evidence of ownership and of the loss,
      destruction or theft of the Subscription Receipt Certificate so lost,
      destroyed or stolen as shall be satisfactory to the Company and to the
      Subscription Receipt Agent, in their sole discretion acting reasonably,
      and such applicant may also be required to furnish an indemnity and a
      surety bond in amount and form satisfactory to the Company and the
      Subscription Receipt Agent, in their sole discretion acting reasonably,
      and shall pay the reasonable charges of the Company and the Subscription
      Receipt Agent in connection therewith.



2.10  Exchange of Subscription Receipt
Certificates 

Subject to Sections 2.13 and 2.14: 




- 13 -

	 	(a) 	
      Subscription Receipt Certificates may, upon compliance
      with the reasonable requirements of the Subscription Receipt Agent, be
      exchanged for one or more other Subscription Receipt Certificates, bearing
      the same legends, representing the same aggregate number of Subscription
      Receipts as represented by the Subscription Receipt Certificate or
      Subscription Receipt Certificates so exchanged;

	 	 	 
	 	(b) 	
      Subscription Receipt Certificates may be exchanged only
      at the Designated Office or at any other place that is designated by the
      Company with the approval of the Subscription Receipt Agent;

	 	 	 
	 	(c) 	
      Subscription Receipt Certificates issued in exchange for
      Subscription Receipt Certificates in accordance with this section shall
      bear the legends set forth in Subsections 2.13 and 2.14(b), as applicable;
      and

	 	 	 
	 	(d) 	
      any Subscription Receipt Certificate tendered for
      exchange shall be cancelled by the Subscription Receipt
  Agent.



2.11   Charges for Exchange

Except as otherwise herein provided, a reasonable charge may be
levied by the Subscription Receipt Agent in respect of the exchange of any
Subscription Receipt Certificate or the issue of a new Subscription Receipt
Certificate(s) pursuant hereto provided that the reimbursement of the
Subscription Receipt Agent or the Company for any and all transfer, stamp or
similar taxes or other governmental charges required to be paid shall be made by
the holder requesting such exchange as a condition precedent to such exchange.


2.12   Transfer and Ownership of
Subscription Receipts 

	 	(a) 	
      Subject to Sections 2.12(d), 2.13 and 2.14, there are no
      restrictions on the transfer of the Subscription Receipts. However, the
      Subscription Receipts may only be transferred on the register kept by the
      Subscription Receipt Agent at the Designated Office or branch registers of
      transfers by the holder or his legal representatives or attorney duly
      appointed by an instrument in writing. Upon surrender for registration of
      transfer of Subscription Receipts at the Designated Office and upon
      compliance with Sections 2.13 and 2.14, the Company shall issue and
      thereupon the Subscription Receipt Agent shall certify and deliver a new
      Subscription Receipt Certificate of like tenor in the name of the
      designated transferee and register such transfer in accordance with
      Section 2.7 hereof. If less than all the Subscription Receipts evidenced
      by the Subscription Receipt Certificate(s) so surrendered are transferred,
      the transferor shall be entitled to receive, in the same manner, a new
      Subscription Receipt Certificate registered in its name evidencing the
      Subscription Receipts not transferred. However, notwithstanding the
      foregoing, Subscription Receipts shall only be transferred
  upon:







- 14 -

	 	(i) 	
      payment to the Subscription Receipt Agent of a reasonable
      sum for each new Subscription Receipt Certificate issued upon such
      transfer, and reimbursement of the Subscription Receipt Agent or the
      Company for any and all stamp taxes or governmental or other charges
      required to be paid in respect of such transfer;

	 	 	 
	 	(ii) 	
      compliance with all requirements of any legends affixed
      to a Subscription Receipt Certificate; and

	 	 	 
	 	(iii) 	
      such reasonable requirements as the Subscription Receipt
      Agent may prescribe (which shall include surrender of the original
      Subscription Receipt Certificate, and a duly completed Transfer
      Form/Instrument of Transfer),



and all such transfers shall be duly noted in such register by
the Subscription Receipt Agent.

	 	(b) 	
      The Company and the Subscription Receipt Agent and their
      respective agents may deem and treat the holder of any Subscription
      Receipt Certificate as the absolute owner of that Subscription Receipts
      represented thereby for all purposes and the Company and the Subscription
      Receipt Agent and their respective agents shall not be affected by any
      knowledge to the contrary. The holder of any Subscription Receipt shall be
      entitled to the rights evidenced by that Subscription Receipt free from
      all equities or rights of set-off or counterclaim between the Company and
      the original or any intermediate holder thereof and all persons may act
      accordingly and the receipt from any holder for the Common Shares, or
      monies obtainable pursuant thereto shall be a good discharge to the
      Company and the Subscription Receipt Agent for the same and neither the
      Company nor the Subscription Receipt Agent shall be bound to inquire into
      the title of any holder.

	 	 	 
	 	(c) 	
      The transfer register in respect of Subscription Receipts
      shall be closed at 5:00 p.m. (Toronto time) at the Designated Office or
      branch registers of transfers, on the earlier to occur of the Conversion
      Date and the Automatic Escrow Release Deadline.

	 	 	 
	 	(d) 	
      The Subscription Receipt Agent shall promptly advise the
      Company of any requested transfer of Subscription Receipts. The Company
      shall be entitled, and may direct the Subscription Receipt Agent, to
      refuse to recognize any transfer, or enter the name of any transferee, of
      any Subscription Receipts on the registers referred to in this Article, if
      such transfer would constitute a violation of the securities laws of any
      jurisdiction or the rules, regulations or policies of any regulatory
      authority having jurisdiction.

	 	 	 
	 	(e) 	
      Subject to the provisions of this Agreement and
      Applicable Legislation, a Subscription Receiptholder shall be entitled to
      rights and privileges attaching to the Subscription Receipts and neither
      the Company nor the Subscription Receipt Agent shall be bound to inquire
      into the title of a Receiptholder or a transferee of Subscription Receipts
      who surrenders a Subscription Receipt
Certificate.







- 15 -

	2.13 	
      Global Subscription Receipt

	 	 	 
		(a) 	
      Unless the Book-Entry Only System ceases to exist,
      Subscription Receipts will be issued to certain Receiptholders in the form
      of a Global Subscription Receipt Certificate, which will be registered in
      the name of and deposited with CDS or its nominee.

	 	 	 
		(b) 	
      Beneficial interests in the Global Subscription Receipt
      will be represented only through the Book-Entry Only System. Transfers of
      Subscription Receipts between CDS participants shall occur in accordance
      with CDS’ rules and procedures. The Company shall not have any
      responsibility or liability for any aspects of the records relating to or
      payments made by CDS, or its nominee, on account of the beneficial
      interests in the Subscription Receipts. Nothing herein shall prevent the
      owners of beneficial interests in the Subscription Receipts from voting
      such Subscription Receipts using duly executed proxies.

	 	 	 
		(c) 	
      Subscription Receipt Certificates originally issued, as
      well as all certificates issued in exchange for or in substitution of the
      Subscription Receipt Certificates, shall bear the following
  legends:

	 	 	 
			
      “UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE
      HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT
      IS 4 MONTHS AND A DAY AFTER NOVEMBER 22, 2010.

	 	 	 
			
      UNLESS THE CERTIFICATE IS PRESENTED BY AN AUTHORIZED
      REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO
      ADIRA ENERGY LTD. (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION OF
      TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT
      THEREOF IS REGISTERED IN THE NAME OF CDS & CO., OR IN SUCH OTHER NAME
      AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS
      MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
      AUTHORIZED REPRESENTATIVE OF CDS & CO.), ANY TRANSFER, PLEDGE OR OTHER
      USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
      THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN
      THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A
      VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH
      THIS CERTIFICATE.”

	 	 	 
			 provided that if, at any time, in the opinion of Counsel,
        either of such legends are no longer necessary or advisable under applicable
        Securities Laws, or the holder of any such legended certificate, at the
        holder’s expense, provides the Company with evidence satisfactory
        in form and substance to the Company (which may include an opinion of
        Counsel satisfactory to the Company) to the effect that such legend are
        not required, such legended certificate may thereafter be surrendered
        to the Company in exchange for a certificate which does not bear such
        legend. 







- 16 -

	 	(d) 	
      All references herein to actions by, notices given or
      payments made to Subscription Receiptholders shall, where Subscription
      Receipts are held through CDS, refer to actions taken by, or notices given
      or payments made to, CDS upon instruction from the CDS participants in
      accordance with its rules and procedures. For the purposes of any
      provision hereof requiring or permitting actions with the consent of or at
      the direction of Subscription Receiptholders evidencing a specified
      percentage of the aggregate Subscription Receipts outstanding, such
      direction or consent may be given by holders acting through CDS and the
      CDS participants owning Subscription Receipts evidencing the requisite
      percentage of the Subscription Receipts. The rights of a Subscription
      Receiptholder whose Subscription Receipts are held through CDS shall be
      exercised only through CDS and the CDS participants and shall be limited
      to those established by law and agreements between such holders and CDS
      and the CDS participants upon instructions from the CDS participants. Each
      of the Subscription Receipt Agent and the Company may deal with CDS for
      all purposes (including the making of payments) as the authorized
      representative of the respective Subscription Receiptholders and such
      dealing with CDS shall constitute satisfaction or performance, as
      applicable, of their respective obligations hereunder.

	 	 	 
	 	(e) 	
      For so long as Subscription Receipts are held through
      CDS, if any notice or other communication is required to be given to
      Subscription Receiptholders, the Subscription Receipt Agent will give such
      notices and communications to CDS.

	 	 	 
	 	(f) 	
      If the Company or CDS advises the Subscription Receipt
      Agent that CDS will discontinue the eligibility of Subscription Receipts,
      with or without cause, and the Company is unable to locate a qualified
      successor depositary, CDS ceases to be a recognized clearing agency under
      applicable Securities Laws or otherwise ceases to be eligible to be a
      depositary and a successor depositary is not appointed, or the Company
      gives notice to CDS that it is unwilling or unable to continue to have CDS
      hold the Subscription Receipts in the Book-Entry Only System or that it
      desires or has processed an entitlement requiring a withdrawal of
      Subscription Receipts, CDS shall surrender the Global Subscription Receipt
      to the Subscription Receipt Agent with instructions for registration of
      Subscription Receipts in the name and in the amount specified by CDS and
      the Company shall issue, and the Subscription Receipt Agent shall certify
      and deliver, the aggregate number of Subscription Receipts then
      outstanding in the form of definitive Subscription Receipt Certificates
      representing such Subscription Receipts.




	2.14 	
      U.S. Legend

	 	 	 
		(a) 	 The Subscription Receipt Agent understands and acknowledges
        that the Subscription Receipts, the Common Shares and the Common Share
        Purchase Warrants issuable upon conversion of the Subscription Receipts,
        as well as the Listed Common Shares, have not been and will not be registered
        under the 1933 Act or any state securities laws; provided, however, that
        such understanding and acknowledgement shall not detract from or in any
        way lessen or diminish the obligations of the holders thereof, and the
        transferors and transferees of such securities to comply with all applicable
        laws with respect to the transfer, trade, disposition, sale or acquisition
        of such securities.







- 17 - 

	 	(b) 	 Each Subscription Receipt Certificate originally issued
        to a U.S. Purchaser, and until such time as the same is no longer required
        under the applicable requirements of the 1933 Act or applicable state
        securities laws and regulations, certificates representing the Subscription
        Receipts and all certificates issued in exchange therefor or in substitution
        thereof, shall bear the following legend (the “U.S. Legend”):




  
    
      
        “THIS SUBSCRIPTION RECEIPT AND THE SECURITIES
          DELIVERABLE UPON EXERCISE THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED
          UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933
          ACT”), OR APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES.
          THIS SUBSCRIPTION RECEIPT MAY NOT BE EXERCISED IN THE UNITED STATES
          OR BY OR ON BEHALF OF, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON
          UNLESS THIS SUBSCRIPTION RECEIPT AND SECURITIES ISSUABLE UPON EXERCISE
          OF THIS SUBSCRIPTION RECEIPT HAVE BEEN REGISTERED UNDER THE 1933 ACT
          AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION
          FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. THIS SUBSCRIPTION
          RECEIPT MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
          COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
          REGULATION S UNDER THE 1933 ACT AND IN COMPLIANCE WITH APPLICABLE CANADIAN
          AND OTHER APPLICABLE LOCAL LAWS AND REGULATIONS, OR (C) IN COMPLIANCE
          WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933
          ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE
          WITH APPLICABLE STATE SECURITIES LAWS, OR IN ANOTHER TRANSACTION THAT
          DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE
          LAWS, AND THE HOLDER HAS, IN THE CASE OF ANY TRANSFER PURSUANT TO THIS
          CLAUSE (C), PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION
          OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE OF EXEMPTION, IN
          EITHER CASE, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY
          AND THE COMPANY’S TRANSFER AGENT TO SUCH EFFECT. “UNITED STATES”
          AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE
          1933 ACT.” 

      

    

  






- 18 - 


  
    
       

    

    and until such time as the same is no longer required under
      applicable requirements of the 1933 Act or applicable state securities laws
      and regulations, certificates representing the Listed Common Shares OR Listed
      Common Shares issuable upon the exercise of the Common Share Purchase Warrants
      (to the extent they are derived from Subscription Receipts or Common Share
      Purchase Warrants which bear the U.S. Legend) and all securities issued
      in exchange therefor or in substitution thereof, shall bear the following
      legend: 

    
      
        “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
          AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
          1933, AS AMENDED (THE “1933 ACT”) OR APPLICABLE STATE SECURITIES
          LAWS OF THE UNITED STATES. THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED
          OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED
          STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT
          AND IN ACCORDANCE WITH LOCAL LAWS AND REGULATIONS, OR (C) IN COMPLIANCE
          WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933
          ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE
          WITH APPLICABLE STATE SECURITIES LAWS, OR IN ANOTHER TRANSACTION THAT
          DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE
          LAWS, AND THE HOLDER HAS, IN THE CASE OF ANY TRANSFER PURSUANT TO THIS
          CLAUSE (C), PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION
          OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE OF EXEMPTION, IN
          EITHER CASE, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY
          AND THE COMPANY’S TRANSFER AGENT TO SUCH EFFECT. DELIVERY OF THIS
          CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT
          OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.” 

      

    

    and until such time as the same is no longer required under
      applicable requirements of the 1933 Act or applicable state securities laws
      and regulations, certificates representing the Common Share Purchase Warrants
      (to the extent they are derived from Subscription Receipts which bear the
      U.S. Legend) and all 

  






- 19 - 


  
    certificates issued in exchange therefor or in substitution
      thereof, shall bear the following legend: 

    
      
        “THIS WARRANT AND THE SECURITIES DELIVERABLE UPON
          EXERCISE THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
          UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”),
          OR APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES. THIS WARRANT
          MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF, OR
          FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON UNLESS THIS WARRANT AND
          SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER
          THE 1933 ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE
          OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. THIS
          WARRANT MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
          COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
          REGULATION S UNDER THE 1933 ACT AND IN COMPLIANCE WITH APPLICABLE CANADIAN
          LOCAL LAWS AND REGULATIONS, OR (C) IN COMPLIANCE WITH THE EXEMPTION
          FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE
          144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE
          SECURITIES LAWS, OR IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION
          UNDER THE 1933 ACT OR ANY APPLICABLE STATE LAWS, AND THE HOLDER HAS,
          IN THE CASE OF ANY TRANSFER PURSUANT TO THIS CLAUSE (C), PRIOR TO SUCH
          SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING
          OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE, IN FORM AND SUBSTANCE
          REASONABLY SATISFACTORY TO THE COMPANY AND THE COMPANY’S TRANSFER
          AGENT TO SUCH EFFECT. “UNITED STATES” AND “U.S. PERSON”
          ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.” 

