Filed by sedaredgar.com - Endeavour Silver Corp. - Exhibit 10.2






EXECUTION VERSION 

SUBSCRIPTION AGREEMENT 

	TO: 	ENDEAVOUR SILVER CORP. 
	AND TO: 	EURO PACIFIC CAPITAL INC. AND TO SALMAN
      PARTNERS INC. (together the “Agents”) 


The undersigned (referred to herein as the “Purchaser”),
hereby irrevocably subscribes to purchase from ENDEAVOUR SILVER CORP.
(the “Issuer”) that number of 10% Subordinated Unsecured Convertible
Redeemable Debentures (the “Convertible Debentures”) of the Issuer set
out below for the total aggregate subscription price (the “Aggregate
Subscription Price”) set form below. This subscription plus the attached
terms and conditions (the “Terms and Conditions”), each completed and
executed Canadian Subscriber Certificate (as defined in the Terms and
Conditions), each completed and executed U.S. Subscriber Certificate (as defined
in the Terms and Conditions) and the schedules attached hereto and thereto, are
collectively referred to as the “Subscription Agreement”. Each
Convertible Debenture shall be convertible into units (“Units”)
consisting of one common share (a “Common Share”) of the Issuer and one
half of a common share purchase warrant (each whole common share purchase
warrant, a “Warrant”) at a conversion price of CDN$1.90 at any time prior
to the maturity date of the Convertible Debentures in accordance with the terms
and conditions of the Indenture (as defined herein). Each Warrant shall be
exercisable for one Common Share of the Issuer (a “Warrant Share”) prior
to the maturity date of the Convertible Debentures at an exercise price of
CDN$2.05 and may be exercised on a “cashless” or “net exercise” basis at the
option of the Purchaser, and shall be in substantially the same form as
Exhibit I hereto. The Purchaser agrees to be bound by the Terms and
Conditions and agrees that the Issuer and the Agents may rely upon the
covenants, representations and warranties contained in the Subscription
Agreement. 


	________________________________Convertible Debentures
      at 	 	Aggregate Subscription Price:
      _________________
	CDN$1,000 per Convertible Debenture 	 	  




	Name and Address of Purchaser: 	 	Registration Instructions (if different):
  
	 	 	 
	______________________________________________	 	______________________________________________
	Name of Purchaser
      (please print) 	 	Name
  
	 	 	 
	By:
      ___________________________________________	 	______________________________________________
	     
       Authorized Signature 	 	Account
      Reference, if applicable 
	 	 	 
	______________________________________________	 	______________________________________________
	Official Capacity or
      Title (please print) 	 	 
    
	 	 	______________________________________________
		 	
	______________________________________________	 	______________________________________________
	(Please print
      name of signatory if different from the 	 	Address, including postal code 
	name of the
      Purchaser printed above.) 	 	
		 	Delivery Instructions (if different): 
	 	 	 
	Purchaser’s Address,
      including province: 	 	______________________________________________
		 	Name
  
	______________________________________________	 	______________________________________________
		 	Account
      Reference, if applicable 
	 	 	 
	______________________________________________	 	______________________________________________
		 	
	 	 	 
	______________________________________________	 	______________________________________________
		 	 
	Telephone Number:
      _______________________________	 	
	 	 	______________________________________________
	 	 	 
	Fax Number:
      _____________________________________	 	______________________________________________
		 	Address, including postal code 
	 	 	 
	E-mail Address:
      ___________________________________	 	______________________________________________
		 	Telephone Number 






EXECUTION VERSION 


	INSTRUCTIONS FOR PURCHASERS 

The
      Purchaser must: 
(1) Read this Subscription
      Agreement; 
(2) Complete and execute the face page of
      this Subscription Agreement; 
(3) Read and complete the
      U.S. Subscriber Certificate; 
(4) If resident in Canada,
      read and complete the Canadian Subscriber Certificate; 
(5)
      Make payment for the Convertible Debentures as required by Section 2 of
      the Terms and Conditions; and 
(6) Deliver the signed
      documents as required by Section 3 of the Terms and Conditions.
  



ACCEPTANCE AND EXTENSION OF REPRESENTATIONS AND WARRANTIES
TO SUBSCRIBER: The Issuer hereby (i) accepts the above subscription subject
to the Terms and Conditions contained in this Subscription Agreement; (ii)
represents and warrants to the Purchaser that the representations and warranties
made by the Issuer to the Agents and Purchaser in Section 2 of that
certain Placement Agency Agreement, dated February ____, 2009, by and among the
Issuer and the Agents (the “Agency Agreement”), which are incorporated by
reference in this Subscription Agreement, are true and correct as of the date of
the Agency Agreement (except as waived by the Agents); (iii) agrees that the
Purchaser is entitled to rely, subject to the limitations and other terms of the
Agency Agreement, on the representations and warranties made by the Issuer to
the Agents and the Purchaser (except as waived by the Agents) and on the
covenants made by the Issuer (except as waived or modified by the Agents) in the
Agency Agreement, each of which are incorporated by reference in this
Subscription Agreement; and (iv) accepts the conditions to the obligations of
the Agents and the Purchaser in Section 6 of the Agency Agreement and
agrees to deliver documents as specified in Section 3 of the Agency Agreement,
each of which is incorporated by reference in this Subscription Agreement. 

ENDEAVOUR SILVER CORP. 


	Per:	  	Date:     	  
	 	BRADFORD J. COOKE 	 	  
	 	CHAIRMAN AND CHIEF EXECUTIVE 	 	  
	 	OFFICER 	 	  






     EXECUTION
VERSION

 - 3 - 

TERMS AND CONDITIONS OF SUBSCRIPTION FOR 
CONVERTIBLE
DEBENTURES OF ENDEAVOUR SILVER CORP. 

	1. 	
      Acceptance

	 	 	 
	1.1 	
      The Issuer may accept or reject this Subscription
      Agreement in whole or in part at any time prior to the Closing Time (as
      defined herein) and the Issuer has the right to allot to any Purchaser
      less than the amount of Convertible Debentures subscribed for.

	 	 	 
	1.2 	
      The Issuer shall forward to the Purchaser confirmation of
      acceptance or rejection of this Subscription Agreement promptly, but in
      any case within five (5) Business Days (as defined hereinafter) after the
      acceptance or rejection of this Subscription Agreement by the Issuer. If
      this Subscription Agreement is rejected in whole, the Purchaser
      understands that any funds, certified cheques and bank drafts delivered by
      the Purchaser to the Agents, representing the purchase price for
      Convertible Debentures will be promptly, but in any case within five (5)
      Business Days, returned to the Purchaser without interest. If this
      Subscription Agreement is accepted only in part, the Purchaser understands
      that a cheque representing the portion of the purchase price for that
      portion of its subscription for Convertible Debentures that is not
      accepted will be promptly, but in any case within five (5) Business Days,
      delivered to the Purchaser without interest.

	 	 	 
	2. 	
      Payment

	 	 	 
		
      The Purchaser shall deliver the Aggregate Subscription
      Price payable in respect of the Convertible Debentures subscribed for
      hereunder to the Agent with whom the Purchaser deals at or before the
      Closing Time on the Closing Date (as defined herein), by certified cheque
      or bank draft drawn on a Canadian chartered bank or trust company in
      Canadian dollars and payable to such account as the Issuer and the
      Subscriber may agree, or payable in such other manner as may be agreed by
      the Issuer and the Purchaser.

	 	 	 
	3. 	
      Additional Deliveries and Conditions for
      Acceptance

	 	 	 
	3.1 	
      The Purchaser shall complete, sign and return
  to:

	 	 	 
		(a) 	
      if the Purchaser is resident in the United States, to
      Euro Pacific Capital Inc. at 4667 MacArthur Blvd., Ste. 340, Newport
      Beach, CA 92660; or

	 	 	 
		(b) 	
      if the Purchaser is resident outside the United States,
      to Salman Partners Inc. at 1095 West Pender Street, 17th Floor,
      Vancouver, B.C. V6E 2M6 (Fax no.: (604) 685-2471).



as soon as possible and, in any event
not later than 5:00 p.m. (Vancouver time) three Business Days (as defined
herein) on or before the Closing Date: 

	 	(i) 	
      one completed and executed copy of this Subscription
      Agreement;

	 	 	 
	 	(ii) 	
      one completed and executed copy of the subscriber
      certificate in the form attached as Schedule “A” hereto (the “U.S.
      Subscriber Certificate”);

	 	 	 
	 	(iii) 	
      if the Purchaser is resident in Canada, one completed and
      executed copy of the Subscriber certificate in the form attached as
      Schedule “B” hereto (the “Canadian Subscriber Certificate”);
    and

	 	 	 
	 	(iv) 	
      any other document required by applicable Securities Laws
      (as defined herein), U.S. federal or state securities laws or the rules
      and regulations of the NYSE Alternext U.S. or any other exchange upon
      which the Issuer’s securities are listed or quoted, which the Agents or
      the Issuer requests.







     EXECUTION
VERSION 

- 4 - 

The Purchaser acknowledges and agrees
that such documents, when executed and delivered by the Purchaser, will form
part of and will be incorporated into this Subscription Agreement with the same
effect as if each constituted a representation and warranty or covenant of the
Purchaser hereunder in favour of the Issuer and the Agents. The Purchaser
acknowledges and agrees that this offer and any other documents delivered in
connection herewith will be held by the Agents and the purchase price will be
held by the Agents until such time as the conditions set out in the Agency
Agreement are satisfied by the Issuer or waived by the Agents. 

