IVANHOE ENERGY INC.
 - and -
 MACQUARIE CAPITAL MARKETS CANADA LTD.
 - and -
 CIBC MELLON TRUST COMPANY
 
 Share Purchase Warrant Indenture
Dated as of January 26, 2010
Providing for the Issue of Common Share Purchase Warrants
of Ivanhoe Energy Inc.




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TABLE OF CONTENTS
 PageARTICLE 1 INTERPRETATION
    
    
    51.1 Definitions
    
    
    51.2 Headings
    
    
    91.3 Gender
    
    
    91.4 Business Day
    
    
    91.5 Meaning of Outstanding
    
    
    91.6 Time
    
    
    91.7 Applicable Law
    
    
    9ARTICLE 2 ISSUE AND PURCHASE OF WARRANTS
    
    
    102.1 Creation and Issue of Warrants
    
    
    102.2 Book Entry System
    
    
    102.3 Global Warrant Certificates
    
    
    112.4 Form and Terms of Warrants
    
    
    122.5 Registration and Transfer of Warrants
    
    
    132.6 List of Warrantholders
    
    
    132.7 Transfer and Ownership of Warrants
    
    
    132.8 Legends
    
    
    142.9 Warrantholders Not Shareholders
    
    
    162.10 Signing of Warrants
    
    
    162.11 Countersigning
    
    
    162.12 Loss, Mutilation, Destruction or Theft of Warrants
    
    
    172.13 Issue of Warrants
    
    
    172.14 Fractions
    
    
    172.15 Warrants to Rank Pari Passu
    
    
    182.16 Exchange of Warrants
    
    
    182.17 Recognition of Registered Holder
    
    
    182.18 Cancellation of Surrendered Warrants
    
    
    19ARTICLE 3 COVENANTS OF THE COMPANY
    
    
    193.1 Covenants of the Company
    
    
    193.2 Suits by Warrantholder
    
    
    203.3 Warrant Agent May Institute Proceedings
    
    
    20ARTICLE 4 ADJUSTMENT OF SUBSCRIPTION RIGHTS
    
    
    214.1 Adjustment of Subscription Rights
    
    
    214.2 Proceedings Prior to any Action Requiring Adjustment
    
    
    264.3 Certificate of Adjustment
    
    
    264.4 Adjustment Rules
    
    
    264.5 Notice of Special Matters
    
    
    274.6 No Action after Notice
    
    
    274.7 Protection of Warrant Agent
    
    
    27ARTICLE 5 EXERCISE AND CANCELLATION OF WARRANTS
    
    
    285.1 Exercise of Warrants
    
    
    285.2 Effect of Exercise of Warrants
    
    
    305.3 Postponement of Delivery of Certificates
    
    
    315.4 Warrants Void after Expiry Time
    
    
    315.5 Fractions
    
    
    315.6 Partial Exercise of Warrants
    
    
    325.7 Accounting and Recording
    
    
    325.8 Warrant Exercise Proceeds
    
    
    32
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PageARTICLE 6 MEETINGS OF WARRANTHOLDERS
    
    
    326.1 Convening of Meeting
    
    
    326.2 Notice
    
    
    336.3 Chairman
    
    
    336.4 Quorum
    
    
    336.5 Show of Hands
    
    
    336.6 Poll
    
    
    346.7 Regulations
    
    
    346.8 Minutes
    
    
    346.9 Powers Exercisable by Extraordinary Resolution
    
    
    356.10 Meaning of Extraordinary Resolution
    
    
    366.11 Powers Cumulative
    
    
    366.12 Company, Warrantholders and Warrant Agent May be Represented
    
    
    366.13 Instruments in Writing
    
    
    366.14 Binding Effect of Resolutions
    
    
    376.15 Holdings by the Company or Subsidiaries of the Company Disregarded
    
    
    37ARTICLE 7 SUPPLEMENTAL AGREEMENTS, MERGER, SUCCESSORS
    
    
    377.1 Provision for Supplemental Agreements for Certain Purposes
    
    
    377.2 Company May Consolidate, etc. on Certain Terms
    
    
    387.3 Successor Body Corporate Substituted
    
    
    38ARTICLE 8 CONCERNING THE WARRANT AGENT
    
    
    398.1 No Conflict of Interest
    
    
    398.2 Replacement of Warrant Agent
    
    
    398.3 Duty of Warrant Agent
    
    
    408.4 Experts, Advisors and Agents
    
    
    408.5 Warrant Agent Not Required to Give Security
    
    
    408.6 Warrant Agent Not Ordinarily Bound
    
    
    408.7 Warrant Agent may Rely on Certificates
    
    
    418.8 Warrant Agents Liability
    
    
    428.9 Indemnification
    
    
    428.10 No Representation as to Validity
    
    
    428.11 Acceptance of Duties
    
    
    438.12 Contracting with Company
    
    
    438.13 Warrant Agents Authority to Carry on Business
    
    
    438.14 Monetary Distributions
    
    
    438.15 Trust Indenture Legislation
    
    
    438.16 Limitations on Warrant Agent
    
    
    44ARTICLE 9 NOTICE AND CERTIFICATES
    
    
    449.1 Notice to Company or Agent
    
    
    449.2 Notice to Warrantholders
    
    
    459.3 Notice to Warrant Agent
    
    
    459.4 Mail Service Interruption
    
    
    469.5 General Provisions as to Certificates
    
    
    46ARTICLE 10 GENERAL PROVISIONS
    
    
    4710.1 Power of Board of Directors
    
    
    4710.2 Formal Date and Execution Date
    
    
    4710.3 Further Assurances
    
    
    4710.4 Unenforceable Terms
    
    
    4710.5 Entire Agreement
    
    
    4810.6 Amendments
    
    
    4810.7 Counterparts
    
    
    4810.8 No Waiver
    
    
    4810.9 Enurement
    
    
    4810.10 Conflicts
    
    
    4810.11 Assignment
    
    
    48
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THIS WARRANT INDENTURE th
 BETWEEN:
 IVANHOE ENERGY INC.
 Company
 AND:
 MACQUARIE CAPITAL MARKETS CANADA LTD.
 Agent
 AND:
 CIBC MELLON TRUST COMPANY
 Warrant Agent
 WHEREAS:
 (A)
    
    terms used in these recitals which are not otherwise defined have the meanings assigned to
them in Article 1;
 (B)
    
    pursuant to the terms of the Agency Agreement and the Special Warrants, the Company proposes
to create and issue the Warrants to be constituted and issued in the manner set forth herein;(C)
    
    the Company is authorized to create and issue the Warrants;
 (D)
    
    each one (1) Warrant will entitle the holder to acquire upon exercise thereof one (1) Common
Share, subject to adjustment and on the terms and conditions as set forth herein;
 (E)
    
    the Company represents to the Warrant Agent that all necessary resolutions of the directors
of the Company have been duly enacted, passed or confirmed and all other proceedings taken and
conditions complied with to authorize the execution and delivery of this Indenture and the
execution and issue of the Warrants and to make the same legal and valid and binding on the
Company in accordance with the laws relating to the Company;
 (F)
    
    the foregoing recitals are made as representations and statements of fact by the Company and
not by the Warrant Agent and the Warrant Agent shall not be liable for or by reason of any
statements of fact or recitals in this Indenture and all such statements are and shall be
deemed to be made by the Company;
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(G)
    
    the Warrant Agent has agreed to act as Warrant Agent for the Warrantholders on the terms and
conditions herein set forth; and
 (H)
    
    all things necessary have been done and performed to make the Warrants, when certified by the
Warrant Agent and issued as in this Indenture provided, legal, valid and binding upon the
Company with the benefits of and subject to the terms of this Indenture.
 NOW THEREFORE
 ARTICLE 1
INTERPRETATION
 1.1 Definitions
  (a)
    
    Agency Agreement means the agency agreement dated as of January 12, 2010
between the Company and the Agent;
 (b)
    
    Agents Option Warrants means any Common Share purchase warrants underlying
the Option Special Warrants issued pursuant to the exercise of the Option, such
warrants to have substantially the same terms and conditions as the Warrants;(c)
    