        “THIS WARRANT AND THE SECURITIES ISSUABLE UPON
          EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT,
          OR THE SECURITIES LAWS OF ANY STATE. THIS WARRANT MAY NOT BE EXERCISED
          UNLESS THE WARRANT AND THE UNDERLYING SECURITIES HAVE BEEN REGISTERED
          UNDER THE 1933 ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY
          SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.”
        

      

    

  






- 20 - 


  
    
      
         

      

    

    provided, that if any of the securities are being
      sold under clause (B) above, at a time when the Company is a “foreign
      issuer,” as defined in Rule 902 under the 1933 Act, any such legend
      may be removed by providing a declaration to the Company and Equity Transfer
      & Trust Company in the form attached hereto as SCHEDULE D or such other
      evidence as the Company or its transfer agent (or warrant agent, as applicable)
      may from time to time prescribe to the effect that the sale of the securities
      is being made in compliance with Rule 904 of Regulation S under the 1933
      Act; provided further, that if any of the Listed Common Shares or
      Listed Common Shares issuable upon the exercise of the Common Share Purchase
      Warrants are being sold pursuant to the exemption from registration under
      the 1933 Act provided by Rule 144 thereunder or in another transaction that
      does not require registration under the 1933 Act, the legend may be removed
      by delivery to the Company’s transfer agent of an opinion of counsel,
      of recognized standing, satisfactory to the Company and its transfer agent
      to the effect that the legend is no longer required under applicable requirements
      of the 1933 Act or state securities laws. 

  



2.15  Cancellation of Surrendered
Subscription Receipt Certificates 

All Subscription Receipt Certificates surrendered to the
Subscription Receipt Agent pursuant to Sections 2.9, 2.10, 2.12 and 5.1 shall be
returned to or received by the Subscription Receipt Agent for cancellation and,
if required by the Company, the Subscription Receipt Agent shall furnish the
Company with a cancellation certificate identifying the Subscription Receipt
Certificates so cancelled and the number of Subscription Receipts evidenced
thereby. 

ARTICLE 3 
SATISFACTION OF AUTOMATIC ESCROW RELEASE
CONDITIONS, ELECTIVE 

  RELEASE OR PAYMENT UPON TERMINATION EVENT 

3.1    Notice of Satisfaction
of Automatic Escrow Release Conditions 

Upon the satisfaction of the Automatic Escrow Release
Conditions, in the following order: 

	 	(a) 	
      the Company shall forthwith deliver to the Agent, the
      Company Condition Precedent Certificate;

	 	 	 
	 	(b) 	 the Agent and the Company shall forthwith execute and
        deliver to the Subscription Receipt Agent the Automatic Release Certificate.
        Notwithstanding paragraph 3.1(a) above, the Company shall act and rely
        solely and absolutely on the Automatic Release Certificate in issuing
        the Common Shares and the Common Share Purchase Warrants pursuant to paragraph
        3.1(f) below, and the Subscription Receipt Agent shall act and rely solely
        and absolutely on the Automatic Release Certificate in releasing the Escrowed
        Funds pursuant to paragraphs 3.1(e) below and issuing and delivering the
        Common Shares and the Common Share Purchase Warrants pursuant to paragraph
        3.1(f) below; 







- 21 -

	 	(c) 	
      the Finder’s Fees shall be paid to certain finders as
      directed by the Company;

	 	 	 
	 	(d) 	
      the Agent’s Commission, any unpaid portion of the Initial
      Payment and Broker Options shall be issued to the Agent, as
    directed;

	 	 	 
	 	(e) 	
      the Escrowed Funds, less the amount contemplated in
      subsection (c) and (d) above, shall be paid to the Company, as directed;
      and

	 	 	 
	 	(f) 	
      the Company shall issue or cause to be issued: (i) as
      evidenced by entry on the register of members of the Company the Common
      Shares issuable pursuant to the conversion of the Subscription Receipts in
      accordance with Section 3.3; and (ii) as evidenced by entry on the warrant
      register of the Company, the Common Share Purchase Warrants issuable
      pursuant to the conversion of the Subscription Receipts in accordance with
      Section 3.3.



3.2    Notice of Elective Release

If the Automatic Release Certificate has not been delivered to
the Escrow Agent, within 22 days of the Automatic Escrow Release Deadline, the
Company and the Agent may deliver to the Subscription Receipt Agent the Elective
Release Certificate. Following the delivery of the Elective Release Certificate
to the Escrow Agent, the following may occur in the following order: 

	 	(a) 	
      Upon receipt of the Elective Release Certificate, the
      Subscription Receipt Agent shall act and rely solely and absolutely on the
      Elective Release Certificate in releasing the Funds and issuing and
      delivering the Common Shares and Common Share Purchase Warrants as set out
      below;

	 	 	 
	 	(b) 	
      the Agent’s Commission and any unpaid portion of the
      Initial Payment shall be paid to the Agent and Broker Options shall be
      issued to the Agent, as directed in the Elective Release
    Certificate;

	 	 	 
	 	(c) 	
      the Finder’s Fees shall be paid to certain finders as
      directed in the Elective Release Certificate;

	 	 	 
	 	(d) 	
      certain of the Escrowed Funds to be returned to
      Subscription Receiptholders shall be paid directly to the refunding
      Subscription Receiptholders as directed in the Elective Release
      Certificate (and if any additional funds are required to refunds each
      Subscription Receiptholder for the cost of US$0.40 per Subscription
      Receipt the Company shall provide additional funds to the Escrow Agent for
      disbursement to the Subscription Receiptholders );

	 	 	 
	 	(e) 	
      the Escrowed Funds, less the amount contemplated in
      subsections (b), (c) and (d) above, shall be paid to the Company as
      directed in the Elective Release Certificate;
and







- 22 -

	 	(f) 	
      the Company shall issue or cause to be issued: (i) as
      evidenced by entry on the register of members of the Company the Common
      Shares issuable pursuant to the conversion of the Subscription Receipts in
      accordance with Section 3.3; and (ii) as evidenced by entry on the warrant
      register of the Company, the Common Share Purchase Warrants issuable
      pursuant to the conversion of the Subscription Receipts as directed in the
      Elective Release Certificate in accordance with Section
  3.3.




	3.3 	
      Issue and Delivery of Common Shares and Common Share
      Purchase Warrants

	 	 	 
		(a) 	
      If the events set out in sections 3.1 or 3.2 have
      occurred, all or certain of the Subscription Receipts shall be
      automatically converted on the Conversion Date for no additional
      consideration and without further action on the part of the Subscription
      Receiptholder, and the Common Shares and Common Share Purchase Warrants
      shall be issued to the holders on the Conversion Date upon, in the case of
      the Common Shares, the updating of the register of members of the Company
      reflecting the issue of the Common Shares in accordance with the rights of
      such holders as described in Section 2.2(a) hereof and such Common Shares
      and Common Share Purchase Warrants shall be issued on the Conversion Date,
      notwithstanding that a certificate therefore may not yet have been issued
      or entered, as the case may be. The persons to whom such Common Shares and
      Common Share Purchase Warrants are to be issued in accordance with the
      terms of this Agreement shall become the holders of record of such Common
      Shares and Common Share Purchase Warrants on the Conversion
Date.

	 	 	 
		(b) 	
      Effective immediately after the Common Shares and Common
      Share Purchase Warrants have been issued as contemplated in this Section
      3.3 and, in the case of the Elective Release Certificate, the Escrow Funds
      having been dispersed in accordance with the instructions in the Elective
      Release Certificate, the Subscription Receipts relating thereto shall be
      void and of no value or effect.

	 	 	 
		(c) 	
      The holders hereby irrevocably authorize and direct the
      Subscription Receipt Agent to take all required action to effect the
      conversion of the Subscription Receipts pursuant to Subsection 3.3(a)
      hereof.

	 	 	 
		(d) 	
      If, in the opinion of Counsel, any instrument is required
      to be filed with, or any permission, order or ruling is required to be
      obtained from, any securities administrator, regulatory agency or
      governmental authority in Canada or any other step is required under any
      federal or provincial law of Canada or any federal or state law of the
      United States or under the laws of any International Jurisdictions before
      the Common Shares and Common Share Purchase Warrants issuable upon the
      conversion of the Subscription Receipts may be issued or delivered to a
      Subscription Receiptholder, the Company covenants that it will use its
      commercially reasonable efforts to file such instrument, obtain such
      permission, order or ruling or take all such other actions, at its
      expense, as is required or appropriate in the
  circumstances.







- 23 -

	 	(e) 	
      The Company or, if required by the Company, the
      Subscription Receipt Agent will give written notice of the issue of the
      Common Shares and Common Share Purchase Warrants issuable upon the
      conversion of the Subscription Receipts in such detail as may be required,
      to each Regulatory Authority or government authority in Canada in each
      jurisdiction in which there is legislation requiring the giving of any
      such notice.

	 	 	 
	 	(f) 	
      Under no circumstances shall the Company be obliged to
      issue any fractional Common Shares or Common Share Purchase Warrants or
      make any payment of cash or other consideration in lieu thereof upon the
      conversion of one or more Subscription Receipts. To the extent that the
      holder of one or more Subscription Receipts would otherwise have been
      entitled to receive on the conversion thereof a fraction of a Common Share
      and a Common Share Purchase Warrant, such fraction shall be rounded down
      to the nearest whole number.



3.4     Payment on
Termination 

If a Termination Event occurs, upon which the Company shall
forthwith deliver to the Agent, a Termination Notice: 

	 	(a) 	
      the Company shall forthwith notify the Subscription
      Receipt Agent thereof in writing;

	 	 	 
	 	(b) 	
      each Subscription Receipt shall be automatically
      terminated and cancelled without further action on the part of the
      Subscription Receiptholder and each Subscription Receiptholder shall be
      entitled from and after the Automatic Escrow Release Deadline to a payment
      in the aggregate amount of the Subscription Receiptholder’s Escrowed
      Funds;

	 	 	 
	 	(c) 	
      the register of holders in respect of the Subscription
      Receipts shall be closed at 5:00 p.m. (Toronto time) on the Automatic
      Escrow Release Deadline; and

	 	 	 
	 	(d) 	
      the Subscription Receipt Agent shall make the payments,
      within three business days, contemplated by Section 6.5
  hereof.



ARTICLE 4 

  ADJUSTMENT OF NUMBER OF COMMON SHARES

4.1    Definitions

In this Article, the terms “record date” and
“effective date” where used herein shall mean the 5:00 p.m. (Toronto
time) on the relevant date. 

4.2    Adjustment of Entitlement
  Number

The number of Common Shares to be issued upon the conversion of
a Subscription Receipt shall be subject to adjustment from time to time in the
manner provided in Section 4.3 and as follows: 




- 24 -

	 	(a) 	
      If after the Closing Date and prior to the Conversion
      Date the Company shall:

	 	 	 	 	 
	 		(i) 	
      issue to all or substantially all the holders of the
      Common Shares, by way of a share distribution, share dividend or
      otherwise, Common Shares or Convertible Securities; or

	 	 	 	 	 
	 		(ii) 	
      subdivide its outstanding Common Shares into a greater
      number of Common Shares; or

	 	 	 	 	 
	 		(iii) 	
      combine or consolidate its outstanding Common Shares into
      a smaller number of Common Shares,

	 	 	 	 	 
	 			
      (any of these events being herein called a “Securities
      Reorganization”),

	 	 	 	 	 
	 			
      the Entitlement Number shall be adjusted effective
      immediately after the record date at which the holders of Common Shares
      are determined for the purposes of the Securities Reorganization to a
      number that is the product of (1) the Entitlement Number and (2) a
      fraction:

	 	 	 	 	 
	 			(A) 	
      the numerator of which shall be the number of Common
      Shares outstanding after giving effect to the Securities Reorganization;
      and

	 	 	 	 	 
	 			(B) 	
      the denominator of which shall be the number of Common
      Shares outstanding on the record date before giving effect to the
      Securities Reorganization.

	 	 	 	 	 
	 			
      For the purposes of determining the number of Common
      Shares outstanding at any particular time for the purpose of this
      Subsection 4.2(a), there shall be included that number of Common Shares
      which would have resulted from the conversion at that time of all
      outstanding Convertible Securities.

	 	 	 	 	 
	 	(b) 	
      If after the Closing Date and prior to the Conversion
      Date the Company shall issue or distribute to all or substantially all the
      holders of Common Shares (i) shares of any class other than Common Shares,
      or (ii) rights, options or warrants, or (iii) evidences of indebtedness,
      or (iv) any other assets (excluding any cash distributions resulting from
      a release of Escrowed Funds on the occurrence of a Termination Event
      pursuant to Section 6.5, and that issuance or distribution does not
      constitute a Securities Reorganization or a Rights Offering (as
      hereinafter defined) (any of those events being herein called a
      “Special Distribution”), the Entitlement Number shall be adjusted
      effective immediately after the record date at which the holders of Common
      Shares are determined for purposes of the Special Distribution to an
      Entitlement Number that is the product of (1) the Entitlement Number in
      effect on the record date and (2) a fraction:







- 25 -

	 	(i) 	
      the numerator of which shall be the product of (i) the
      sum of the number of Common Shares outstanding on the record date and (ii)
      the Current Market Price thereof on that date; and

	 	 	 	 
	 	(ii) 	
      the denominator of which shall be:

	 	 	 	 
	 		(A) 	
      the product of (A) the sum of the number of Common Shares
      outstanding on the record date and (B) the Current Market Price thereof on
      that date; less,

	 	 	 	 
	 		(B) 	
      the aggregate fair market value, as determined by the
      directors, whose determination shall, absent manifest error, be
      conclusive, of the shares, rights, options, warrants, evidences of
      indebtedness or other assets issued or distributed in the Special
      Distribution;



Any Common Shares owned by or held for
the account of the Company shall be deemed not to be outstanding for the purpose
of any such computation. To the extent that the distribution of shares, rights,
options, warrants, evidences of indebtedness or assets if not so made or to the
extent that any rights, options or warrants so distributed are not exercised,
the Entitlement Number shall be readjusted to the Entitlement Number that would
then be in effect based upon the shares, rights, options, warrants, evidences of
indebtedness or assets actually distributed or based upon the number of Common
Shares or Convertible Securities actually delivered upon the exercise of the
rights, options or warrants, as the case may be, but subject to any other
adjustment required hereunder by reason of any event arising after the record
date. 

