sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, theparties hereto hereby agree to the sale and purchase of the Units as set forth herein.**1. DEFINITIONS.**In addition to the terms defined elsewhere in this Agreement, for all purposes ofthis Agreement, the following terms have the meanings indicated in this Section 1.     **“Affiliate”**means, with respect to any specified Person: (i) if such Person is an individual,the spouse of that Person and, if deceased or disabled, his heirs, executors, or legalrepresentatives, if applicable, or any trusts for the benefit of such individual or suchindividual’s spouse and/or lineal descendants, or (ii) otherwise, another Person that directly, orindirectly through one or more intermediaries, controls, is controlled by, or is under commoncontrol with, the Person specified. As used in this definition, “control” shall mean thepossession, directly or indirectly, of the power to cause the direction of the management andpolicies of a Person, whether through the ownership of voting securities or by contract or otherwritten instrument.     **“Business Day”**means any day on which banks located in New York, New York, United States orToronto, Ontario, Canada are not required or authorized by law to remain closed.     **“CAD”**means Canadian Dollar.     **“Closing Escrow Agreement”**means the Closing Escrow Agreement, dated March ___, 2010, by andamong the Company, the Placement Agent and the Escrow Agent.     **“Commission”**means Ontario Securities Commission.     **“Company’s knowledge”**means the information and/or other items that the following executivesof the Company have actual knowledge of after due inquiry: the Chairman and Chief ExecutiveOfficer, the Chief Operating Officer, the Chief Financial Officer, the Vice President of CommercialDevelopment, the Corporate Secretary, the Chief Geologist, the Vice Presidents of Finance, and theVice President of Investor Relations.     **“Escrow Account”**means the escrow account established by the Escrow Agent pursuant to theClosing Escrow Agreement where funds representing the Investors’ aggregate Purchase Price shall beheld pending the First Closing.     **“Escrow Agent”**means Gowling Lafleur Henderson LLP.     **“Exchange Act”**means the Securities Exchange Act of 1934, as amended.     **“Governmental Body”**means any: (a) nation, state, commonwealth, province, territory, county,municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal,foreign or other government; or (c) governmental or quasi-governmental authority of any nature(including any governmental or administrative division, department, agency, commission,instrumentality, official, organization, unit, body or entity) and any court or other tribunal.
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     **“Intellectual Property”**means the Company’s patents, patent applications, provisionalpatents, trademarks, service marks, trade names, trademark registrations, service markregistrations, copyrights, licenses, formulae, mask works, customer lists, internet domain names,know-how and other intellectual property, including trade secrets and other unpatented and/orunpatentable proprietary or confidential information, systems, procedures or registrations orapplications relating to the same.     **“Indebtedness”**of any Person means all obligations of such Person: (i) for borrowed money,(ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchaseprice of goods or services (other than trade payables or accruals incurred in the ordinary courseof business), (iv) under capital leases, and (v) in the nature of guarantees of the obligationsdescribed in clauses (i) through (iv) above of any other Person.     **“Investor”**means any person who purchases Units in the Offering pursuant to this Agreement.     **“Legal Requirement”**shall mean any federal state, local, municipal, foreign or other law,statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule,regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwiseput into effect by or under the authority of any Governmental Body (or under the authority of anynational securities exchange upon which the Common Stock is then listed or traded). Reference toany Legal Requirement means such Legal Requirement as amended, modified, codified, replaced orre-enacted, in whole or in part, and in effect from time to time, and reference to any section orother provision of any Legal Requirement means that provision of such Legal Requirement from timeto time in effect and constituting the substantive amendment, modification, codification,replacement or re-enactment of such section or other provision.     **“Lien(s)”**means any interest in Property securing an obligation owed to a Person whether suchinterest is based on the common law, statute or contract, and including but not limited to asecurity interest arising from a mortgage, lien, title claim, assignment, encumbrance, adverseclaim, contract of sale, pledge, conditional sale or trust receipt or a lease, consignment orbailment for security purposes. The term “Lien” includes but is not limited to mechanics’,materialmen’s, warehousemen’s and carriers’ liens and other similar encumbrances. For the purposeshereof, a Person shall be deemed to be the owner of Property which it has acquired or holdssubject to a conditional sale agreement or other arrangement pursuant to which title to theProperty has been retained by or vested in some other Person for security purposes.     **“Material Adverse Effect”**means a material adverse effect on, and a **“MaterialAdverse Change**” means a material adverse change in: (i) the assets, liabilities, results ofoperations, condition (financial or otherwise) or business of the Company taken as a whole; or (ii)the ability of the Company to perform its obligations under the Transaction Documents, but, to theextent applicable, shall exclude any circumstance, change or effect to the extent resulting orarising from: (a) any change in general economic conditions in the industries or markets in whichthe Company and its Subsidiaries operates so long as the Company and its Subsidiaries are notdisproportionately (in a material manner) affected by such changes; (b) national or internationalpolitical conditions, including any engagement in hostilities, whether or not pursuant to thedeclaration of a national emergency or war, or the occurrence of any military or terrorist attackso long as the Company and its Subsidiaries are
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not disproportionately (in a material manner) affected by such changes; (c) changes in UnitedStates or Canadian generally accepted accounting principles, or the interpretation thereof; (d)the entry into or announcement of this Agreement, actions contemplated by this Agreement, or theconsummation of the transactions contemplated hereby; or (e) temporary in nature.     **“OTCBB”**shall mean the Over-the-Counter Bulletin Board system.     **“Offering”**shall mean the offering and sale of the Units pursuant to this Agreement and theMemorandum.     **“Person”**shall mean an individual, entity, corporation, partnership, association, limitedliability company, limited liability partnership, joint-stock company, trust or unincorporatedorganization.     **“Property”**means any interest in any kind of property or asset, whether real, personal ormixed, or tangible or intangible.     **“Purchase Price”**shall mean an amount equal to CAD $0.84 per Unit multiplied by the number ofUnits being purchased.     **“RegulatoryAuthorities”**means collectively the Commission and theTSX;     **“SEC”**means the United States Securities and Exchange Commission.     **“Securities”**means the Units, the Notes, the Conversion Shares, the Warrants and the WarrantShares.     **“Securities Act”**means the Securities Act of 1933, as amended.     **“Securities Laws”** means the securities legislation and regulations of, and the instruments,policies, rules, orders, codes, notices and interpretation notes of the Commission;     **“Subsidiaries”**shall mean any corporation or other entity or organization, whetherincorporated or unincorporated, in which the Company owns, directly or indirectly, any controllingequity or other controlling ownership interest or otherwise controls through contract or otherwise,including, without limitation, any variable interest entity of the Company.     **“Trading Day”**means: (i) a day on which the Common Stock is traded on a Trading Market (otherthan the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (otherthan the OTC Bulletin Board), a day on which the Common Stock is traded in the over the countermarket, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on anyTrading Market, a day on which the Common Stock is quoted in the over the counter market asreported by the Pink Sheets LLC (or any similar organization or agency succeeding to its functionsof reporting prices); provided, that in the event that the Common Stock is not listed or quoted asset forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.
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     **“Trading Market”**means whichever of the TSX, New York Stock Exchange, the NYSE AMEX, theNASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC BulletinBoard on which the Common Stock is listed or quoted for trading on the date in question.     **“Transaction Documents”**means this Agreement, the Memorandum, the certificates representingthe Notes, the certificates representing the Warrants, and the Closing Escrow Agreement.     **“Transfer”**means any sale, transfer, assignment, conveyance, charge, pledge, mortgage,encumbrance, hypothecation, security interest or other disposition, or to make or effect any ofthe above.     **“TSX”**means the Toronto Stock Exchange.**2. SALE AND PURCHASE OF UNITS.**     2.1. **Subscription for Units by Investors.**Subject to the terms and conditions of thisAgreement, on the Closing Date, each of the Investors shall severally, and not jointly, purchase,and the Company shall sell and issue to each Investor, the number of Units specified by it on itsrespective signature page attached hereto in exchange for the Purchase Price. Units will be sold inminimum denominations of CAD $1,000.     2.2. **Closing.**Subject to the terms and conditions set forth in this Agreement, the Companyshall issue and sell to each Investor listed on Schedule A-1, and each such Investor shall,severally and not jointly, purchase from the Company on the Closing Date, such number of Units setforth on the respective signature pages attached hereto, which will be reflected opposite suchInvestor’s name on Schedule A-1 (the **“Closing”).**The date of the Closing is hereinafterreferred to as the **“Closing Date”.**The Closing shall occur within the time periods set forth in theMemorandum at the offices of Pillsbury Winthrop Shaw Pittman LLP at 2300 N Street, NW, Washington,DC 20037 or remotely via the exchange of documents and signatures.The Investors acknowledge that the Offering may be completed at one or more partial closings inthe discretion of the Company and the Investor Representative and that the Closing as contemplatedin this Agreement may be effected at one or more of such partial Closings until the Maximum Amountis raised; provided, however, that Units equal to at least the Minimum Amount are required to besold at the first such partial Closing. Upon completion of the Closing, the Company is irrevocablyentitled to the Purchase Price for the Units, subject to the rights of the Investors under thisAgreement and any applicable laws.     2.3. **Closing Deliveries.**At the Closing, the Company shall deliver to the Investors purchasingUnits at such Closing, against delivery by the Investor of the Purchase Price (as provided below),certificates representing the Notes and the Warrants. At the Closing, each Investor purchasingUnits at the Closing shall deliver or cause to be delivered to the Company: (i) the Purchase Priceset forth in its counterpart signature page annexed hereto by paying Canadian dollars via bank,certified or personal check which has cleared prior to the applicable Closing or in immediatelyavailable funds, by wire transfer to the Escrow Account pursuant to the Closing Escrow Agreement;(ii) any further documentation as required under the Securities Laws or the policies of anyRegulatory Authority.
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     2.4. **The Notes.**The Notes shall have the terms and conditions and be substantiallyin the form attached hereto as Exhibit A.     2.5. **The Warrants.**The Warrants shall have the terms and conditions and be substantially inthe forms attached hereto as Exhibit B-1 and Exhibit B-2.     2.6. **Use of Proceeds.**The Company hereby covenants and agrees that the proceeds from thesale of Units shall be used as provided for in the Memorandum.     2.7. **Investor Representative.**Each Investor, severally and not jointly, hereby appoints thePlacement Agent (together with its permitted successors, and in this context, the **“InvestorRepresentative”),**as its true and lawful agent and attorney-in-fact to without the need for anyfurther consent or further action on the part of any Investor: (a) enter into any agreement inconnection with the transactions contemplated by this Agreement and any transactions contemplatedby the Transaction Documents, (b) to accept delivery of the certificates representing the Notes andthe Warrants comprised in the Units purchased hereunder; (c) exercise all or any of the powers,authority and discretion conferred on such Investor under this Agreement or any of the TransactionDocuments, (d) waive any terms and conditions of this Agreement or any of the TransactionDocuments, including, but not limited to, waive any Event of Default (as defined in the certificaterepresenting the Notes) and any negative or affirmative covenants of the Company contained in anyTransaction Document, (e) give and receive notices on such Investor’s behalf and to be suchInvestor’s exclusive representative with respect to any matter, suit, claim, action or proceedingarising with respect to any transaction contemplated by this Agreement or any Transaction Document,and the Investor Representative agrees to act as, and to undertake the duties and responsibilitiesof, such agent and attorney-in-fact. This power of attorney is coupled with an interest andirrevocable. The Investor Representative shall not be liable for any action taken or not taken byit in connection with its obligations under this Agreement in the absence of its own grossnegligence or willful misconduct. If the Investor Representative shall be unable or unwilling toserve in such capacity, its successor shall be named by those persons holding more than fiftypercent (50%) in principal amount of the Notes who shall serve and exercise the powers of InvestorRepresentative hereunder.**3. ACKNOWLEDGEMENTS OF THE INVESTORS.**     Each Investor, severally and not jointly, acknowledges that:     3.1. **Resale Restrictions.**None of the Securities have been registered under the SecuritiesAct, or under any state securities or “blue sky” laws of any state of the United States, and,unless so registered, none of the Securities may be offered or sold by the Investor except pursuantto an effective registration statement under the Securities Act, or pursuant to an exemption from,or in a transaction not subject to, the registration requirements of the Securities Act and in eachcase only in accordance with applicable state securities laws. ***The Investors further acknowledgethat neither this Agreement nor any of the other Transaction Documents provide the Investor withany registration rights and the Company has no intention of registering any of the Securities.***     3.2. **Agreements.**Such Investor has received, carefully read and acknowledges the terms ofthe Transaction Documents and Memorandum, including the Risk Factors setforth in the Memorandum.