    Applicable Legislation has the meaning set forth in Section 8.15 hereof;
 (d)
    
    Applicable Securities Laws means, collectively, the applicable securities
laws of the Qualifying Provinces, the securities laws of the United States and the
states thereof, the regulations, rules, rulings and orders made thereunder, the
applicable policy statements issued by the securities regulatory authorities in the
Qualifying Provinces, the United States Securities and Exchange Commission and the
securities legislation and policies of each other relevant jurisdiction;
 (e)
    
    Beneficial Owners means any person who holds a beneficial interest in a
Global Warrant Certificate as shown on the books of the Depository or a Participant;
 (f)
    
    Book Entry Only System means the book-based securities transfer system
administered by a Depository in accordance with its operating procedures;
 (g)
    
    Business Day means any day except Saturday, Sunday or a statutory or banking
holiday in Vancouver, British Columbia;
 (h)
    
    Certificate of the Company means a certificate signed by any one of the
President, Vice-President, Secretary or Chief Financial Officer of the Company in
accordance with Section 9.5;
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(i)
    
    Common Shares means, collectively, the fully paid and non-assessable common
 shares in the capital of the Company as presently constituted and, except where the
context hereof otherwise requires, includes common shares issued or to be issued in
accordance with the exercise of Warrants hereunder;
 (j)
    
    Companys auditors means the firm of accountants appointed by the
shareholders of the Company as the auditors of the Company from time to time;
 (k)
    
    counsel means a barrister and solicitor or a firm of barristers and
solicitors retained by the Warrant Agent or retained by the Company and acceptable to
the Warrant Agent;
 (l)
    
    Current Market Price of a Common Share at any date means the price per share
equal to the volume weighted average price at which the Common Shares have traded on
the TSX for any 20 consecutive Trading Days immediately preceding such date or, if the
Common Shares are not listed on the TSX, on any other stock exchange or securities
market on which the Common Shares are then listed as may be selected by the directors,
or, if the Common Shares are not listed on any stock exchange, then on the
over-the-counter market, with the weighted average price per Common Share being
determined by dividing the aggregate sale price of all Common Shares sold on such stock
exchange or market, as the case may be, during such 20 consecutive Trading Day period
by the aggregate number of Common Shares so sold or, if not traded on any recognized
market or exchange, as determined by the directors, acting reasonably;
 (m)
    
    Depository means CDS Clearing and Depository Services Inc. (CDS), or its
successor, or any other depository offering a book based securities registration and
transfer system similar to that administered by CDS which the Company, with the consent
of the Trustee, acting reasonably, may designate;
 (n)
    
    director means a director of the Company for the time being and reference
without more to action by the directors means action by the directors of the Company as
a board or, whenever duly empowered, action by a committee of the board;(o)
    
    Document shall have the meaning ascribed to such term in Section 9.5 hereof;(p)
    
    Exercise Date has the meaning set forth in Section 5.2 hereof;
 (q)
    
    Exercise Consideration means the sum of Cdn.$3.16, being the amount payable
in connection with the exercise of one (1) Warrant in order to purchase one (1) Common
Share, subject to adjustment under Article 4;
 (r)
    
    Expiry Date means January 25, 2011, representing the first anniversary of the
closing date of the issue of the Special Warrants;
 (s)
    
    Expiry Time means 5:00 p.m. (Vancouver time) on the Expiry Date;
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(t)
    
    Extraordinary Resolution has the meaning set forth in Section 6.10 and 6.13
hereof;
 (u)
    
    Final Prospectus means the (final) short form prospectus of the Company which
qualifies, among other things, the distribution of the Warrants in the Qualifying
Jurisdictions and includes any amendments or supplements thereto;
 (v)
    
    Final Receipt means the final decision document in respect of the Final
Prospectus issued in accordance with Multilateral Instrument 11-102  Passport System
and National Policy 11-202  Process for Prospectus Reviews in Multiple Jurisdictions
by the Ontario Securities Commission and the Companys principal regulator on its own
behalf and on behalf of the regulators in the Qualifying Jurisdictions (other than the
Ontario Securities Commission);
 (w)
    
    Global Warrant Certificate means a Warrant Certificate that is issued to and
registered in the name of the Depository or its nominee;
 (x)
    
    Indenture, hereto, hereunder, hereof, hereby and similar expressions
mean or refer to this Indenture and not to any particular Article, Section, Subsection,
paragraph, clause, subdivision or portion hereof and include any agreement, deed or
instrument supplemental or ancillary hereto and the expressions Article, Section,
Subsection and paragraph followed by a number mean and refer to the specified
Articles, Sections, Subsections or paragraphs of this Indenture;
 (y)
    
    Issue Date means in respect of any Warrants issued hereunder, their date of
issue as shown on the corresponding Warrant Certificate;(z)
    
    Option has the meaning ascribed thereto in the Agency Agreement;
 (aa)
    
    Option Special Warrants has the meaning ascribed thereto in the Special
Warrant Indenture;
 (bb)
    
    Participant means a person recognized by the Depository as a participant in
the Book-Entry Only System administered by the Depository;
 (cc)
    
    person means any entity whatsoever including, without limitation, an
individual, a corporation, a partnership, a trust, an unincorporated organization, a
syndicate and words importing persons have a similar meaning;
 (dd)
    
    Qualifying Provinces has the meaning set out in the Special Warrant
Indenture;(ee)
    
    Regulation S means Regulation S under the U.S. Securities Act;(ff)
    
    Share Rate has the meaning ascribed to such term in Section 4.1(b) hereto;
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(gg)
    
    Special Warrants means special warrants of the Company issued pursuant to the
Special Warrant Indenture, each special warrant entitling the holder thereof to one
Common Share and one-quarter (0.25) of one Warrant upon conversion or deemed conversion
thereof;
 (hh)
    
    Special Warrant Indenture means the Special Warrant Indenture among the
Company, the Agent and the Warrant Agent dated January 25, 2010;
 (ii)
    
    subsidiary of the Company means a corporation of which voting securities
carrying a majority of votes attached to all outstanding voting securities are owned,
directly or indirectly, by the Company or by one or more subsidiaries of the Company,
or by the Company and one or more subsidiaries of the Company, and, as used in this
definition, voting securities means securities, other than debt securities, carrying a
voting right to elect directors either under all circumstances or under some
circumstances that may have occurred and are continuing;
 (jj)
    
    Trading Day, with respect to any stock exchange or over-the-counter market,
means a day on which shares may be traded through the facilities of such stock exchange
or in such over-the-counter market and otherwise means a day on which shares may be
traded through the facilities of the principal stock exchange on which the Common
Shares are then listed (or, if the Common Shares are not then listed on any stock
exchange, then in the over-the-counter market).
 TSX
 (ll)
    
    United States means the United States as that term is defined in Rule 902
of Regulation S;
 (mm)
    
    U.S. Person means a U.S. person as that term is defined in Rule 902 of
Regulation S;
 (nn)
    
    U.S. Securities Act means the United States Securities Act of 1933, as
amended;
 (oo)
    
    Warrant Certificate means a certificate substantially in the form attached
hereto as Schedule A evidencing one or more Warrants;(pp)
    
    Warrantholder or holder means the registered holder of a Warrant hereunder;
 (qq)
    
    Warrantholders Request means an instrument, signed in one or more
counterparts by Warrantholders and/or holders of Agents Option Warrants who hold in
the aggregate not less than 10% of the total number of Warrants and Agents Option
Warrants then outstanding, requesting the Warrant Agent to take some action or
proceeding specified therein;
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(rr)
    