For the purposes hereof, “Business
Day” means any day except Saturday, Sunday or a statutory holiday in the City of
Vancouver, British Columbia, Canada. 

	3.2 	
      Any obligation of the Issuer to sell the Convertible
      Debentures to the Purchaser is subject to (a) performance by the Purchaser
      of its covenants under and in accordance with this Subscription Agreement;
      (b) the truth, at the time of acceptance and at the Closing Date, of the
      Purchaser’s representations and warranties in this Subscription Agreement;
      (c) the trade of Convertible Debentures to the Purchaser being exempt from
      the prospectus and registration of applicable Securities Laws and exempt
      from the registration requirements of U.S. federal and state securities
      laws; (d) the terms and conditions contained in the Agency Agreement for
      the benefit of the Issuer being complied with to the satisfaction of the
      Issuer or waived by the Issuer; (e) the Issuer having obtained all
      required regulatory approvals to permit the completion of such sale; and
      (f) the Purchaser executing and delivering all requisite documentation as
      specified in Section 1.1 above.

	 	 
	3.3 	
      The Purchaser understands that the information provided
      herein will be relied upon by the Issuer for purposes of determining the
      eligibility of the Purchaser to purchase the Convertible Debentures. The
      Purchaser agrees to provide upon request any additional information that
      the Issuer reasonably determines necessary or appropriate in determining
      the Purchaser’s eligibility.

	 	 
	3.4 	
      For the purposes hereof, “Securities Laws” means
      the securities laws, regulations and rules, and the blanket rulings,
      policies and written interpretations of and multilateral or national
      instruments adopted by the securities regulators of the Province of
      British Columbia and Ontario and the rules and policies of the Toronto
      Stock Exchange (the “TSX”).

	 	 
	4. 	
      Closing

	 	 
	4.1 	
      Closing of this subscription for the Convertible
      Debentures (the “Closing”) will be completed at the offices of
      Blake, Cassels & Graydon, in City of Vancouver, British Columbia, at
      9:00 a.m. (Vancouver time), or such other place or time as the Agents and
      the Issuer may agree upon (the “Closing Time”) on February 20,
      2009, or such later date as the Agents and the Issuer may agree upon (the
      “Closing Date”). If, by the Closing Time, the terms and conditions
      contained in the Agency Agreement have been complied with to the
      satisfaction of the Agents or waived by the Agents, the Agents shall (a)
      deliver to the Issuer all completed subscription agreements, including
      this Subscription Agreement, and (b) deliver to the Issuer the aggregate
      subscription proceeds, against (i) delivery by the Issuer of the
      Convertible Debentures, and (ii) delivery by the Issuer of such other
      documentation as may be required by the Agents.

	 	 
	4.2 	
      If the Closing does not occur, this Subscription
      Agreement will be returned to the Purchaser and the applicable Agent and
      the Issuer shall promptly to return any funds, certified cheques and bank
      drafts delivered by the Purchaser representing the purchase price for
      Convertible Debentures, without interest, to the Purchaser.

	 	 
	5. 	
      Representations, Warranties and Covenants of the
      Purchaser

	 	 
		
      By executing this Subscription Agreement, the Purchaser
      represents, warrants and covenants to the Issuer and the Agents and
      acknowledges that the Issuer and the Agents are relying thereon
    that:







     EXECUTION
VERSION 

- 5 - 

	 	(a) 	
      the Purchaser understands that the Convertible Debentures
      subscribed for by the Purchaser hereunder form part of a larger offering
      (the “Offering”) of Convertible Debentures by the Issuer upon and
      subject to the terms and conditions set forth herein and the Purchaser has
      received a term sheet in the form attached hereto as Schedule “D” setting
      out the principal terms of the Offering; furthermore, the Purchaser
      understands that the Offering is not subject to any minimum subscription
      level and therefore any funds invested are available to and will be paid
      to the Issuer on the Closing Date and need not be refunded to the
      Purchaser unless the Closing Date does not occur on or before February 20,
      2009;

	 	 	 
	 	(b) 	
      the Purchaser acknowledges that the description of the
      Convertible Debentures set out in this Subscription Agreement including,
      without limitation, Schedule “D”, is a summary only and is subject to the
      detailed provisions of a trust indenture to be entered into between the
      Issuer and a trust company mutually satisfactory to the Issuer and the
      Agents, each acting reasonably and in good faith (the “Indenture”)
      under which such Convertible Debentures will be issued. In the event of a
      conflict, the provisions of the Indenture shall prevail;

	 	 	 
	 	(c) 	
      the Purchaser has completed, executed and delivered the
      U.S. Subscriber Certificate;

	 	 	 
	 	(d) 	
      if resident in Canada, the Purchaser has completed,
      executed and delivered the Canadian Subscriber Certificate;

	 	 	 
	 	(e) 	
      the Purchaser is aware of the characteristics of the
      Convertible Debentures, the Units, the Common Shares, the Warrants and the
      Warrant Shares, the risks relating to an investment therein and agrees
      that the Purchaser must bear the economic risk of his or her investment in
      the Convertible Debentures. The Purchaser understands that he or she will
      not be able to resell the Convertible Debentures, Units, Warrants, Common
      Shares or Warrant Shares until expiry of the applicable hold period under
      applicable Securities Laws and, subject to the U.S. resale registration
      rights provisions contained in Section 6 hereof, under U.S. federal and
      state securities laws, unless such securities are registered under the
      1933 Act (as defined hereinafter) or an exemption from registration is
      available.

	 	 	 
	 	(f) 	
      the Purchaser alone, or with the assistance of its
      professional advisors, has such knowledge in financial and business
      affairs as to be capable of evaluating the merits and risks of the
      Purchaser’s proposed investment in the Convertible Debentures;

	 	 	 
	 	(g) 	
      the Purchaser will execute and deliver within the
      applicable time periods all documentation as may be required by applicable
      securities laws or by any securities regulatory authority or stock
      exchange or other regulatory authority to permit the purchase of the
      Convertible Debentures on the terms set forth herein and the Purchaser
      will use its commercially reasonable efforts to execute, deliver, file and
      otherwise assist the Issuer in filing such reports, undertakings and other
      documents with respect to the issue of the Convertible Debentures as may
      be required by applicable securities laws or by any securities regulatory
      authority or stock exchange or other regulatory authority;

	 	 	 
	 	(h) 	
      if the Purchaser is an individual, he/she has attained
      the age of majority and is legally competent to execute this Subscription
      Agreement and to take all actions required pursuant hereto;

	 	 	 
	 	(i) 	
      if the Purchaser is a corporation, partnership,
      unincorporated association or other entity, the Purchaser has the legal
      capacity and competence to execute this Subscription Agreement and to take
      all actions required pursuant hereto;

	 	 	 
	 	(j) 	
      if the Purchaser is not an individual, the Purchaser has
      not been created solely or primarily to use exemptions from the
      registration and prospectus exemptions under applicable securities laws
      and has a pre-existing purpose other than to use such
  exemptions;







     EXECUTION
VERSION 

- 6 - 

	 	(k) 	
      this Subscription Agreement has been duly and validly
      authorized, executed and delivered by, and upon acceptance by the Issuer
      constitutes a legal, valid, binding and enforceable obligation of, the
      Purchaser;

	 	 	 	 
	 	(l) 	
      the Purchaser has not received, nor has the Purchaser
      requested, nor does the Purchaser have any need to receive, any
      prospectus, sales or advertising literature, offering memorandum or any
      other document (other than an annual or interim report, financial
      statements or any other document, other than an offering memorandum, the
      content of which is prescribed by statute or regulation, or any
      information available on the Issuer’s website) describing or purporting to
      describe the business and affairs of the Issuer which has been prepared
      for delivery to, and review by, prospective purchasers in order to assist
      them in making an investment decision in respect of the purchase of the
      Convertible Debentures pursuant to the Offering;

	 	 	 	 
	 	(m) 	
      the Purchaser has relied only upon publicly available
      information relating to the Issuer and not upon any verbal or written
      representation as to fact, and the Purchaser acknowledges that neither the
      Issuer, the Agents or anyone acting on its or their behalf have made any
      written representations, warranties or covenants in respect of such
      publicly available information, except as set forth in this Subscription
      Agreement and the Agency Agreement. Without limiting the generality of the
      foregoing, except as may be provided herein, no person has made any
      written or oral representation to the Purchaser that any person will
      re-sell or re-purchase the Convertible Debentures, or refund any of the
      purchase price of the Convertible Debentures, or that the Convertible
      Debentures will be listed on any exchange or quoted on any quotation and
      trade reporting system, or that application has been or will be made to
      list any such security on any exchange or quote the security on any
      quotation and trade reporting system, and no person has given any
      undertaking to the Purchaser relating to the future value or price of the
      Convertible Debentures;

	 	 	 	 
	 	(n) 	
      the Purchaser agrees that it is solely responsible for
      obtaining such legal, tax and other advice as the Purchaser considers
      appropriate in connection with the execution, delivery and performance of
      this Subscription Agreement and the transactions contemplated
      hereunder;