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     3.3. **Books and Records.**The books and records of the Company were available upon reasonablenotice for inspection, subject to certain confidentiality restrictions, by the Investor duringreasonable business hours at the Company’s principal place of business, that all documents, recordsand books in connection with the sale of the Securities hereunder have been made available forinspection by the Investor and its attorney and/or advisor(s) and that the Investor and/or itsadvisor has reviewed all such documents, records and books to its full satisfaction and allquestions it and/or its advisor may have had been answered to their respective full satisfaction.     3.4. **Independent Advice.**The Investor has been advised to consult the Investor’s own legal,tax and other advisors with respect to the merits and risks of an investment in the Securities andwith respect to applicable resale restrictions, and it is solely responsible (and neither theCompany nor the Placement Agent is in any way, directly and/or indirectly, responsible) forcompliance with:          (a) any applicable laws of the jurisdiction in which the Investor is resident in connectionwith the distribution of the Securities hereunder, and          (b) applicable resale restrictions.     3.5. **No Governmental Review or Insurance.**Neither the SEC nor any other securitiescommission, securities regulator or similar regulatory authority has reviewed or passed on themerits of the Securities or on any of the documents reviewed or executed by the Investor inconnection with the sale of the Securities, and there is no government or other insurance coveringany of the Securities.     3.6. **Personal Information.**The Investor acknowledges and consents to the fact that theCompany is collecting personal information (as that term is defined under applicable privacylegislation, including, without limitation, the *Personal Information Protection and ElectronicDocuments Act*(Canada) and any other applicable similar, replacement or supplemental provincial orfederal legislation or laws in effect from time to time) of the Investor for the purpose ofcompleting this Agreement. The Investor acknowledges and consents to the Company retaining suchpersonal information for as long as permitted or required by law or business practices; theInvestor agrees and acknowledges that the Company may use and disclose such personal information:(i) for internal use with respect to managing the relationships between and contractualobligations of the Company and the Investor; (ii) for use and disclosure for income tax relatedpurposes, including, without limitation, where required by law, disclosure to Canadian RevenueAgency; (iii) disclosure to professional advisers of the Company; (iv) disclosure to securitiesregulatory authorities and other regulatory bodies with jurisdiction with respect to reports oftrade or similar regulatory filings; (v) disclosure to a governmental or other authority to whichthe disclosure is required by court order or subpoena compelling such disclosure and where thereis no reasonable alternative to such disclosure; (vi) disclosure to any Person where suchdisclosure is necessary for legitimate business reasons and is made with the Investor’s priorwritten consent; (vii) disclosure to a court determining the rights of the parties under thisAgreement; and (viii) for use and disclosure as otherwise required or permitted by law; inaddition, the Investor further acknowledges and consents to the fact that the Company may berequired to provide any one or more of the Canadian securities regulators, stock exchanges, the
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Investment Industry Regulatory Organization of Canada, other regulatory agencies or the Company’sregistrar and transfer agent with any personal information provided by the Investor in thisAgreement, and may make any other filings of such personal information as the Company’s counseldeems appropriate, and the Investor acknowledges receipt of notification of the disclosure ofPersonal Information by the Company to the TSX and the Investor hereby consents to and authorizesthe foregoing use and disclosure of such Personal Information and agrees to provide, on request,all particulars required by the Company in order to comply with the foregoing. The Investorfurther acknowledges and expressly consents to:          (a) the disclosure of Personal Information by the Company to the TSX and other applicableregulatory authorities, as required; and          (b) the collection, use and disclosure of Personal Information by the TSX for such purposes asmay be identified by the TSX, from time to time,(for the purposes of this Section 3.7 **“Personal Information”**means any information identifiableabout the Investor).     3.7. **No Restriction.**Except as otherwise expressly provide in any Transaction Document, theissue of the Units will not restrict or prevent the Company from obtaining any other financing orfrom issuing additional securities or rights.     3.8. **Proceeds of Crime.**The funds representing the aggregate Purchase Price in respect of theUnits which will be advanced by the Investor to the Company hereunder will not represent proceedsof crime for the purpose of the *Proceeds of Crime (Money Laundering) and Terrorist Financing Act*(Canada) (the **“PCMLTF Act”)**and the Investor acknowledges that the Company may in the future berequired by law to disclose the Investor’s name and other information relating to this Agreementand the Investor’s subscription hereunder, on a confidential basis, pursuant to the PCMLTF Act; tothe best of the Investor’s knowledge, none of the subscription funds to be provided hereunder (i)have been or will be obtained or derived, directly or indirectly, from or related to any activitythat is deemed illegal under the laws of Canada or the United States or any other jurisdiction, or(ii) are being tendered on behalf of a person or entity who has not been identified to theInvestor; the Investor shall promptly notify the Company if the Investor discovers that any suchrepresentation ceases to be true, and shall provide the Company with appropriate information inconnection therewith.     3.9. **Investment Experience.**Such Investor acknowledges that the purchase of the Securities isa highly speculative investment and that it can, without impairing its financial condition, bearthe economic risk and complete loss of its entire investment in the Securities and has suchknowledge and experience in financial and/or business matters that it is capable of evaluating themerits and risks of the investment contemplated hereby and the Investor can be assured to have thecapacity to protect its own interest in connection with its investment.     3.10. **Company’s Right to Reject Subscriptions.**The Investor acknowledges that the Company, inits sole discretion, reserves the unconditional right to accept or reject, in whole or in part,this subscription, with or without cause or to determine not to proceed with the Offering.
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**4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.**     Each Investor, severally and not jointly, represents and warrants to the Company solely as tosuch Investor that as at the date given above and the Closing Date:     4.1. **Capacity.**The Investor: (i) if a natural person, represents that the Investor has reachedthe age of 21 and has full authority, legal capacity and competence to enter into, execute anddeliver this Agreement and the Transaction Documents to which the Investor is a party and all otherrelated agreements or certificates and to take all actions required pursuant hereto and thereto andto carry out the provisions hereof and thereof and, (ii) if a corporation, partnership, or limitedliability company or partnership, or association, joint stock company, trust, unincorporatedorganization or other entity, represents that such entity was not formed for the specific purposeof acquiring the Units, such entity is duly organized, validly existing and in good standing underthe laws of the state of its organization, such entity has full power and authority to execute anddeliver this Agreement, the Transaction Documents to which it is a party and all other relatedagreements or certificates and to take all actions required pursuant hereto and thereto and tocarry out the provisions hereof and thereof and to purchase and hold the Units, the execution anddelivery of this Agreement and the Transaction Documents to which it is a Party have been dulyauthorized by all necessary action; or (iii) if executing this Agreement in a representative orfiduciary capacity, represents that it has full power and authority to execute and deliver thisAgreement and the Transaction Documents to which it is a Party in such capacity and on behalf ofthe subscribing individual, ward, partnership, trust, estate, corporation, or limited liabilitycompany or partnership, or other entity for whom the Investor is executing this Agreement and theTransaction Documents, and such individual, partnership, ward, trust, estate, corporation, orlimited liability company or partnership, or other entity has full right and power to performpursuant to this Agreement and the Transaction Documents to which it is a Party and make aninvestment in the Company.     4.2. **No Violation of Corporate Governance Documents.**If the Investor is a corporation or otherentity, the entering into of this Agreement and the other Transaction Documents to which it is aparty and the transactions contemplated hereby and thereby do not and will not result in theviolation of any of the terms and provisions of any law applicable to, or the charter or otherorganizational documents, bylaws or other governing documents of, the Investor or of any agreement,written or oral, to which the Investor may be a party or by which the Investor is or may be bound.     4.3. **Binding Agreement.**The Investor has duly executed and delivered this Agreement and theother Transaction Documents to which it is a party, and this Agreement and the other TransactionDocuments to which it is a party constitute a valid and binding agreement of the Investorenforceable against the Investor in accordance with their respective terms, except as suchenforceability may be limited by general principals of equity, or to applicable bankruptcy,insolvency, reorganization, moratorium, liquidation and other similar laws relating to, oraffecting generally, the enforcement of applicable creditors’ rights and remedies.     4.4. **Purchase Entirely for Own Account.**The Securities are being acquired by the Investor asprincipal for such Investor’s own account, not as nominee or agent, and not for the benefit of anyPerson, for investment purposes only and not with a view to the resale or distribution of any partthereof in violation of the Securities Act or the Securities Laws,