    Warrants means, collectively, the Common Share purchase warrants of the
Company issued and certified hereunder entitling holders thereof to receive, upon
the exercise of one (1) such Common Share purchase warrant, one (1) Common Share
and/or such kind and amount of securities or property determined pursuant to Article
4 hereof; and
 (ss)
    
    written direction of the Company, written order of the Company and any
other document required to be signed by the Company, mean, respectively, a written
direction, order or request, consent or other document signed in the name of the
Company by any of the President, Vice-President, Secretary or Chief Financial Officer
of the Company, and may consist of one or more instruments so executed.
 1.2 Headings
  1.3 Gender
  1.4 Business Day
  1.5 Meaning of Outstanding
  1.6 Time
  1.7 Applicable Law
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ARTICLE 2
ISSUE AND PURCHASE OF WARRANTS
 2.1 Creation and Issue of Warrants
  2.2 Book Entry System
 (a)
    
    Unless the Book-Entry Only System is terminated or required to do so by
applicable law, Warrant Certificates will only be issued in the form of a Global
Warrant Certificate, which will be registered in the name of and deposited with the
Depository or its nominee.
 (b)
    
    All references herein to actions by, notices given or payments made to
Warrantholders shall, where Warrants are held through the Depository, refer to actions
taken by, or notices given or payments made to, the Depository upon instruction from
the 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 Warrantholders evidencing a specified percentage of the aggregate Warrants
outstanding, such direction or consent may be given by holders of Warrants acting
through the Depository and the Participants owning Warrants evidencing the requisite
percentage of the Warrants. The rights of a Warrantholder whose Warrants are held
through the Depository shall be exercised only through the Depository and the
Participants and shall be limited to those established by law and agreements between
such holders and the Depository and the Participants upon instructions from the
Participants. Each of the Warrant Agent and the Company may deal with the Depository
for all purposes as the authorized representative of the respective Warrantholders and
such dealing with the Depository shall constitute satisfaction or performance, as
applicable, of their respective obligations hereunder. For so long as Warrants are held
through the Depository, if any notice or other communication is required to be given to
Warrantholders, the Warrant Agent will give such notices and communications to the
Depository.
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2.3 Global Warrant Certificates
 (a)
    
    The Company shall issue the Warrants pursuant to one or more Global Warrant
Certificates registered in the name of the Depository or its nominee and the Company
shall execute and the Warrant Agent shall certify and deliver one or more Global
Warrant Certificates that shall represent the aggregate number of outstanding Warrants.
 (b)
    
    Transfers of beneficial ownership in any Warrant represented by a Global
Warrant Certificate will be effected only (i) with respect to the interest of a
Participant, through records maintained by the Depository or its nominee for such
Global Warrant Certificate, and (ii) with respect to the interest of any person other
than a Participant, through records maintained by Participants. Beneficial Owners who
are not Participants but who desire to sell or otherwise transfer ownership of or any
other interest in Warrants represented by such Global Warrant Certificate may do so
only through a Participant.
 (c)
    
    The rights of Beneficial Owners shall be limited to those established by
applicable law and agreements between the Depository and the Participants and between
such Participants and Beneficial Owners and must be exercised through a Participant in
accordance with the rules and procedures of the Depository.
 (d)
    
    Subject to subsection 2.3(e) and 2.3(f), neither the Company nor the Warrant
Agent shall be under any obligation to deliver to any Participant or Beneficial Owner,
nor shall any Participant or Beneficial Owner have any right to require the delivery
of, a certificate or other instrument evidencing any interest in Warrants except where
physical certificates evidencing ownership in the Warrants.
 (e)
    
    If any Warrant is represented by a Global Warrant Certificate and any of the
following events occurs:
 (i)
    
    the Depository or the Company has notified the Warrant Agent
that (A) the Depository is unwilling or unable to continue as Depository or (B)
the Depository ceases to be a clearing agency in good standing under applicable
laws and, in either case, the Company is unable to locate a qualified successor
Depository within 90 days of delivery of such notice;
 (ii)
    
    the Company has determined, in is sole discretion, to terminate
the Book-Entry Only System in respect of such Global Warrant Certificate and
has communicated such determination to the Warrant Agent in writing;
 (iii)
    
    the Company or the Depository is required by applicable law to
take the action contemplated in this subsection 2.3(e); or
 (iv)
    
    the Book-Entry Only System administered by the Depository
ceases to exist;

then one or more definitive fully registered Warrant Certificates shall be executed
by the Company and certified and delivered by the Warrant Agent to the Depository in
exchange for the Global Warrant Certificate(s) held by the Depository.
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(f)
    
    Fully registered Warrant Certificates issued and exchanged pursuant to
subsection 2.3(e) shall be registered in such names and in such denominations as the
Depository shall instruct the Warrant Agent, provided that the aggregate number of
Warrants represented by such Warrant Certificates shall be equal to the aggregate
number of Warrants represented by the Global Warrant Certificate(s) so exchanged. Upon
exchange of a Global Warrant Certificate for one or more Warrant Certificates in
definitive form, such Global Warrant Certificate shall be cancelled by the Warrant
Agent.
 (g)
    
    Notwithstanding anything herein or in the terms of the Warrant Certificates to
the contrary, neither the Company nor the Warrant Agent nor any agent thereof shall
have any responsibility or liability for (i) the records maintained by the Depository
relating to any ownership interests or any other interest in the Warrants or the
depository system maintained by the Depository, or payments made on account of any
ownership interest or any other interest of any person in any Warrant represented by
any Global Warrant Certificate (other than the applicable Depository or its nominee),
(ii) maintaining, supervising or reviewing any records of the Depository or any
Participant relating to any such interest, or (iii) any advice or representation made
or given by the Depository or those contained herein that relate to the rules and
regulations of the Depository or any action to be taken by the Depository on its own
direction or at the direction of any Participant.
 (h)
    
    The provisions of Sections 2.6 and 2.7 with respect to the transfer of Warrants
are subject to the provisions of this section 2.3 while the Warrants are represented by
Global Warrant Certificate(s).
 2.4 Form and Terms of Warrants
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2.5 Registration and Transfer of Warrants
  2.6 List of Warrantholders
  2.7 Transfer and Ownership of Warrants
  (a)
    
    the executor, administrator, heir or legal representative of the heirs of the
estate of a deceased Warrantholder;
 (b)
    
    a guardian, committee, Warrant Agent, curator or tutor representing a
Warrantholder who is an infant, an incompetent person or a missing person;(c)
    
    a liquidator of, or a Warrant Agent in bankruptcy for, a Warrantholder; or
 (d)
    
    a transferee of a Warrantholder who provides the Warrant Agent with evidence
satisfactory to the Warrant Agent and the Company, acting reasonably, including but not
limited to a properly completed and executed declaration attached as Exhibit A to the
transfer form attached to the Warrant Certificate, that such transferee is/was either:
(i) not in the United States at the time the buy order for the Warrants was executed,
not acquiring the Warrants for the account or benefit of a U.S. Person or a person in
the United States and was not offered the Warrants in the United States, or (ii) a
person that has purchased or acquired Warrants in a transaction that was exempt from
registration under the U.S. Securities Act and has provided the Company with
satisfactory evidence of the availability of such exemption which shall include an
opinion of counsel reasonably acceptable to the Company that such transaction was
exempt from registration under any applicable securities laws of any state of the
United States and that the securities laws of any
other applicable jurisdiction(s) have been complied with in relation to the transfer
of the Warrants involved,
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2.8 Legends
 (a)
    
    No Common Shares will be issued pursuant to the exercise of any Warrant if the
issue of such Common Shares would constitute a violation of the securities laws of any
jurisdiction and, without limiting the generality of the foregoing, the certificates
representing the Common Shares thereby issued will bear such legend or legends as may,
in the opinion of counsel to the Company, be necessary or advisable in order to avoid a
violation of any securities laws of any jurisdiction or to comply with the requirements
of any stock exchange on which the Common Shares are then listed, provided that if, at
any time, in the opinion of counsel to the Company, such legend or legends are no
longer necessary or advisable in order to avoid a violation of any such laws or
requirements, or the holder of any such legended certificate, at such 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 holder is entitled to sell or otherwise transfer such Common Shares in a
transaction in which such legend or legends are not required, such legended certificate
may thereafter be surrendered to the Company in exchange for a certificate which does
not bear such legend or legends.
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(b)
    