	 	(c) 	 If after the Closing Date and prior to the Conversion
        Date there is (i) a reorganization of the Company; (ii) or a consolidation
        or merger or amalgamation of the Company with or into another entity including
        a transaction whereby all or substantially all of the Company’s undertaking
        and assets become the property of any other entity (any such event being
        herein called a “Capital Reorganization”) each holder
        of a Subscription Receipt shall be entitled to receive and shall accept,
        upon the conversion of the Subscription Receipts for Common Shares at
        any time after the effective date of the Capital Reorganization, in lieu
        of the number of Common Shares (and any other securities or properties
        to which holders are entitled upon the conversion of the Subscription
        Receipts) to which it, he or she was theretofore entitled upon the conversion
        of the Subscription Receipt, the aggregate number of Common Shares or
        other securities or property of the Company, or the continuing, successor
        or purchasing person, as the case may be, under the Capital Reorganization
        that the holder would have been entitled to receive as a result of the
        Capital Reorganization if, on the effective date thereof, it, he or she
        had been the holder of the number of Common Shares (and any other securities
        to which holders are entitled upon the conversion of the Subscription
        Receipts) to which immediately before the transaction he or she was entitled
        upon the conversion of the Subscription Receipts. No Capital Reorganization
        shall be completed unless all necessary steps shall have been taken so
        that the holders shall thereafter be entitled to receive the number of
        Common Shares or other securities or property of the Company or of the
        continuing, successor or purchasing person, as the case may be, under
        the Capital Reorganization, subject to adjustment thereafter in accordance
        with provisions the same, as nearly as may be possible, as those contained
        in this Section 4.2. 







- 26 -

	 	(d) 	
      If after the Closing Date and prior to the Conversion
      Date the Company shall issue rights, options or warrants to all or
      substantially all the holders of the Common Shares pursuant to which those
      holders are entitled to subscribe for, purchase or otherwise acquire
      Common Shares or Convertible Securities within a period of 45 days from
      the date of issue thereof at a price, or at a conversion price, of less
      than 95% of the Current Market Price at the record date for such
      distribution (any such issuance being herein called a “Rights
      Offering” and Common Shares that may be acquired in exercise of the
      Rights Offering or upon conversion of the Convertible Securities offered
      by the Rights Offering being herein called the “Offered
      Securities”), the Entitlement Number shall be adjusted effective
      immediately after the record date at which holders of Common Shares are
      determined for the purposes of the Rights Offering to an Entitlement
      Number that is the product of (1) the Entitlement Number in effect on the
      record date and (2) a fraction:




	 	(i) 	
      the numerator of which shall be the sum of: (i) the
      number of Common Shares outstanding on the record date plus; (ii) the
      number of Offered Securities offered pursuant to the Rights Offering or
      the maximum number of Offered Securities into which the Convertible
      Securities so offered pursuant to the Rights Offering may be converted, as
      the case may be; and

	 	 	 	 
	 	(ii) 	
      the denominator of which shall be the sum of:

	 	 	 	 
	 		(A) 	
      the number of Common Shares outstanding on the record
      date for the Rights Offering; and

	 	 	 	 
	 		(B) 	
      the number arrived at when (A) either the product of (1)
      the number of Offered Securities so offered and (2) the price at which
      those Common Shares are offered, or the product of (3) the conversion
      price thereof and (4) the maximum number of Offered Securities for or into
      which the Convertible Securities so offered pursuant to the Rights
      Offering may be converted, as the case may be, is divided by (B) the
      Current Market Price of the Common Shares on the record
  date.



Any Offered Securities owned by or held
  for the account of the Company shall be deemed not to be outstanding for the
  purpose of any such computation. If all the rights, options or warrants are
  not so issued or if all rights, options or warrants are not exercised prior
  to the expiration thereof, the Entitlement Number shall be readjusted to the
  Entitlement Number in effect immediately prior to the record date and the Entitlement
  Number shall be further adjusted based upon the number of Offered Securities
  (or Convertible Securities into Offered Securities) actually delivered upon
  the exercise of the rights, options or warrants, as the case may be, but subject
  to any other adjustment required hereunder by reason of any event arising after
  that record date. 




- 27 -

	 	(e) 	
      If the Company shall reclassify or otherwise change the
      outstanding Common Shares, the Entitlement Number shall be adjusted
      effective immediately upon the reclassification becoming effective so that
      holders shall be entitled to receive Common Shares as they would have
      received had the Subscription Receipts been converted immediately prior to
      the effective date, subject to adjustment thereafter in accordance with
      provisions the same, as nearly as may be possible, as those contained in
      this Section 4.2.



4.3    Entitlement Number
Adjustment Rules 

The following rules and procedures shall be applicable to
adjustments made pursuant to Section 4.2: 

	 	(a) 	
      the adjustments and readjustments provided for in Section
      4.2 are cumulative and shall apply (without duplication) to successive
      issues, subdivisions, combinations, consolidations, distributions and any
      other events that require adjustment of the number of Common Shares to be
      issued or the number or kind of securities that can be acquired
      hereunder.

	 	 	 
	 	(b) 	
      No adjustment in the number of Common Shares to be issued
      shall be required unless the adjustment would result in a change of at
      least 1% of the number of Common Shares to be issued, provided, however,
      that any adjustments that, except for the provisions of this subsection
      would otherwise have been required to be made, shall be carried forward
      and taken into account in any subsequent adjustment.

	 	 	 
	 	(c) 	
      No adjustment in the number of Common Shares to be issued
      shall be made in respect of any events described in Section 4.2 if the
      holders are entitled to participate in the events on the same terms,
      mutatis mutandis, as if their Subscription Receipts had been converted
      immediately prior to the effective date or record date of the
    events.

	 	 	 
	 	(d) 	
      If a dispute shall at any time arise with respect to
      adjustments of the number of Common Shares to be issued the dispute shall
      be conclusively determined by the Company’s Auditors or, if they are
      unable or unwilling to act, by such firm of independent chartered
      accountants as may be selected by the directors and any such determination
      shall, absent manifest error, be binding upon the Company, the
      Subscription Receipt Agent and all holders.

	 	 	 
	 	(e) 	 If the Company shall set a record date to determine
        the holders of Common Shares for the purpose of entitling them to receive
        any distribution or any subscription or purchase rights in accordance
        with Section 4.2 and shall, thereafter, legally abandon its plans to pay
        or deliver the distribution or subscription or purchase rights, then no
        adjustment in the number of Common Shares to be issued shall be required
        by reason of the setting of the record date. 







- 28 -

	 	(f) 	
      If and whenever at any time prior to the Conversion Date,
      the Company shall take any action affecting or relating to the Common
      Shares, other than any action described in this Section, which in the
      opinion of the directors of the Company would prejudicially affect the
      rights of any holders, the number of Common Shares to be issued will be
      adjusted by the directors of the Company in such manner, if any, and at
      such time, as the directors of the Company, may in their sole discretion,
      subject to the approval of any stock exchange on which the Common Shares
      are then listed and posted for trading, reasonably determine to be
      equitable in the circumstances to such holders.

	 	 	 
	 	(g) 	
      As a condition precedent to the taking of any action
      which would require an adjustment in any of the rights under the
      Subscription Receipts, the Company will use its best efforts to take any
      action which, in the opinion of Counsel to the Company, may be necessary
      in order that the Company, or any successor to the Company or successor to
      the undertaking or assets of the Company will be obligated to, and may
      validly and legally, issue all the Common Shares which the holders would
      be entitled to receive thereafter upon the conversion of such Subscription
      Receipts in accordance with the provisions hereof.

	 	 	 
	 	(h) 	
      Notwithstanding anything to the contrary in this
      Agreement, there shall be no adjustment of the Entitlement Number as a
      result of any transaction, reorganization, transfer, conveyance or action
      in respect of the Common Shares and Common Share Purchase Warrants
      pursuant to the Definitive Agreement.



4.4    Postponement of Adjustment

In any case where the application of Section 4.2 results in an
increase in the Entitlement Number taking effect immediately after the record
date for or occurrence of a specific event, if any Subscription Receipts are
converted after that record date or occurrence and prior to completion of the
event or of the period for which a calculation is required to be made, the
Company may postpone the issuance to the holder of the Subscription Receipts of
the Common Shares to which the holder is entitled by reason of the increase in
the number of Common Shares to be issued but the Common Shares shall be so
issued and delivered to that holder upon completion of that event or of the
period for which a calculation is required to be made, with the number of Common
Shares adjusted for completion of that event or period, and the Company shall
forthwith after the Conversion Date deliver to the person or persons in whose
name or names the Common Shares are to be issued appropriate instruments
evidencing the person’s or persons’ right to receive the Common Shares. 




- 29 -

	4.5 	
      Notice of Certain Events

	 	 	 	 
		(a) 	
      Promptly upon the occurrence of the earlier of the
      effective date of or the record date for any event referred to in Sections
      4.2 or 4.3 that requires an adjustment in the Entitlement Number, the
      Company shall:

	 	 	 	 
			(i) 	
      file with the Subscription Receipt Agent a certificate of
      the Company specifying the particulars of the event and, if determinable,
      the adjustment and computation of the adjustment and the Subscription
      Receipt Agent may act and rely absolutely on such certificate of the
      Company; and

	 	 	 	 
			(ii) 	
      give notice to the holders and to the Agent, of the
      particulars of the event and, if determinable, the adjustment.

	 	 	 	 
		(b) 	
      If notice has been given under Subsection 4.5(a) and the
      adjustment is not then determinable, the Company shall promptly, after the
      adjustment is determinable:

	 	 	 	 
			(i) 	
      file with the Subscription Receipt Agent a computation of
      the adjustment; and

	 	 	 	 
			(ii) 	
      give notice to the holders and to the Agent, of the
      adjustment.



4.6    Adjustment to Common
Share Purchase Warrants 

If any adjustment is required to be made under this Article 4,
then the Common Share Purchase Warrants to be issued upon the conversion of the
Subscription Receipts shall be similarly adjusted such that the number of Common
Shares, and the exercise price of the Common Share Purchase Warrants are
adjusted in a similar manner that the Common Shares were so adjusted hereunder.


4.7    Protection of
Subscription Receipt Agent 

Subject to the provisions of Article 10, the Subscription
Receipt Agent: 

	 	(a) 	
      shall not at any time be under any duty or responsibility
      to any Subscription Receiptholder to determine whether any facts exist
      which may require any adjustment when made, or with respect to the method
      employed in making the same;

	 	 	 
	 	(b) 	
      shall not be accountable with respect to the validity or
      value (or kind or amount) of any Common Shares, Common Share Purchase
      Warrants or other securities or property which may at any time be issued
      or delivered upon the exercise of the rights attaching to any Subscription
      Receipt; and

	 	 	 
	 	(c) 	
      shall be entitled to act and rely on any adjustment
      calculation of the Company, its directors or the Company’s
  Auditors.







- 30 -

ARTICLE 5 
RIGHTS AND COVENANTS OF THE
COMPANY

5.1    Optional Purchases by
  the Company

Subject to applicable securities legislation, the Company may
from time to time purchase by private contract or otherwise any of the
Subscription Receipts issued by it. Any Subscription Receipt Certificates
representing the Subscription Receipts purchased pursuant to this Section 5.1
shall forthwith be delivered to and cancelled by the Subscription Receipt Agent
and no Subscription Receipts shall be issued in replacement thereof. 

5.2    General Covenants of the
  Company

So long as any Subscription Receipts remain outstanding the
Company covenants as follows:

	 	(a) 	
      it will cause the Common Shares issuable pursuant to the
      conversion of the Subscription Receipts to be duly issued in accordance
      with the Subscription Receipt Certificates and the terms hereof;

	 	 	 
	 	(b) 	
      all Common Shares issuable upon the conversion of the
      Subscription Receipts (in accordance with the terms hereof and of the
      Subscription Receipt Certificates) shall be credited as fully
    paid-up;

	 	 	 
	 	(c) 	
      it will cause the Common Share Purchase Warrants issuable
      pursuant to the conversion of the Subscription Receipts to be duly issued
      in accordance with the Subscription Receipt Certificates and the terms
      hereof;

	 	 	 
	 	(d) 	
      all Warrant Shares issuable upon the due exercise of the
      Common Share Purchase Warrants in accordance with the terms and conditions
      of the certificates representing such Common Share Purchase Warrants shall
      be credited as fully paid-up;

	 	 	 
	 	(e) 	
      it will use reasonable commercial efforts to maintain its
      corporate existence;

	 	 	 
	 	(f) 	
      generally, it will well and truly perform and carry out
      all of the acts or things to be done by it as provided in this Agreement
      and it will do, execute, acknowledge and deliver or cause to be done,
      executed, acknowledged and delivered, all other acts, deeds and assurances
      in law as the Subscription Receipt Agent may reasonably require for the
      better accomplishing and effecting the intentions and provisions of this
      Agreement; and

	 	 	 
	 	(g) 	
      upon becoming aware of the same, it will promptly advise
      the Subscription Receipt Agent in writing of any default by the Company of
      the terms of this Agreement; and

	 	 	 
	 	(h) 	 SEC Matters: The Company confirms that as at the date
        of execution of this Indenture it (i) does not have a class of securities
        registered pursuant to Section 12 of the Exchange Act or have a reporting
        obligation pursuant to Section 15(d) of the Exchange Act; and (ii) is
        exempt from the reporting requirements of the Exchange Act pursuant to
        Rule 12g3-2(b) under the Exchange Act. 







- 31 -

The Company covenants that in the event
  that (i) any class of its securities shall become registered pursuant to Section
  12 of the Exchange Act or the Company shall incur a reporting obligation pursuant
  to Section 15(d) of the Exchange Act; (ii) it ceases to be a “foreign issuer”
  within the meaning of Regulation S under the U.S. Securities Act; or (iii) any
  such registration or reporting obligation shall be terminated by the Company
  in accordance with the Exchange Act, the Company shall promptly deliver to the
  Escrow Agent an officers’ certificate (in a form provided by the Escrow
  Agent) notifying the Escrow Agent of such registration or termination and such
  other information as the Escrow Agent may require at the time. The Company acknowledges
  that the Escrow Agent is relying upon the foregoing representation and covenants
  in order to meet certain SEC obligations with respect to those clients who are
  filing with the SEC. 

5.3    Subscription Receipt
Agent’s Remuneration and Expenses 

The Company covenants that it will pay (and shall be
responsible for the payments thereof) to the Subscription Receipt Agent from
time to time reasonable remuneration for its services hereunder and will pay or
reimburse the Subscription Receipt Agent upon its request for all reasonable
expenses, disbursements, GST/HST and advances incurred or made by the
Subscription Receipt Agent in the administration or execution of its duties as
set out in this Agreement (including the reasonable compensation and the
disbursements and GST/HST of its Counsel and all other advisors and assistants
not regularly in its employ) both before any default hereunder and thereafter
until all duties of the Subscription Receipt Agent hereunder shall be finally
and fully performed, except any such expense, disbursement, GST/HST or advance
as may arise out of or result from the Subscription Receipt Agent’s gross
negligence or wilful misconduct or fraud. 