	 	 	 	 
	 	(o) 	
      in order to ensure compliance with applicable U.S.
      federal and state securities laws, the Purchaser represents, warrants and
      covenants as follows:

	 	 	 	 
	 		(i) 	
      it is purchasing the Convertible Debentures for its own
      account and not with a view to any resale, distribution or other
      disposition of the Convertible Debentures, the Units, the Warrants, the
      Common Shares or the Warrant Shares in violation of U.S. federal or state
      securities laws;

	 	 	 	 
	 		(ii) 	
      it understands that the Convertible Debentures, the
      Units, the Warrants, the Common Shares and the Warrant Shares have not
      been registered under the United States Securities Act of 1933, as amended
      (the “1933 Act”) or any applicable state securities laws, and are,
      therefore, “restricted securities” within the meaning of Rule 144 under
      the 1933 Act and that the contemplated sale of Convertible Debentures is
      being made in reliance on a private placement exemption available under
      Rule 506 of Regulation D under the 1933 Act to U.S. Accredited Investors
      (as defined in Schedule “A”);

	 	 	 	 
	 		(iii) 	
      it has had opportunity to discuss the Issuer’s business,
      management and financial affairs with the Issuer’s management and has had
      access to such additional information, if any, concerning the Issuer as it
      has considered necessary in connection with its investment decision to
      acquire the Convertible Debentures;

	 	 	 	 
	 		(iv) 	
      it is a U.S. Accredited Investor and has completed and
      executed Schedule “A” to this Agreement;







     EXECUTION
VERSION 

- 7 - 

	 	(v) 	
      it agrees that if it decides to offer, sell, pledge or
      otherwise transfer any Convertible Debentures, Common Shares, Warrants or
      Warrant Shares it will do so only, pursuant to an effective registration
      statement under the 1933 Act or pursuant to an available exemption from,
      or in a transaction not subject to, the registration requirements of the
      1933 Act and in accordance with applicable state securities laws as
      evidenced by a legal opinion of counsel to such effect;

	 	 	 
	 	(vi) 	
      it understands and acknowledges that, in addition to any
      legend setting forth transfer restrictions under applicable securities
      laws, upon the original issuance thereof, and until such time as the same
      is no longer required under applicable requirements of the 1933 Act or
      applicable state securities laws, certificates representing the
      Convertible Debentures, the Common Shares, the Warrants and the Warrant
      Shares, and all certificates issued in exchange therefor or in
      substitution thereof, shall bear the following restrictive legend (the
      “U.S. Legend”):



THESE SECURITIES [AND THE
SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE HEREOF] HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

provided, that with respect to any
such pledge that the transferee is a U.S. Accredited Investor and such transfer
complies with applicable United States federal and state securities laws and
Canadian federal and provincial securities laws; 

	 	(vii) 	
      it is not purchasing the Convertible Debentures as a
      result of any “general solicitation or general advertising” (as those
      terms are used in Regulation D under the 1933 Act), including, but not
      limited, any advertisements, articles, notices or other communications
      published in any newspaper, magazine or similar media or on the Internet
      or broadcast over radio, television or the Internet, or any seminar or
      meeting whose attendees have been invited by general solicitation or
      general advertising, and it has a pre-existing business relationship with
      (i), if a director or officer of the Issuer, the Issuer or (ii) the Agents
      and, other than a director or officer of the Issuer, it was first made
      aware of the offering of the Convertible Debentures by the
  Agents;

	 	 	 
	 	(viii) 	
      it understands that the Convertible Debentures may not be
      converted unless an exemption is available from the registration
      requirements of the 1933 Act and the securities laws of any applicable
      states, and the holder has furnished an opinion of counsel of recognized
      standing) or other evidence reasonably satisfactory to the Issuer to such
      effect in form and substance reasonably satisfactory to the Issuer
      provided, however, that a holder who purchased Convertible Debentures in
      the Issuer’s private placement of Convertible Debentures will not be
      required to deliver an opinion of counsel or other evidence in connection
      with the conversion of those Convertible Debentures;

	 	 	 
	 	(ix) 	
      it understands that the Warrants may not be exercised
      unless an exemption from registration is available under the 1933 Act and
      any applicable state securities laws and







     EXECUTION
VERSION 

- 8 - 

	 		
      the Issuer has received an opinion counsel of recognized
      standing to such effect in form and substance reasonably satisfactory to
      the Issuer; provided, however, that a holder who is a U.S. Accredited
      Investor at the time of exercise of Warrants and purchased Convertible
      Debentures in the Issuer’s private placement of Convertible Debentures
      will not be required to deliver an opinion of counsel in connection with
      the exercise of Warrants that are a part of the Units underlying those
      Convertible Debentures; and

	 	 	 
	 	(x) 	
      it is aware that (i) purchasing, holding and disposing of
      the Convertible Debentures, the Units, the Common Shares, the Warrants and
      the Warrant Shares may have tax consequences under the laws of both Canada
      and the United States, (ii) the tax consequences for prospective investors
      who are resident in, or citizens of, the United States are not described
      in this Subscription Agreement, and (iii) it is solely responsible for
      determining the tax consequences applicable to its particular
      circumstances and should consult its own tax advisors concerning
      investment in such securities.

	 	 	 
	 	(xi) 	
      if the Purchaser is resident in Canada, it is resident in
      or otherwise subject to applicable securities laws of Canada and it is an
      “accredited investor”, as such term is defined in NI 45-106, it was not
      created or used solely to purchase or hold securities as an accredited
      investor as described in paragraph (m) of the definition of “accredited
      investor” in NI 45- 106, and it has concurrently executed and delivered an
      Canadian Subscriber Certificate in the form attached as Schedule “B” to
      this Subscription Agreement and has initialled or placed a check mark in
      Exhibit 1 thereto indicating that the Purchaser satisfies one of the
      categories of “accredited investor” set forth in such
  definition;




	 	(p) 	
      if the address of the Purchaser in this Subscription
      Agreement is in a jurisdiction outside of British Columbia, the Purchaser
      certifies that the Subscriber (or beneficial purchaser, if applicable) is
      not resident in British Columbia and acknowledges that:

	 	 	 	 
	 		(i) 	
      no securities commission or similar regulatory authority
      has reviewed or passed on the merits of the Convertible Debentures, Units,
      Common Shares, Warrants or Warrant Shares;

	 	 	 	 
	 		(ii) 	
      there is no government or other insurance covering the
      Convertible Debentures, Units, Common Shares, Warrants or Warrant
      Shares;

	 	 	 	 
	 		(iii) 	
      there are risks associated with the purchase of the
      Convertible Debentures, Units, Common Shares, Warrants or Warrant
      Shares;

	 	 	 	 
	 		(iv) 	
      there are restrictions on the Purchaser’s ability to
      re-sell the Convertible Debentures, Units, Common Shares, Warrants or
      Warrant Shares and it is the responsibility of the Purchaser to find out
      what those restrictions are and to comply with them before selling the
      Debentures, Units, Common Shares, Warrants or Warrant Shares;
and

	 	 	 	 
	 		(v) 	
      the Corporation has advised the Purchaser that the
      Corporation is relying on an exemption from the requirements to provide
      the Purchaser with a prospectus and to sell securities through a person or
      company registered to sell securities under the Securities Act
      (British Columbia) (the “Act”) and, as a consequence of
      acquiring the Convertible Debentures pursuant to an exemption, certain
      protections, rights and remedies provided by the Act, including statutory
      rights of rescission and damages, will not be available to the
      Purchaser;

	 	 	 	 
	 	(q) 	
      the Purchaser is aware that, in addition to any legend
      setting forth transfer restrictions under applicable securities laws, the
      certificates evidencing the Convertible Debentures, the Warrants, the
      Common Shares and the Warrant Shares issued to the Purchaser will be
      endorsed with, a







     EXECUTION
VERSION 

- 9 - 

legend setting out resale restrictions
under applicable Securities Laws in substantially the following form: 

“UNLESS PERMITTED UNDER SECURITIES
LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE
[INSERT DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION DATE].” 

	6. 	
      U.S. Resale Registration Statement

	 	 	 	 
		(a) 	
      On or before March 31, 2009 (the “Registration Due
      Date”) and subject to any limitations imposed by Rule 415 (“Rule
      415”) under the 1933 Act or by the United States Securities and
      Exchange Commission (the “Commission”) with respect to
      interpretations thereof or thereunder, the Issuer shall prepare and file
      with the Commission a registration statement on Form F-3, or , if form F-3
      is not available, such other form that the Issuer is eligible to use (the
      “Registration Statement”), covering the resale of the Common Shares
      and the Warrant Shares (collectively, the “Registrable
      Securities”). The Issuer will use commercially reasonable efforts to
      cause such registration statement to become effective within 120 days
      following the Closing Date (such effective date the “Effective
      Date”), and shall use commercially reasonable efforts to maintain the
      effectiveness of the Registration Statement for a period of two years from
      the Effective Date (the “Effectiveness Period”).