    For greater certainty, if any Special Warrants are converted to Common Shares
and Warrants prior to the receipt of the Final Receipt, the certificates representing
such Warrants and the Common Shares issuable upon the exercise of such Warrants will
bear the following legend:
  (c)
    
    Certificates representing Warrants and Common Shares issuable on the exercise
of such Warrants originally issued to a U.S. Person, a person in the United States, or
a person purchasing for the account or benefit of a U.S. Person or a person in the
United States, as well as all certificates issued in exchange for or in substitution of
such certificates, will bear the following additional legend:
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(d)
    
    Warrant Certificates in the form of a Global Warrant Certificate, as well as
all certificates issued in exchange for, in substitution of or upon exercise of such
certificates representing Warrants, will, if directed by the Company, bear the
following legend:
  2.9 Warrantholders Not Shareholders
  2.10 Signing of Warrants
  2.11 Countersigning
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2.12 Loss, Mutilation, Destruction or Theft of Warrants
   2.13 Issue of Warrants
  2.14 Fractions
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2.15 Warrants to Rank Pari Passu
 pari passu
 2.16 Exchange of Warrants
  (a)
    
    Warrant Certificates may, upon compliance with the reasonable requirements of
the Warrant Agent, be exchanged for Warrant Certificates in any other authorized
denomination representing in the aggregate the same number of Warrants. The Company
shall sign, and the Warrant Agent shall countersign, in accordance with Sections 2.10
and 2.11, all Warrant Certificates necessary to carry out the exchanges contemplated
herein;
 (b)
    
    Warrant Certificates may be exchanged only at the principal office of the
Warrant Agent in the city of Vancouver. Any Warrant Certificates tendered for exchange
shall be surrendered to the Warrant Agent and cancelled; and
 (c)
    
    the Warrant Agent may charge registered holders requesting an exchange a
reasonable sum for each Warrant Certificate exchanged and payment of such charges and
reimbursement of the Warrant Agent or the Company for any and all taxes or governmental
or other charges required to be paid shall be made by the party requesting such
exchange as a condition precedent to such exchange.
 2.17 Recognition of Registered Holder
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2.18 Cancellation of Surrendered Warrants
  ARTICLE 3
COVENANTS OF THE COMPANY
 3.1 Covenants of the Company
  (a)
    
    To Issue Warrants and Reserve Common Shares: The Company is duly
authorized to create and issue the Warrants and the Warrant Certificates, when issued
and countersigned as herein provided, will be valid and enforceable against the Company
and, subject to the provisions of this Indenture, the Company will cause a sufficient
number of Common Shares from time to time issuable upon the exercise of Warrants under
this Indenture together with the certificates representing such Common Shares to be
duly issued and delivered in accordance with instructions on the Warrant Certificates
and the terms hereof. At all times prior to the Expiry Time, while any of the Warrants
are outstanding, the Company shall reserve and allot and conditionally issue out of its
authorized capital a number of Common Shares sufficient to enable the Company to meet
its obligation to issue Common Shares in respect of the exercise of all Warrants
outstanding hereunder from time to time. All Common Shares acquired upon the exercise
of the Warrants shall be fully paid and non-assessable.
 (b)
    
    To Pay Warrant Agents Remuneration: The Company will pay to the
Warrant Agent from time to time reasonable remuneration for its services hereunder and
will repay to the Warrant Agent on demand the amount of all expenditures, disbursements
and advances whatsoever which the Warrant Agent reasonably incurs in and about the
administration or execution of the trusts hereby created (including the compensation
and disbursements of its counsel and other advisors and assistants not regularly in its
employ), both before any default hereunder and thereafter until all duties of the
Warrant Agent hereunder have been finally and fully performed.
 (c)
    
    To Execute Further Assurances: The Company 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 Warrant Agent may reasonably require for
effecting the intentions and provisions of this Indenture.
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(d)
    
    To Carry on Business: Subject to the express provisions hereof, the
Company will at all times maintain its corporate existence, carry on and conduct (and
cause
to be carried on and conducted) its business in the same manner as heretofore
carried on and conducted, provided, however, that the Company or any subsidiary of
the Company may dispose of any business, premises, property or operation if in the
reasonable opinion of the directors or officers of the Company or any subsidiary of
the Company, as the case may be, it would be advisable and in the best interests of
the Company or any subsidiary of the Company to do so; and subject to the express
provisions hereof, it will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, provided, however, that
(subject to compliance with the provisions of Article 4 hereof) nothing herein
contained shall prevent the amalgamation, consolidation or merger of the Company or
any subsidiary of the Company or the abandonment of any rights and franchises of the
Company or any subsidiary of the Company if, in the reasonable opinion of the
directors or officers of the Company, or the directors or officers of any subsidiary
of the Company, as the case may be, it would be advisable and in the best interests
of the Company or of such subsidiary of the Company to do so. The Company will keep
or cause to be kept proper books of account in accordance with generally accepted
accounting practices and will file with the Warrant Agent copies of all annual
statements of the Company furnished to its shareholders after the date hereof,
forthwith following delivery to its shareholders.
 (e)
    
    Performance of Covenants By Warrant Agent: If the Company shall fail
to perform any of its covenants contained in this Indenture, the Warrant Agent may
notify the Warrantholders of such failure on the part of the Company or may itself
perform any of the said covenants capable of being performed by it, but, subject to
Section 8.3 hereof, the Warrant Agent shall be under no obligation to do so or to
notify any Warrantholder. All sums reasonably expended or advanced by the Warrant
Agent in performance of its rights provided for in this Subsection 3.1(e) shall be
repayable as provided in Subsection 3.1(b). No such performance, expenditure or
advance by the Warrant Agent shall be deemed to relieve the Company of any default
hereunder or its continuing obligations hereunder.
 (f)
    
    Performance of Indenture: The Company will well and truly perform and
carry out all of the acts or things to be done by it as provided in this Indenture.
 3.2 Suits by Warrantholder
  3.3 Warrant Agent May Institute Proceedings
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ARTICLE 4
ADJUSTMENT OF SUBSCRIPTION RIGHTS
 4.1 Adjustment of Subscription Rights
  (a)
    
    if and whenever at any time from the date hereof (and for greater certainty
such date being prior to the issuance of the Warrants) and prior to the Expiry Time,
the Company shall:
 (i)
    
    subdivide, redivide or change its outstanding Common Shares
into a greater number of shares;
 (ii)
    
    reduce, consolidate or combine the outstanding Common Shares
into a lesser number of shares; or
 (iii)
    
    issue Common Shares or securities convertible into or
exchangeable for Common Shares to all or substantially all of the holders of
Common Shares by way of stock dividend or other distribution;
  (A)
    
    the numerator shall be the total number of
Common Shares outstanding immediately after such date, or, in the case
of the issuance of securities convertible into or exchangeable for
Common Shares, the total number of Common Shares outstanding
immediately after such date plus the number of Common Shares issuable
upon conversion or exchange of such securities, and
 (B)
    
    the denominator shall be the total number of
Common Shares outstanding immediately prior to such date,
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(b)
    
    if and whenever at any time from the date hereof (and for greater certainty
such date being prior to the issuance of the Warrants) and prior to the Expiry Time,
the Company shall fix a record date for the issue of rights, options or warrants to all
or substantially all of the holders of Common Shares entitling the holders thereof,
within a period expiring not more than 45 days after the record date for such issue,
to subscribe for or purchase Common Shares (or securities convertible into or
exchangeable for Common Shares) at a price per Common Share (or having a conversion
or exchange price per Common Share) less than 95% of the Current Market Price on the
earlier of such record date and the date on which the Company announces its
intention to make such issue, then, in each such case, the Exercise Consideration
will be adjusted immediately after such record date so that it will equal the price
determined by multiplying the Exercise Consideration in effect on such record date
by a fraction, of which the denominator shall be the total number of Common Shares
outstanding on such record date plus the number arrived at when (A) either the
product of (1) the number of Common Shares so offered for subscription 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 Common Shares for or into which the
convertible or exchangeable securities so offered pursuant to the rights offering
may be converted or exchanged, as the case may be, is divided by (B) the Current
Market Price on the record day, and of which the numerator shall be the total number
of Common Shares outstanding on such record date plus the total number of additional
Common Shares so offered for subscription or purchase (or into or for which the
convertible or exchangeable securities so offered are convertible or exchangeable).
Any Common Shares owned by or held for the account of the Company or any subsidiary
of the Company will be deemed not to be outstanding for the purpose of any such
computation. Such adjustment will be made successively whenever such a record date
is fixed, provided that if two or more such record dates or record dates referred to
in Section 4.1(c) hereof are fixed within a period of 20 Trading Days, such
adjustment will be made successively as if each of such record dates occurred on the
earliest of such record dates. To the extent that any such rights, options or
warrants are not exercised prior to the expiration thereof, the number of Common
Shares obtainable on the exercise of each Warrant (Share Rate) will then be
readjusted to the Share Rate which would then be in effect based upon the number of
Common Shares (or securities convertible into or exchangeable for Common Shares)
actually issued upon the exercise of such rights, options or warrants, as the case
may be;
 (c)
    