5.4    Performance of Covenants
by Subscription Receipt Agent 

If the Company shall fail to perform any of its respective
covenants contained in this Agreement, the Subscription Receipt Agent may notify
the holders of such failure on the part of the Company or may itself perform any
of the covenants capable of being performed by it but shall be under no
obligation to perform said covenants or to notify the holders of such
performance or non-performance by it. All sums expended or advanced by the
Subscription Receipt Agent in so doing shall be repayable as provided in Section
5.3. No such performance, expenditure or advance by the Subscription Receipt
Agent shall relieve the Company of any default hereunder or of its continuing
obligations under the covenants herein contained. 

ARTICLE 6 

  ESCROWED FUNDS

	6.1 	
      Acknowledgement of Escrowed Funds

	 	 	 
		(a) 	 The Subscription Receipt Agent shall acknowledge receipt
        from the Agent, and the Company, respectively, or legal counsel on behalf
        of same, of wire transfers in the aggregate amount of the Escrowed Funds
        on the Closing Date and will confirm that such funds have been deposited
        in a segregated account and, will retain such amount in accordance with
        the terms of this Agreement. 







- 32 - 

	 	(b) 	
      The Company hereby:

	 	 	 	 
	 		(i) 	
      acknowledges that the amounts received by the
      Subscription Receipt Agent pursuant to paragraph 6.1(a) represents payment
      in full of the Purchase Price for the Subscription Receipts; and

	 	 	 	 
	 		(ii) 	
      irrevocably directs the Subscription Receipt Agent to
      retain such amounts in accordance with the terms of this Agreement pending
      payment of such amounts in accordance with the terms of this
    Agreement.



6.2    Escrowed Funds

The Subscription Receipt Agent shall accept and hold the
Escrowed Funds in escrow for and on behalf of the persons who have an interest
therein pursuant hereto, shall disburse and deal with the Escrowed Funds in the
manner contemplated by this Article 6 and at all times shall keep the Escrowed
Funds in a segregated account, all on the terms and subject to the conditions
hereof. The Company further acknowledges and confirms that it has no interest in
the Escrowed Funds or in the Earned Interest unless and until the Automatic
Release Certificate is delivered to the Subscription Receipt Agent on or prior
to the Automatic Escrow Release Deadline. The Subscription Receipt Agent shall
retain the Escrowed Funds for the benefit of the holders and, upon the delivery
of the Automatic Release Certificate to the Subscription Receipt Agent,
retroactively for the benefit of the Company and the Agents, in accordance with
the provisions of this Article 6. 

6.3    Qualified Investments

Until released in accordance with this Agreement the Escrowed
Funds shall be kept segregated in the records of the Escrow Agent and shall be
invested in short-term government debt or as directed by the Company and the
Agents, deposited in one or more segregated interest-bearing trust accounts to
be maintained by the Escrow Agent in the name of the Escrow Agent at one or more
banks listed below in this Section 6.3 (each such bank, an “Approved
Bank”). The Escrowed Funds shall bear interest at an annual rate which is
equal to 2 percent less than the prime rate of interest announced from time to
time by The Bank of Nova Scotia on Canadian dollar loans made to its most credit
worthy customers in Canada. The Escrow Agent shall be entitled to retain for its
own benefit, as partial compensation for its services hereunder, any amount of
the interest earned on the Escrowed Funds that is not payable pursuant to this
Section. 

All amounts held by the Escrow Agent pursuant to this Agreement
  shall be held in escrow by the Escrow Agent for the benefit of the Subscription
  Receiptholders and the delivery of the Escrowed Funds to the Escrow Agent shall
  not give rise to a debtor-creditor or other similar relationship between the
  Escrow Agent and the Subscription Receiptholders. The amounts held by the Escrow
  Agent pursuant to this Agreement are the sole risk of the Subscription Receiptholders
  and, without limiting the generality of the foregoing, the Escrow Agent shall
  have no responsibility or liability for any diminution of the Escrowed Funds
  which may result from any deposit made with an Approved Bank pursuant to this
  Section 6.3, including any losses resulting from a default by the Approved Bank
  or other credit losses (whether or not resulting from such a default) and any
  credit or other losses on any deposit liquidated or sold prior to maturity.
  The Corporation and the Lead Agents acknowledge and agree that the Escrow Agent
  acts prudently in depositing the Escrowed Funds at any Approved Bank, and that
  the Escrow Agent is not required to make any further inquiries in respect of
  any such bank. 




- 33 - 

At any time and from time to time the Company and the Agents
shall be entitled to jointly direct the Escrow Agent by written notice (a) not
to deposit any new amounts in any Approved Bank specified in the notice and/or
(b) to withdraw all or any of the Escrowed Funds that may then be deposited with
any Approved Bank specified in the notice. With respect to any withdrawal
notice, the Escrow Agent will endeavour to withdraw such amount specified in the
notice as soon as reasonably practicable and the Company and the Agents
acknowledges and agrees that such specified amount remains at the sole risk of
the Subscription Receiptholders prior to and after such withdrawal. 

Approved Banks


	
Bank 
	Relevant S&P Issuer 
Credit
      Rating 
(as at June 18, 2009) 
	Bank of Montreal 	A+ 
	Citibank NA 	A+ 
	Bank of America NA 	A+ 
	Harris Bancorp Inc. 	A+ 
	PNC Bank NA 	A+ 
	The Bank of Nova Scotia 	AA- 
	Royal Bank of Canada 	AA- 




	6.4 	
      Release of Escrowed Funds Upon Receipt of Automatic
      Release Certificate or Elective Release
Certificate



As soon as practicable upon receipt of the Automatic Release
Certificate or Elective Release Certificate, and in any event within two
Business Days thereafter, the Subscription Receipt Agent shall: 

	 	(a) 	
      liquidate any investment of the Escrowed Funds;
  and

	 	 	 
	 	(b) 	
      pay the Escrowed Funds in the manner set forth in the
      Automatic or Release Certificate (including account information if payment
      is to be made by wire transfer).



6.5    Release of Escrowed
Funds on Termination Event 

Upon the occurrence of a Termination Event, the Company shall
  forthwith deliver a Termination Notice to each of the holders, the Agents and
  the Subscription Receipt Agent. The Subscription Receipt Agent shall return
  to each holder an amount equal to the Subscription Receiptholder’s Escrowed
  Funds, less any applicable withholding taxes, all in the manner and on the terms
  and conditions set out in this Agreement. 




- 34 -


Each holder’s Subscription Receiptholder’s Escrowed
  Funds shall be mailed to such holder within five Business Days following the
  receipt by the Subscription Receipt Agent of the Termination Notice. Payment
  made in accordance with this Article 6 shall be made in accordance with Section
  6.8 hereof and the Subscription Receipt Agent shall mail such payment to such
  holders at their address last appearing on the register of the Subscription
  Receipts maintained by the Subscription Receipt Agent. All Subscription Receipt
  Certificates shall be deemed to have been cancelled on the Automatic Escrow
  Release Deadline and the Subscription Receipt Agent shall record the deemed
  cancellation of such Subscription Receipt Certificates on the register of the
  Subscription Receipts and shall be without further force and effect whatsoever.


6.6    Direction

In order to permit the Subscription Receipt Agent to carry out
its obligations under this Article 6, the Company hereby specifically authorizes
and directs the Subscription Receipt Agent to make any stipulated payment or to
take any stipulated action in accordance with the provisions of this Agreement.


6.7    Early Termination of any
Investment of the Escrowed Funds 

In making any payment pursuant to this Agreement, the
Subscription Receipt Agent has the authority to liquidate any investments in
order to make payments contemplated under this Article 6 and shall not be liable
for any loss sustained in the escrow account for early termination of any
investment of the Escrowed Funds necessary to enable the Subscription Receipt
Agent to make such payment. 

	6.8 	
      Method of Disbursement and Delivery

	 	 	 
		(a) 	
      All disbursements of money made in accordance with the
      provisions of this Article 6 may be made by wire transfer as may be
      directed by the holders, the Company or the Agents, and if not so
      directed, by cheque drawn upon a Canadian Schedule I chartered bank or by
      official cheque drawn upon the account of the Subscription Receipt Agent
      made payable to or to the order of the persons entitled to disbursement
      and in the correct amount (less all amounts required to be withheld by the
      Company by law, including without limitation, under the Income Tax Act
      (Canada) based on an opinion of Counsel).

	 	 	 
		(b) 	 If the Subscription Receipt Agent delivers any such
        wire transfer or cheque as required under Subsection 6.8(a), the Subscription
        Receipt Agent shall have no further obligation or liability for the amount
        represented thereby, unless any such cheque is not paid on due presentation;
        provided that in the event of the non- receipt of such wire transfer or
        cheque by the payee, or the loss or destruction of such cheque, the Subscription
        Receipt Agent, upon being furnished with reasonable evidence of such non-receipt,
        loss or destruction and funding and indemnity reasonably satisfactory
        to it, shall initiate a new wire transfer or issue to such payee a replacement
        cheque for the amount of such wire transfer or cheque. 







- 35 - 

	6.9 	
      Miscellaneous

	 	 	 
		(a) 	
      The Subscription Receipt Agent will disburse monies
      according to this Agreement only to the extent that monies have been
      deposited with it. The Subscription Receipt Agent shall not, under any
      circumstances, be required to disburse funds in excess of the amounts on
      deposit with it at the time of such disbursement.

	 	 	 
		(b) 	
      The Subscription Receipt Agent shall not be responsible
      for any losses which may occur as a result of the investment of the
      Escrowed Funds where the Escrowed Funds have been invested in accordance
      with the terms of this Agreement.

	 	 	 
		(c) 	
      In addition to the other rights granted to holders in
      this Agreement, until the release of the Escrowed Funds pursuant to the
      terms of this Agreement, each holder of Subscription Receipts has a claim
      against the Subscription Receiptholder’s Escrowed Funds, which claim shall
      subsist until such time as the Common Shares and Common Share Purchase
      Warrants issuable upon the conversion of the Subscription Receipts are
      issued or such amount is paid in full. In the event that, prior to the
      release of the Escrowed Funds in accordance with the terms of this
      Agreement, the Company: (i) makes a general assignment for the benefit of
      creditors or any proceeding is instituted by the Company seeking relief on
      behalf thereof as a debtor, or to adjudicate the Company a bankrupt or
      insolvent, or seeking liquidation, winding-up, reorganization,
      arrangement, adjustment or composition of the Company or the debts of the
      Company under any law relating to bankruptcy, insolvency, reorganization
      or relief of debtors, or seeking appointment of a receiver, receiver and
      manager, trustee, custodian or similar official for the Company or any
      substantial part of the property and assets of the Company or the Company
      takes any corporate action to authorize any of the actions set forth
      above; or (ii) the Company shall be declared insolvent, or a receiver,
      receiver and manager, trustee, custodian or similar official is appointed
      for the Company or any substantial part of its property and assets of the
      Company or an encumbrancer shall legally take possession of any
      substantial part of the property or assets of the Company or a distress or
      execution or any similar process is levied or enforced against such
      property and assets and remains unsatisfied for such period as would
      permit such property or such part thereof to be sold thereunder, the right
      of each holder of Subscription Receipts to be issued Common Shares and
      Common Share Purchase Warrants upon the conversion of the Subscription
      Receipts of such holder will terminate and such holder will be entitled to
      assert a claim against the Escrowed Funds held in escrow and the Company
      in an amount equal to the Subscription Receiptholder’s Escrowed Funds less
      any withholding tax or charges required to be withheld in respect
      thereof.

	 	 	 
		(d) 	 In the event that the Subscription Receipt Agent shall
        hold any amount of interest or other distributable amount which is unclaimed
        or which cannot be paid for any reason other than the gross negligence
        or wilful misconduct or fraud of the Subscription Receipt Agent, the Subscription
        Receipt Agent shall be under no obligation to invest or reinvest the same
        but shall only be obligated to hold the same on behalf of the person or
        persons entitled thereto in a current or other non-interest bearing account
        pending payment to the person or persons entitled thereto. The Subscription
        Receipt Agent shall, as and when required by law, and may at any time
        prior to such required time, pay all or part of such interest or other
        distributable amount so held to an appropriate official or agency of the
        Province of Ontario, whose receipt shall be good discharge and release
        of the Subscription Receipt Agent for such amounts. 







- 36 -



	 	(e) 	
      The Subscription Receipt Agent shall be entitled to act
      and rely absolutely on the Automatic Release Certificate in releasing the
      Escrowed Funds upon the receipt of the Automatic Release Certificate as
      provided for in this Agreement.



ARTICLE 7 

  ENFORCEMENT

7.1    Suits by holders

Subject to Section 8.10, all or any of the rights conferred
upon a Subscription Receiptholder by the terms of the Subscription Receipts held
by such Subscription Receiptholder and/or this Agreement may be enforced by such
Subscription Receiptholder by appropriate legal proceedings but without
prejudice to the right that is hereby conferred upon the Subscription Receipt
Agent to proceed in its own name to enforce each and all of the provisions
herein contained for the benefit of the holders from time to time outstanding.
The Subscription Receipt Agent shall also have the power at any time and from
time to time to institute and to maintain such suits and proceedings as it may
reasonably be advised shall be necessary or advisable to preserve and protect
its interests and the interests of holders. 

7.2    Limitation of Liability

The obligations of the Company hereunder (including without
limitation under Section 10.3) are not personally binding upon, nor shall resort
hereunder be had to, the private property of any of the past, present or future
directors or shareholders of the Company or any of the past, present or future
officers, employees or agents of the Company but only the property of the
Company (or any successor person) shall be bound in respect hereof, provided
that the holders are not, for greater certainty, waiving or releasing any right,
cause of action or remedy under any other agreement. 

ARTICLE 8 

  MEETINGS OF SUBSCRIPTION RECEIPTHOLDERS

8.1    Right to Convene Meetings

The Subscription Receipt Agent may at any time and from time
  to time, and shall on receipt of a written request of the Company or of a Subscription
  Receiptholder’s Request and upon being indemnified and provided with funding
  to its reasonable satisfaction by the Company or by the holders signing such
  Subscription Receiptholder’s Request against the cost which may be incurred
  in connection with the calling and holding of such meeting, call and hold a
  meeting of the holders. In the event of the Subscription Receipt Agent failing
  to so call and hold a meeting within seven (7) days after receipt of such written
  request of the Company or such Subscription Receiptholder’s Request and
  indemnity and funding given as aforesaid, the Company or such holders, as the
  case may be, may call and hold such meeting. Every such meeting shall be held
  in the City of Toronto or at such other place as may be approved or determined
  by the Subscription Receipt Agent and the Company. 




- 37 -



8.2    Notice

At least ten (10) Business Days’ prior notice of any meeting of
holders shall be given to the holders in the manner provided for in Section 11.2
and a copy of such notice shall be sent by mail to the Subscription Receipt
Agent (unless the meeting has been called by the Subscription Receipt Agent) and
to the Company (unless the meeting has been called by the Company). Such notice
shall state the time when and the place where the meeting is to be held, shall
state briefly the general nature of the business to be transacted thereat and
shall contain such information as is reasonably necessary to enable the holders
to make a reasoned decision on the matter, but it shall not be necessary for any
such notice to set out the terms of any resolution to be proposed or any of the
provisions of this Article 8. 