	 	 	 	 
		(b) 	
      If the Issuer (i) subject to any limitations imposed by
      Rule 415 and the Commission’s interpretations thereof and thereunder,
      fails to have the Registration Statement covering the registration of 110%
      of the Registrable Securities filed with the Commission by the
      Registration Due Date, (ii) fails to use commercially reasonable efforts
      to have the Registration Statement declared effective by the Effective
      Date, or (iii) fails to use commercially reasonable efforts to maintain
      the effectiveness of the Registration Statement during the Effectiveness
      Period, then, as liquidated damages for such failure, the principal amount
      of the Convertible Debentures purchased by such Purchaser will be deemed
      to have increased by an amount equal to one percent (1%) of the original
      principal amount of Convertible Debentures purchased by such Purchaser for
      every 30-day period, or portion thereof, until the Registration Statement
      has been filed or declared effective. Notwithstanding the foregoing, the
      aggregate amount of liquidated damages payable by the Issuer to the
      Purchasers as a result of a failure to timely file or cause the
      Registration Statement to become effective and to maintain its effective
      status shall be capped at ten percent (10%) of the amount subscribed for
      by the Purchasers. Moreover, the Issuer shall not accrue liquidated
      damages with respect to more than one of any failure under this Section 6
      at a time.

	 	 	 	 
		(c) 	
      In connection with the Issuer’s registration obligations
      herein, the Issuer will:

	 	 	 	 
			(i) 	
      Not less than three (3) business days prior to the filing
      of the Registration Statement or any related prospectus or any amendment
      or supplement thereto (i) furnish to the Purchasers copies of all such
      documents proposed to be filed and (ii) cause its officers and counsel to
      respond to such inquiries as shall be necessary, in the reasonable opinion
      of respective counsel, to conduct a reasonable investigation within the
      meaning of the 1933 Act. In this regard, the Purchaser acknowledges and
      agrees to provide an email address on the cover page of this Subscription
      Agreement to which such documents may be sent. If such an email address is
      not provided, the Issuer shall have no obligation to provide such
      documents to the Purchaser pursuant to this Section 6(c)(i). The Issuer
      shall not file the Registration Statement or any such prospectus or any
      amendments or supplements thereto to which the Purchasers of a majority of
      the Registrable Securities shall reasonably object in good faith, provided
      that the Issuer is notified of such objection in writing no later than two
      (2) business days after the Purchasers have been so furnished copies of
      such documents;







     EXECUTION
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	 	(ii) 	
      prepare and file with the Commission such amendments and
      supplements to such Registration Statement and the prospectus used in
      connection therewith as may be necessary to keep such registration
      statement effective and to comply with the provisions of the 1933 Act with
      respect to the sale or other disposition of all securities covered by such
      Registration Statement until the such time as all of such securities have
      been disposed of in a public offering or as otherwise set forth
    herein;

	 	 	 
	 	(iii) 	
      furnish to each Purchaser such number of copies of a
      summary prospectus or other prospectus, including a preliminary
      prospectus, in conformity with the requirements of the 1933 Act, and such
      other documents, as the Purchasers may reasonably request;

	 	 	 
	 	(iv) 	
      register or qualify the Registrable Securities covered by
      the Registration Statement under such other securities or blue sky laws of
      such jurisdictions within the United States as the Agents shall reasonably
      request (provided, however, that it shall not be obligated to qualify as a
      foreign corporation to do business under the laws of any jurisdiction in
      which it is not then qualified or to file any general consent to service
      or process);

	 	 	 
	 	(v) 	
      furnish, at the request of the Purchasers, a legal
      opinion of the counsel representing the Issuer for the purposes of such
      registration, addressed to the Purchasers, in customary form and covering
      matters of the type customarily covered in such legal opinions;

	 	 	 
	 	(vi) 	
      otherwise use its commercially reasonable efforts to
      comply with all applicable rules and regulations of the Commission;
    and

	 	 	 
	 	(vii) 	
      promptly notify the Purchasers of (i) the issuance by the
      Commission of an order suspending the effectiveness of the Registration
      Statement, or of the threat of any proceeding for that purpose, or (ii)
      the suspension of the qualification of any Registrable Securities to be
      included in the Registration Statement for sale in any jurisdiction or the
      initiation or threat of any proceeding for that
purpose.




	 	(d) 	
      It shall be a condition precedent to the obligations of
      the Issuer to take any action pursuant to Section 6 hereof and the payment
      of liquidated damages hereunder that the Purchaser furnish to the Issuer
      such information regarding itself, the Registrable Securities held by it
      and the intended method of disposition of such securities as shall be
      required to timely effect the filing and effectiveness of the Registration
      Statement pursuant to the terms of this Section 6. In addition, the
      Purchaser shall not be obligated to pay liquidated damages hereunder if
      Purchasers of a majority of Registrable Securities object to the filing of
      the Registration Statement under Section 6(c)(i).

	 	 	 
	 	(e) 	
      No Purchaser shall have any right to obtain or seek an
      injunction restraining or otherwise delaying any the filing of the
      Registration Statement as the result of any controversy that might arise
      with respect to the interpretation or implementation of this Section
    6.

	 	 	 
	 	(f) 	
      Without limiting the other provisions of this Section 6,
      the Purchaser agrees that, if so requested by the Issuer upon a good faith
      determination by the Issuer’s board of directors that the imposition of a
      “Suspension Period” is necessary to enable the Issuer to pursue the
      objectives described in this Section 6(f), not to effect any offer or sale
      of securities pursuant to the Registration Statement, or otherwise, or
      engage in any hedging or other transaction intended to reduce or transfer
      the risk of ownership for any period (not to exceed 45 days) reasonably
      deemed necessary by the Issuer in connection with (i) the offering of
      securities by the Issuer for its own account or (ii) any proposal or plan
      by the Issuer to engage in any material financing or material acquisition
      or disposition by the Issuer or any subsidiary thereof of the securities
      or substantially all of the assets of any other person (other than in the
      ordinary course of business), any tender offer or any merger,
      consolidation, corporate reorganization, strategic partnership arrangement
      or restructuring or other similar transaction (each, a “Business
      Combination”) material to the Issuer and its
subsidiaries







     EXECUTION
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      taken as a whole. Any period during which the Issuer
      requires pursuant to this Section 6(f) that the Purchaser not effect such
      transactions is hereafter referred to as a “Suspension Period”. A
      Suspension Period shall commence on the date set forth in a written notice
      by the Issuer to the Purchaser pursuant to this Section 6(f) and shall end
      on the date when the Purchaser is advised in writing by the Issuer that
      such transactions may be resumed. The Issuer may only impose a Suspension
      Period on the Purchaser one (1) time during any twelve month period. The
      obligation under Section 6 to keep a Registration Statement effective
      shall not include any period of time such Registration Statement was
      subject to a Suspension Period.

	 	 	 
	 	(g) 	
      All expenses incurred in connection with the Registration
      Statement will be borne by the Issuer except for (i) any costs and
      expenses of counsel, accountants or other advisors retained by the
      Purchasers and (ii) all transfer, franchise, capital stock and other
      taxes, if any, applicable to the Purchasers’ securities which shall be
      paid by the Purchasers.

	 	 	 
	 	(h) 	
      The Issuer shall indemnify and hold harmless each
      Purchaser holding such Registrable Securities, such Purchaser’s directors
      and officers, and each other person (including each underwriter) who
      participated in the offering of such Registrable Securities and each other
      person, if any, who controls such Purchaser or such participating person
      within the meaning of the 1933 Act, against any losses, claims, damages or
      liabilities, joint or several, to which such Purchaser or any such
      director or officer or participating person or controlling person may
      become subject under the 1933 Act or any other statute or at common law,
      insofar as such losses, claims, damages or liabilities (or actions in
      respect thereof) arise out of or are based upon (i) any untrue statement
      or any alleged untrue statement of any material fact contained, on the
      effective date thereof, in the Registration Statement, any preliminary
      prospectus or final prospectus contained therein, or any amendment or
      supplement thereto, (ii) any omission or any alleged omission to state
      therein a material fact required to be stated therein or necessary to make
      the statements therein not misleading, or (iii) any other violation of any
      applicable securities laws, and in each of the foregoing circumstances
      shall reimburse such Purchaser or such director, officer or participating
      person or controlling person for any legal or any other expenses
      reasonably incurred by such Purchaser or such director, officer or
      participating person or controlling person in connection with
      investigating or defending any such loss, claim, damage, liability or
      action; provided, however, that the Issuer shall not be liable in any such
      case (A) to amounts paid in settlement of any such loss, claim, damage,
      liability or action if such settlement is effected without the consent of
      the Issuer (which consent shall not be unreasonably withheld), (B) to the
      extent that any such loss, claim, damage or liability arises out of or is
      based upon any actual or alleged untrue statement or actual or alleged
      omission made in such Registration Statement, preliminary prospectus,
      prospectus or amendment or supplement in reliance upon and in conformity
      with information furnished to the Issuer by such Purchaser specifically
      for use therein, or (C) for any loss, claim, damage, liability or action
      that is the result of or is caused, directly or indirectly, by the wilful
      misconduct or negligence of the Purchaser. Notwithstanding the provisions
      of this paragraph, the Issuer shall not be required to indemnify the
      Purchaser or any other person pursuant to this paragraph or contribute
      pursuant to paragraph (i) below in an amount in excess of the aggregate
      proceeds received from such Purchaser or other person pursuant to this
      Offering.