    if and whenever at any time from the date hereof (and for greater certainty
such date being prior to the issuance of the Warrants) and prior to the Expiry Time,
the Company shall fix a record date for the making of a distribution to all or
substantially all of the holders of Common Shares of:
 (i)
    
    shares of any other class other than Common Shares whether of
the Company or any other corporation;
 (ii)
    
    rights, options or warrants to acquire Common Shares or
securities exchangeable for or convertible into Common Shares or property or
other assets of the Company (other than rights, options or warrants exercisable
by the holders thereof within a period expiring not more than 45 days after the
record date for such issue or distribution to acquire Common Shares or
securities exchangeable for or convertible into Common Shares at a price per
share, or at an exchange or conversion price per share in the case of
securities exchangeable for or convertible into Common Shares, of at least
95% of the Current Market Price of the Common Shares on such record date);
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(iii)
    
    evidences of indebtedness; or
 (iv)
    
    cash, securities or other property or assets (other than cash
dividends paid in the ordinary course);
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(d)
    
    if and whenever at any time from the date hereof (and for greater certainty
such date being prior to the issuance of the Warrants) and prior to the Expiry Time,
there is a reclassification of the Common Shares or a capital reorganization of the
Company other than as described in Subsections 4.1(a), (b) or (c) or a consolidation,
amalgamation, arrangement or merger of the Company or other form of business
combination of the Company with or into any other body corporate, trust, partnership or
other entity, any sale, conveyance, lease, exchange or transfer of the undertaking or
assets of the Company as an entirety or substantially as an entirety to another
corporation or entity, any Warrantholder who has not exercised his right of
subscription prior to the effective date of such reclassification, capital
reorganization, consolidation, amalgamation, merger, sale or conveyance, upon the
exercise of such right thereafter, shall be entitled to receive and shall accept the
kind and number of shares, securities or property that such Warrantholder would have
been entitled to receive on such reclassification, capital reorganization,
consolidation, amalgamation, merger, sale or conveyance, if, on the record date or the
effective date thereof, as the case may be, the Warrantholder had been the registered
holder of the number of Common Shares receivable upon the exercise of Warrants then
held, subject to adjustment thereafter in accordance with provisions the same, as
nearly as may be possible, as those contained in this Section 4.1; provided that no
such action shall be carried into effect unless all necessary steps shall have been
taken so that the holders of the Warrants shall thereafter be entitled to receive such
kind and number of securities and property. The Company, its successor, or purchasing
body corporate, partnership, trust or other entity, as the case may be, shall, as a
condition precedent to any such reclassification, capital reorganization,
consolidation, amalgamation, merger, sale or conveyance, take all necessary steps
hereunder to enter into an agreement which shall provide, to the extent possible, that
the provisions set forth in this Indenture shall thereafter correspondingly be made
applicable, as nearly as may reasonably be, to the securities and property to which a
Warrantholder is entitled on the exercise of his Warrants thereafter. Any agreement
entered into between the Company and the Warrant Agent pursuant to the provisions of
this Subsection 4.1(d) shall be a supplemental agreement entered into pursuant to the
provisions of Article 7 hereof. Any agreement entered into between the Company, any
successor to the Company or any purchasing body corporate, partnership, trust or other
entity and the Warrant Agent shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided in this Section 4.1 and
which shall apply to successive reclassifications, capital reorganizations,
amalgamations, consolidations, mergers, sales or conveyances;
 (e)
    
    in any case in which this Section 4.1 requires an adjustment to become
effective immediately after a record date for an event referred to herein, the Company
may defer, until the occurrence of such event, issuing any Warrantholder exercising or
deemed to be exercising his subscription rights after such record
date the additional Common Shares or other securities or property issuable upon such exercise
by reason of the adjustment required by such event; provided, however, that the
Company shall deliver to such holder an appropriate instrument evidencing such
holders right to receive such additional Common Shares or other securities or
property, as the case may be, upon the occurrence of the event requiring such
adjustment and the right to receive any distributions made on such additional Common
Shares or other securities or property, as the case may be, declared in favour of
holders of record of such Common Shares or other securities or property, as the case
may be, on and after the date of exercise or such later date as such holder would
but for the provisions of this Subsection 4.1(e), have become the holder of record
of such additional Common Shares, other securities or property, as the case may be,
upon the exercise of the Warrants held by such holder;
  - 24 -




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(f)
    
    after any adjustment pursuant to this Section 4.1, the term Common Shares
where used in this Indenture shall be interpreted to mean securities of any class or
classes or property which, as a result of such adjustment and all prior adjustments
pursuant to this Section 4.1, a Warrantholder is entitled to receive upon the exercise
of such holders Warrants, and the number of Common Shares indicated to be issuable
upon any exercise of a Warrant shall be interpreted to include the number of Common
Shares or other securities or property a Warrantholder is entitled to receive, as a
result of such adjustment and all prior adjustments pursuant to this Section 4.1, upon
the exercise of the Warrant;
 (g)
    
    all shares of any class or classes or other securities or property which a
Warrantholder is at the time in question entitled to receive on the exercise of his
Warrant, whether or not as a result of adjustments made pursuant to this Section 4.1
shall, for the purposes of the interpretation of this Indenture, be deemed to be Common
Shares which such Warrantholder is entitled to subscribe for pursuant to the exercise
of such Warrant;
 (h)
    
    anything in this Section 4.1 to the contrary notwithstanding, no adjustment
shall be made in the subscription rights attaching to the Warrants if the issue of
Common Shares is being made pursuant to any stock option or stock purchase plan in
force from time to time for directors, officers or employees of the Company or any
other currently existing obligation of the Company; and
 (i)
    
    in the event of any question arising with respect to the adjustments provided
for in this Section 4.1 such question shall be conclusively determined, subject to the
consent of any stock exchange upon which the Common Shares are then listed, by a firm
of chartered accountants appointed by the Company and acceptable to the Warrant Agent
(which may be the Companys auditors). Such accountants shall have access to all
necessary records of the Company, and such determination shall be binding upon the
Company, the Warrant Agent, all Warrantholders and all other persons interested
therein. In the event that any such determination is made, the Company shall deliver a
certificate to the Warrant Agent describing such determination;
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4.2 Proceedings Prior to any Action Requiring Adjustment
  4.3 Certificate of Adjustment
  4.4 Adjustment Rules
   - 26 -




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4.5 Notice of Special Matters
  4.6 No Action after Notice
  4.7 Protection of Warrant Agent
  (a)
    
    shall not at any time be under any duty or responsibility to any Warrantholder
to determine whether any facts exist which may require any adjustment contemplated by
Section 4.1 hereof, or with respect to the nature or extent of any such 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 the kind or
amount) of any Common Share or of any other securities or property which may at any
time be issued or delivered upon the exercise of the subscription rights attaching to
any Warrant;
 (c)
    
    shall not be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver Common Shares (or certificates representing
same) upon the surrender or deemed surrender of any Warrants upon the exercise of the
subscription rights attaching to any Warrants or to comply with any of the covenants
contained in this Article 4; and
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(d)
    
    shall not incur any liability or responsibility whatever or be in any way
responsible for the consequence of any breach on the part of the Company of any of the
representations, warranties or covenants herein contained or of any acts of the agents
or servants of the Company.
 ARTICLE 5
EXERCISE AND CANCELLATION OF WARRANTS
 5.1 Exercise of Warrants
 (a)
    