8.3    Chairman

An individual (who need not be a Subscription Receiptholder)
designated in writing by the Subscription Receipt Agent shall be chairman of the
meeting and if no individual is so designated, or if the individual so
designated is not present within 30 minutes from the time fixed for the holding
of the meeting, the holders present in person or by proxy shall choose some
individual present to be chairman. 

8.4    Quorum

Subject to the provisions of Section 8.11, at any meeting of
the holders a quorum shall consist of holders present in person or by proxy and
representing at least 20% of the aggregate number of the then outstanding
Subscription Receipts, provided that at least two persons entitled to vote
thereat are personally present or represented by proxy. If a quorum of the
holders shall not be present within 30 minutes from the time fixed for holding
any meeting, the meeting, if summoned by holders or on a Subscription
Receiptholder’s Request, shall be dissolved; but in any other case the meeting
shall be adjourned to the same day in the next week (unless such day is not a
Business Day, in which case it shall be adjourned to the next following Business
Day) at the same time and place and no notice of the adjournment need be given.
Any business may be brought before or dealt with at an adjourned meeting which
might have been dealt with at the original meeting in accordance with the notice
calling the same. No business shall be transacted at any meeting unless a quorum
be present at the commencement of business. At the adjourned meeting, the
holders present in person or by proxy shall form a quorum and may transact the
business for which the meeting was originally convened, notwithstanding that
they may not be representing at least 20% of the then outstanding Subscription
Receipts. 




- 38 -

8.5    Power to Adjourn

The chairman of any meeting at which a quorum of the holders is
present may, with the consent of the meeting, adjourn any such meeting, and no
notice of such adjournment need be given except such notice, if any, as the
meeting may prescribe. 

8.6    Show of Hands

Every question submitted to a meeting shall be decided in the
first place by a majority of the votes given on a show of hands except that
votes on an extraordinary resolution shall be given in the manner hereinafter
provided. At any such meeting, unless a poll is duly demanded as herein
provided, a declaration by the chairman that a resolution has been carried or
carried unanimously or by a particular majority or lost or not carried by a
particular majority shall be conclusive evidence of the fact. 

8.7    Poll and Voting

On every extraordinary resolution, and on any other question
submitted to a meeting and after a vote by show of hands when demanded by the
chairman or by one or more of the holders acting in person or by proxy and
holding in the aggregate at least 5% of the aggregate number of the then
outstanding Subscription Receipts, a poll shall be taken in such manner as the
chairman shall direct. Questions other than those required to be determined by
extraordinary resolution shall be decided by a majority of the votes cast on the
poll. 

On a show of hands, every person who is present and entitled to
vote, whether as a Subscription Receiptholder or as proxy for one or more absent
holders, or both, shall have one vote. On a poll, each Subscription
Receiptholder present in person or represented by a proxy duly appointed by
instrument in writing shall be entitled to one vote in respect of each
Subscription Receipt then held or represented by it. A proxy need not be a
Subscription Receiptholder. The chairman of any meeting shall be entitled, both
on a show of hands and on a poll, to vote in respect of the Subscription
Receipts, if any, held or represented by him but shall not be entitled to a
casting vote in the case of an equality of votes. 

8.8    Regulations

The Subscription Receipt Agent, or the Company with the
approval of the Subscription Receipt Agent, may from time to time make and from
time to time vary such regulations as it shall think fit for: 

	 	(a) 	
      the setting of a record date for a meeting for the
      purpose of determining the holders entitled to receive notice of and to
      vote at the meeting;

	 	 	 
	 	(b) 	
      the form of the instrument of proxy;

	 	 	 
	 	(c) 	 for the deposit of instruments appointing proxies at
        such place and time as the Subscription Receipt Agent, the Company or
        the holders convening the meeting, as the case may be, may in the notice
        convening the meeting direct, which shall entitle the persons named therein
        to be present and vote at the meeting and at any adjournment thereof in
        the same manner and with the same effect as though the persons so named
        in the proxy were the actual holders specified therein; 







- 39 -

	 	(d) 	
      for the deposit of instruments appointing proxies at some
      approved place or places other than the place at which the meeting is to
      be held and enabling particulars of the instruments appointing proxies to
      be sent by mail, facsimile or other means of prepaid, transmitted,
      recorded communication before the meeting to the Company or to the
      Subscription Receipt Agent at the place where the same is to be held and
      for the voting of proxies so deposited as though the instruments
      themselves were produced at the meeting; and

	 	 	 
	 	(e) 	
      generally for the calling of meetings of holders and the
      conduct of business thereat.



Any regulations so made shall be binding and effective and the
votes given in accordance therewith shall be valid and shall be counted. Save as
such regulations may provide, the only persons who shall be recognized at any
meeting as a Subscription Receiptholder, or be entitled to vote or be present at
the meeting in respect thereof (subject to Section 8.9), shall be holders or
their Counsel, or proxies of holders. 

8.9    Company and Subscription
Receipt Agent May be Represented 

The Company and the Subscription Receipt Agent, by their
respective employees, directors and officers, Counsel for the Company and the
Counsel for the Subscription Receipt Agent may attend any meeting of the
holders, but shall not be entitled to vote thereat, whether in respect of any
Subscription Receipts held by them or otherwise. 

8.10  Powers Exercisable by Extraordinary
Resolution 

In addition to all other powers conferred upon them by any
other provisions of this Agreement or by law, the holders at a meeting shall,
subject to the provisions of Section 8.11, have the power, exercisable from time
to time by extraordinary resolution: 

	 	(a) 	
      to agree to any modification, abrogation, alteration,
      compromise or arrangement of the rights of holders or the Subscription
      Receipt Agent (in the case of the rights of the Subscription Receipt
      Agent, subject to the prior consent of the Subscription Receipt Agent) or
      on behalf of the holders against the Company whether such rights arise
      under this Agreement or the Subscription Receipt Certificates or
      otherwise;

	 	 	 
	 	(b) 	
      to amend, alter or repeal any extraordinary resolution
      previously passed or sanctioned by the holders;

	 	 	 
	 	(c) 	
      to direct or to authorize the Subscription Receipt Agent
      to enforce any of the covenants on the part of the Company contained in
      this Agreement or the Subscription Receipt Certificates or to enforce any
      of the rights of the holders in any manner specified in such extraordinary
      resolution or to refrain from enforcing any such covenant or
  right:







- 40 -

	 	(d) 	
      to waive, and to direct the Subscription Receipt Agent to
      waive, any default on the part of the Company in complying with any
      provisions of this Agreement or the Subscription Receipt Certificates
      either unconditionally or upon any conditions specified in such
      extraordinary resolution;

	 	 	 
	 	(e) 	
      to restrain any Subscription Receiptholder from taking or
      instituting any suit, action or proceeding against the Company for the
      enforcement of any of the covenants on the part of the Company in this
      Agreement or the Subscription Receipt Certificates or to enforce any of
      the rights of the holders;

	 	 	 
	 	(f) 	
      to direct any Subscription Receiptholder who, as such,
      has brought any suit, action or proceeding to stay or to discontinue or
      otherwise to deal with the same upon payment of the costs, charges and
      expenses reasonably and properly incurred by such Subscription
      Receiptholder in connection therewith;

	 	 	 
	 	(g) 	
      to assent to any change in or omission from the
      provisions contained in the Subscription Receipt Certificates and this
      Agreement or any ancillary or supplemental instrument which may be agreed
      to by the Company, and to authorize the Subscription Receipt Agent to
      concur in and execute any ancillary or supplemental agreement embodying
      the change or omission;

	 	 	 
	 	(h) 	
      with the consent of the Company, not to be unreasonably
      withheld, to remove the Subscription Receipt Agent or its successor in
      office and to appoint a new trustee or trustees to take the place of the
      Subscription Receipt Agent so removed;

	 	 	 
	 	(i) 	
      to assent to any compromise or arrangement with any
      creditor or creditors or any class or classes of creditors, whether
      secured or otherwise, and with holders of any shares or other securities
      of the Company; and

	 	 	 
	 	(j) 	
      in the event that the Automatic Release Event has not
      occurred on or prior to the Automatic Escrow Release Deadline, to extend
      the Automatic Escrow Release Deadline.




	8.11 	
      Meaning of Extraordinary Resolution

	 	 	 
		(a) 	
      The expression “extraordinary resolution” when used in
      this Agreement means, subject as hereinafter provided in this Section 8.11
      and in Section 8.14, a resolution proposed at a meeting of holders duly
      convened for that purpose and held in accordance with the provisions of
      this Article 8 at which there are present in person or by proxy holders
      representing not less than 20% of the then outstanding Subscription
      Receipts and passed by the affirmative votes of holders representing not
      less than 662/3% of the aggregate number of the then outstanding
      Subscription Receipts represented at the meeting and voted on the poll
      upon such resolution.

	 	 	 
		(b) 	 If, at the meeting at which an extraordinary resolution
        is to be considered, holders representing at least 20% of the then outstanding
        Subscription Receipts are not present in person or by proxy within 30
        minutes after the time appointed for the meeting, then the meeting, if
        convened by holders or on a Subscription Receiptholder’s Request,
        shall be dissolved; but in any other case it shall stand adjourned to
        such day, being not less than 30 or more than 45 days later, and to such
        place and time as may be appointed by the chairman. Not less than 10 Business
        Days’ prior notice shall be given of the time and place of such adjourned
        meeting in the manner provided for in Section 11.2. Such notice shall
        state that at the adjourned meeting the holders present in person or by
        proxy shall form a quorum but it shall not be necessary to set forth the
        purposes for which the meeting, was originally called or any other particulars.
        At the adjourned meeting the holders present in person or by proxy shall
        form a quorum and may transact the business for which the meeting was
        originally convened and a resolution proposed at such adjourned meeting
        and passed by the requisite vote as provided in Subsection 8.11(a) shall
        be an extraordinary resolution within the meaning of this Agreement notwithstanding
        that holders holding at least 20% of the aggregate number of the then
        outstanding Subscription Receipts are not present in person or by proxy
        at such adjourned meeting. 







- 41 -

	 	(c) 	
      Votes on an extraordinary resolution shall always be
      given on a poll and no demand for a poll on an extraordinary resolution
      shall be necessary.



8.12  Powers Cumulative

Any one or more of the powers or any combination of the powers
in this Agreement stated to be exercisable by the holders by extraordinary
resolution or otherwise may be exercised from time to time and the exercise of
any one or more of such powers or any combination of powers from time to time
shall not be deemed to exhaust the right of the holders to exercise such power
or powers or combination of powers then or thereafter from time to time. 

8.13  Minutes

Minutes of all resolutions and proceedings at every meeting of
holders shall be made and duly entered in books to be provided from time to time
for that purpose by the Subscription Receipt Agent at the expense of the Company
and any such minutes as aforesaid, if signed by the chairman or the secretary of
the meeting at which such resolutions were passed or proceedings held shall be
prima facie evidence of the matters therein stated and, until the
contrary is proved, every such meeting in respect of the proceedings of which
minutes shall have been made shall be deemed to have been duly convened and
held, and all resolutions passed thereat or proceedings taken shall be deemed to
have been duly passed and taken. 

8.14  Instruments in Writing

All actions which may be taken and all powers that may be exercised
  by the holders at a meeting held as provided in this Article 8 may also be taken
  and exercised by holders representing at least 662/3% of the aggregate number
  of the then outstanding Subscription Receipts by an instrument in writing signed
  in one or more counterparts by such holders in person or by attorney duly appointed
  in writing, and the expression “extraordinary resolution” when used
  in this Agreement shall include an instrument so signed. 




- 42 -

8.15  Binding Effect of Resolutions

Every resolution and every extraordinary resolution passed in
accordance with the provisions of this Article 8 at a meeting of holders shall
be binding upon all the holders, whether present at or absent from such meeting,
and every instrument in writing signed by holders in accordance with Section
8.14 shall be binding upon all the holders, whether signatories thereto or not,
and each and every Subscription Receiptholder and the Subscription Receipt Agent
(subject to the provisions for its funding indemnity herein contained) shall be
bound to give effect accordingly to every such resolution and instrument in
writing. 

8.16  Holdings by Company Disregarded

In determining whether holders holding the required number of
Subscription Receipts are present at a meeting of holders for the purpose of
determining a quorum or have concurred in any consent, waiver, extraordinary
resolution, Subscription Receiptholder’s Request or other action under this
Agreement, Subscription Receipts owned legally or beneficially by the Company or
any subsidiary or affiliate of the Company shall be disregarded in accordance
with the provisions of Section 11.9 and shall not be entitled to vote on any
matter considered at such a meeting of holders. 

ARTICLE 9 

  SUPPLEMENTAL AGREEMENTS

9.1    Provision for
Supplemental Agreements for Certain Purposes 

From time to time the Company (when authorized by action of the
directors) and the Subscription Receipt Agent may, subject to the provisions
hereof, and they shall, when so directed in accordance with the provisions
hereof, execute and deliver by their proper officers, agreements, indentures or
instruments supplemental hereto, which thereafter shall form part hereof, for
any one or more or all of the following purposes: 

	 	(a) 	
      providing for the issuance of additional Subscription
      Receipts hereunder and any consequential amendments hereto as may be
      required by the Subscription Receipt Agent, relying on the advice of
      Counsel;

	 	 	 
	 	(b) 	
      adding to the provisions hereof such additional covenants
      and enforcement provisions as, in the opinion of Counsel are necessary or
      advisable, provided that the same are not in the opinion of the
      Subscription Receipt Agent, based on the advice of Counsel, prejudicial to
      the interests of the holders;

	 	 	 
	 	(c) 	
      giving effect to any resolution or extraordinary
      resolution passed as provided in Article 8;

	 	 	 
	 	(d) 	 making such provisions not inconsistent with this Agreement
        as may be necessary or desirable with respect to matters or questions
        arising hereunder, provided that such provisions are not, in the opinion
        of the Subscription Receipt Agent, based on the advice of Counsel, prejudicial
        to the interests of the holders; 







- 43 -

	 	(e) 	
      adding to or altering the provisions hereof in respect of
      the transfer of Subscription Receipts, making provision for the exchange
      of Subscription Receipt Certificates, and making any modification in the
      form of the Subscription Receipt Certificates which does not affect the
      substance thereof;

	 	 	 
	 	(f) 	
      modifying any of the provisions of this Agreement,
      including relieving the Company from any of the obligations, conditions or
      restrictions herein contained, provided that such modification or relief
      shall be or become operative or effective only if, in the opinion of the
      Subscription Receipt Agent, based on the opinion of Counsel, such
      modification or relief in no way prejudices any of the rights of the
      holders or of the Subscription Receipt Agent, and provided further that
      the Subscription Receipt Agent may in its sole discretion decline to enter
      into any such supplemental agreement which in its opinion, based on the
      advice of Counsel, may not afford adequate protection to the Subscription
      Receipt Agent when the same shall become operative; and

	 	 	 
	 	(g) 	
      for any other purpose not inconsistent with the terms of
      this Agreement, including the correction or rectification of any
      ambiguities, defective or inconsistent provisions, errors, mistakes or
      omissions herein, provided that in the opinion of the Subscription Receipt
      Agent, based on the advice of Counsel, the rights of the Subscription
      Receipt Agent and of the holders are in no way prejudiced
  thereby,



in each case, without the consent of the holders.