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and such Investor has no present intention of selling, granting any participation in, or otherwisedistributing the same in violation of the Securities Act or the Securities Laws, without prejudice,however, to such Investor’s right at all times to sell or otherwise dispose of all or any part ofsuch Securities in compliance with applicable federal and state securities laws or the SecuritiesLaws.     4.5. **Not a Broker-Dealer.**Such Investor is neither a registered representative under theFinancial Industry Regulatory Authority **(“FINRA”)**, a member of FINRA or associated or Affiliatedwith any member of FINRA, nor a broker-dealer registered with the SEC under the Exchange Act orengaged in a business that would require it to be so registered, nor is it an Affiliate of a such abroker-dealer or any Person engaged in a business that would require it to be registered as abroker-dealer. In the event such Investor is a member of FINRA, or associated or Affiliated witha member of FINRA, such Investor agrees, if requested by FINRA, to sign a lock-up, the form ofwhich shall be satisfactory to FINRA with respect to the Securities.     4.6. **Not an Underwriter.**Such Investor is not an underwriter of the Common Stock, nor is itan Affiliate of an underwriter of the Common Stock.     4.7. **Disclosure of Information.**Such Investor has had an opportunity to receive, and fully andcarefully review, all information related to the Company and the Securities requested by it and toask questions of and receive answers from the Company regarding the Company and its business andthe terms and conditions of the Offering of the Securities. Neither such inquiries nor any otherdue diligence investigation conducted by such Investor shall modify, amend or affect suchInvestor’s right to rely on the Company’s representations and warranties contained in thisAgreement. Such Investor acknowledges that it has received, and fully and carefully reviewed andunderstands all of the Transaction Documents, including, but not limited to, the Memorandumdescribing, among other items, the Company, its business and risks, the Securities andthe offering of the Securities. Investor acknowledges that it has received, and fully andcarefully reviewed and understands, copies of the SEC Reports, either in hard copy orelectronically through the SEC’s EDGAR system. The Investor acknowledges that the TransactionDocuments, including, but not limited to, the Memorandum do not contain all the information thatwould be included in a registration statement covering the offering and sale of the Securitiesunder the Securities Act. The Investor further acknowledges that it is aware that (i) in January2010 the Company completed an amalgamation with Zedex Minerals Limited (“Zedex”), a New Zealandcorporation with interests in Southeast Asia, (ii) the Company has not filed with the SEC itsAnnual Report on Form 20-F for the year ended December 31, 2009 **(“Form 20-F”),**which will includedetailed disclosures of Zedex’s assets, minerals properties, financial statements, and relatedinformation, and (iii) the existing SEC Reports do not contain the information regarding Zedex thatwill be included in the Form 20-F. Such Investor understands that its investment in the Securitiesinvolves a high degree of risk. Such Investor’s decision to enter into this Agreement has been madebased solely on the independent evaluation of the Investor and its representatives. Such Investorhas received such accounting, tax and legal advice from Persons (other than the Company) as it hasconsidered necessary to make an informed investment decision with respect to the acquisition of theSecurities.     4.8. **Restricted Securities.**Such Investor understands that the sale or re-sale of theSecurities has not been and is not being registered under the Securities Act or any
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applicable state securities laws, and the Securities, as applicable, may not be transferredunless:          (a) they are sold pursuant to an effective registration statement under the Securities Act; or          (b) they are being sold pursuant to a valid exemption from the registration requirements ofthe Securities Act; or          (c) they are sold or transferred to an “affiliate” (as defined in Rule 144, promulgated underthe Securities Act (or a successor rule **(“Rule 144”))**of such Investor who agrees to sell orotherwise transfer the Securities only in accordance with this Section 4.9 and who is an accreditedinvestor, or          (d) they are validly sold pursuant to Rule 144.     Such Investors further understands that any sale of the Securities made in reliance on Rule144 may be made only in accordance with the terms of Rule 144 and neither the Company nor anyother Person is under any obligation to register the Securities under the Securities Act or anystate securities laws. Notwithstanding the foregoing or anything else contained herein to thecontrary, the Securities may be pledged as collateral in connectionwith a *bona fide*margin accountor other lending arrangement.     4.9. **Accredited Investor.**Such Investor is an “accredited investor” as defined in Rule 501(a)of Regulation D, as amended, under the Securities Act **(“Regulation D”).**     4.10. **No General Solicitation.**Such Investor did not learn of the investment in the Securitiesas a result of any public advertising or general solicitation, and is not aware of any publicadvertisement or general solicitation in respect of the Company or its securities.     4.11. **Brokers and Finders.**No Investor will have, as a result of the transactionscontemplated by the Transaction Documents, any valid right, interest or claim against or upon theCompany, any Subsidiary or any other Investor for any commission, fee or other compensationpursuant to any agreement, arrangement or understanding entered into by or on behalf of suchInvestor.     4.12. **Prohibited Transactions.**Other than with respect to the transactions contemplatedherein, since the earlier to occur of: (i) the time that such Investor was first contacted by theInvestor Representative, or any other Person regarding an investment in the Company and (ii) thethirtieth (30th) day prior to the date hereof, neither the Investor nor any Affiliate ofthe Investor which (x) had knowledge of the transactions contemplated hereby, (y) has or sharesdiscretion relating to the Investor’s investments or trading or information concerning suchInvestor’s investments, including in respect of the Securities, or (z) is subject to the Investor’sreview or input concerning such Affiliate’s investments or trading decisions (collectively,**“Trading Affiliates”)**has, directly or indirectly, nor has any Person acting on behalf of, orpursuant to, any understanding with such Investor or Trading Affiliate effected or agreed to effectany transactions in the securities of the Company or involving the Company’s securities (a**“Prohibited Transaction”).**
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     4.13. **Residency.**Such Investor is a resident of, or if not an individual, has its head officelocated in, the jurisdiction set forth in on such Investor’s signature page hereto which address isthe Investor’s residence or principal place of business, and such address was not obtained or usedsolely for the purpose of acquiring the Units.     4.14. **Reliance on Exemptions.**The Investor understands that the Securities are being offeredand sold to it in reliance upon specific exemptions from the registration requirements of UnitedStates federal and state securities laws and that the Company is relying upon the truth andaccuracy of, and the Investor’s compliance with, the representations, warranties,agreements, acknowledgments and understandings of the Investor set forth herein in order todetermine the availability of such exemptions and the eligibility of the Investor to acquire theSecurities. All of the information which the Investor has provided to the Company is true, correctand complete as of the date this Agreement is signed, and if there should be any change in suchinformation prior to the Closing, the Investor will immediately provide the Company with suchinformation. The Investor will indemnify and hold the Company, its affiliates, andrepresentatives, harmless from and against any and all loss, liability, cost, damage, expense(including attorney’s fees and expenses) and claims arising out of, in connection with or resulting(i) from the sale or distribution of the Securities by the Investor in violation of any applicablelaw, rule or regulation, and (ii) any misrepresentation by the Investor or any breach of anywarranties herein or any covenants or agreements set forth herein. Notwithstanding the provisionsof this paragraph, no Investor shall be required to indemnify any person or entity pursuant to thisparagraph in an amount in excess of the amount of the aggregate Purchase Price paid by suchInvestor pursuant to this Offering.     4.15. **Control Person.**The Investor is not a “control person” of the Company as defined inthe *Securities Act*(Ontario), will not become a “control person” by virtue of the purchase of anyof the Units and does not intend to act in concert with any other Person to form a control group ofthe Company.     4.16. **No Representation.**Other than in connection with the redemption of the Notes, noperson has made to the Investor any written or oral representations: (i) that any Person willresell or repurchase any of the Securities; (ii) that any Person will refund the Purchase Price;(iii) as to the future price or value of any of the Securities; or (iv) that any of the Securitieswill be listed and posted for trading on a stock exchange or that application has been made to listand post any of the Securities for trading on a stock exchange.     4.17. **International Investors.**If the Investor is resident outside the United States, theInvestor: (a) is knowledgeable of, or has been independently advised as to the applicablesecurities laws of the securities regulatory authorities (the **“Authorities”)**having application inthe jurisdiction in which the Investor is resident (the **“International Jurisdiction”)**which wouldapply to the acquisition of the Units; (b) is purchasing the Units pursuant to exemptions from theprospectus and registration requirements under the applicable securities laws of the Authorities inthe International Jurisdiction or, if such is not applicable, the Investor is permitted to purchasethe Units under the applicable securities laws of the Authorities in the International Jurisdictionwithout the need to rely on any exemption; (c) the Investor confirms that the subscription by theInvestor does not contravene any applicable securities laws of the Authorities in the InternationalJurisdiction and does not require the Company to make any filings or seek any approvals of anynature whatsoever from any
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Authority of any kind whatsoever in the International Jurisdiction in connection with the issue andsale or resale of the Units; and (d) the Investor confirms that the purchase of the Units by theInvestor does not trigger: an obligation by the Company or any other Person to prepare and file aregistration statement, prospectus or similar document, or any other report with respect to suchpurchase in the International Jurisdiction; or continuous disclosure reporting obligations of theCompany in the International Jurisdiction; and the Investor will, if requested by the Companycomply with such other requirements as the Company may reasonably require.**5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.**     Except as set forth in: (i) the SEC Reports, (ii) the Memorandum or (ii) the correspondingsection of the Disclosure Schedules delivered to the Investor Representative concurrently herewith,the Company hereby makes the following representations and warranties as of the date hereof and asof the Closing Date to each Investor:     5.1. **Subsidiaries.**A true and correct structure chart of the Company and its wholly-ownedand consolidated Subsidiaries is included as Schedule 5.1 to the Disclosure Schedules.Except as disclosed on Schedule 5.1 to the Disclosure Schedules or in the Memorandum, theCompany owns, directly or indirectly, all of the capital stock of each Subsidiary free and clear ofany Liens, and all the issued and outstanding shares of capital stock of each Subsidiary arevalidly issued and are fully paid, non-assessable and free of pre-emptive and similar rights.     5.2. **Organization and Qualification.**Each of the Company and the Subsidiaries is an entityduly incorporated or otherwise organized, validly existing and in good standing under the laws ofthe jurisdiction of its incorporation or organization, with the requisite power and authority toown and use its properties and assets and to carry on its business as currently conducted. Neitherthe Company nor any Subsidiary is in violation of any of the provisions of its respectivecertificate or articles of incorporation, bylaws or other organizational or charterdocuments. Each of the Company and the Subsidiaries is duly qualified to conduct business and isin good standing as a foreign corporation or other entity in each jurisdiction in which the natureof the business conducted or property owned by it makes such qualification necessary, except wherethe failure to be so qualified or in good standing, as the case may be, would not have orreasonably be expected to result in a Material Adverse Effect.     5.3. **Authorization; Enforcement.**The Company has the requisite corporate power andauthority to enter into and to consummate the transactions contemplated by each of the TransactionDocuments and otherwise to carry out its obligations thereunder. The execution and delivery ofeach of the Transaction Documents by the Company and the consummation by it of the transactionscontemplated thereby have been duly authorized by all necessary action on the part of the Companyand no further action is required by the Company in connection therewith. Each TransactionDocument has been (or upon delivery will have been) duly executed by the Company and, whendelivered in accordance with the terms hereof, will constitute the valid and binding obligation ofthe Company enforceable against the Company in accordance with its terms except: (i) as limited byapplicable bankruptcy, insolvency, reorganization, moratorium and other laws of general applicationaffecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to theavailability of specific performance, injunctive relief or other equitable remedies.