	 	 	 
	 	(i) 	
      Each Purchaser holding Registrable Securities, by
      acceptance hereof, agrees to indemnify and hold harmless the Issuer, its
      directors and officers and each other person, if any, who controls the
      Issuer within the meaning of the 1933 Act and any other Purchaser against
      any losses, claims, damages or liabilities, joint or several, to which the
      Issuer or any such director or officer or any such person may become
      subject under the 1933 Act or any other statute or at common law, insofar
      as such losses, claims, damages or liabilities (or actions in respect
      thereof) arise out of or are based upon (i) any untrue statement or any
      alleged untrue statement of any material fact contained, on the effective
      date thereof, in the Registration Statement, any preliminary prospectus or
      final prospectus contained therein, or any amendment or supplement
      thereto, or (ii) any omission or any alleged omission to state therein a
      material fact required to be stated therein or necessary to make the
      statements therein not misleading, but in either case only to the extent
      that such untrue







     EXECUTION
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      statement or omission is (A) made in reliance on and in
      conformity with any information furnished in writing by such Purchaser to
      the Issuer concerning such Purchaser specifically for inclusion in the
      offering documents relating to such offering, and (B) is not corrected by
      such Purchaser prior to any such loss, claim, damage or liability.
      Notwithstanding the provisions of this paragraph, no Purchaser shall be
      required to indemnify any person or entity pursuant to this paragraph or
      to contribute pursuant to paragraph (j) below in an amount in excess of
      the amount of the Aggregate Subscription Price paid by such Purchaser
      pursuant to this Offering.

	 	 	 	 
	 	(j) 	
      If the indemnification provided for in Section 6(i) above
      from the indemnifying party is unavailable to an indemnified party
      hereunder in respect of any losses, claims, damages, liabilities or
      expenses referred to therein, then the indemnifying party, in lieu of
      indemnifying such indemnified party, shall contribute to the amount paid
      or payable by such indemnified party as a result of such losses, claims,
      damages, liabilities or expenses in such proportion as is appropriate to
      reflect the relative fault of the indemnifying party and indemnified
      parties in connection with the actions which resulted in such losses,
      claims, damages, liabilities or expenses, as well as any other relevant
      equitable considerations. The relative fault of such indemnifying party
      and indemnified parties shall be determined by reference to, among other
      things, whether any action in question, including any untrue or alleged
      untrue statement of a material fact or omission or alleged omission to
      state a material fact, has been made by, or relates to information
      supplied by, such indemnifying party or indemnified parties, and the
      parties’ relative intent, knowledge, access to information and opportunity
      to correct or prevent such action. The amount paid or payable by a party
      as a result of the losses, claims, damages, liabilities and expenses
      referred to above shall be deemed to include any legal or other fees or
      expenses reasonably incurred by such party in connection with any
      investigation or proceeding. The parties hereto agree that it would not be
      just and equitable if contribution pursuant to this paragraph were
      determined by pro rata allocation or by any other method of allocation
      which does not take account of the equitable considerations referred to
      above. No person guilty of fraudulent misrepresentation (within the
      meaning of Section 11(f) of the 1933 Act) shall be entitled to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation.

	 	 	 	 
	 	(k) 	
      In order to permit the Purchasers to sell the Registrable
      Securities, if so desired, pursuant to any applicable resale exemption
      under applicable securities laws and regulations, the Issuer shall for a
      period of two years from the Closing Date:

	 	 	 	 
	 		(i) 	
      comply with all rules and regulations of the Commission
      in connection with use of any such resale exemption;

	 	 	 	 
	 		(ii) 	
      make and keep available adequate and current public
      information regarding the Issuer;

	 	 	 	 
	 		(iii) 	
      file with the Commission in a timely manner, all reports
      and other documents required to be filed under the 1933 Act, the Exchange
      Act, or other applicable securities laws and regulations;

	 	 	 	 
	 		(iv) 	
      furnish to the Purchasers copies of annual reports
      required to be filed under the Exchange Act and other applicable
      securities laws and regulations; and

	 	 	 	 
	 		(v) 	
      furnish to the Purchasers, upon written request such
      other information as may be reasonably required to permit the Purchasers
      to sell pursuant to any applicable resale exemption under the 1933 Act or
      other applicable securities law and regulations, if any.

	 	 	 	 
	 	(l) 	
      Certificates evidencing Registrable Securities shall not
      contain any U.S. restrictive legend: (i) while a registration statement
      (including the Registration Statement) covering such Registrable
      Securities is then effective and a Suspension Period is not in effect; or
      (ii) following a sale or transfer of such Registrable Securities pursuant
      to Rule 144 promulgated under the 1933 Act







     EXECUTION
VERSION

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      (“Rule 144”) (assuming the transferee is not an
      “affiliate” (as such term is defined in Rule 405 under the 1933 Act) of
      the Issuer), or (iii) while such Registrable Securities are eligible for
      sale by the selling Purchaser without volume restrictions under Rule 144.
      The Issuer agrees that following the Effective Date or such other time as
      U.S. restrictive legends are no longer required to be set forth on
      certificates representing Registrable Securities under this Section 6(l),
      it will, no longer than three trading days following the delivery by a
      Purchaser to the Issuer or the Issuer’s transfer agent of a certificate
      representing such Registrable Securities containing a U.S. restrictive
      legend, deliver or instruct the Issuer’s transfer agent to deliver to such
      Investor, Registrable Securities which are free of all U.S. restrictive
      and other U.S. legends. If the Issuer is then eligible, certificates for
      Registrable Securities subject to U.S. legend removal hereunder shall be
      transmitted by the Issuer’s transfer agent to a Purchaser by crediting the
      prime brokerage account of such Purchaser with the Depository Trust Issuer
      System as directed by such Purchaser.

	 	 	 
	 	(m) 	
      Neither the Issuer nor any of its security holders (other
      than the Purchasers in such capacity pursuant hereto) may include
      securities of the Issuer in the Registration Statement other than the
      Registrable Securities without the consent of Purchasers holding a
      majority of the then outstanding Registrable Securities, and the Company
      shall not, during the Effectiveness Period, enter into any agreement
      providing any such right to any of its security
holders.




	7. 	
      Pre-emptive Right

	 	 	 
		(a) 	
      The Issuer agrees that no additional convertible
      debentures of the Issuer shall be issued within (2) years of the Closing
      Date unless the Issuer, by written notice, advises the holders of any
      Convertible Debentures at such time of the Issuer’s intention to issue
      such additional debentures (the “Offered Debentures”) and the
      subscription price per Offered Debenture for same. Each of holders of
      Convertible Debentures shall have a pre-emptive right, exercisable within
      a period of 15 Business Days from receipt of such notice from the Issuer,
      to elect in writing to acquire the Offered Debentures in proportion to
      their respective holdings of the outstanding Convertible Debentures at the
      same price and on the same terms as those that are specified in the
      written notice issued by the Issuer. If any holders of Convertible
      Debentures so elect to acquire the Offered Debentures, the holder shall be
      obligated to acquire its proportion of the Offered Debentures (as
      determined pursuant to the foregoing) in its entirety.

	 	 	 
		(b) 	
      If the holder does not elect to acquire the Offered
      Debentures in accordance with Section 7(a), the Issuer may issue the
      Offered Debentures at any time within 90 days from the issuance of the
      notice referred to in Section 7(a), provided that such issuance is not on
      terms that are more favourable than those specified in the written notice
      issued by the Issuer.

	 	 	 
		(c) 	
      Following the issuance of Offered Debentures or 90 days
      following the issuance of the written notice referred to in Section 7(a)
      from which an issuance of the Offered Debentures did not result, as the
      case may be, the provisions of Section 7(a) shall once again apply to any
      intention by the Issuer to issue additional convertible debentures of the
      Issuer within (2) years of the Closing Date.

	 	 	 
	8. 	
      Prohibition on Short Sales

	 	 	 
		
      The Purchaser covenants and agrees that it will not sell
      short any Common Shares of the Issuer from the date hereof until the
      Closing Date.

	 	 	 
	9. 	
      Reliance Upon Representations, Warranties and
      Covenants by Issuer and Agents

	 	 	 
		
      The Purchaser acknowledges that the representations,
      warranties and covenants made by the Purchaser in this Subscription
      Agreement (including without limitation those made in each Subscriber
      Certificate to be executed and delivered in accordance with this
      Subscription Agreement) are made with the intent that they may be relied
      upon by the Issuer, the Agents and their respective counsel to, among
      other things, determine







     EXECUTION
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      the Purchaser’s eligibility to purchase the Convertible
      Debentures, including without limitation the availability of exemptions
      from the registration and prospectus requirements of applicable Securities
      Laws in connection with the issuance of the Convertible Debentures to the
      Purchaser. The Purchaser further covenants to the Issuer and the Agents
      that by accepting the Convertible Debentures, the Purchaser shall be
      representing and warranting that such representations and warranties are
      true as at the Closing Date with the same force and effect as if they had
      been made by the Purchaser at the Closing Date and that the covenants of
      the Purchaser made by it in this Subscription Agreement to be performed
      prior to the Closing Date have been performed. The Purchaser further
      agrees to indemnify the Issuer, the Agents and its respective directors,
      officers, employees, advisers, affiliates, shareholders and agents, and
      their respective counsel, against all losses, claims, costs, expenses,
      damages and liabilities which any of them may suffer or incur and which
      are caused by or arise from any inaccuracy in, or breach or
      misrepresentation by the Purchaser of, any such representations,
      warranties and covenants made by the Purchaser in this Subscription
      Agreement. The Purchaser undertakes to immediately notify the Issuer and
      the Agents of any change in any statement or other information relating to
      the Purchaser set forth herein or in a Subscriber Certificate that takes
      place prior to the Closing Date.