9.2    Successor Company


In the case of the consolidation, amalgamation, merger or
transfer of the undertaking or assets of the Company as an entirety or
substantially as an entirety to another corporation (“successor
corporation”), the successor corporation resulting from such consolidation,
amalgamation, merger or transfer (if not the Company) shall expressly assume, by
supplemental agreement satisfactory in form to the Subscription Receipt Agent
and executed and delivered to the Subscription Receipt Agent, the due and
punctual performance and observance of each and every covenant and condition of
this Agreement to be performed and observed by the Company and the successor
corporation shall by supplemental agreement satisfactory in term to the
Subscription Receipt Agent and executed and delivered to the Subscription
Receipt Agent, expressly assuming those obligations. 




- 44 - 

ARTICLE 10 
CONCERNING THE SUBSCRIPTION RECEIPT
AGENT

	10.1 	
      Applicable Legislation

	 	 	 
		(a) 	
      If and to the extent that any provision of this Agreement
      limits, qualifies or conflicts with a mandatory requirement of the
      Applicable Legislation, such mandatory requirement shall
prevail.

	 	 	 
		(b) 	
      The Company and the Subscription Receipt Agent agree that
      each will, at all times in relation to this Agreement and any action to be
      taken hereunder, observe and comply with and be entitled to the benefits
      of the Applicable Legislation.

	 	 	 
	10.2 	
      Rights and Duties of Subscription Receipt
    Agent

	 	 	 
		(a) 	
      The Subscription Receipt Agent shall have no duties
      except those which are expressly set forth herein, and it shall not be
      bound by any notice of a claim or demand with respect to, or any waiver,
      modification, amendment, termination or rescission of this Agreement,
      unless received by it in writing, and signed by the parties hereto and if
      its duties herein are affected, unless it shall have given its prior
      written consent thereto.

	 	 	 
		(b) 	
      The Subscription Receipt Agent shall retain the right not
      to act and shall not be held liable for refusing to act unless it has
      received clear and reasonable instructions in writing which comply with
      the terms of this Agreement. Such documentation must not require the
      exercise of any discretion or independent judgment.

	 	 	 
		(c) 	
      Any certificate of a party referred to herein, unless
      otherwise specified, shall, in the case of the Company, refer to a
      certificate signed in the name of the Company by any officer or director
      of the Company, and, in the case of any other party, refer to a
      certificate of an authorized officer of such party.

	 	 	 
		(d) 	
      In the exercise of the rights and duties prescribed or
      conferred by the terms of this Agreement, the Subscription Receipt Agent
      shall exercise that degree of care, diligence and skill that a reasonably
      prudent Subscription Receipt Agent would exercise in comparable
      circumstances.

	 	 	 
		(e) 	 The obligation of the Subscription Receipt Agent to
        commence or continue any act, action or proceeding for the purpose of
        enforcing any rights of the Subscription Receipt Agent or the holders
        hereunder shall be conditional upon the holders furnishing, when required
        by notice by the Subscription Receipt Agent, sufficient funds to commence
        or to continue such act, action or proceeding and an indemnity reasonably
        satisfactory to the Subscription Receipt Agent to protect and to hold
        harmless the Subscription Receipt Agent against the costs, charges and
        expenses and liabilities to be incurred thereby and any loss and damage
        it may suffer by reason thereof. None of the provisions contained in this
        Agreement shall require the Subscription Receipt Agent to expend or to
        risk its own funds or otherwise to incur financial liability in the performance
        of any of its duties or in the exercise of any of its rights or powers
        unless indemnified and funded as aforesaid. 







- 45 -

	 	(f) 	
      The Subscription Receipt Agent may, before commencing or
      at any time during the continuance of any such act, action or proceeding,
      require the holders at whose instance it is acting to deposit with the
      Subscription Receipt Agent the Subscription Receipts held by them, for
      which Subscription Receipts the Subscription Receipt Agent shall issue
      receipts.

	 	 	 
	 	(g) 	
      Every provision of this Agreement that by its terms
      relieves the Subscription Receipt Agent of liability or entitles it to
      rely upon any evidence submitted to it is subject to the provisions of the
      Applicable Legislation, of this Section 10.2 and of Sections 10.3 and
      10.4.

	 	 	 
	 	(h) 	
      The Subscription Receipt Agent shall not be liable for
      any error in judgment or for any act done or step taken or omitted by it
      in good faith or for any mistake, in fact or law, or for anything which it
      may do or refrain from doing in connection therewith, except arising out
      of its own gross negligence or wilful misconduct or fraud.

	 	 	 
	 	(i) 	
      In the event of any disagreement arising regarding the
      terms of this Agreement, the Subscription Receipt Agent shall be entitled,
      at its option, to refuse to comply with any or all demands whatsoever
      until the dispute is settled, either by agreement amongst the various
      parties or by a court of competent jurisdiction.

	 	 	 
	 	(j) 	
      The Subscription Receipt Agent shall not be bound to do
      or give any notice or take any act, action, proceeding for the enforcement
      of any of the obligations of the Company under this Agreement unless and
      until it shall have received a Subscription Receiptholder’s Request
      specifying the act, action or proceeding which the Subscription Receipt
      Agent is requested to take, nor shall the Subscription Receipt Agent be
      required to take notice of any default hereunder, unless and until
      notified in writing of such default, which notice shall distinctly specify
      the default desired to be brought to the attention of the Subscription
      Receipt Agent and, in the absence of any such notice, the Subscription
      Receipt Agent may for all purposes of this Agreement conclusively assume
      that no default has been made in the observance or performance of any of
      the representations, warranties, covenants, agreements, or conditions
      contained herein.

	 	 	 
	 	(k) 	
      The Subscription Receipt Agent shall not incur any
      liability or responsibility whatsoever or be in any way responsible for
      the consequence of any breach on the part of the Company of any of the
      covenants herein contained or of any acts of any directors, officers,
      employees, agents or servants of the Company.







- 46 -

10.3  Indemnification

Without limiting any protection or indemnity of the
Subscription Receipt Agent under any other provisions hereof, or otherwise at
law, the Company hereby agrees to indemnify and hold harmless the Subscription
Receipt Agent and its employees, directors, officers and agents from and against
any and all liabilities, losses, damages, penalties, claims, actions, suits,
costs, expenses and disbursements, including reasonable legal or advisor fees
and disbursements, of whatever kind and nature which may at any time be imposed
on, incurred by or asserted against the Subscription Receipt Agent in connection
with the performance of its duties and obligations hereunder, other than such
liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses
and disbursements arising by reason of the gross negligence or wilful misconduct
or fraud of the Subscription Receipt Agent. This provision shall survive the
resignation or removal of the Subscription Receipt Agent, or the termination of
this Agreement. The Subscription Receipt Agent shall not be under any obligation
to prosecute or to defend any action or suit which, in the opinion of its
Counsel, may involve it in expense or liability, unless the Company shall, so
often as required, furnish the Subscription Receipt Agent with satisfactory
indemnity and funding against such expense or liability. 

	10.4 	
      Evidence, Experts and Advisers

	 	 	 
		(a) 	
      In addition to the reports, certificates, opinions and
      other evidence required by this Agreement and the Company shall furnish to
      the Subscription Receipt Agent such additional evidence of compliance with
      any provision hereof, and in such form, as may be prescribed by Applicable
      Legislation or as the Subscription Receipt Agent may reasonably require by
      written notice to the Company.

	 	 	 
		(b) 	
      In the exercise of its rights and duties hereunder, the
      Subscription Receipt Agent may, if it is acting in good faith, rely as to
      the truth of the statements and the accuracy of the opinions expressed in
      statutory declarations, opinions, reports, written requests, consents, or
      orders of the Company, certificates of the Company or other evidence
      furnished to the Subscription Receipt Agent pursuant to a request of the
      Subscription Receipt Agent.

	 	 	 
		(c) 	
      Whenever it is provided in this Agreement or under
      Applicable Legislation that the Company shall deposit with the
      Subscription Receipt Agent resolutions, certificates, reports, opinions,
      requests, orders or other documents, it is intended that the truth and
      accuracy thereof be conditions precedent to the right of the Company to
      have the Subscription Receipt Agent take the action to be based
      thereon.

	 	 	 
		(d) 	
      The Subscription Receipt Agent may employ or retain such
      Counsel, accountants, appraisers or other experts or advisers as it may
      reasonably require for the purpose of discharging its duties hereunder and
      may pay reasonable remuneration for all services so performed by any of
      them, without taxation of costs of any Counsel, and shall not be
      responsible for any misconduct or negligence on the part of any such
      experts or advisers who have been appointed with due care by the
      Subscription Receipt Agent.







- 47 -

	 	(e) 	
      Whenever Applicable Legislation requires that evidence
      referred to in Subsection 10.4(a) be in the form of a statutory
      declaration, the Subscription Receipt Agent may accept such statutory
      declaration in lieu of a certificate of the Company required by any
      provision hereof. Any such statutory declaration may be made by one or
      more of the Chief Executive Officer or Chief Financial Officer or Company
      Secretary of the Company.

	 	 	 
	 	(f) 	
      Proof of the execution of an instrument in writing,
      including a Subscription Receiptholder’s Request, by any Subscription
      Receiptholder may be made by the certificate of a notary, solicitor or
      commissioner for oaths, or other officer with similar powers, that the
      person signing such instrument acknowledged to him the execution thereof,
      or by an affidavit of a witness to such execution or in any other manner
      which the Subscription Receipt Agent may consider adequate and in respect
      of a corporate Subscription Receiptholder, shall include a certificate of
      incumbency of such Subscription Receiptholder together with a certified
      resolution authorizing the person who signs such instrument to sign such
      instrument.



10.5  Actions by Subscription Receipt
Agent to Protect Interest 

Subject to the provisions of this Agreement, the Subscription
Receipt Agent shall have power to institute and to maintain such actions and
proceedings as it may consider necessary or expedient to preserve, protect or
enforce its interests and the interests of the holders. 

10.6  Subscription Receipt Agent Not
Required to Give Security 

The Subscription Receipt Agent shall not be required to give
any bond or security in respect of the performance of its duties hereunder and
the exercise of its powers as provided for in this Agreement. 

10.7  Protection of Subscription Receipt
Agent 

By way of supplement to the provisions of any Applicable
Legislation it is expressly declared and agreed as follows: 

	 	(a) 	
      the Subscription Receipt Agent shall not be liable for or
      by reason of any statements of fact or recitals in this Agreement or in
      the Subscription Receipt Certificates (except the representation contained
      in Section 10.9 or in the certificate of the Subscription Receipt Agent on
      the Subscription Receipt Certificates) or be required to verify the same,
      but all such statements or recitals are and shall be deemed to be made by
      the Company;

	 	 	 
	 	(b) 	
      nothing herein contained shall impose any obligation on
      the Subscription Receipt Agent to see to or to require evidence of the
      registration or filing (or renewal thereof) of this Agreement or any
      instrument ancillary or supplemental hereto;

	 	 	 
	 	(c) 	
      the Subscription Receipt Agent shall not be bound to give
      notice to any person or persons of the execution hereof;
  and







- 48 -

	 	(d) 	
      the Subscription Receipt Agent shall be protected in
      acting upon any written notice, request, waiver, consent, certificate,
      receipt, statutory declaration or other paper or document furnished to it
      hereunder, not only as to its due execution and the validity and the
      effectiveness of its provisions but also as to the truth and acceptability
      of any information therein contained which it in good faith believes to be
      genuine and what it purports to be.




	10.8 	
      Replacement of Subscription Receipt Agent; Successor
      by Merger

	 	 	 
		(a) 	
      The Subscription Receipt Agent may resign from its duties
      and be discharged from all further duties and liabilities hereunder,
      subject to this Section 10.8, by giving to the Company not less than 60
      days’ prior notice in writing or such shorter prior notice as the Company
      may accept as sufficient. The holders by extraordinary resolution shall
      have power at any time to remove the person then appointed as
      “Subscription Receipt Agent” hereunder (the “Existing Agent”
      or once removed or resigned, the “Predecessor Agent”) and to
      appoint a new person in its stead (the “Successor Agent”). In the
      event of the Existing Agent resigning or being removed as aforesaid or
      being dissolved, becoming bankrupt, going into liquidation or otherwise
      becoming incapable of acting hereunder, the Company shall forthwith
      appoint a Successor Agent unless a Successor Agent has already been
      appointed by the holders; failing such appointment by the Company, the
      Existing Agent or any Subscription Receiptholder may apply to a justice of
      the Supreme Court of Ontario (the “Court”) on such notice as such
      justice may direct, for the appointment of a Successor Agent; but any
      Successor Agent so appointed by the Company, or by the Court shall be
      subject to removal as aforesaid by the holders. Any Successor Agent
      appointed under any provision of this Section 10.8 shall be a corporation
      authorized to carry on the business of a trust company in the Province of
      Ontario and, if required by the Applicable Legislation for any other
      provinces, in such other provinces. On any such appointment the Successor
      Agent shall be vested with the same powers, rights, duties and
      responsibilities as if it had been originally named as the “Subscription
      Receipt Agent” hereunder.

	 	 	 
		(b) 	
      Upon the appointment of a Successor Agent, the Company
      shall promptly notify the holders thereof in the manner provided for in
      Section 11.2 hereof.

	 	 	 
		(c) 	
      Any corporation into or with which the Subscription
      Receipt Agent may be merged or consolidated or amalgamated, or any
      corporation resulting therefrom to which the Subscription Receipt Agent
      shall be a party, or any corporation succeeding to the trust business of
      the Subscription Receipt Agent shall be the successor to the Subscription
      Receipt Agent hereunder without any further act on its part or any of the
      parties hereto, provided that such corporation would be eligible for
      appointment as a Successor Agent under Subsection 10.8(a).

	 	 	 
		(d) 	
      Any Subscription Receipt Certificates certified but not
      delivered by a Predecessor Agent may be certified by the Successor Agent
      in the name of the Predecessor Agent or Successor
Agent.







- 49 -

	10.9 	
      Conflict of Interest

	 	 	 
		(a) 	
      The Subscription Receipt Agent represents to the Company
      and the Agent, that at the time of execution and delivery hereof no
      material conflict of interest exists between its role hereunder and its
      role in any other capacity and agrees that in the event of a material
      conflict of interest arising hereafter it will, within 30 days after
      ascertaining that it has such material conflict of interest, either
      eliminate the same or assign its appointment hereunder to a Successor
      Agent approved by the Company and meeting the requirements set forth in
      Subsection 10.8(a). Notwithstanding the foregoing provisions of this
      Subsection 10.9, if any such material conflict of interest exists or
      hereafter shall exist, the validity and enforceability of this Agreement
      and the Subscription Receipt Certificate shall not be affected in any
      manner whatsoever by reason thereof.

	 	 	 
		(b) 	
      Subject to Subsection 10.9(a), the Subscription Receipt
      Agent and its affiliates, in its personal or any other capacity, may buy,
      lend upon and deal in securities of the Company and generally may contract
      and enter into financial transactions with the Company or any subsidiary
      of the Company without being liable to account for any profit made
      thereby.