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     5.4. **No Conflicts.**The execution, delivery and performance of the Transaction Documents bythe Company and the consummation by the Company of the transactions contemplated thereby do not andwill not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’scertificate or articles of incorporation, bylaws or other organizational or charter documents, or(ii) conflict with, or constitute a default (or an event that with notice or lapse of time or bothwould become a default) under, or give to others any rights of termination, amendment, accelerationor cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility,debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or otherunderstanding to which the Company or any Subsidiary is a party or by which any property or assetof the Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law,rule, regulation, order, judgment, injunction, decree or other restriction of any court orgovernmental authority to which the Company or a Subsidiary is subject (including federal andstate securities laws and regulations), or by which any property or asset of the Company or aSubsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such aswould not have or reasonably be expected to result in a Material Adverse Effect.     5.5. **Filings, Consents and Approvals.**Neither Company nor any Subsidiary is required toobtain any consent, waiver, authorization or order of, give any notice to, or make any filing orregistration with, any court or other foreign, federal, state, local or other governmentalauthority or other Person in connection with the execution, delivery and performance by the Companyof the Transaction Documents, other than (a) the application(s) to each Trading Market for thelisting of the Shares and Warrant Shares for trading thereon in the time and manner requiredthereby, and applicable Blue Sky filings, (b) such as have already been obtained or such exemptivefilings as are required to be made under applicable securities laws, (c) such other filings thathave been made pursuant to applicable state securities laws and post-sale filings pursuant toapplicable state and federal securities laws which the Company undertakes to file within theapplicable time periods. Subject to the accuracy of the representations and warranties of eachInvestor set forth in Section 4 hereof, the Company has taken all action necessary to exempt: (i)the issuance and sale of the Securities, (ii) the issuance of the Warrant Shares upon due exerciseof the Warrants, and (iii) the other transactions contemplated by the Transaction Documents fromthe provisions of any stockholder rights plan or other “poison pill” arrangement, anyanti-takeover, business combination or control share law or statute binding on the Company or towhich the Company or any of its assets and properties may be subject and any provision of theCompany’s Articles of Incorporation or Bylaws that is or could reasonably be expected to becomeapplicable to the Investors as a result of the transactions contemplated hereby, including withoutlimitation, the issuance of the Securities and the ownership, disposition or voting of theSecurities by the Investors or the exercise of any right granted to the Investors pursuant to thisAgreement or the other Transaction Documents.     5.6. **Issuance of the Securities.**The Notes are (or will be) duly authorized and, when issuedand paid for in accordance with the Transaction Documents, will be duly and validly created, freeand clear of all Liens. The Warrants have been duly and validly authorized. Upon the dueconversion of the Notes, the Conversion Shares will be validly issued, fully paid andnon-assessable free and clear of all Liens. Upon the due exercise of the Warrants, the WarrantShares will be validly issued, fully paid and non-assessable free and clear of all Liens. TheCompany has reserved (or will reserve) from its duly authorized
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capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement,the Notes and the Warrants.     5.7. **Capitalization.**Schedule 5.7 to the Disclosure Schedules sets forth as of thedate hereof (a) the authorized capital stock of the Company; (b) the number of shares of capitalstock issued and outstanding; (c) the number of shares of capital stock issuable pursuant to theCompany’s stock plans; and (d) the number of shares of capital stock issuable and reserved forissuance pursuant to securities (other than the Notes and the Warrants) exercisable for, orconvertible into or exchangeable for any shares of capital stock of the Company. All of the issuedand outstanding shares of the Company’s capital stock have been duly authorized and validly issuedand are fully paid, non-assessable and free of pre-emptive rights and were issued in fullcompliance with applicable state and federal securities law and any rights of third parties. NoPerson has any right of first refusal, pre-emptive right, right of participation, or any similarright to participate in the transactions contemplated by the Transaction Documents. Except asdescribed on Schedule 5.7 to the Disclosure Schedules, there are no outstanding options,warrants, script rights to subscribe to, calls or commitments of any character whatsoever relatingto, or securities, rights or obligations convertible into or exchangeable for, or giving any Personany right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,understandings or arrangements by which the Company or any Subsidiary is or may become bound toissue additional shares of Common Stock, or securities or rights convertible or exchangeable intoshares of Common Stock, other than in connection with the Company’s stock option plan. The issueand sale of the Securities will not obligate the Company to issue shares of Common Stock or othersecurities to any Person (other than the Investors) and will not result in a right of any holder ofCompany securities to adjust the exercise, conversion, exchange or reset price under suchsecurities. Except as described on Schedule 5.7 to the Disclosure Schedules, there are novoting agreements, buy-sell agreements, option or right of first purchase agreements or otheragreements of any kind among the Company and any of the securityholders of the Company relating tothe securities of the Company held by them. Except as described onSchedule 5.7 to theDisclosure Schedules, and no Person has the right to require the Company to register any securitiesof the Company under the Securities Act, whether on a demand basis or in connection with theregistration of securities of the Company for its own account or for the account of any otherPerson.     5.8. **SEC Reports; Financial Statements.**The Company has filed all reports and registrationstatements required to be filed by it under the Securities Act and the Exchange Act, includingpursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or suchshorter period as the Company was required by law to file such material) (the foregoing materials,including the exhibits thereto, being collectively referred to herein as the **“SEC Reports”**and,together with the Disclosure Schedules to this Agreement and the Memorandum, the **“DisclosureMaterials”)**on a timely basis or has received a valid extension of such time of filing and hasfiled any such SEC Reports prior to the expiration of any such extension. As of their respectivedates, the SEC Reports complied in all material respects with the requirements of the SecuritiesAct and the Exchange Act and the rules and regulations of the Commission promulgated thereunder,and none of the SEC Reports, when filed, contained any untrue statement of a material fact oromitted to state a material fact required to be stated therein or necessary in order to make thestatements therein, in light of the circumstances under which they were made, not misleading. Thefinancial statements of the Company included in the SEC Reports comply in all material respectswith applicable accounting requirements and the rules and regulations of the Commission withrespect thereto
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as in effect at the time of filing. Such financial statements have been prepared in accordancewith generally accepted accounting principles in Canada applied on a consistent basis during theperiods involved **(“Canadian GAAP”),**except as may be otherwise specified in such financialstatements or the notes thereto and except that unaudited financial statements may not contain allfootnotes required by Canadian GAAP, and fairly present in all material respects the financialposition of the Company and its consolidated subsidiaries as of and for the dates thereof and theresults of operations and cash flows for the periods then ended, subject, in the case of unauditedstatements, to normal, immaterial, year-end audit adjustments.     5.9. **Material Changes.**Except as otherwise disclosed in the Memorandum, since the date of thelatest audited financial statements included within the SEC Reports, except as disclosed in theSEC Reports, the Company and its Subsidiaries have not:          (a) suffered any Material Adverse Change;          (b) suffered any damage, destruction or loss, whether or not covered by insurance, in anamount in excess of CAD $200,000;          (c) granted or agreed to make any increase in the compensation payable or to become payable bythe Company or any of its Subsidiaries to any officer or employee, except for normal raises fornon-executive personnel made in the ordinary course of business that are usual and normal inamount;          (d) declared, set aside or paid any dividend or made any other distribution on or in respectof the shares of capital stock of the Company or any of its Subsidiaries, or declared or agreed toany direct or indirect redemption, retirement, purchase or other acquisition by the Company or anyof its Subsidiaries of such shares;          (e) issued any shares of capital stock of the Company or any of its Subsidiaries, or anywarrants, rights or options thereof, or entered into any commitment relating to the shares ofcapital stock of the Company or any of its Subsidiaries;          (f) adopted or proposed the adoption of any change in the Company’s Certificate ofIncorporation or Bylaws or similar constituent instruments;          (g) made any change in the accounting methods or practices they follow, whether for generalfinancial or tax purposes, or any change in depreciation or amortization policies or rates adoptedtherein, or any tax election;          (h) sold, leased, abandoned or otherwise disposed of any real property or any machinery,equipment or other operating property other than in the ordinary course of their business;          (i) sold, assigned, transferred, licensed or otherwise disposed of any of the Company’sIntellectual Property or interest thereunder or other intangible asset except in the ordinarycourse of their business;          (j) been involved in any dispute involving any employee which would reasonably beexpected to result in a Material Adverse Change;
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          (k) entered into, terminated or modified any employment, severance, termination orsimilar agreement or arrangement with, or granted any bonuses (or bonus opportunity) to, orotherwise increased the compensation of any executive officer;          (l) entered into any material commitment or transaction (including without limitation anyborrowing or capital expenditure);          (m) amended or modified, or waived any default under, any Material Contract (as definedherein);          (n) to the Knowledge of the Company, incurred any material liabilities, contingent orotherwise, either matured or unmatured (whether or not required to be reflected in financialstatements in accordance with Canadian GAAP, and whether due or to become due), except foraccounts payable or accrued salaries that have been incurred by the Company since the date of thelatest audited financial statements included within the SEC Reports, in the ordinary course of itsbusiness and consistent with the Company’s past practices;          (o) permitted or allowed any of their material property or assets to be subjected to anymaterial Lien;          (p) settled any claim, litigation or action, whether now pending or hereafter made orbrought;          (q) made any capital expenditure or commitment for additions to property, plant or equipmentindividually in excess of CAD $200,000, or in the aggregate, in excess of CAD $50,000;          (r) paid, loaned or advanced any amount to, or sold, transferred or leased any properties orassets to, or entered into any agreement or arrangement with any of their Affiliates, officers,directors or stockholders or, to the Company’s knowledge, any Affiliate or associate of any of theforegoing;          (s) made any amendment to, or terminated any agreement that, if not so amended or terminated,would be material to the business, assets, liabilities, operations or financial performance of theCompany or any of its Subsidiaries;          (t) compromised or settled any claims relating to taxes, any tax audit or other taxproceeding, or filed any amended tax returns;          (u) merged or consolidated with any other Person, or acquired a material amount of assets ofany other Person;          (v) entered into any agreement in contemplation of the transactions specified herein otherthan this Agreement and the other Transaction Documents; or          (w) agreed to take any action described in this Section 5.9 or which would reasonably beexpected to otherwise constitute a breach of any of the representations or warranties of theCompany contained in this Agreement or any other Transaction Documents.     5.10. **Litigation.**Except as described on Schedule 5.10 to the Disclosure Schedules,there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, tothe knowledge of the Company, threatened against or affecting the Company,
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any Subsidiary or any of their respective properties before or by any court, arbitrator,governmental or administrative agency or regulatory authority (federal, state, county, local orforeign) (collectively, an **“Action”)**which: (i) adversely affects or challenges the legality,validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, ifthere were an unfavourable decision, have or reasonably be expected to result in a Material AdverseEffect. Neither the Company nor any Subsidiary, nor, to the Company’s knowledge, any director orofficer thereof, is or has been the subject of any Action involving a claim of violation of orliability under federal or state securities laws or a claim of breach of fiduciary duty. There hasnot been, and to the knowledge of the Company, there is not pending or contemplated, anyinvestigation by the Commission or SEC involving the Company or any current or former director orofficer of the Company. Neither the Commission nor the SEC has issued any stop order or other ordersuspending the effectiveness of any registration statement filed by the Company or any Subsidiaryunder the Exchange Act or the Securities Act.     5.11. **Compliance.**Neither the Company nor any Subsidiary: (i) is in default under or inviolation of (and no event has occurred that has not been waived that, with notice or lapse of timeor both, would result in a default by the Company or any Subsidiary under), nor has the Company orany Subsidiary received notice of a claim that it is in default under or that it is in violationof, any indenture, loan or credit agreement or any other agreement or instrument to which it is aparty or by which it or any of its properties is bound (whether or not such default or violationhas been waived), (ii) is in violation of any order of any court, arbitrator or Governmental Body,or (iii) is or has been in violation of any statute, rule or regulation of any governmentalauthority, including without limitation all foreign, federal, state and local laws applicable toits business, except in the case of clauses (i), (ii) and (iii) as would not have or reasonably beexpected to result in a Material Adverse Effect.     5.12. **Regulatory Permits.**Except as disclosed in the SEC Reports and the Memorandum, theCompany and the Subsidiaries possess all certificates, authorizations and permits issued by theappropriate federal, state, local or foreign regulatory authorities necessary to conduct theirrespective businesses as described in the SEC Reports and the Memorandum, except where the failureto possess such permits would not have or reasonably be expected to result in a Material AdverseEffect **(“Material Permits”),**and neither the Company nor any Subsidiary has received any notice ofproceedings relating to the revocation or modification of any Material Permit.     5.13. **Title to Assets.**Except as disclosed in the SEC Reports and theMemorandum, the Company and the Subsidiaries have good and marketable title to all real propertyowned by them that is material to the business of the Company and the Subsidiaries and good andmarketable title in all personal property owned by them that is material to the business of theCompany and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do notmaterially affect the value of such property and do not materially interfere with the use made andproposed to be made of such property by the Company and the Subsidiaries and Liens for the paymentof federal, state or other taxes, the payment of which is neither delinquent nor subject topenalties. Any real property and facilities held under lease by the Company and the Subsidiariesare held by them under valid, subsisting and enforceable leases of which the Company and theSubsidiaries are in compliance.