	 	 
	10. 	
      Reliance Upon Representations, Warranties and
      Covenants by the Purchaser

	 	 
		
      The Issuer acknowledges that the representations,
      warranties and covenants made by the Issuer in this Subscription Agreement
      and the Agency Agreement, which are incorporated herein by reference, are
      made with the intent that they may be relied upon by the Purchaser and
      their respective counsel to, among other things, assist Purchaser in
      making its investment decision regarding the Convertible Debentures. The
      Issuer further agrees to indemnify the Purchaser and its respective
      directors, officers, employees, advisers, affiliates, shareholders and
      agents, and their respective counsel, against all losses, claims, costs,
      expenses, damages and liabilities which any of them may suffer or incur
      and which are caused by or arise from any inaccuracy in, or breach or
      misrepresentation by the Issuer of, any such representations, warranties
      and covenants made by the Issuer in this Subscription Agreement. The
      Issuer undertakes to immediately notify the Purchaser of any change in any
      statement or other information relating to the Issuer set forth herein
      that takes place prior to the Closing Date.

	 	 
	11. 	
      Survival

	 	 
		
      This Subscription Agreement, including without limitation
      the representations, warranties and covenants contained herein and in each
      Subscriber Certificate shall survive and continue in full force and effect
      and be binding upon the Issuer and the Purchaser, notwithstanding the
      completion of the purchase of the Convertible Debentures by the Purchaser
      pursuant hereto, the issuance of any underlying securities, or the
      subsequent disposition of the Convertible Debentures or the underlying
      securities by the Purchaser, subject in the case of the representations
      and warranties in the Agency Agreement to the limitations and other terms
      thereof.

	 	 
	12. 	
      Personal Information Authorization

	 	 
		
      By executing this Subscription Agreement, the Purchaser
      hereby consents to the collection, use and disclosure of the personal
      information provided herein and other personal information provided by the
      Purchaser or collected by the Issuer or its agents as reasonably necessary
      in connection with the Purchaser’s subscription for the Convertible
      Debentures (collectively, “personal information”) as follows: (a)
      the Issuer may use personal information and disclose personal information
      to intermediaries such as the Issuer’s legal counsel and withholding
      and/or transfer agents for the purposes of determining the Purchaser’s
      eligibility to invest in the Convertible Debentures and for managing and
      administering the Purchaser’s investment in the Convertible Debentures;
      (b) if the Purchaser purchased securities through a registered dealer, the
      Issuer may disclose and collect such personal information relating to the
      Purchaser’s holding of the Convertible Debentures to and from the dealer;
      (c) the Issuer and its agents may use the Purchaser’s social insurance
      number for income reporting purposes in accordance with applicable law;
      (d) the Issuer, its agents and advisors, may each collect, use and
      disclose personal information for the purposes







     EXECUTION
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      of meeting legal, regulatory, self-regulatory, security
      and audit requirements (including any applicable tax, securities, money
      laundering or anti-terrorism legislation, rules or regulations) and as
      otherwise permitted or required by law, which disclosures may include
      disclosures to tax, securities or other regulatory or self- regulatory
      authorities in Canada, the United States of America and/or in foreign
      jurisdictions, if applicable, in connection with the regulatory oversight
      mandate of such authorities; (e) the Issuer and its agents and advisors
      may use personal information and disclose personal information to parties
      connected with the proposed or actual transfer, sale, assignment, merger
      or amalgamation of the Issuer or its business or assets or similar
      transactions, for the purpose of permitting such parties to evaluate
      and/or proceed with and complete such transaction. Purchasers, assignees
      and successors of the Issuer or its business or assets may collect, use
      and disclose personal information as described in this Subscription
      Agreement. The Purchaser acknowledges that the Issuer’s agents or
      intermediaries may be located outside of Canada and the United States, and
      personal information may be transferred and/or processed outside of Canada
      and the United States for the purposes described above, and that measures
      the Issuer may use to protect personal information while handled by
      agents, intermediaries or other third parties on its behalf, and personal
      information otherwise disclosed or transferred outside of Canada and/or
      the United States for the purposes described above, are subject to legal
      requirements in foreign countries applicable to the Issuer or such third
      parties, for example lawful requirements to disclose personal information
      to government authorities in those countries.

	 	 
	13. 	
      Governing Law

	 	 
		
      This Subscription Agreement shall be governed by and
      construed in accordance with the laws of the Province of British Columbia
      and the federal laws of Canada applicable therein. The Purchaser hereby
      irrevocably attorns to the non-exclusive jurisdiction of the courts of the
      Province of British Columbia with respect to any matters arising out of
      this Subscription Agreement.

	 	 
	14. 	
      Costs

	 	 
		
      Each party shall pay the fees and expenses of its
      advisers, counsel, accountants and other experts, if any, and all other
      expenses incurred by such party incident to the negotiation, preparation,
      execution, delivery and performance of the Subscription Agreement. The
      Issuer shall pay all stamp and other taxes and duties levied in connection
      with the sale of the Convertible Debentures.

	 	 
	15. 	
      Assignment

	 	 
		
      This Subscription Agreement shall enure to the benefit of
      and be binding on the Issuer, the Purchaser and their respective heirs,
      administrators, executors, successors and permitted assigns. This
      Subscription Agreement may not be assigned by the Issuer and may only be
      transferred or assigned by the Purchaser: (i) subject to compliance with
      applicable Securities Law, applicable U.S. federal and state securities
      laws and the rules and regulations of the NYSE Alternext U.S. and any
      other exchange upon which the Issuer’s securities are listed or quoted and
      (ii) with the prior written consent of the Issuer and the
Agents.

	 	 
	16. 	
      Entire Agreement

	 	 
		
      This Subscription Agreement constitutes the entire
      agreement between the parties hereto pertaining to the subject matter
      hereof and supersedes all prior agreements, understandings, negotiations
      and discussions, whether oral or written. There are no conditions,
      representations, warranties, covenants or other agreements between the
      parties hereto relating to the subject matter hereof, except as
      specifically set out, referred to or incorporated by reference
    herein.

	 	 
	17. 	
      Amendments and Waivers

	 	 
		
      Except as permitted by the Agency Agreement, no amendment
      to this Subscription Agreement will be valid or binding unless set forth
      in writing and duly executed by the parties hereto and no waiver of any
      breach







     EXECUTION
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      of any provision of this Subscription Agreement will be
      effective or binding unless made in writing and signed by the waiving
      party.

	 	 
	18. 	
      Language

	 	 
		
      The parties hereto confirm their express wish that this
      Subscription Agreement and all documents and agreements directly or
      indirectly relating hereto be drawn up in the English language. Les
      parties reconnaissent leur volonté expresse que la présente ainsi que tous
      les documents et contrats s’y rattachant directmente ou indirectmente
      soient rédigés en anglais.

	 	 
	19. 	
      Time of Essence

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

	 	 
	20. 	
      Facsimile Deliveries and Counterparts

	 	 
		
      The Issuer and the Agents shall be entitled to rely on
      delivery by facsimile of a copy of this Subscription Agreement executed by
      the Purchaser, and acceptance by the Issuer of such executed Subscription
      Agreement shall be legally effective to create a valid and binding
      agreement between the Purchaser and the Issuer in accordance with the
      terms hereof. In addition, this Subscription Agreement may be executed in
      counterparts, each of which shall be deemed to be an original and all of
      which shall constitute one and the same document.

	 	 
	21. 	
      Extended Meanings and Headings

	 	 
		
      In this Subscription Agreement words importing the
      singular number include the plural and vice versa, words importing any
      gender include all genders and words importing persons include
      individuals, partnerships, associations, trusts and unincorporated
      associations. The headings contained herein are for convenience of
      reference only and shall not affect the construction or interpretation
      hereof.

	 	 
	22. 	
      Currency

	 	 
		
      All references to currency herein are to lawful money of
      Canada.