    Upon and subject to the provisions of this Article 5, any holder of a Warrant
may exercise the right thereby conferred on him to subscribe for Common Shares by
delivering or causing to be delivered to the Warrant Agent after the Issue Date and
until the Expiry Time at its principal office in the City of Vancouver, or any other
place designated by the Company with the approval of the Warrant Agent, during normal
business hours on a Business Day,
 (i)
    
    the Warrant Certificate evidencing the Warrants, with the
Exercise Form attached to the Warrant Certificate duly completed and executed
by the holder or his executors or administrators or other legal representatives
or his or their attorney duly appointed by an instrument in writing in form and
manner satisfactory to the Warrant Agent; and(ii)
    
    either:
 A.
    
    a certified cheque, bank draft or money order
in lawful money of Canada payable to or to the order of the Warrant
Agent, in trust for the Company, at par in such city or other place, in
an amount equal to the Exercise Consideration multiplied by the number
of Warrants being exercised; or
 B.
    
    a written notice by the Company that the
Company has received payment in full of an amount equal to the Exercise
Consideration multiplied by the number of Warrants being exercised.
  (b)
    
    Unless the Company has instructed the Warrant Agent in writing to waive any or
all of the following requirements, the Warrants may not be exercised by or for the
account or benefit of a U.S. Person or a person in the United States unless the holder
certifies in writing to the Company and the Warrant Agent that the holder: (i)
purchased the Special Warrants directly from the Company pursuant to a written
subscription agreement for the purchase of Special Warrants, (ii) is exercising the
Warrants solely for its own account and not on behalf of any other Person; and (iii)
was an Accredited Investor, as that term is defined in Regulation D under the
Securities Act, both on the date the Warrants were issued
by the Company and on the date of exercise of the Warrants; or (iii) a registered
transferee of such Warrants who has complied with Subsection 2.7(d) hereof, provided
that the Company may, in its sole discretion, accept, in substitution of the
foregoing, evidence satisfactory to the Company, acting reasonably, to the effect
that the Common Shares have been registered under the U.S. Securities Act and
applicable state securities laws or that the Common Shares may be issued upon
exercise of the Warrants without registration under the U.S. Securities Act and any
applicable state securities laws.
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(c)
    
    The Exercise Form attached to the Warrant Certificate shall be signed as set
out above and shall specify:
 (i)
    
    the number of Warrants which the Warrantholder wishes to
exercise; and
 (ii)
    
    the number of Common Shares owned or controlled (beneficially
and legally) by the Warrantholder on the date of exercise; and
 (iii)
    
    the person or persons in whose name or names the Common Shares
issuable upon the exercise of such Warrants are to be registered, the address
or addresses and the social insurance number or numbers of such person or
persons and the number of Common Shares to be issued to each such person if
more than one is so specified, provided that the Warrantholder shall only be
entitled to direct his entitlement to the Common Shares in a manner permitted
by applicable securities legislation, and provided further that no certificates
for Common Shares shall be registered at or delivered to an address in the
United States unless the person in whose name the certificates are to be
registered has complied with the requirements of subsection 2.7(d) hereof.
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(d)
    
    If at the time of the exercise of the Warrants there remain trading
restrictions on the Common Shares issuable upon such exercise pursuant to Applicable
Securities Laws, the Company may, on the advice of counsel, endorse the certificates
representing such Common Shares with legends accordingly until such time as the Company
determines that such endorsement is no longer necessary to avoid a violation of such
securities laws by the Company and so advises the Warrant Agent in writing or unless
and until the holder of any such endorsed 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 holder is entitled to sell or otherwise transfer such Common Shares in a
transaction in which such endorsement is not required, whereupon such endorsed
certificate may thereafter be surrendered to the Company in exchange for a certificate
which does not bear such endorsement.
 (e)
    
    In the event of non-receipt of any certificates representing Common Shares
issuable upon an exercise of Warrants by the person to whom such certificates are so
sent as aforesaid, or the loss or destruction thereof, the Company shall issue and the
Warrant Agent shall countersign and deliver to such person a replacement certificate of
like date and tenor in place of the one lost or destroyed upon being furnished with
such evidence of ownership and non-receipt, loss or destruction and with such indemnity
and surety bond or security as the Company may reasonably require. The Warrantholder
shall bear the cost of the issue of such replacement certificates.
 5.2 Effect of Exercise of Warrants
 Exercise Date
   (a)
    
    cause to be mailed to the person in whose name the Common Shares so subscribed
for are to be issued, at the address specified in the Exercise Form attached to the
Warrant Certificate representing the Warrant exercised;
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(b)
    
    if so specified therein, cause to be delivered to such person at the office of
the Warrant Agent where such Warrant was surrendered; or
 (c)
    
    if no specification as contemplated by (a) or (b) is provided, cause to be
mailed to the person in whose name the Common Shares are to be issued at the address of
such person last appearing on the register maintained by the Warrant Agent pursuant
hereto or as such person may otherwise notify the Warrant Agent in writing on or prior
to the Exercise Date,
   5.3 Postponement of Delivery of Certificates
  5.4 Warrants Void after Expiry Time
  5.5 Fractions
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5.6 Partial Exercise of Warrants
  5.7 Accounting and Recording
  (a)
    
    promptly account to the Company with respect to Warrants exercised and forward
to the Company or to an account or accounts of the Company at a bank or trust company
designated by the Company for that purpose) all cash or instruments of payment received
on the exercise of Warrants; and
 (b)
    
    record the particulars of Warrants exercised, which particulars shall include
the names and addresses of the persons who become holders of Common Shares on such
exercise and the Exercise Date in respect thereof. The Warrant Agent shall provide
such particulars in writing to the Company within five (5) Business Days of any request
by the Company therefor.
 5.8 Warrant Exercise Proceeds
  ARTICLE 6
MEETINGS OF WARRANTHOLDERS
 6.1 Convening of Meeting
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6.2 Notice
  6.3 Chairman
  6.4 Quorum
 (a)
    
    Quorum: Subject to the provisions of Section 6.10 hereof, at any
meeting of Warrantholders a quorum will consist of two or more Warrantholders, present
in person or represented by proxy at the commencement of the meeting, who hold in the
aggregate not less than 25% of the total number of Warrants then outstanding.
 (b)
    
    No Quorum: If a quorum of Warrantholders is not present within 30
minutes after the time appointed for holding a meeting, the meeting, if convened by
Warrantholders or on a Warrantholders Request, will be dissolved, but, subject to
Section 6.10 hereof, in any other case will stand adjourned to the same day in the next
week (unless such day is not a Business Day, in which case it will be adjourned to the
next following Business Day) at the same time and place and no notice of the
adjournment need be given.
 (c)
    