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     5.14. **Contracts.**          (a) Except as set forth in the SEC Reports or the Memorandum and other than in the ordinarycourse of business as gold mining production and exploration company, including, withoutlimitation, as required for construction of the Phuoc Son processing plant, neither the Companynor any of its Subsidiaries is party or subject to, or bound by:               (i) any agreements, contracts or commitments that call for prospective fixed and/or contingentpayments or expenditures by or to the Company or any of its Subsidiaries of more than CAD $200,000,or which is otherwise material and not entered into in the ordinary course of business;               (ii) any contract, lease or agreement involving payments in excess of CAD $200,000, which isnot cancelable by the Company or any of its Subsidiaries, as applicable, without penalty on notless than 60 days notice except for: Blasting Service Contract for Bong Mieu 18 August 2009 to 31December 2014 for US$64,303 pa. Balance to go US$241,136; Ore Hauling Contract for Phuoc Son 1November 2008 to 31 September 2010 for US$966,891 with 7 months to pay is US$294,271; and Leaseand operating costs commitments for Toronto office expires 31 December 2012. Net commitmentremaining is C$305,507               (iii) any contract, including any distribution agreements, containing covenants directly orexplicitly limiting the freedom of the Company or any of its Subsidiaries to compete in any lineof business or with any Person or to offer any of its products or services;               (iv) any indenture, mortgage, promissory note, loan agreement, guaranty or other agreement orcommitment for the borrowing of money or pledging or granting a security interest in any assets;               (v) any employment contracts, non-competition agreements, invention assignments, severance orother agreements with officers, directors, employees, stockholders or consultants of the Companyor any of its Subsidiaries or Persons related to or affiliated with such Persons;               (vi) any stock redemption or purchase agreements or other agreements affecting or relating tothe capital stock of the Company or any of its Subsidiaries, including, without limitation, anyagreement with any stockholder of the Company or any of its Subsidiaries which includes, withoutlimitation, antidilution rights, voting arrangements or operating covenants;               (vii) any pension, profit sharing, retirement, stock option or stock ownership plans;               (viii) any royalty, dividend or similar arrangement based on the revenues or profits of theCompany or any of its Subsidiaries or based on the revenues or profits derived from any materialcontract;               (ix) any acquisition, merger, asset purchase or other similar agreement;
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               (x) any sales agreement which entitles any customer to a right of set-off, or right to arefund after acceptance thereof;               (xi) any agreement with any supplier or licensor containing any provision permitting suchsupplier or licensor to change the price or other terms upon a breach or failure by the Company orany of its Subsidiaries, as applicable, to meet its obligations under such agreement; or               (xii) any agreement under which the Company or any of its Subsidiaries has granted any Personregistration rights for securities.          (b) Schedule 5.15(b) to the Disclosure Schedules along with the material contractsdisclosed by the Company in its SEC Reports together constitute a listing or description of allagreements, contracts or instruments, including all amendments thereto, to which the Company or itsSubsidiaries are bound which meet the criteria set forth in Section 5.15(a) (such agreements,contracts or instruments, collectively, the **“Material Contracts”).**The Company has made availableto the Investor Representative copies of the Material Contracts. Neither the Company nor any ofits Subsidiaries has entered into any oral contracts which, if written, would qualify as a MaterialContract. Each of the Material Contracts is valid and in full force and effect, is enforceable inaccordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulenttransfer, moratorium or similar laws affecting creditors’ rights generally and general principlesof equity, and will continue to be so immediately following the Closing Date.          (c) Actions with Respect to Material Contracts.               (i) Neither the Company nor any of its Subsidiaries has violated or breached, or committedany default under, any Material Contract in any material respect, and, to the Company’s knowledge,no other Person has violated or breached, or committed any default under any Material Contract,except for violations, breaches of defaults which would not have a Material Adverse Effect; and               (ii) To the Company’s knowledge, no event has occurred, and no circumstance or conditionexists, that (with or without notice or lapse of time) will, or would reasonably be expected to:(A) result in a material violation or breach of any of the provisions of any Material Contract,(B) give any Person the right to declare a default or exercise any remedy under any MaterialContract, (C) give any Person the right to accelerate the maturity or performance of any MaterialContract or (D) give any Person the right to cancel, terminate or modify any Material Contract,except, in each case, as would not have a Material Adverse Effect.     5.15. **Taxes.**          (a) The Company and its Subsidiaries have timely and properly filed all tax returns requiredto be filed by them for all years and periods (and portions thereof) for which any such taxreturns were due, except where the failure to so file would not have a Material Adverse Effect.All such filed tax returns are accurate in all material respects. The Company has timely paid alltaxes due and payable (whether or not shown on filed tax returns), except where the failure to sopay would not have a Material Adverse Effect. There are no pending assessments, asserteddeficiencies or claims for additional taxes that have not been paid. The reserves for taxes, ifany, reflected in the SEC Reports or the in the
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Memorandum are adequate, and there are no Liens for taxes on any property or assets of the Companyand any of its Subsidiaries (other than Liens for taxes not yet due and payable). There have beenno audits or examinations of any tax returns by any Governmental Body, and the Company or itsSubsidiaries have not received any notice that such audit or examination is pending orcontemplated. No claim has been made by any Governmental Body in a jurisdiction where the Companyor any of its Subsidiaries does not file tax returns that it is or may be subject to taxation bythat jurisdiction. To the knowledge of the Company, no state of facts exists or has existed whichwould constitute grounds for the assessment of any penalty or any further tax liability beyond thatshown on the respective tax returns. There are no outstanding agreements or waivers extending thestatutory period of limitation for the assessment or collection of any tax.          (b) Neither the Company nor any of its Subsidiaries is a party to any tax-sharingagreement or similar arrangement with any other Person.     5.16. **Employees and Labor Relations**.          (a) Each Person who performs services for the Company or any of its Subsidiaries has been, andis, properly classified by the Company or its Subsidiaries as an employee or an independentcontractor.          (b) To the Company’s knowledge, no employee or advisor of the Company or any of itsSubsidiaries is or is alleged to be in violation of any term of any employment contract,disclosure agreement, proprietary information and inventions agreement or any othercontract or agreement or any restrictive covenant or any other common law obligation to a formeremployer relating to the right of any such employee to be employed by the Company or any of itsSubsidiaries because of the nature of the business conducted or to be conducted by the Company orany of its Subsidiaries or to the use of trade secrets or proprietary information of others, andthe employment of the employees of the Company and its Subsidiaries does not subject the Company orthe Company’s stockholders to any liability. There is neither pending nor, to the Company’sknowledge, threatened any actions, suits, proceedings or claims, or, to the Company’s knowledge,any basis therefor or threat thereof with respect to any contract, agreement, covenant orobligation referred to in the preceding sentence.          (c) No material labor dispute exists or, to the knowledge of the Company, is imminent withrespect to any of the employees of the Company which could reasonably be expected to result in aMaterial Adverse Effect.     5.17. **Patents and Trademarks.**To the knowledge of the Company, the Company and theSubsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademarkapplications, service marks, trade names, copyrights, licenses and other similar rights that arenecessary or material for use in connection with their respective businesses as described in theSEC Reports and the Memorandum and which the failure to so have could have or reasonably beexpected to result in a Material Adverse Effect (collectively, the **“Intellectual PropertyRights”).**Neither the Company nor any Subsidiary has received a written notice that theIntellectual Property Rights used by the Company or any Subsidiary violates or infringes upon therights of any Person. To the knowledge of the Company, all such Intellectual Property Rights areenforceable. The Company and its Subsidiaries have taken reasonable steps to protect the Company’sand its Subsidiaries’ rights in their
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Intellectual Property Rights and confidential information (the **“Confidential Information”).**Eachemployee, consultant and contractor who has had access to Confidential Information which isnecessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses ascurrently conducted or as currently proposed to be conducted has executed an agreement to maintainthe confidentiality of such Confidential Information and has executed appropriate agreements thatare substantially consistent with the Company’s standard forms thereof. Except underconfidentiality obligations, there has been no material disclosure of any of the Company’s or itsSubsidiaries’ Confidential Information to any third party.     5.18. **Environmental Matters.**To the Company’s knowledge, neither the Company norany Subsidiary is in violation of any statute, rule, regulation, decision or order of anyGovernmental Body relating to the use, disposal or release of hazardous or toxic substances orrelating to the protection or restoration of the environment or human exposure to hazardous ortoxic substances (collectively, **“Environmental Laws”),**owns or operates any real propertycontaminated with any substance that is subject to any Environmental Laws, is liable for anyoff-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claimrelating to any Environmental Laws, which violation, contamination, liability or claim has had orcould reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;and there is no pending or, to the Company’s knowledge, threatened investigation that might lead tosuch a claim.     5.19. **Insurance.**The Company and the Subsidiaries are insured by insurers of recognizedfinancial responsibility against such losses and risks and in such amounts as are prudent andcustomary in the businesses in which the Company and the Subsidiaries are engaged as described inthe Memorandum. Neither the Company nor any Subsidiary has any reason to believe that it will notbe able to renew its existing insurance coverage as and when such coverage expires or to obtainsimilar coverage from similar insurers as may be necessary to continue its business without asignificant increase in cost.     5.20. **Private Placement.**Assuming the accuracy of the Investors representations and warrantiesset forth in Section 4, no registration under the Securities Act is required for the offer and saleof the Securities by the Company to the Investors as contemplated hereby.     5.21. **No Integrated Offering.**Neither the Company, nor any of its affiliates, nor any Personacting on its or their behalf has, directly or indirectly, made any offers or sales of any securityor solicited any offers to buy any security, under circumstances that would cause this Offering ofthe Securities to be integrated with prior offerings by the Company for purposes of the SecuritiesAct or any applicable shareholder approval provisions, including, without limitation, under therules and regulations of any exchange or automated quotation system on which any of the securitiesof the Company are listed or designated.     5.22. **Brokers and Finders.**Other than as described in the Memorandum, no Person will have,as a result of the transactions contemplated by the Transaction Documents, any valid right,interest or claim against or upon the Company, any Subsidiary or an Investor for any commission,fee or other compensation pursuant to any agreement, arrangement or understanding entered into byor on behalf of the Company.     5.23. **No Directed Selling Efforts or General Solicitation.**Neither the Company nor any Personacting on its behalf has conducted any general solicitation or general advertising (as those termsare used in Regulation D) in connection with the offer or sale of