10.10 Role and Capacity of Subscription
Receipt Agent 

The Subscription Receipt Agent hereby accepts the duties in
this Agreement and its appointment hereunder and agrees to perform the same upon
the terms and conditions herein set forth. 

10.11 Subscription Receipt Agent Not to be
Appointed Receiver 

The Subscription Receipt Agent and any person related to the
Subscription Receipt Agent shall not be appointed a receiver, a receiver and
manager or liquidator of all or any part of the assets or undertaking of the
Company. 

10.12 Documents, Moneys, etc. Held by
Subscription Receipt Agent 

Any securities, documents of title or other instruments that
may at any time be held by the Subscription Receipt Agent hereunder may be
placed in the deposit vaults of the Subscription Receipt Agent or of any
Canadian Schedule I bank for safekeeping. Unless herein otherwise expressly
provided, including for certainty the provisions of Article 6, any moneys held,
pending the application or withdrawal thereof under any provisions of this
Agreement, shall be invested in Qualified Investments however when not so
invested in accordance with this Agreement may be deposited in the name of the
Subscription Receipt Agent in a segregated interest-bearing account (including
an affiliate or related party of the Subscription Receipt Agent), at the rate of
interest (if any) then current on similar deposits. 

10.13 Books and Records

The Subscription Receipt Agent shall maintain accurate books,
  records and accounts of the transactions effected or controlled by the Subscription
  Receipt Agent hereunder and the receipt, investment, re-investment and disbursement
  of the property hereunder and shall provide to the Company records and statements
  thereof periodically upon written request. 




- 50 -

10.14 Not Bound to Act

The Subscription Receipt Agent shall retain the right not to
act and shall not be liable for refusing to act if, due to a lack of information
or for any other reason whatsoever, the Subscription Receipt Agent, in its sole
judgment, determines that such act might cause it to be in non-compliance with
any applicable anti-money laundering or anti-terrorist legislation, regulation
or guideline. Further, should the Subscription Receipt Agent, in its sole
judgment, determine at any time that its acting under this Agreement has
resulted in its being in non-compliance with any applicable anti-money
laundering or anti-terrorist legislation, regulation or guideline, then it shall
have the right to resign on 10 days written notice to the Company, provided: (a)
that the Subscription Receipt Agent’s written notice shall describe the
circumstances of such non-compliance; and (b) that if such circumstances are
rectified to the Subscription Receipt Agent’s satisfaction within such 10 day
period, then such resignation shall not be effective. 

10.15 Third Party Interests

Each party to this Agreement hereby represents to the
Subscription Receipt Agent that any account to be opened by, or interest to be
held by the Subscription Receipt Agent in connection with this Agreement, for or
to the credit of such party, either (a) is not intended to be used by or on
behalf of any third party; or (b) is intended to be used by or on behalf of a
third party, in which case such party hereto agrees to complete and execute
forthwith a declaration in the Subscription Receipt Agent’s prescribed form as
to the particulars of such third party. 

10.16 Authorization to Carry on Business

The Subscription Receipt Agent represents to the Company that
it is registered to carry on the business of a trust company in the Province of
Ontario. 

ARTICLE 11

  GENERAL 

	11.1 	
      Notice to the Company, the Subscription Receipt Agent
      and the Agents

	 	 	 
		(a) 	
      Unless herein otherwise expressly provided, any notice to
      be given hereunder to the Company, the Subscription Receipt Agent or the
      Agents shall be deemed to be validly given if delivered, sent by
      registered letter, postage prepaid or facsimile:



If to the Company, to: 

Adira Energy Ltd. 
Suite 1204, 120
Adelaide Street West
Toronto, Ontario, M5H 1T1

Attention:            
Alan Friedman 
Fax
No.:               (416)
925-1404





- 51 -

with a copy to (which copy shall not
constitute notice hereunder):

Aird & Berlis LLP 
Brookfield
Place 
1800 - 181 Bay Street 
Toronto, Ontario, M5J 2T9

Attention:            
Daniel Bloch 
Fax
No.:               
(416) 863-1515 

If to the Subscription Receipt Agent,
to:

Computershare Trust Company of Canada

510 Burrard Street, 3rd Floor 
Vancouver, British Columbia,
V6C 3B9

Attention:            
General Manager, Corporate Trust 
Fax
No.:               
(604) 661.9403 If to the Agent: 

DS Apex Mergers &
Acquisitions
Discount Tower 
23 Yehuda Haleri Street 
26th
Floor 
Tel Aviv, Israel 65136

Attention:            
Yair Ephrati

  Fax No.:                +972-3-516-5505


with a copy to (which copy shall not
constitute notice hereunder):

Richard Bardenstein & Co.
Law
Offices and Consultants
2 Ben Sira Street 

  Jerusalem 97890 

Attention:            
Richard Bardenstein

  Fax No.:                +972-2-624-1040


	 		
      and any such notice delivered in accordance with the
      foregoing shall be deemed to have been received on the date of delivery if
      that day is a Business Day or, if mailed, on the fifth Business Day
      following the date of the postmark on such notice or, if sent by
      facsimile, on the next Business Day following the date of transmission
      provided that its contents are transmitted and received completely and
      accurately.

	 	 	 
	 	(b) 	 The Company, the Subscription Receipt Agent or the Agents,
        as the case may be, may from time to time notify the other in the manner
        provided in Subsection 11.1(a) of a change of address which, from the
        effective date of such notice and until changed by like notice, shall
        be the address of the Company, the Subscription Receipt Agent or the Agents,
        as the case may be, for all purposes of this Agreement. 







- 52 -

	 	(c) 	
      If, by reason of a strike, lockout or other work
      stoppage, actual or threatened, involving postal employees, any notice to
      be given to the Subscription Receipt Agent, the Company or the Agents
      hereunder could reasonably be considered unlikely to reach its
      destination, such notice shall be valid and effective only if it is
      delivered to the named officer of the party to which it is addressed or,
      if it is delivered to such party at the appropriate address provided in
      Subsection 11.1(a), by facsimile or other means of prepaid, transmitted
      and recorded communication.




	11.2 	
      Notice to holders

	 	 	 
		(a) 	
      Unless otherwise expressly provided herein, any notice to
      be given hereunder to holders shall be deemed to be validly given if the
      notice is sent by first class mail, postage prepaid, addressed to the
      holders or delivered by hand (or so mailed to certain holders and so
      delivered to other holders), including, without limitation, CDS, at their
      respective addresses appearing on the register maintained by the
      Subscription Receipt Agent. Any notice so given shall be deemed to have
      been given on the day of delivery by hand or on the third Business Day
      following the date of the postmark if delivered by mail.

	 	 	 
		(b) 	
      If, by reason of strike, lockout or other work stoppage,
      actual or threatened, involving postal employees, any notice to be given
      to the holders could reasonably be considered unlikely to reach its
      destination, the notice may be published or distributed once in the Report
      on Business section of the national edition of The Globe and Mail
      newspaper and the Marketplace section of the Wall Street Journal or, in
      the event of a disruption in the circular of that newspaper, once in a
      daily newspaper in the English language of general circulation in the City
      of Toronto, Ontario and the City of New York, as the case may be; provided
      that in the case of a notice convening a meeting of the holders, the
      Subscription Receipt Agent may require such additional publications of
      that notice, in the same or in other cities or both, as it may deem
      necessary for the reasonable protection of the holders or to comply with
      any applicable requirement of law or any stock exchange. Any notice so
      given shall be deemed to have been given on the day on which it has been
      published in all of the cities in which publication was required (or first
      published in a city if more than one publication in that city is
      required).

	 	 	 
		(c) 	
      Accidental error or omissions in giving notice or
      accidental failure to mail notice to any Subscription Receiptholder will
      not invalidate any action or proceeding founded
thereon.







- 53 -

11.3 Calculation of Notice Period

In determining under any provision hereof, the date when notice
of any meeting or other event must be given, the date of giving notice shall be
included and the date of the meeting or other event shall be excluded. 

11.4 Ownership of Subscription Receipts

The Company and the Subscription Receipt Agent may deem and
treat the registered owner of any Subscription Receipts as the absolute owner
thereof for all purposes, and the Company and the Subscription Receipt Agent
shall not be affected by any notice or knowledge to the contrary except where
the Company or the Subscription Receipt Agent is required to take notice by
statute or by order of a court of competent jurisdiction. A Subscription
Receiptholder shall be entitled to the rights evidenced by its Subscription
Receipt Certificate free from all equities or rights of set off or counterclaim
between the Company and the original or any intermediate holder of the
Subscription Receipts and all persons may act accordingly. The receipt by any
such Subscription Receiptholder of the Common Shares and Common Share Purchase
Warrants which may be acquired pursuant to the conversion of Subscription
Receipts shall be a good discharge to the Company and the Subscription Receipt
Agent for the same and none of the Company or the Subscription Receipt Agent
shall be bound to inquire into the title of any such holder except where the
Company or the Subscription Receipt Agent is required to take notice by statute
or by order of a court of competent jurisdiction. 

11.5 Force Majeure

None of the parties shall be liable to the other parties, or
held in breach of this Agreement, if prevented, hindered, or delayed in the
performance or observance of any provision contained herein by reason of act of
God, riots, terrorism, acts of war, epidemics, governmental action or judicial
order, earthquakes, or any other similar causes (including, but not limited to,
mechanical, electronic or communication interruptions, disruptions or failures).
Performance times under this Agreement shall be extended for a period of time
equivalent to the time lost because of any delay that is excusable under this
Section. 

11.6 Counterparts

This Agreement may be executed in several counterparts, each of
which when so executed shall be deemed to be an original and such counterparts
together shall constitute one and the same instrument and notwithstanding their
date of execution they shall be deemed to be dated as of the date hereof. Each
of the parties to this Agreement will be entitled to rely on delivery of a
facsimile copy of this Agreement and acceptance by each party of any such
facsimile copy will be legally effective to create a valid and binding agreement
between the parties hereto in accordance with the terms hereof. 

11.7 Satisfaction and Discharge of Agreement


Upon the earlier of: (a) the issue of the Common Shares and Common
  Share Purchase Warrants upon deemed exercise of the Subscription Receipts and
  payment of all monies as provided in Section 6.4 upon satisfaction of the Automatic
  Escrow Release Conditions; and (b) the payment of all monies pursuant to Section
  6.5 hereof upon the occurrence of a Termination Event, this Agreement shall
  cease to be of any force and effect and the Subscription Receipt Agent, on written
  demand of the Company and at the cost and expense of the Company and upon delivery
  to the Subscription Receipt Agent of a certificate of the Company and the Agent,
  stating that all conditions precedent to the satisfaction and discharge of this
  Agreement have been complied with, shall execute proper instruments acknowledging
  satisfaction of and discharging this Agreement. Notwithstanding the foregoing,
  the indemnities provided to the Subscription Receipt Agent by the Company hereunder
  shall remain in full force and effect and survive the termination of this Agreement
  or the resignation or removal of the Subscription Receipt Agent. 




- 54 -

11.8 Provisions of Agreement and Subscription
Receipts for the Sole Benefit of Parties and holders 

Nothing in this Agreement or in the Subscription Receipt
Certificates, expressed or implied, shall give or be construed to give to any
person other than the parties hereto and the holders, as the case may be, any
legal or equitable right, remedy or claim under this Agreement, or under any
covenant or provision herein or therein contained, all such covenants and
provisions being for the sole benefit of the parties hereto and the holders.


11.9 Subscription Receipts Owned by the
Company or its Subsidiaries and Affiliates -Certificate to be Provided 

For the purpose of disregarding any Subscription Receipts owned
legally or beneficially by the Company or any subsidiary or affiliate of the
Company in Section 8.16, the Company shall provide to the Subscription Receipt
Agent, from time to time, a certificate of the Company setting forth as at the
date of such certificate: 

	 	(a) 	
      the names of the registered holders which, to the
      knowledge of the Company, are owned by or held for the account of the
      Company or any subsidiary or affiliate of the Company; and

	 	 	 
	 	(b) 	
      the number of Subscription Receipts owned legally or
      beneficially by the Company or any subsidiary or affiliate of the
      Company,



and the Subscription Receipt Agent, in making the computations
in Section 8.16, shall be entitled to rely on such certificate without any
additional evidence. 

ARTICLE 12 

  PRIVACY LAWS

12.1 Privacy Laws

The parties acknowledge that federal and/or provincial legislation
  that addresses the protection of individuals’ personal information (collectively,
  “Privacy Laws”) applies to obligations and activities under
  this Agreement. Despite any other provision of this Agreement, neither party
  shall take or direct any action that would contravene, or cause the other to
  contravene, applicable Privacy Laws. The Company shall, prior to transferring
  or causing to be transferred persona linformation to the Subscription Receipt
  Agent, obtain and retain required consents of the relevant individuals to the
  collection, use and disclosure of their personal information, or shall have
  determined that such consents either have previously been given upon which the
  parties can rely or are not required under the Privacy Laws. 




- 55 -

The Subscription Receipt Agent shall use commercially reasonable
  efforts to ensure that its services hereunder comply with Privacy Laws. Specifically,
  the Subscription Receipt Agent agrees: (a) to have a designated chief privacy
  officer; (b) to maintain policies and procedures to protect personal information
  and to receive and respond to any privacy complaint or inquiry; (c) to use personal
  information solely for the purposes of providing its services under or ancillary
  to this Agreement and not to use it for any other purpose except with the consent
  of or direction from the Company or the individual involved; (d) not to sell
  or otherwise improperly disclose personal information to any third party; and
  (e) to employ administrative, physical and technological safeguards to reasonably
  secure and protect personal information against loss, theft, or unauthorized
  access, use or modification. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




- 56 -

IN WITNESS WHEREOF the parties hereto have executed this
Agreement under the hands of their proper officers in that behalf. 

ADIRA ENERGY LTD.


By:
“Signed”                                                                 
 
Authorized Signing Officer


DS APEX MERGERS &
ACQUISITIONS
LTD. 


By:
“Signed”                                                                   
Authorized
Signing Officer

By:
“Signed”                                                                   
Authorized
Signing Officer

COMPUTERSHARE TRUST
COMPANY
OF CANADA 


By:
“Signed”                                                                   
Authorized
Signing Officer

By:
“Signed”                                                                   
Authorized
Signing Officer




SCHEDULE A

This is SCHEDULE A to the Subscription Receipt Agreement dated
November 22, 2010 among Adira Energy Ltd., DS Apex Mergers & Acquisitions
Ltd. And Computershare Trust Company of Canada. 

	 
	FORM OF SUBSCRIPTION RECEIPT CERTIFICATE
  


UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A
DAY AFTER NOVEMBER 22, 2010. 