	 	 
	23. 	
      Further Assurances

	 	 
		
      Each of the parties hereto shall from time to time
      execute and deliver all such further documents and instruments and do all
      acts and things as the other party may, either before or after the closing
      of the transactions contemplated hereby, reasonably require to effectively
      carry out or better evidence or perfect the full intent and meaning of
      this Subscription Agreement



(remainder of this page intentionally left blank) 




A-1 

SCHEDULE “A” 

U.S. SUBSCRIBER CERTIFICATE 

(FOR ALL PURCHASERS)

	TO: 	ENDEAVOUR SILVER CORP. (the
      “Issuer”) 
	AND TO: 	EURO PACIFIC CAPITAL INC. and
      SALMAN PARTNERS INC. (the “Agents”) 


In connection with the proposed purchase of Convertible
Debentures of the Issuer the undersigned represents and warrants that the
undersigned has read the following definition of an “U.S. Accredited Investor”
and certifies that the undersigned is a U.S. Accredited Investor as indicated
below (check one): 

“U.S. Accredited Investor” shall mean any of (check
one): 

	 	A bank, as defined in Section 3(a)(2) of the 1933 Act, or
      savings and loan association or other institution as defined in Section
      3(a)(5)(A) of the 1933 Act, whether acting in its individual or fiduciary
      capacity; 	[   ] 
	 	  	  
	 	A broker or dealer registered pursuant to Section 15 of the
      United States Securities Exchange Act of 1934, as amended; 	[   ] 
	 	  	  
	 	An insurance company (as defined in Section 2(13) of the
      1933 Act); 	[   ] 
	 	  	  
	 	An investment company registered under the United States
      Investment Company Act of 1940, as amended (the “1940 Act”); 	[   ] 
	 	  	  
	 	A business development company (as defined in Section
      2(a)(48) of the 1940 Act); 	[   ] 
	 	  	  
	 	A Small Business Investment Company licensed by the U.S.
      Small Business Administration under Section 301(c) or (d) of the United
      States Small Business Investment Act of 1958, as amended; 	[   ] 
	 	  	  
	 	A plan established and maintained by a state, its political
      subdivisions, or any agency or instrumentality of a state or its political
      subdivisions, for the benefit of its employees, if such plan has total
      assets in excess of U.S.$5,000,000; 	[   ] 
	 	  	  
	 	An employee benefit plan within the meaning of the United
      States Employee Retirement Income Security Act of 1974, as amended
      (“ERISA”), (1) whose investment decision is made by a plan fiduciary as
      defined in Section 3(21) of ERISA, which is either a bank, savings and
      loan association, insurance company or registered investment advisor, or
      (2) having total assets in excess of U.S.$5,000,000, or (3) if a
      self-directed plan, with investment decisions made solely by persons that
      are accredited investors; 	[   ] 
	 	  	  
	 	A private business development company (as defined in
      Section 202(a)(22) of the United States Investment Advisers Act of 1940);
    	[   ] 
	 	  	  
	 	An organization described in Section 501(c)(3) of the
      Internal Revenue Code of 1986 as amended, company, or similar business
      trust, or partnership, not formed for the specific purpose of acquiring
      the securities offered, having total assets in excess of U.S.$5,000,000;
    	[   ] 
	 	  	  
	 	A director or executive officer of the Issuer; 	[   ] 
	 	  	  
	 	A natural person with individual net worth, or joint net
      worth with his or her 	[   ] 






A-2 

	 	spouse, at the time of purchase in excess of
      U.S.$1,000,000; 	  
	 	  	  
	 	A natural person with an individual income in excess of
      U.S.$200,000 in each of the last two years or joint income with his or her
      spouse in excess of U.S.$300,000 in each of those years, and who
      reasonably expects to reach the same income level in the current year; 	[   ] 
	 	  	  
	 	A trust, with total assets in excess of U.S.$5,000,000, not
      formed for the specific purpose of acquiring the securities offered, whose
      purchase is directed by a sophisticated person as described in Section
      Rule 506 (b)(2)(ii) of the 1933 Act; and 	[   ] 
	 	  	  
	 	An entity in which all of the equity owners are U.S.
      Accredited Investors. 	[   ] 


TERMS NOT DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO
THEM IN THE SUBSCRIPTION AGREEMENT TO WHICH THIS SCHEDULE IS ATTACHED. 

The foregoing representation, warranty and certificate are true
and accurate as of the date of this certificate. 

Dated: ____________________________

[PURCHASER NAME] 

 

By:   ____________________________________________

          
Name: 
         Title: 




SCHEDULE “B” 

CANADIAN SUBSCRIBER CERTIFICATE 

(FOR CANADIAN PURCHASERS)

	TO: 	ENDEAVOUR SILVER CORP. (the
      “Issuer”) 
	 	 
	AND TO: 	EURO PACIFIC CAPITAL INC. and
      SALMAN PARTNERS INC. (the “Agents”) 


Reference is made to the subscription agreement between the
Issuer and the undersigned (referred to herein as the “Purchaser”) dated
as of the date hereof (the “Subscription Agreement”). Upon execution of
this Subscriber Certificate by the Purchaser, this Subscriber Certificate shall
be incorporated into and form a part of the Subscription Agreement. Terms not
otherwise defined herein have the meanings attributed to them in the
Subscription Agreement and in National Instrument 45-106 - Prospectus and
Registration Exemptions (“NI 45-106”). 

	A. 	
      The Subscriber is resident in or is subject to the laws
      of a province of Canada;

	 	 
	B. 	
      The Subscriber is purchasing the Convertible Debentures
      as principal for its own account;

	 	 
	C. 	
      The Subscriber is an “accredited investor” within the
      meaning of NI 45-106 by virtue of satisfying the indicated criterion as
      set out in Exhibit I to this Subscriber Certificate and the Subscriber has
      not been created or used solely to purchase or hold securities as an
      “accredited investor” as described in paragraph (m) of the definition of
      “accredited investor” in NI 45-106, which is reproduced in Exhibit I to
      this Subscriber Certificate; and

	 	 
	D. 	
      Upon execution of this Schedule “B” by the Subscriber,
      this Schedule “B” shall be incorporated into and form a part of the
      Subscription Agreement.



Dated: __________________________________________

 

	 	Print name of Purchaser
	 	 	 
	 		
	 	By:	  
	 		Signature 
	 	 	 
	 	 	 
	 		Print name of Purchaser (if different from Subscriber)
    
	 	 	 
	 	 	 
	 		Title 


IMPORTANT: PLEASE INITIAL THE CATEGORY OR CATEGORIES 
IN
EXHIBIT 1 ON THE NEXT PAGE THAT DESCRIBE YOU 

 

 

B-1 




EXHIBIT 1 

TO SCHEDULE “B” 

PLEASE MARK YOUR INITIALS OR PLACE A CHECKMARK BESIDE THE
CATEGORY OF “ACCREDITED INVESTOR” TO WHICH YOU BELONG. 

Accredited Investor - (defined in National Instrument
45-106) means: 

	_______	(1) 	
      an individual who, either alone or with a spouse,
      beneficially owns, directly or indirectly, financial assets having an
      aggregate realizable value that before taxes, but net of any related
      liabilities, exceeds $1,000,000;

	 	 	 
	_______	(2) 	
      an individual whose net income before taxes exceeded
      $200,000 in each of the 2 most recent calendar years or whose net income
      before taxes combined with that of a spouse exceeded $300,000 in each of
      the 2 most recent calendar years and who, in either case, reasonably
      expects to exceed that net income level in the current calendar
    year;

	 	 	 
	_______	(3) 	
      an individual who, either alone or with a spouse, has net
      assets of at least $5,000,000; or

	 	 	 
	_______	(4) 	
      a person, other than an individual or investment fund,
      that has net assets of at least $5,000,000 as shown on its most recently
      prepared financial statements.



NOTE: The investor must initial or place a checkmark beside
the applicable portion of the above definition. 

For the purposes hereof: 

	 	(5) 	
      “financial assets” means

	 	 	 	 
	 		(a) 	
      cash,

	 	 	 	 
	 		(b) 	
      securities, or

	 	 	 	 
	 		(c) 	
      a contract of insurance, a deposit or an evidence of a
      deposit that is not a security for the purposes of securities
      legislation;

	 	 	 	 
	 	(6) 	
      “individual” means a natural person, but does not
      include

	 	 	 	 
	 		(a) 	
      a partnership, unincorporated association, unincorporated
      syndicate, unincorporated organization or a trust, or

	 	 	 	 
	 		(b) 	
      a natural person in the person's capacity as trustee,
      executor, administrator or other legal personal representative;

	 	 	 	 
	 	(7) 	
      “person” includes

	 	 	 	 
	 		(a) 	
      an individual,

	 	 	 	 
	 		(b) 	
      a corporation,

	 	 	 	 
	 		(c) 	
      a partnership, trust, fund and an association, syndicate,
      organization or other organized group of persons, whether incorporated or
      not, and



B-2 





	 	(d) 	
      an individual or other person in that person's capacity
      as a trustee, executor, administrator or personal or other legal
      representative;




	 	(8) 	
      “spouse” means, an individual who,

	 	 	 	 
	 		(a) 	
      is married to another individual and is not living
      separate and apart within the meaning of the Divorce Act (Canada),
      from the other individual, or

	 	 	 	 
	 		(b) 	
      is living with another individual in a marriage-like
      relationship, including a marriage-like relationship between individuals
      of the same gender.



B-3 




C-1 

SCHEDULE “C” 

ENDEAVOUR SILVER CORP.

PRIVATE PLACEMENT OF
SUBORDINATED UNSECURED
CONVERTIBLE REDEEMABLE DEBENTURES 

TERM SHEET 

	Issuer: 	
      Endeavour Silver Corp. (the “Company”). 

	  	
       

	Agents: 	
      Euro Pacific Capital Inc. and Salman Partners Inc. (the
      “Agents”). 

	  	
       

	Issue: 	
      Subordinated Unsecured Convertible Redeemable Debentures
      (the “Debentures”). 

	  	
       

	Amount: 	
      Up to CDN$8.0 million. The Company has given the Agents
      the option to sell up to an additional CDN$6.0 million of Debentures on or
      before the closing of the transactions contemplated by this term sheet
      (the “Closing”). 