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any of the Securities.     5.24. **Disclosures.**Neither the Company nor any Person acting on its behalf has provided theInvestors or their agents or counsel with any information that constitutes or might constitutematerial, non-public information, other than the terms of the transactions contemplated hereby. Thewritten materials delivered to the Investors in connection with the transactions contemplated bythe Transaction Documents do not contain any untrue statement of a material fact or omit to state amaterial fact necessary in order to make the statements contained therein, in light of thecircumstances under which they were made, not misleading as at the date of such statements.     5.25. **Solvency.**The Company has not (a) made a general assignment for the benefit ofcreditors; (b) filed any voluntary petition in bankruptcy or suffered the filing of any involuntarypetition by its creditors; (c) suffered the appointment of a receiver to take possession of all, orsubstantially all, of its assets; (d) suffered the attachment or other judicial seizure of all, orsubstantially all, of its assets; (e) admitted in writing its inability to pay its debts as theycome due; or (f) made an offer of settlement, extension or composition to its creditors generally.     5.26. **Related Party Transactions.**Except as set forth in the SEC Reports or the Memorandum:(a) none of the Company or any of its Affiliates, officers, directors, stockholders oremployees, or any Affiliate of any of such Person, has any material interest in any property, realor personal, tangible or intangible, including the Company’s Intellectual Property used in orpertaining to the business of the Company, except for the normal rights of a stockholder, or, tothe knowledge of the Company, any supplier, distributor or customer of the Company, (b) there areno agreements, understandings or proposed transactions between the Company and any of its officers,directors, employees, Affiliates, or, to the Company’s knowledge, any Affiliate thereof, (c) to theCompany’s knowledge, no employee, officer or director of the Company or any of its Subsidiaries hasany direct or indirect ownership interest in any firm or corporation with which the Company isaffiliated or with which the Company has a business relationship, or any firm or corporation thatcompetes with the Company; (d) to the Company’s knowledge, no member of the immediate family of anyofficer or director of the Company is directly or indirectly interested in any Material Contract or(e) there are no amounts owed (cash and stock) to officers, directors and consultants (salary,bonuses or other forms of compensation).     5.27. **Questionable Payments.**Neither the Company nor any of its Subsidiaries nor, to theCompany’s knowledge, any of their respective current or former stockholders, directors, officers,employees, agents or other Persons acting on behalf of the Company or any Subsidiary, has on behalfof the Company or any Subsidiary or in connection with their respective businesses: (a) used anycorporate funds for unlawful contributions, gifts, entertainment or other unlawful expensesrelating to political activity; (b) made any direct or indirect unlawful payments to anygovernmental officials or employees from corporate funds; (c) established or maintained anyunlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitiousentries on the books and records of the Company or any Subsidiary; or (e) made any unlawful bribe,rebate, payoff, influence payment, kickback or other unlawful payment of any nature.     5.28. **PFIC.**None of the Company or any of its Subsidiaries is or intends to become a“passive foreign investment company” within the meaning of Section 1297 of the
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Code of 1986.     5.29. **OFAC.**None of the Company or any of its Subsidiaries nor, to the knowledge of theCompany, any director, officer, agent, employee, Affiliate or Person acting on behalf of theCompany or any of its Subsidiaries, is currently subject to any U.S. sanctions administered by theOffice of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will notdirectly or indirectly use the proceeds of the sale of the Units, or lend, contribute or otherwisemake available such proceeds to any of the Company’s Subsidiaries, joint venture partner or otherPerson or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any othercountry sanctioned by OFAC or for the purpose of financing the activities of any Person currentlysubject to any U.S. sanctions administered by OFAC.     5.30. **Money Laundering Laws.**To the Company’s knowledge, the operations of each of theCompany or any of its Subsidiaries are and have been conducted at all times in compliance with themoney laundering Legal Requirements of all applicable Governmental Bodies and any related orsimilar rules, regulations or guidelines, issued, administered or enforced by any Governmental Body(collectively, the **“Money Laundering Laws”)**and no action, suit or proceeding by or before anycourt or Governmental Body or any arbitrator involving the Company or any of its Subsidiaries withrespect to the Money Laundering Laws is pending or, to the best knowledge of the Company,threatened.**6. CONDITIONS TO EACH CLOSING OF THE INVESTORS.**     The obligation of the Investors to purchase the Units at any Closing is subject to thefulfillment to, the satisfaction of the Placement Agent, acting reasonably, on or prior to suchapplicable Closing Date, of the following conditions, any of which may be waived by the PlacementAgent:     6.1. **Representations and Warranties.**The representations and warranties made by the Company inSection 5 hereof qualified as to materiality shall be true and correct at all times prior to andon the applicable Closing Date, except to the extent any such representation or warrantyexpressly speaks as of an earlier date, in which case such representation or warranty shall be trueand correct as of such earlier date, and, the representations and warranties made by the Company inSection 5 hereof not qualified as to materiality shall be true and correct in all material respectsat all times prior to and on the applicable Closing Date, except to the extent any suchrepresentation or warranty expressly speaks as of an earlier date, in which case suchrepresentation or warranty shall be true and correct in all material respects as of such earlierdate.     6.2. **Performance of Agreements.**The Company shall have performed in all material respectsall obligations and covenants herein required to be performed by it on or prior to the applicableClosing Date.     6.3. **Approvals.**The Company shall have obtained any and all consents, permits, approvals,registrations and waivers necessary or appropriate for consummation of the purchase and sale of theSecurities and the consummation of the other transactions contemplated by the TransactionDocuments, all of which shall be in full force and effect.     6.4. **Judgments, etc.**No judgment, writ, order, injunction, award or decree of or
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by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or anyorder of or by any governmental authority, shall have been issued, and no action or proceedingshall have been instituted by any governmental authority, enjoining or preventing theconsummation of the transactions contemplated hereby or in the other Transaction Documents.     6.5. **Stop Orders.**No stop order or suspension of trading shall have been imposed by the SEC,the TSX, or any other governmental or regulatory body having jurisdiction over the Company or themarket(s) where the Common Stock is listed or quoted, with respect to public trading in the CommonStock.     6.6. **Adverse Changes.**Since the date of execution of this Agreement, no event or series ofevents shall have occurred that reasonably could have or result in a Material Adverse Effect or amaterial adverse change with respect to the Company or any of its Subsidiaries taken as a whole.     6.7. **Company Officer Certificate.**The Company shall have delivered aCertificate, executed on behalf of the Company by its Chief Executive Officer or its ChiefFinancial Officer, or such other senior officers as may be acceptable to the Placement Agent,dated as of the applicable Closing Date, certifying to the fulfillment of the conditions specifiedin this Section 6.     6.8. **Company Secretary Certificate.**The Company shall have delivered a Certificate, executedon behalf of the Company by its Secretary, or such other officer as may be acceptable to thePlacement Agent, dated as of the applicable Closing Date, certifying the resolutions adopted bythe Board of Directors of the Company approving the transactions contemplated by this Agreementand the other Transaction Documents and the issuance of the Securities, certifying the currentversions of the Articles of Incorporation and Bylaws of the Company and certifying as to thesignatures and authority of persons signing the Transaction Documents and related documents onbehalf of the Company. The foregoing certificate shall only be required to be delivered on thefirst partial Closing Date, unless any information contained in the certificate has changed.     6.9. **Opinions of Counsel.**          (a) The Investors and the Placement Agent shall have received an opinion from Berns & Berns,the Company’s U.S. legal counsel, dated as of each Closing Date, in such form and substance asagreed to by the Company and the Placement Agent (it being agreed that such counsel shall not berequired to deliver a “10b-5” or negative assurances letter or opinion).          (b) The Investors and the Placement Agent shall have received an opinion from Gowling LafleurHenderson LLP, the Company’s Canadian legal counsel, dated as of each Closing Date, in such formand substance as agreed to by the Company and the Placement Agent (it being agreed that suchcounsel shall not be required to deliver a “10b-5” or negative assurances letter or opinion).     6.10. **Note and Warrants.**The Company shall have delivered the certificates representing theNotes and Warrants being sold at the applicable Closing.
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     6.11. **TSX Approval.**If required by applicable regulation, TSX shall have approved theConversion Shares and Warrant Shares for listing and provided any other requisite approvals inconnection with the transactions contemplated hereby.**7. CONDITIONS TO EACH CLOSING OF THE COMPANY.**     The obligations of the Company to effect the transactions contemplated by this Agreement aresubject to the fulfillment at or prior to the applicable Closing Date of the conditions listedbelow.     7.1. **Representations and Warranties.**The representations and warranties made by the Investorsin Section 4 shall be true and correct in all material respects at the time of Closing as if madeon and as of such date.     7.2. **Corporate Proceedings.**All corporate and other proceedings required to be undertaken bythe Investor in connection with the transactions contemplated hereby shall have occurred and alldocuments and instruments incident to such proceedings shall be reasonably satisfactory insubstance and form to the Company.     7.3. **Agreements.**Such Investor shall have completed and executed this Agreement,and the investor questionnaire in the form attached hereto as Exhibit C, and delivered thesame to the Company.     7.4. **Purchase Price.**The Investors shall have delivered or caused to be delivered the PurchasePrice to the Escrow Account.     7.5. **TSX Approval.**If required by applicable regulation, TSX shall have approved theConversion Shares and Warrant Shares for listing and provided any other requisite approvals inconnection with the transactions contemplated hereby.     7.6. **Minimum Amount.**The Minimum Amount shall have been raised.**8. OTHER AGREEMENTS**     8.1. **Furnishing of Information.**As long as any Investor owns the Securities, the Companycovenants to timely file (or obtain extensions in respect thereof and file within the applicablegrace period) all reports required to be filed by the Company after the date hereof pursuant to theExchange Act. As long as any Investor owns Securities, if the Company is not required to filereports pursuant to such laws, it will prepare and furnish to the Investors and make publiclyavailable in accordance with Rule 144(c) such information as is required for the Investors to sellthe Securities under Rule 144. The Company further covenants that it will take such furtheraction as any holder of Securities may reasonably request, all to the extent required from time totime to enable such Person to sell the Securities without registration under the Securities Actwithin the limitation of the exemptions provided by Rule 144.     8.2. **Integration.**The Company shall not, and shall use its best efforts to ensure that noAffiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwisenegotiate in respect of any security (as defined in Section 2 of the Securities Act) that would beintegrated with the offer or sale of the Securities in a manner that would require the registrationunder the Securities Act of the sale of the Securities to the Investors, or that would
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be integrated with the offer or sale of the Securities for purposes of the rules and regulations ofany Trading Market in a manner that would require stockholder approval of the sale of theSecurities to the Investors.     8.3. **Securities Laws Disclosure; Publicity.**By 9:00 a.m. (New York time) on the Trading Dayfollowing the initial Closing Date and each Subsequent Closing Date, the Company shall issue apress release disclosing the transactions contemplated hereby and the Closing. By no later thanthe fourth Trading Day following the Closing Date (and on each subsequent Closing Date if requiredby applicable law) the Company will file a Report of Foreign Private Issuer on Form 6-K disclosingthe material terms of this Agreement and the other Transaction Documents (and attach as exhibitsthereto the Transaction Documents) and the Closing. In addition, the Company will make such otherfilings and notices in the manner and time required by the SEC and the Trading Market on which theCommon Stock is listed.     8.4. **Limitation on Issuance of Future Priced Securities.**So long as any Securities remainoutstanding, the Company shall not issue any “Future Priced Securities” as such term is describedby the rules and regulations of FINRA.     8.5. **Listing of Securities.**The Company agrees that: (i) if the Company applies to have theCommon Stock traded on any other Trading Market, it will include in such application theSecurities, and will take such other action as is necessary or desirable to cause the Securities tobe listed on such other Trading Market as promptly as possible, and (ii) it will take all actionreasonably necessary to continue the listing and trading of its Common Stock on a Trading Marketand will comply in all material respects with the Company’s reporting, filing and other obligationsunder the bylaws or rules of the Trading Market.     8.6. **Controls and Procedures.**Following the Closing, the Company agrees that it will utilizecommercially reasonable efforts to establish and maintain, to the extent required by law, rule orregulation, a system of internal accounting controls sufficient to provide reasonable assurancethat: (i) transactions are executed in accordance with management’s general or specificauthorizations, (ii) transactions are recorded as necessary to permit preparation of financialstatements in conformity with Canadian GAAP and to maintain asset accountability, (iii) access toassets is permitted only in accordance with management’s general or specific authorization, and(iv) the recorded accountability for assets is compared with the existing assets at reasonableintervals and appropriate action is taken with respect to any differences.     8.7. **Reservation of Shares.**The Company shall maintain a reserve from its duly authorizedshares of Common Stock to comply with its obligations to issue the Conversion Shares and theWarrant Shares upon conversion of the Note and exercise of the Warrants, respectively.     8.8. **Make Good.**          (a) The Company projects that it will produce at least 60,000 ounces of gold (the**“Production Target”)**in its fiscal years ending December 31, 2010 and 2011 combined. The Companyacknowledges that the Placement Agent and the Investors are making their investment decision andvaluation of the Company based in part based upon these projections.