[Include on Subscription Receipt Certificates issued to U.S.
Purchasers only: 

THIS SUBSCRIPTION RECEIPT AND THE SECURITIES DELIVERABLE UPON
EXERCISE THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR APPLICABLE STATE
SECURITIES LAWS OF THE UNITED STATES. THIS SUBSCRIPTION RECEIPT MAY NOT BE
EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF, OR FOR THE ACCOUNT OR
BENEFIT OF, A U.S. PERSON UNLESS THIS SUBSCRIPTION RECEIPT AND SECURITIES
ISSUABLE UPON EXERCISE OF THIS SUBSCRIPTION RECEIPT HAVE BEEN REGISTERED UNDER
THE 1933 ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. THIS SUBSCRIPTION
RECEIPT MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY,
(B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER
THE 1933 ACT AND IN COMPLIANCE WITH APPLICABLE CANADIAN AND OTHER APPLICABLE
LOCAL LAWS AND REGULATIONS. OR (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, IF
AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR IN
ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY
APPLICABLE STATE LAWS, AND THE HOLDER HAS, IN THE CASE OF ANY TRANSFER PURSUANT
TO THIS CLAUSE (C), PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF
COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY AND THE COMPANY’S
TRANSFER AGENT TO SUCH EFFECT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED
BY REGULATION S UNDER THE 1933 ACT.] 




SUBSCRIPTION RECEIPTS TO ACQUIRE COMMON SHARES 
AND
WARRANTS OF ADIRA ENERGY LTD. 

	Subscription Receipt Certificate No. •	 • Subscription Receipts 
	CUSIP •	ISIN •


THIS CERTIFIES THAT h (the “holder”) is the registered
holder of h Subscription Receipts represented hereby. 

The Subscription Receipts represented by this Subscription
Receipt Certificate were issued pursuant to a Subscription Receipt Agreement
dated November ___, 2010 (the “Agreement”) among Adira Energy Ltd., DS
Apex Mergers & Acquisitions Ltd., (the “Agent”) and Computershare
Trust Company of Canada. 

Capitalized terms used in the Agreement have the same meaning
herein as therein, unless otherwise defined. 

Each Subscription Receipt entitles the holder:

	(a) 	
      if the Automatic Escrow Release Conditions are satisfied
      prior to the Automatic Escrow Release Deadline and the Automatic Release
      Certificate is delivered to the Subscription Receipt Agent, to receive,
      for no additional consideration and without further action, one Common
      Share and one-half of one Common Share Purchase Warrant, subject to
      adjustment as set forth in the Agreement; and

	 	 	 
	(b) 	
      if the Automatic Escrow Release Conditions are not
      satisfied prior to the Automatic Escrow Release Deadline,
either:

	 	 	 
		(i) 	
      to receive an amount equal to the Subscription
      Receiptholder’s Escrowed Funds, less any applicable withholding taxes, all
      in the manner and on the terms and conditions set out in the Agreement;
      or

	 	 	 
		(ii) 	
      receive for no additional consideration and without
      further action, one Common Share and one-half of one Common Share Purchase
      Warrant for each Subscription Receipt exercised, as directed in the
      Elective Release Certificate, subject to adjustment as set forth in this
      Agreement.



The Subscription Receipts represented hereby are issued under
and pursuant to the Agreement. Reference is hereby made to the Agreement and any
and all other instruments supplemental or ancillary thereto for a full
description of the rights of the holders and the terms and conditions upon which
such Subscription Receipts are, or are to be, issued and held, all to the same
effect as if the provisions of the Agreement and all instruments supplemental or
ancillary thereto were herein set forth, and to all of which provisions the
holder of these Subscription Receipts by acceptance hereof are subject. 

In the event of any inconsistency between the terms set forth
in this Subscription Receipt Certificate and the terms of the Agreement, the
terms of the Agreement shall govern. 




- 2 -

Following the satisfaction of the Automatic Escrow Release
Conditions and the delivery of the Automatic Escrow Release Certificate on or
prior to the Automatic Escrow Release Deadline to the Subscription Receipt
Agent, the Subscription Receipts represented by this Subscription Receipt
Certificate shall be converted without any further action on the part of the
holder, including the payment of any additional consideration, for Common Shares
and Common Share Purchase Warrants on the Conversion Date. 

If such conditions are not satisfied, the holder of this
Subscription Recieptholder shall have a right to exercise this certificate, each
Subscription Receipt exercisable for one Common Share and one-half of one Common
Share Purchase Warrant or to receive a refund for their investment, in
accordance with the terms of the Subscription Receipt Agreement.

The Agreement provides for adjustments to the right of
subscription, including the amount of and kind of securities or other property
issuable upon the conversion of the Subscription Receipts, upon the happening of
certain stated events, including the subdivision or consolidation of the Common
Shares, certain distributions of Common Shares or securities convertible into
Common Shares or of other securities or assets of the Company, certain offerings
or rights, warrants or options, and certain capital reorganizations. The
Agreement provides for similar adjustments to the Common Share Purchase
Warrants. 

The Subscription Receipts and the Common Shares and Common
Share Purchase Warrants issuable upon the conversion of these Subscription
Receipts have not been and will not be registered under the United States
Securities Act of 1933, as amended, or under the securities laws of any state or
other jurisdiction of the United States. 

The holding of the Subscription Receipts evidenced by this
Subscription Receipt Certificate shall not constitute the holder hereof a
Shareholder or entitle such holder to any right or interest in respect thereof
except as herein and in the Agreement expressly provided. 

The Agreement contains provisions making binding upon all
holders outstanding thereunder resolutions passed at meetings of such holders
held in accordance with such provisions and by instruments in writing signed by
the holders of a specified majority of the outstanding Subscription Receipts.


The Subscription Receipts evidenced by this Subscription
Receipt Certificate may be transferred in the register kept at the offices of
the Subscription Receipt Agent by the registered holder hereof or his legal
representatives or attorney duly appointed by an instrument in writing in form
and execution satisfactory to the Subscription Receipt Agent, only upon payment
of the charges provided for in the Agreement and upon compliance with such
reasonable requirements as the Subscription Receipt Agent may prescribe. The
transfer register shall be closed at 5:00 p.m. (Toronto time) on the earlier to
occur of the Conversion Date and the Automatic Escrow Release Deadline. 

This Subscription Receipt Certificate shall not be valid for
any purpose whatever unless and until it has been countersigned by or on behalf
of the Subscription Receipt Agent. 

Time shall be of the essence hereof. This Subscription Receipt
Certificate is governed by the laws of Ontario and the laws of Canada applicable
therein. 




- 3 -

IN WITNESS WHEREOF the Company has caused this Subscription
Receipt Certificate to be signed by a duly authorized representative on November
___, 2010. 

ADIRA ENERGY LTD.


 

By: 
______________________________________


Countersigned by:

COMPUTERSHARE TRUST COMPANY
OF CANADA 


By:    _____________________________________

Date: _____________________________________




SCHEDULE B

This is SCHEDULE B to the Subscription Receipt Agreement dated
November 22, 2010 among Adira Energy Ltd., DS Apex Mergers & Acquisitions
Ltd. and Computershare Trust Company of Canada. 

	 
	COMPANY CONDITION PRECEDENT CERTIFICATE
  


TO:                
DS APEX MERGERS & ACQUISITIONS LTD. 

This Company Condition Precedent Certificate is being provided
pursuant to Section 3.1 of the subscription receipt agreement dated November 22,
2010 (the “Agreement”) among Adira Energy Ltd., DS Apex Mergers &
Acquisitions Ltd. (the “Agent”) and Computershare Trust Company of
Canada. 

Capitalized terms which are not otherwise defined herein shall
have the meanings ascribed to such terms in the Agreement. 

I, ________________ of the Company, do hereby certify for and
on behalf of the Company and not in my personal capacity that all of the
Automatic Escrow Release Conditions have been satisfied or waived, specifically:


	 	(i) 	
      a confirmation in writing from the TSXV, that all
      conditions to the listing of the Listed Common Shares, other than
      customary post-closing conditions, shall have been obtained;

	 	 	 
	 	(ii) 	
      there shall have been no material adverse change in the
      financial condition, business, operations of the Company; and

	 	 	 
	 	(iii) 	
      the Company shall not be in breach or default of any of
      its covenants or obligations under the Agency Agreement, except those
      breaches or defaults that have been waived by the
Agent.



DATED this ______ day of ______________, 2010.

ADIRA ENERGY
LTD.




By:_____________________________________





SCHEDULE C

This is SCHEDULE C to the Subscription Receipt Agreement dated
November 22, 2010 among Adira Energy Ltd., DS Apex Mergers & Acquisitions
Ltd. (the “Agent”) and Computershare Trust Company of Canada. 

	 
	AUTOMATIC RELEASE CERTIFICATE 


TO:              
COMPUTERSHARE TRUST COMPANY OF CANADA

This Automatic Release Certificate is being provided pursuant
to Section 3.1(b) of the Subscription Receipt Agreement dated November 22, 2010
(the “Agreement”) among Adira Energy Ltd., DS Apex Mergers &
Acquisitions Ltd., (the “Agent”), and Computershare Trust Company of
Canada. 

Capitalized terms not defined herein have the meaning ascribed
to them in the Agreement. 

The Company and the Agent, hereby confirm that the Automatic
Escrow Release Conditions (other than the delivery of this Automatic Release
Certificate) have been satisfied or waived and hereby direct you to: 

	 	(i) 	
      pay the amount of $<*>, representing the Agents’
      Commission and any unpaid portion of the Initial Payment, in the following
      manner: <*>;

	 	 	 
	 	(ii) 	
      pay the amount of $<*> representing the Finder Fees
      payable by the Company to <*>, in the following manner:
      <*>;

	 	 	 
	 	(iii) 	
      pay the amount of $<*>, representing the balance of
      Escrowed Proceeds after deduction of the amounts contemplated in (i) and
      (ii) above to the Company, in the following manner: <*> pay the
      amount of $<*>, representing the balance of Escrowed Funds after
      deduction of the amounts contemplated in (i) and (ii) above, to the
      Company, in the following manner: <*>; and

	 	 	 
	 	(iv) 	
      issue and deliver the Common Shares and Common Share
      Purchase Warrants to the holders of the Subscription Receipts as set out
      in the Agreement.



DATED this _________ day of ______________, 2010.

ADIRA ENERGY
LTD.




By:_____________________________________




2

DS APEX MERGERS & ACQUISITIONS
LTD. 

	 	By:    
       _____________________________________
	 	           
           Name: 
	 	           
           Title:: 






SCHEDULE D

This is SCHEDULE D to the Subscription Receipt Agreement dated
November 22, 2010 among Adira Energy Ltd., DS Apex Mergers & Acquisitions
Ltd. (the “Agent”) and Computershare Trust Company of Canada. 

ELECTIVE RELEASE CERTIFICATE

TO:                   
COMPUTERSHARE TRUST COMPANY OF CANADA

This Elective Release Certificate is being provided pursuant to
Section 3.2(b) of the Subscription Receipt Agreement dated November 22, 2010
(the “Agreement”) among Adira Energy Ltd., DS Apex Mergers &
Acquisitions Ltd., (the “Agent”), and Computershare Trust Company of
Canada. 

Capitalized terms not defined herein have the meaning ascribed
to them in the Agreement. 

The Company and the Agent, hereby confirm that the Release
Conditions (other than the delivery of this Release Certificate) have been
satisfied or waived and hereby direct you to: 

	 	(i) 	
      pay the amount of $<*>, representing the Agents’
      Commission and any unpaid portion of the Initial Payment in the following
      manner: <*>;

	 	 	 
	 	(ii) 	
      pay the amount of $<*> representing the Finder Fees
      payable by the Company to <*>, in the following manner:
      <*>;

	 	 	 
	 	(iii) 	
      pay the aggregate amount of $<*> to the
      Subscription Receiptholders as set out in Schedule “A”;

	 	 	 
	 	(iv) 	
      pay the amount of $<*>, representing the balance of
      Escrowed Proceeds after deduction of the amounts contemplated in (i), (ii)
      and (iii) above to the Company, in the following manner: <*>;
    and

	 	 	 
	 	(v) 	
      issue and deliver the Common Shares and Common Share
      Purchase Warrants to the holders to the Subscription Receiptholders as set
      out in Schedule “B” hereto.



DATED this _________ day of ______________, 2010. 

ADIRA ENERGY LTD.

 

By:
_____________________________________




DS APEX MERGERS & ACQUISITIONS
LTD. 

	 	By:   
      _____________________________________
	 	           
           Name: 
	 	           
           Title:: 


Schedule A 

Refunded Subscription Receiptholders 


	Name 	Amount 	Payment Instructions 
	<*> 	<*> 	<*> 



Schedule B 

Exercising Subscription Receiptholders 


	Name 	Number of Common Shares 	Number of Warrants 
	<*> 	<*> 	<*>








SCHEDULE E

This is SCHEDULE E to the Subscription Receipt Agreement dated
November 22, 2010 among Adira Energy Ltd., DS Apex Mergers & Acquisitions
Ltd. (the “Agent”) and Computershare Trust Company of Canada. 

	  	FORM OF DECLARATION FOR
      REMOVAL OF LEGEND 
	 	 
	TO: 	Adira Energy Ltd. (the
      “Company”) 
	 	 
	AND TO: 	The Registrar and Transfer Agent
    
	 	(or Warrant Agent,
      as applicable) of the Company 


The undersigned (a) acknowledges that the sale of the
securities of the Company to which this declaration relates is being made in
reliance on Rule 904 of Regulation S under the United States Securities Act of
1933, as amended (the “U.S. Securities Act”), and (b) certifies that (1)
the undersigned is not an “affiliate” (as that term is defined in Rule 405 under
the U.S. Securities Act) of the Company, (2) the offer of such securities was
not made to a person in the United States and either (A) at the time the buy
order was originated, the buyer was outside the United States, or the seller and
any person acting on its behalf reasonably believed that the buyer was outside
the United States, or (B) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither the seller nor
any person acting on its behalf know that the transaction has been prearranged
with a buyer in the United States, (3) neither the seller nor any affiliate of
the seller nor any person acting on any of their behalf has engaged or will
engage in any directed selling efforts in the United States in connection with
the offer and sale of such securities, (4) the sale is bona fide and not for the
purpose of “washing off” the resale restrictions imposed because the securities
are “restricted securities” (as such term is defined in Rule 144(a)(3) under the
U.S. Securities Act), (5) the seller does not intend to replace such securities
with fungible unrestricted securities and (6) the contemplated sale is not a
transaction, or part of a series of transactions which, although in technical
compliance with Regulation S under the U.S. Securities Act, is part of a plan or
scheme to evade the registration provisions of the U.S. Securities Act. Terms
used herein have the meanings given to them by Regulation S under the U.S.
Securities Act. 

Dated:
_______________________                                             
____________________________
                                                                                                             
Name of Seller 

                                                                                                             
By:
_________________________
                                                                                                                      
Name: 
                                                                                                                       Title:





Affirmation by Seller’s Broker-Dealer

We have read the foregoing representations of our customer,
_____________________________ (the “Seller”), dated
_______________________, with regard to our sale, for such Seller’s account, of
the _________________Shares, represented by certificate number ______________
(the “Shares”), of the Company described therein, and on behalf of
ourselves we certify and affirm that (A) we have no knowledge that the
transaction had been prearranged with a buyer in the United States or a U.S.
person, (B) the transaction was executed on or through the facilities of a
“designated offshore securities market” and (C) neither we, nor any person
acting on our behalf, engaged in any “directed selling efforts” in connection
with the offer and sale of such Securities. Terms used herein have the meanings
given to them by Regulation S. 

Name of Firm: ________________________________

By:
_________________________________________

         Authorized Officer