    Adjourned Meeting: At the adjourned meeting the Warrantholders present
in person or by proxy will form a quorum and may transact any business for which the
meeting was originally convened notwithstanding the number of Warrants that they hold.
 6.5 Show of Hands
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6.6 Poll
  6.7 Regulations
  (a)
    
    the setting of the record date for a meeting for the purpose of determining
Warrantholders entitled to receive notice of and to vote at a meeting;
 (b)
    
    voting by proxy, the form of instrument appointing proxyholders, the manner in
which proxies are to be executed and the production of the authority of any persons
signing on behalf of a Warrantholder;
 (c)
    
    the lodging of and means of forwarding the instruments appointing proxyholders
and the time before the holding of a meeting or adjourned meeting by which the
instruments appointing proxyholders are to be deposited; and(d)
    
    any other matter relating to the conduct of meetings of Warrantholders.
  6.8 Minutes
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6.9 Powers Exercisable by Extraordinary Resolution
  (a)
    
    to agree to or sanction any modification, abrogation, alteration or compromise
of the rights of the Warrantholders or (subject to the prior consent of the Warrant
Agent therefor) the Warrant Agent in its capacity as Warrant Agent hereunder or on
behalf of Warrantholders against the Company which shall be agreed to by the Company
whether such rights arise under this Indenture or under the Warrants or otherwise;
 (b)
    
    to assent to any change in or omission from the provisions contained in the
Warrants and this Indenture or any ancillary or supplemental instrument which may be
agreed to by the Company, and to authorize the Warrant Agent to concur in and execute
any ancillary or supplemental agreement embodying the change or omission;
 (c)
    
    with the consent of the Company, not to be unreasonably withheld, to remove the
Warrant Agent or its successor in office and to appoint a new Warrant Agent or Warrant
Agents to take the place of the Warrant Agent so removed;
 (d)
    
    to require, direct or authorize the Warrant Agent to enforce any of the
covenants on the part of the Company contained in this Indenture or the Warrants or to
enforce any of the rights of the Warrantholders in any manner specified in such
Extraordinary Resolution or to refrain from enforcing any such covenant or right, in
each case upon the Warrant Agent being furnished with an indemnity and such funding as
the Warrant Agent may, in the reasonable exercise of its discretion determine it
requires to so act;
 (e)
    
    to restrain any Warrantholder from instituting or continuing any suit or
proceedings against the Company for the enforcement of the covenants on the part of the
Company contained in this Indenture or the Warrants or of any of the rights conferred
upon the Warrantholders by the Warrants and this Indenture;
 (f)
    
    to direct any Warrantholder who, as such, has brought any suit, action or
proceeding to stay or discontinue or otherwise deal with the same upon payment of the
costs, charges and expenses reasonably and properly incurred by such Warrantholder in
connection therewith;
 (g)
    
    to waive and direct the Warrant Agent to waive any default on the part of the
Company in complying with any of the provisions of this Indenture or the Warrants
either unconditionally or upon any conditions specified in such Extraordinary
Resolution;
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(h)
    
    to assent to any compromise or arrangement with any creditor or creditors or
any class or classes of creditors, whether secured or unsecured, and with holders of
any shares or other securities of the Company; and
 (i)
    
    to amend, alter or repeal any Extraordinary Resolution previously passed or
sanctioned by the Warrantholders.
  6.10 Meaning of Extraordinary Resolution
 2/3
  6.11 Powers Cumulative
  6.12 Company, Warrantholders and Warrant Agent May be Represented
  6.13 Instruments in Writing
 2/3
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6.14 Binding Effect of Resolutions
  6.15 Holdings by the Company or Subsidiaries of the Company Disregarded
  ARTICLE 7
SUPPLEMENTAL AGREEMENTS, MERGER, SUCCESSORS
 7.1 Provision for Supplemental Agreements for Certain Purposes
  (a)
    
    adding to the provisions hereof such additional covenants and enforcement
provisions as, in the opinion of counsel, are necessary or advisable in the premises,
provided that the same are not, in the opinion of the Warrant Agent, relying on the
advice of counsel, prejudicial to the interests of the Warrantholders;
 (b)
    
    giving effect to any Extraordinary Resolution passed as provided in Article 6
hereof;
 (c)
    
    making such provisions not inconsistent with this Indenture as may be necessary
or desirable with respect to matters or questions arising hereunder or for the purpose
of obtaining a listing or quotation of the Common Shares issuable upon
the exercise of the Warrants on any stock exchange, or for the purpose of complying
with applicable laws, provided that such provisions are not, in the opinion of the
Warrant Agent, relying on the advice of counsel, prejudicial to the interests of the
Warrantholders;
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(d)
    
    making any modification in the form of the Warrant Certificate which does not
affect the substance of the Warrants;
 (e)
    
    evidencing any succession, or successive successions, of other bodies
corporate, or other persons to the Company and the assumption by any successor of the
covenants of the Company contained herein and in the Warrant Certificates as provided
hereafter in this Article 7; and
 (f)
    
    for any other purpose not inconsistent with the terms of this Indenture,
including the correction or rectification of any ambiguities, defective provisions,
errors or omissions herein, provided that, in the opinion of the Warrant Agent, relying
on the advice of counsel, the rights of the Warrant Agent and of the Warrantholders are
in no way prejudiced thereby and provided that the Warrant Agent may in its
uncontrolled discretion decline to enter into any such supplemental indenture which in
its opinion may not afford adequate protection to the Warrant Agent when the same shall
become operative.
 7.2 Company May Consolidate, etc. on Certain Terms
  7.3 Successor Body Corporate Substituted
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ARTICLE 8
CONCERNING THE WARRANT AGENT
 8.1 No Conflict of Interest
  8.2 Replacement of Warrant Agent
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8.3 Duty of Warrant Agent
  8.4 Experts, Advisors and Agents
  (a)
    
    in relation to this Indenture, rely and act on, and shall be protected in
relying and acting in good faith, on the opinion or advice of or information obtained
from any counsel, auditor, valuer, engineer, surveyor or other expert, whether obtained
by the Warrant Agent, the Company, the Agent or otherwise; and/or
 (b)
    
    employ or retain such agents and other assistants as it may reasonably require
for the proper determination and discharge of its duties hereunder and may pay
reasonable remuneration without taxation of costs of counsel for all services performed
for it in the determination and discharge of the duties hereunder and shall receive
reimbursement from the Company for all disbursements, costs and expenses reasonably
made or incurred by it in the determination and discharge of its duties hereunder and
in the management of the trusts hereof. Any counsel employed or consulted by the
Warrant Agent may, but need not be, counsel for the Company or the Agent.
 8.5 Warrant Agent Not Required to Give Security
  8.6 Warrant Agent Not Ordinarily Bound
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8.7 Warrant Agent may Rely on Certificates
      - 41 -




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8.8 Warrant Agents Liability
  8.9 Indemnification
  8.10 No Representation as to Validity
   - 42 -




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8.11 Acceptance of Duties
  8.12 Contracting with Company
  8.13 Warrant Agents Authority to Carry on Business
  8.14 Monetary Distributions
  8.15 Trust Indenture Legislation
   - 43 -




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8.16 Limitations on Warrant Agent
  (a)
    
    nothing in this Agreement will impose on the Warrant Agent any obligation to
see to, or to require evidence of, the registration or filing (or renewal thereof) of
this indenture or any instrument ancillary or supplemental hereto;
 (b)
    
    the Warrant Agent shall not be bound to give notice to any person of the
execution hereof;
 (c)
    
    the Warrant Agent shall not incur any liability or responsibility whatever or
be in any way responsible for the consequences of any breach by the Company of any
obligation herein contained or of any act of any director, officer, employee or agent
of the Company; and
 (d)
    
    the Warrant Agent and any person related to the Warrant Agent will not be
appointed a receiver or receiver and manager or liquidator of all or any part of the
assets or undertaking of the Company.
 ARTICLE 9
NOTICE AND CERTIFICATES
 9.1 Notice to Company or Agent
  (a)
    
    the date of delivery, if delivered during normal business hours of the Company
or the Agent, as applicable, (and, if not, on the next following Business Day);
 (b)
    
    the Business Day immediately following the day of sending, if sent by
telecopier (with receipt confirmed), or(c)
    
    on the fifth (5th) Business Day after effectual posting in Canada.
  - 44 -




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9.2 Notice to Warrantholders
  (a)
    
    the date of delivery, if delivered during normal business hours (and, if not,
on the next following Business Day);
 (b)
    
    the Business Day immediately following the day of sending, if sent by telex,
telegram, cable or telecopier (with receipt confirmed); or(c)
    
    on the fifth (5th) Business Day after effectual posting in Canada.
 9.3 Notice to Warrant Agent
  (a)
    
    the date of delivery, if delivered during normal business hours of the Warrant
Agent (and, if not, on the next following Business Day);
 (b)
    
    the Business Day immediately following the day of sending, if sent by telex,
telegram, cable or telecopier (with receipt confirmed); or
 (c)
    
    on the fifth (5th) Business Day after effectual posting in Canada.
  - 45 -




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9.4
  9.5 General Provisions as to Certificates
 Document
 (a)
    
    a statement that the person signing such Document has read and understands the
conditions precedent with respect to compliance with which such evidence is being
given;
 (b)
    
    a description of the nature and scope of the examination or investigation upon
which the Document is based; and
 (c)
    
    a statement that the person providing the Document has made such examination or
investigation as he believes is necessary to enable him to make the statements or give
the opinions contained or expressed therein.
   - 46 -