	  	
       

	Reference Price: 	
      The Reference Price for determining the Conversion Price
      and Warrant Price is CDN$1.52. 

	  	
       

	Closing and Maturity 
Dates: 	
      The Closing will occur on or before February 20, 2009
      (the “Closing Date”) and the maturity date (the “Maturity
      Date”) will be the fifth (5th) anniversary of the Closing
      Date. 

	  	
       

	Interest Rate: 	
      10% per annum, payable quarterly in arrears in Canadian
      dollars on April 15, July 15, October 15 and January 15. The April 15,
      2009 interest payment will represent accrued interest for the period from
      Closing to April 15, 2009. 

	  	
       

	Use of Proceeds: 	
      The net proceeds to the Company will be used to acquire
      mining equipment, develop underground access to mineralized zones and
      upgrade certain plant circuits at the Company’s Guanacevi and Guanajuato
      mines in Mexico, and for general corporate purposes. 

	  	
       

	Conversion: 	
      The holders of the Debentures (“Holders”) will
      have the right to convert all or part of the Debentures at any time prior
      to the Maturity Date. The Holders must provide at least five (5) days
      prior notice to the Company (“the Conversion Notice”) of the exercise of
      their conversion right. Each Debenture will be convertible into units of
      the Company (the “Units”) each consisting of one common share (the
      “Common Shares”) and one half of a Common Share purchase warrant.
      The share price to be used for the conversion of the Debentures into Units
      (the “Conversion Price”) will be at a 25% premium to the Reference
      Price, or CDN$1.90. 

	  	
       

		
      Each full share purchase warrant (the “Warrants”)
      will entitle the Holder thereof to purchase one Common Share prior to the
      Maturity Date at an exercise price representing a premium of 35% over the
      Reference Price, or CDN$2.05. The Warrants may be exercised on a
      “cashless” or “Net exercise” basis at the option of the holder. 

	  	
       

	  	
      The Company will ensure that the Common Shares issued
      upon the conversion of the 







C-2 

		
      Debentures and the Common Shares issued upon the exercise
      of the Warrants are freely tradable upon such conversion and exercise (see
      Registration rights below) in the United States pursuant to an effective
      registration statement. In addition to the applicable number of Units to
      be received on conversion, each holder of Debentures will be entitled to
      receive the accrued and unpaid interest for the period from the latest
      interest payment to the date of conversion. 

	  	
       

	Redemption: 	
      After a period of 18 months from the Closing, the Company
      will have the right to redeem all or part of the Debentures at any time
      prior to the Maturity Date so long as the Common Shares underlying the
      Units may be transferred pursuant to an effective registration statement
      or are otherwise freely transferrable without restriction. The Company
      must provide at least ten (10) days prior notice (the “Redemption
      Notice”) to the Holders, during which the holders may convert their
      Debentures, and the redemption price will be payable in cash equal to the
      outstanding principal amount plus any accrued and unpaid interest plus a
      redemption fee equal to 7% of the principal amount then outstanding.
    

	  	
       

		
      The Company will not be entitled to redeem all or any
      part of the Debentures unless the volume weighted average price of the
      Common Shares on the Toronto Stock Exchange (“TSX”) for a period of
      thirty (30) consecutive trading days prior to the date of the Redemption
      Notice represents at least a 50% premium to the Conversion Price, or
      CDN$2.85. 

	  	
       

	Ranking: 	
      The Debentures will be subordinated in right of payment
      of principal and interest to all senior secured debt of the Company and
      will be pari passu with any other unsecured debt. 

	  	
       

	Security: 	
      The Debentures will be unsecured. 

	  	
       

	Transfer / Resale: 	
      The Debentures, Units, Common Shares, Warrants and
      Warrant Shares will be transferrable subject to restrictions under
      applicable law, including Canadian and U.S. federal and state securities
      laws and applicable provincial securities laws. 

	  	
       

	Events of Default: 	
      The Indenture in respect of the Debentures will contain
      usual and customary “Events of Default” for transactions of
      this type, including, but not limited to: 

	  	
       

	  	
      Failure to pay principal or interest when due; 

	  	
       

		
      Breach of covenants by the Company (after the expiration
      of a twenty (20) day cure period); 

	  	
       

		
      Cross default to any other debt or obligation more senior
      than the Debentures that results in the acceleration of a payment
      obligation of at least CDN$4,000,000; and cross default to any other
      convertible debt pari passu with the Debentures that results in the
      acceleration of a payment obligation of at least CDN$4,000,000 within 18
      months of the Closing Date; 

	  	
       

	 	
      Bankruptcy, insolvency or dissolution of the Company; and
      

	  	
       

		
      Unpaid judgments in excess of CDN$4,000,000 that are not
      vacated within twenty (20) days. 







C-3 

	Default Interest: 	
      From and during the continuance of an Event of Default
      (as defined above) the Company will be obligated to pay the holder a
      post-Default interest rate that is equal to the then current interest rate
      under the Debenture plus 5.0% (the “Default Rate”). 

	  	
       

	Warranties and 
Covenants 	
      The Company shall not issue any additional convertible
      debentures for two (2) years after the Closing Date unless they first
      offer such debentures to the holders of the Debentures on a pro rata
      basis. The Debentures will also contain covenants (including customary
      affirmative and negative covenants), anti-dilution provisions and other
      provisions that are customary for transactions of this nature. 

	  	
       

		
      The Agents and each Holder will not sell short any Common
      Shares after the announcement of the Debenture financing by the Company
      and prior to the Closing. 

	  	
       

	Registration Rights: 	
      The Company will file a registration statement with the
      U.S. SEC, covering 100% of the Common Shares and the shares of common
      stock underlying the Warrants, on or before March 31, 2009 and use its
      commercially reasonable efforts to cause the registration statement to
      become effective within one hundred twenty (120) days following the
      Closing. 

	  	
       

		
      If the registration statement is not filed on or before
      March 31, 2009 (the “Filing Date”), the principal amount of
      the Debentures will be deemed to have increased by an amount equal to one
      percent (1%) of the original principal amount of the Debenture per month
      (or part thereof) after the Filing Date until the registration statement
      is filed. 

	  	
       

		
      If the Company fails to use commercially reasonable
      efforts to have the registration statement declared effective within 120
      days of the Closing (the “Effective Date”), the principal amount of
      the Debentures will be deemed to have increased by an amount equal to one
      percent (1%) of the original principal amount of the Debenture per month
      (or part thereof) after the Effective Date until the registration
      statement is declared effective. 

	  	
       

		
      If the Company fails to use commercially reasonable
      efforts to maintain the effectiveness of the registration statement during
      the requisite periods, the principal amount of the Debentures will be
      deemed to have increased by an amount equal to one percent (1%) of the
      original principal amount of the Debentures per month (or part thereof)
      during the period that the registration statement is not effective.
  

	  	
       

		
      The Company will be deemed not to have used commercially
      reasonable efforts to cause the registration statement to become, or to
      remain effective during the requisite period if the Company voluntarily
      takes any action that would, or omits any action the omission of which
      would result in either: (i) such registration statement not being declared
      effective; or (ii) the holders of securities covered by a previously
      effective registration statement being prohibited by applicable law from
      trading the securities covered thereby. 

	  	
       

		
      Notwithstanding the foregoing, the aggregate amount of
      liquidated damages payable by the Company to the Purchasers as a result of
      a failure to timely file or cause the registration statement to become or
      maintain its effective status shall be capped at ten percent (10%) of the
      amount subscribed for by the Purchasers. Moreover, the Company shall not
      accrue liquidated damages with respect to more than one of any failure
      under this section at a time. 







C-4 

	Conditions to Closing: 	
      The completion of the transactions contemplated in this
      term sheet will be subject to conditions which are customary for
      transactions of this nature, including the following: 

	  	
       

	  	
      approval by the board of directors of the Company;
  

	  	
       

		
      approval by the TSX (as noted below) and any other
      necessary governmental authorities or agencies; and 

	  	
       

		
      execution of definitive documentation for the
      transaction, in form and substance satisfactory to the Agent and its legal
      counsel. 

	  	
       

	Offering basis: 	
      Offered on a private placement basis in Canada to
      “accredited investors” and in the U.S. to “accredited investors” pursuant
      to Rule 506 of Regulation D promulgated under the 1933 Act. 

	  	
       

	Agency fee: 	
      In connection with the Closing, the Agents will receive
      cash in the amount of 7% of the aggregate principal amount of the issued
      Debentures, plus a Warrant exercisable for a number of Common Shares equal
      to 7% of the aggregate principal amount of the issued Debentures divided
      by the Reference Price. The exercise price for the Warrant will be equal
      to the Conversion Price. The Company will be responsible for the Agents’
      out-of- pocket expenses related to the offering including, without
      limitation, travel expenses, photocopying, courier services and attorney’s
      fees, not to exceed U.S.$65,000.00 without prior written approval by the
      Company. 

	  	
       

	Regulatory Approvals: 	
      The issuance of the Debentures and the listing of the
      Common Shares issuable on the conversion of the Debentures and the
      exercise of the Warrants are subject to approval of the TSX and the NYSE
      AlterNext (AMEX).