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          (b) The Company will notify the Placement Agent in writing, including a certification signedby the Company’s Chief Executive Officer and Chief Financial Officer, within ninety (90) daysfollowing the end of its fiscal year ending December 31, 2011 as to whether it has achieved theProduction Target. If the Company fails to achieve the Production Target, then the annualinterest rate of the Notes shall automatically increase by three (3) additional percentagepoints, with such increase being applied retroactively beginning on January 15, 2012.          (c) If an Investor converts such Investor’s Note prior to the date that the Company deliversthe notice to the Placement Agent described in 8.9(b), then such Investor will not be entitled toreceive any benefit from the increased annual interest rate. If an investor transfers suchInvestor’s Note, then the right of such Investor to receive such increased interest rate hereundershall transfer along with the Note to the transferee of the Note.          (d) The increase in the annual interest rate of the Notes pursuant to this Section 8.9 shallnot apply if the Company fails to achieve the Production Target due to (i) a taking by eminentdomain, requisitions, laws or orders of the Governmental Bodies in which the Company’s miningoperations are conducted, or (ii) the Company’s failure to obtain, timely or at all, the requisitebusiness licenses necessary to conduct the Company’s mining operations from such GovernmentalBodies (provided that the Company has used commercially reasonable efforts to timelyobtain such business licenses).     8.9. **Right of First Refusal.**          (a) From the date hereof until the eighteen (18) month anniversary of the initial ClosingDate, the Company will not, directly or indirectly, offer, sell, grant any option to purchase, orotherwise dispose of (or announce any offer, sale, grant or any option to purchase or otherdisposition of) any of its or its Subsidiaries’ convertible promissory notes (any such offer, sale,grant, disposition or announcement being referred to as a **“Subsequent Placement”)**unless theCompany shall have first complied with this Section 8.10.          (b) The Company shall deliver to each Investor hereunder a written notice (the **“Offer Notice”)**of any proposed or intended issuance or sale or exchange (the **“Offer”)**of the notes being offered(the **“Offered Notes”**) in a Subsequent Placement, which Offer Notice shall (w) identify and describethe Offered Notes, (x) describe the price and other terms upon which they are to be issued, sold orexchanged, and the number or amount of the Offered Notes to be issued, sold or exchanged, (y)identify the persons or entities (if known) to which or with which the Offered Notes are to beoffered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with suchInvestors all of the Offered Notes, allocated among such Investors (a) based on such Investor’s prorata portion of the total Investment Amount hereunder (the **“Basic Amount”),**and (b) with respect toeach Investor that elects to purchase its Basic Amount, any additional portion of the Offered Notesattributable to the Basic Amounts of other Investors as such Investor shall indicate it willpurchase or acquire should the other Investors subscribe for less than theirBasic Amounts (the **“Undersubscription Amount”),**which process shall be repeated until theInvestors shall have an opportunity to subscribe for any remaining Undersubscription Amount.          (c) To accept an Offer, in whole or in part, such Investor must deliver a written notice tothe Company prior to the end of the fifth (5th) Business Day after such
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Investor’s receipt of the Offer Notice (the **“Offer Period”**), setting forth the portion of suchInvestor’s Basic Amount that such Investor elects to purchase and, if such Investor shall elect topurchase all of its Basic Amount, the Undersubscription Amount, if any, that such Investor electsto purchase (in either case, the **“Notice of Acceptance”**). If the Basic Amounts subscribed for byall Investors are less than the total of all of the Basic Amounts, then each Investor who has setforth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, inaddition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for;provided, however, that if the Undersubscription Amounts subscribed for exceed the differencebetween the total of all the Basic Amounts and the Basic Amounts subscribed for (the **“AvailableUndersubscription Amount”**), each Investor who has subscribed for any Undersubscription Amountshall be entitled to purchase only that portion of the Available Undersubscription Amount as theBasic Amount of such Investor bears to the total Basic Amounts of all Investors that havesubscribed for Undersubscription Amounts, subject to rounding by the Company to the extent itsdeems reasonably necessary.          (d) The Company shall have twenty (20) Business Days from the expiration of theOffer Period above to (i) offer, issue, sell or exchange all or any part of such Offered Notes asto which a Notice of Acceptance has not been given by the Investors (the **“Refused Notes”**), but onlyto the offerees described in the Offer Notice (if so described therein) and only upon terms andconditions (including, without limitation, unit prices and interest rates) that are not morefavorable to the acquiring person or persons or less favorable to the Company than those set forthin the Offer Notice and (ii) to publicly announce (a) the execution of such Subsequent PlacementAgreement (as defined below), and (b) either (x) the consummation of the transactions contemplatedby such Subsequent Placement Agreement or (y) the termination of such Subsequent PlacementAgreement, which shall be filed with the SEC on an appropriate form with such Subsequent PlacementAgreement and any documents contemplated therein filed as exhibits thereto. If no disclosure hasbeen made by the Company by the end of the twenty (20) Business Day period referred to in thissubsection (d), the Subsequent Placement shall be deemed to have been abandoned and the Investorsshall no longer be deemed to be in possession of any non-public information with respect to theCompany.          (e) In the event the Company shall propose to sell less than all the Refused Notes (any suchsale to be in the manner and on the terms specified in this Section), then each Investor may, atits sole option and in its sole discretion, reduce the number or amount of the Offered Notesspecified in its Notice of Acceptance to an amount that shall be not less than the number or amountof the Offered Notes that such Investor elected to purchase pursuant to Section 8.10(c) abovemultiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Notesthe Company actually proposes to issue, sell or exchange (including Offered Notes to be issued orsold to Investors pursuant to Section 8.10(c) above prior to such reduction) and (ii) thedenominator of which shall be the original amount of the Offered Notes. In the event that anyInvestor so elects to reduce the number or amount of Offered Notes specified in its Notice ofAcceptance, the Company may not issue, sell or exchange more than the reduced number or amount ofthe Offered Notes unless and until such Offered Notes have again been offered to the Investors inaccordance with Section 8.10(b) above.          (f) Upon the closing of the issuance, sale or exchange of all or less than all of the RefusedNotes, the Investors shall acquire from the Company, and the Company shall issue to the Investors,the number or amount of Offered Notes specified in the Notices of Acceptance, as reduced pursuantto Section 8.10(e) above if the Investors have so elected,
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upon the terms and conditions specified in the Offer. The purchase by the Investors of anyOffered Notes is subject in all cases to the preparation, execution and delivery by the Companyand the Investors of a purchase agreement relating to such Offered Notes reasonably satisfactoryin form and substance to the Investors and their respective counsel (such agreement, the**“Subsequent Placement Agreement”**).          (g) Any Offered Notes not acquired by the Investors or other persons in accordance withSection 8.10(f) above may not be issued, sold or exchanged until they are again offered to theInvestors under the procedures specified in this Agreement.          (h) In exchange for the Company’s willingness to agree to these procedures, each Investorhereby irrevocably agrees that it will hold in strict confidence any and all Offer Notices, theinformation contained therein, and the fact that the Company is contemplating a SubsequentPlacement, until such time as the Company is obligated to make the disclosures required bySection 8.10(d), or unless it notifies the Company in writing that it no longer desires toreceive Offer Notices.          (i) Notwithstanding the foregoing, this Section 8.10 shall not apply in respect of anissuance of promissory notes pursuant to acquisitions or strategic transactions, provided anysuch issuance shall only be to a Person which is, itself or through its subsidiaries, anoperating company in a business synergistic with the business of the Company and in which theCompany receives benefits in addition to the investment of funds, but shall not include atransaction in which the Company is issuing securities primarily for the purpose of raisingcapital or to an entity whose primary business is investing in securities.     8.10. **Further Assurances.**The Company will, and will cause all of its Subsidiaries to, andtheir management to, use their best efforts to satisfy all of the closing conditions under Section7, and will not take any action which could frustrate or delay the satisfaction of suchconditions. In addition, either prior to or following the Closing, the Company will, and willcause each of its Subsidiaries to, and its and their management to, perform, or cause to be doneand performed, all such further acts and things, and shall execute and deliver all such otheragreements, certificates, instruments and documents, as any other party may reasonably request inorder to carry out the intent and accomplish the purposes of this Agreement and the consummationof the transactions contemplated hereby.**9. MISCELLANEOUS.**     9.1. **Compensation of Placement Agent, Brokers, etc.**Each Investor acknowledges that it isfully aware that the Placement Agent will receive from the Company, in consideration of itsservices as placement agent in respect of the offer and sale of the Units contemplated hereby:          (a) a commission of eight (8) percent of the aggregate Purchase Price of the Units sold ateach Closing, payable in cash; and          (b) a warrant to purchase a number of shares of Common Stock derived by dividing an amountequal to 8% of the gross proceeds raised at each Closing by CAD $0.42.     It is acknowledged that the Placement Agent may share such fees and compensation with otherplacement agents or brokers participating in the transactions contemplated hereby.