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ARTICLE 10
GENERAL PROVISIONS
 10.1 Power of Board of Directors
  10.2 Formal Date and Execution Date
  10.3 Further Assurances
  10.4 Unenforceable Terms
   - 47 -




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10.5 Entire Agreement
  10.6 Amendments
  10.7 Counterparts
  10.8 No Waiver
  10.9 Enurement
  10.10 Conflicts
  10.11 Assignment
   - 48 -




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[The remainder of this page has been intentionally left blank]
  - 49 -




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IN WITNESS WHEREOF
 IVANHOE ENERGY INC.Per:
    (signed) Beverly A. BartlettBeverly A. BartlettVice President & Corporate SecretaryMACQUARIE CAPITAL MARKETS CANADA LTD.Per:
    (signed) David VettersPer:
    (signed) Josh WoitasCIBC MELLON TRUST COMPANYPer:
    (signed) Tricia MurphyTricia MurphyManager, Client RelationsPer:
    (signed) Margot SulymkaAssociate ManagerCorporate Trust  - 50 -




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SCHEDULE A
 IVANHOE ENERGY INC. WARRANT CERTIFICATE
   THE FOLLOWING LEGEND FOR U.S. PURCHASERS ONLY
  THE FOLLOWING LEGENDS ONLY IF THE SPECIAL WARRANTS WERE CONVERTED PRIOR TO RECEIPT OF FINAL RECEIPT




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WARRANTS
 IVANHOE ENERGY INC.
 WARRANT CERTIFICATE NO.
    
    Warrants
       - 2 -




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th
      - 3 -




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(a)
    
    the executor, administrator, heir or legal representative of the heirs of the
estate of a Warrantholder,
 (b)
    
    a guardian, committee, trustee, curator or tutor representing a Warrantholder
who is an infant, an incompetent person or a missing person,(c)
    
    a liquidator of, or a trustee in bankruptcy for, a Warrantholder, or
 (d)
    
    a transferee of a Warrantholder who provides the Warrant Agent with evidence
satisfactory to the Warrant Agent and the Company, acting reasonably, including but not
limited to a properly completed and executed declaration attached as Exhibit A to the
transfer form attached to this Warrant Certificate, that such transferee is/was either:
(i) not in the United States at the time the buy order for the Warrants was executed,
not acquiring the Warrants for the account or benefit of a U.S. Person or a person in
the United States and was not offered the Warrants in the United States, or (ii) a
person that has purchased or acquired Warrants in a transaction that was exempt from
registration under the U.S. Securities Act and has provided the Company with
satisfactory evidence of the availability of such exemption (which shall include an
opinion of counsel reasonably acceptable to the Company) and was exempt from
registration under any applicable securities laws of any state of the United States and
that the securities laws of any other applicable jurisdiction(s) have been complied
with in relation to the transfer of the Warrants involved.
     - 4 -




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- 5 -




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
 IVANHOE ENERGY INC.Per:Authorized Signatory Countersigned by:CIBC MELLON TRUST COMPANYPer:Authorized Signatory  - 6 -




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EXERCISE INSTRUCTIONS TO WARRANTHOLDER
 IVANHOE ENERGY INC.
   - 7 -




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EXERCISE FORM
 To:
    
    Ivanhoe Energy Inc.
 
   Number(s) orAmount(s) ofName(s) in Full
    
    Address(es)
    
    Common Shares
 No certificates will be registered or delivered to an address in the United States unless Box
B below is checked.




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The undersigned represents that it (A) has had access to such current public information
concerning Ivanhoe Energy Inc. as it considered necessary in connection with its investment
decision and (B) understands that the securities issuable upon exercise hereof have not and will
not be registered under the United States Securities Act of 1933, as amended (the U.S. Securities
Act).
 [check one only]
 o
    A.
    
    is not in the United States or a U.S. Person as defined in Rule 902 of
Regulation S under the U.S. Securities Act and is not exercising the Exercised Warrants
for the account or benefit of a U.S. Person or a person in the United States.
 o
    B.
    
    is a registered holder that acquired the Exercised Warrants in a transaction
that was exempt from registration under the U.S. Securities Act and applicable state
securities laws and in compliance with Subsections 2.7(d) of the Warrant Indenture.
  Signature Guaranty*
    
    Signature of Subscriber**Name of SubscriberAddress (include Postal Code)SIN/TIN Number (if any)
 *
    
    If the Common Shares are to be issued to a person other than the registered holder, then the
signature of the Subscriber must be guaranteed by a bank or medallion guaranteed by a member
of a recognized medallion guarantee program.**
    
    This signature must correspond exactly with the name appearing on the registration panel. o
    
    Check box if the share certificates are to be delivered at the office where this Warrant is
exercised, failing which they will be mailed.
  - 2 -




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TRANSFER OF WARRANTS
  NameAddress
   Signature Guaranteed
    
    (Signature of Warrant Holder)Print full NamePrint full address and SIN/TIN (if any)
 Instructions
 1.
    
    If the Transfer Form is signed by a trustee, executor, administrator, curator, guardian,
attorney, officer of a corporation or any person acting in a fiduciary or representative
capacity, the certificate must be accompanied by evidence of authority to sign satisfactory to
the Warrant Agent and the Company.
 2.
    
    The signature on the Transfer Form must be guaranteed by an authorized officer of a Schedule
1 chartered bank or medallion guaranteed by a member of a recognized medallion guarantee
program.
 3.
    
    Warrants will only be transferable in accordance with applicable securities laws and stock
exchange regulations. The transfer of Warrants to a transferee may, depending on the
residency of such transferee, result in the securities obtained upon the exercise of the
Warrants not being freely tradeable in the jurisdiction where the transferee is resident.
 4.
    
    Unless the Company has otherwise instructed the Warrant Agent in writing, no transfer of
Warrants will be valid unless this Transfer Form is accompanied by: (a) a duly executed
declaration by the transferee of Warrants in the form attached as Exhibit A to this Transfer
Form; and (b) such other evidence as the Warrant Agent may reasonably require that the
transfer of such Warrants is being made in accordance with all applicable securities
legislation.




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EXHIBIT A
 DECLARATION OF TRANSFEREE OF WARRANTS OF IVANHOE ENERGY INC.
 TO:
    
    CIBC Mellon Trust Company, Warrant Agent of the Warrants of
Ivanhoe Energy Inc.AND TO:
    
    Ivanhoe Energy Inc. (the Company)
    o
    A.
    
    (i) no offers to sell the Subject Securities were made by any person to the
Transferee or any beneficial transferee for whom he is acting while such persons were
in the United States;
 (ii)
    
    the Transferee and each beneficial transferee for whom he is
acting were outside the United States at the time of execution and delivery of
the instrument by which the Transferee and each beneficial transferee for whom
he is acting agreed to acquire the Subject Securities; and
 (iii)
    
    the Transferee and each beneficial transferee for whom he is
acting, is not, and is not acquiring the Subject Securities for the account or
benefit of, a U.S. Person as defined in Rule 904 of Regulation S under the U.S.
Securities Act.
 o
    B.
    
    The Transferee has acquired the Warrants in a transaction exempt from registration under the U.S.
Securities Act and applicable state securities laws and has provided herewith evidence (which
the Transferee acknowledges must be satisfactory to the Company) of such exemption. The
Transferee acknowledges that there is a Warrant Indenture which contains restrictions with
respect to the exercise and transfer of Warrants.




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Name of TransfereeBy:Signature of Authorized RepresentativeName of Person SigningTitle
  - 2 -