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In addition, each Investor acknowledges that it is aware that the Placement Agent will receivefrom the Company payment of all of its accountable fees and expenses including, but not limitedto, all legal fees and expenses incurred in connection with the Offering, up to USD $120,000 inthe aggregate.     9.2. **Notices.**All notices, requests, demands and other communications provided in connectionwith this Agreement shall be in writing and shall be deemed to have been duly given at the timewhen hand delivered, delivered by express courier, or sent by facsimile (with receipt confirmed bythe sender’s transmitting device) in accordance with the contact information provided below or suchother contact information as the parties may have duly provided by notice.   (a) **The Company:**     Olympus Pacific Minerals Inc.  Suite 500, 10 King Street East  Toronto, Ontario  M5C 1C3 Canada  Attention: David A. Seton  Chairman and Chief Executive Officer  Facsimile:     **With a copy to:**     Berns & Berns  Counsellors at Law  767 Third Avenue  New York, New York 10017  Attention: James Berns, Esq.  Facsimile: (212) 332-3315   (b) **The Investors:**     As per the contact information provided on thesignature page hereof.   (c) The Placement Agent/Investor Representative:     Euro Pacific Capital, Inc.  88 Post Road West, 3rd Floor  Westport, CT 06880  Attention: Mr. Thomas Tan  Fax Number: (203) 662-9771
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     **With a copy to:**     Pillsbury Winthrop Shaw Pittman LLP  2300 N Street, N.W.  Washington, DC 20037-1122  Attention: Louis A. Bevilacqua, Esq.  Fax Number: (202) 663-8007     9.3. **Amendments; Waivers.**No provision of this Agreement may be waived or amended except in awritten instrument signed, in the case of an amendment, by the Company and the InvestorRepresentative or, in the case of a waiver, by the party against whom enforcement of any suchwaiver is sought (and if such party is the Investors, then by the Investor Representative). Nowaiver of any default with respect to any provision, condition or requirement of this Agreementshall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or awaiver of any other provision, condition or requirement hereof, nor shall any delay or omission ofeither party to exercise any right hereunder in any manner impair the exercise of any such right.     9.4. **Construction.**The headings herein are for convenience only, do not constitute apart of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.The language used in this Agreement will be deemed to be the language chosen by the parties toexpress their mutual intent, and no rules of strict construction will be applied against any party.     9.5. **Successors and Assigns.**This Agreement shall be binding upon and inure to the benefit ofthe parties and their successors and permitted assigns. The Company may not assign this Agreementor any rights or obligations hereunder without the prior written consent of the InvestorRepresentative. Any Investor may assign any or all of its rights under this Agreement to anyPerson to whom such Investor assigns or transfers any Securities, provided such transferee agreesin writing to be bound, with respect to the transferred Securities, by the provisions hereof thatapply to the “Investors”.     9.6. **No Third-Party Beneficiaries.**This Agreement is intended for the benefit of the partieshereto and their respective successors and permitted assigns and is not for the benefit of, nor mayany provision hereof be enforced by, any other Person.     9.7. **Governing Law, Consent to Jurisdiction, etc.**All questions concerning the construction,validity, enforcement and interpretation of the Transaction Documents shall be governed by andconstrued and enforced in accordance with the internal laws of the State of New York, withoutregard to the principles of conflicts of law thereof. Each party agrees that all legalproceedings concerning the interpretations, enforcement and defense of the transactionscontemplated by this Agreement and any other Transaction Documents (whether brought against a partyhereto or its respective affiliates, directors, officers, shareholders, employees or agents) shallbe commenced exclusively in the state and federal courts sitting in the City of New York. Eachparty hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federalcourts sitting in the City of New York, New York for the adjudication of any dispute hereunder orin connection herewith or with any transaction contemplated hereby or discussed herein (includingwith respect to the enforcement of the any of the Transaction Documents), and hereby irrevocablywaives, and agrees not to assert in any suit, action or proceeding, any claim that it is notpersonally subject to the jurisdiction of any
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such court, that such suit, action or proceeding is improper. Each party hereto hereby irrevocablywaives personal service of process and consents to process being served in any such suit, actionor proceeding by mailing a copy thereof via registered or certified mail or overnight delivery(with evidence of delivery) to such party at the address in effect for notices to it under thisAgreement and agrees that such service shall constitute good and sufficient service of process andnotice thereof. Nothing contained herein shall be deemed to limit in any way any right to serveprocess in any manner permitted by law. EACH PARTY HERETO (INCLUDING ITS AFFILIATES, AGENTS,OFFICERS, DIRECTORS AND EMPLOYEES) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BYAPPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF ORRELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.     9.8. **Survival.**The representations, warranties, agreements and covenantscontained herein shall survive the Closing of the transactions contemplated by this Agreement.     9.9. **Indemnification.**          (a) The Company agrees to indemnify and hold harmless each Investor and its Affiliates andtheir respective directors, officers, employees and agents from and against any and all losses,claims, damages, liabilities and expenses (including without limitation reasonable attorney feesand disbursements and other expenses incurred in connection with investigating, preparing ordefending any action, claim or proceeding, pending or threatened and the costs of enforcementthereof) (collectively, **“Losses”)**to which such Person may become subject as a result of anybreach of representation, warranty, covenant or agreement made by or to be performed on the partof the Company under the Transaction Documents, and will reimburse any such Person for all suchamounts as they are incurred by such Person.          (b) Promptly after receipt by any Person (the **“Indemnified Person”)**of notice of any demand,claim or circumstances which would or might give rise to a claim or the commencement of anyaction, proceeding or investigation in respect of which indemnity may be sought pursuant to thisSection 9.9, such Indemnified Person shall promptly notify the Company in writing and the Companyshall assume the defense thereof, including the employment of counsel reasonably satisfactory tosuch Indemnified Person, and shall assume the payment of all fees and expenses; provided, however,that the failure of any Indemnified Person so to notify the Company shall not relieve the Companyof its obligations hereunder except to the extent that the Company is materially prejudiced bysuch failure to notify. In any such proceeding, any Indemnified Person shall have the right toretain its own counsel, but the fees and expenses of such counsel shall be at the expense of suchIndemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreedto the retention of such counsel; or (ii) in the reasonable judgment of counsel to suchIndemnified Person representation of both parties by the same counsel would be inappropriate dueto actual or potential differing interests between them. The Company shall not be liable for anysettlement of any proceeding effected without its written consent, which consent shall not beunreasonably withheld, but if settled with such consent, or if there be a final judgment for theplaintiff, the Company shall indemnify and hold harmless such Indemnified Person from and againstany loss or liability (to the extent stated above) by reason of such settlement or judgment.Without the prior written consent of the Indemnified Person, which consent shall not beunreasonably withheld, the Company shall not effect any settlement of any pending or
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threatened proceeding in respect of which any Indemnified Person is or could have been a party andindemnity could have been sought hereunder by such Indemnified Party, unless such settlementincludes an unconditional release of such Indemnified Person from all liability arising out of suchproceeding.     9.10. **Restricted Securities.**          (a) All certificates representing Securities shall bear the restrictive legend specified inSection 9.10(b) and 9.10(c) of this Agreement only to the extent required by applicable law and asspecified in the Transaction Documents. The Company warrants that no instruction other than suchinstructions referred to in this Section 9.10 will be given by the Company to its transfer agentand that the Securities shall otherwise be freely transferable on the books and records of theCompany as and to the extent permitted by applicable law and provided by this Agreement. Nothingin this Section shall affect in any way any Investor’s obligations and agreement to comply with allapplicable securities laws upon resale of the Securities. If the Purchaser (i) provides the Companywith an opinion of counsel reasonably satisfactory to the Company that registration by thePurchaser of the Securities is not required under the Securities Act, or (ii) transfers Securitiesto an affiliate which is an accredited investor (in accordance with the provisions of thisAgreement) or in compliance with Rule 144, then in either instance the Company shall permit thesaid transfer, and if applicable promptly instruct its transfer agent to issue one or morecertificates in such name and in such denominations as specified by the Investor.          (b) Certificates evidencing the Securities will contain the following legend, so longas is required by this Section:NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION OFTHESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGECOMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND, ACCORDINGLY, MAYNOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATIONSTATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIESACT”), OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOTSUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND INACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGALOPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICHSHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. NOTWITHSTANDING THEFOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDEMARGIN ACCOUNT OR OTHER LOAN OR REFINANCING ARRANGEMENT SECURED BY THESECURITIES.
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          (c) The certificates representing the Notes and Warrants and, if issued within four monthsfrom the Closing Date, the Conversion Shares and Warrant Shares will bear the following legendssubstantially in the following forms:“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITYMUST NOT TRADE THE SECURITY BEFORE l, 2010” **[the date which is four monthsand one day after the Closing Date will be inserted]**“THE SECURITIES [ISSUABLE UPON EXERCISE/CONVERSION OF THE SECURITIES]REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE(“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THEFACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLYANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” INSETTLEMENT OF TRANSACTIONS ON TSX.”provided that subsequent to the date which is four months and one day after the Closing Date thecertificates representing the Securities may be exchanged for certificates bearing no suchlegends.          (d) Other than the legends specified in Sections 9.10(b)-(c), certificates evidencingSecurities shall not contain any legend (including the legend set forth in Section 9.10(b)): (i)following a sale or transfer of such Securities pursuant to an effective registration statement, or(ii) following a sale or transfer of such Securities pursuant to Rule 144 (assuming the transfereeis not an Affiliate of the Company), or (iii) while such Securities are eligible for sale withoutvolume limitations pursuant to Rule 144. If an Investor shall make a sale or transfer of Securitieseither (x) pursuant to Rule 144 or (y) pursuant to a registration statement and in each case shallhave delivered to the Company or the Company’s transfer agent the certificate representingSecurities containing a restrictive legend which are the subject of such sale or transfer and arepresentation letter in customary form (the date of such sale or transfer and Share delivery beingthe **“Share Delivery Date”)**and (1) the Company shall fail to deliver or cause to be delivered tosuch Investor a certificate representing such Securities that is free from all restrictive or otherlegends, other than the legends set forth in Sections 9.10(b)-(c) by the third Trading Dayfollowing the Share Delivery Date and (2) following such third Trading Day after the Share DeliveryDate and prior to the time such Securities are received free from restrictive legends, theInvestor, or any third party on behalf of such Investor is required by its broker to purchase (inan open market transaction or otherwise) shares of Common Stock (and purchases such shares) todeliver in satisfaction of a sale by the Investor of such Shares (a **“Buy-In”),**then the Companyshall pay in cash to the Investor (for costs incurred either directly by such Investor or on behalfof a third party) the amount by which the total purchase price paid for Common Stock as a result ofthe Buy-In (including brokerage commissions, if any) exceed the proceeds received by such Investoras a result of the sale to which such Buy-In relates. The Investor shall provide the Companywritten notice indicating the amounts payable to the Investor in respect of the Buy-In.Notwithstanding the foregoing, the provisions related to the Buy-In shall only apply if theInvestor has delivered the duly completed and executed requisite documentation, satisfactory
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to the Company and its transfer agent, to effect the removal of the legends specified in Sections9.10(b)-(c).     9.11. **Execution.**This Agreement may be executed in two or more counterparts, all of which whentaken together shall be considered one and the same agreement and shall become effective whencounterparts have been signed by each party and delivered to the other party, it being understoodthat both parties need not sign the same counterpart. In the event that any signature isdelivered by facsimile transmission, such signature shall create a valid and binding obligation ofthe party executing (or on whose behalf such signature is executed) with the same force and effectas if such facsimile signature page were an original thereof.     9.12. **Severability.**If any provision of this Agreement is held to be invalid orunenforceable in any respect, the validity and enforceability of the remaining terms and provisionsof this Agreement shall not in any way be affected or impaired thereby and the parties will attemptto agree upon a valid and enforceable provision that is a reasonable substitute therefor, and uponso agreeing, shall incorporate such substitute provision in this Agreement.     9.13. **Remedies.**In addition to being entitled to exercise all rights provided herein orgranted by law, including recovery of damages, each of the Investors and the Company will beentitled to specific performance under the Transaction Documents. The parties agree that monetarydamages may not be adequate compensation for any loss incurred by reason of any breach ofobligations described in the foregoing sentence and hereby agrees to waive in any action forspecific performance of any such obligation the defense that a remedy at law would be adequate.     9.14. **Payment Set Aside.**To the extent that the Company makes a payment or payments to anyInvestor pursuant to any Transaction Document or a Investor enforces or exercises its rightsthereunder, and such payment or payments or the proceeds of such enforcement or exercise or anypart thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside,recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to theCompany, a trustee, receiver or any other person under any law (including, without limitation, anybankruptcy law, state or federal law, common law or equitable cause of action), then to the extentof any such restoration the obligation or part thereof originally intended to be satisfied shall berevived and continued in full force and effect as if such payment had not been made or suchenforcement or setoff had not occurred.     9.15. **Independent Nature of Investors’ Obligations and Rights.**The obligations of eachInvestor under any Transaction Document are several and not joint with the obligations of any otherInvestor, and no Investor shall be responsible in any way for the performance of the obligations ofany other Investor under any Transaction Document. Nothing contained herein or in any TransactionDocument, and no action taken by any Investor pursuant thereto, shall be deemed to constitute theInvestors as a partnership, an association, a joint venture or any other kind of entity, or createa presumption that the Investors are in any way acting in concert or as a group with respect tosuch obligations or the transactions contemplated by the Transaction Document. Each Investor shallbe entitled to independently protect and enforce its rights, including without limitation, therights arising out of this Agreement or out of the other Transaction Documents, and it shall not benecessary for any other Investor to be joined as an additional party in any proceeding for suchpurpose. Each Investor has been represented by its
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own separate legal counsel in their review and negotiation of the Transaction Documents. TheCompany has elected to provide all Investors with the same terms and Transaction Documents for theconvenience of the Company and not because it was required or requested to do so by the Investors.     9.16. **Irrevocable Offer.**Each Investor agrees that this Agreement constitutes an irrevocableoffer to purchase the Securities of the Company and that Investor cannot cancel, terminate orrevoke this Agreement or any agreement of Investor made hereunder. This Agreement shall survive thedeath or legal disability of Investor and shall be binding upon Investor’s heirs, executors,administrators and successors.**[Signature Pages Follow]**
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     **IN WITNESS WHEREOF,**the parties hereto have caused this Securities Purchase Agreement tobe duly executed by their respective authorized signatories as of the date first indicated above.      **COMPANY:**