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DATED 24 June 2004









(1) CANACCORD CAPITAL (EUROPE) LIMITED

(2) KIRKLAND LAKE GOLD INC.

(3) THE DIRECTORS





________________________________________NOMINATED
ADVISER AND BROKER AGREEMENT
**________________________________________**









McCarthy Tétrault 1 Plough Place London EC4A 1DE
United Kingdom

Tel: +44 (0)20 7822 1500 Fax: +44 (0)20 7822 1555 www.mccarthy.ca





1

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TABLE OF CONTENTS

|1.    
       INTERPRETATION                                            | 1 
|----------------------------------------------------------------------- | --
|                                                                        |   
|2.    
       CONDITION                                                 | 2 
|                                                                        |   
|3.     
      TERM                                                      | 2 
|                                                                        |   
|4.    
       FEES AND EXPENSES                                         | 4 
|                                                                        |   
|5.     
      DUTIES OF THE NOMINATED ADVISER AND BROKER                | 5 
|                                                                        |   
|6.    
       DUTIES AND WARRANTIES OF THE COMPANY AND OF THE DIRECTORS | 5 
|                                                                        |   
|7.     
      ADDITIONAL RIGHTS OF CANACCORD                            | 10
|                                                                        |   
|8.    
       INDEMNITY                                                 | 10
|                                                                        |   
|9.     
      ENTIRE AGREEMENT                                          | 10
|                                                                        |   
|10.   
       ASSIGNMENT                                                | 11
|                                                                        |   
|11.    
      TERMS AND CONDITIONS                                      | 11
|                                                                        |   
|12.    
      VARIATION OF TERMS                                        | 11
|                                                                        |   
|13.    
      COUNTERPARTS AND DELIVERY                                 | 11
|                                                                        |   
|14.    
      NOTICES                                                   | 11
|                                                                        |   
|15.    
      GOVERNING LAW AND SERVICE OF PROCESS                      | 12
|                                                                        |   
|16.    
      THIRD PARTY RIGHTS                                        | 12
|                                                                        |   
|SCHEDULE
      1 - THE DIRECTORS                                        | 13
|                                                                        |   
|SCHEDULE
      2 - ADDITIONAL TERMS AND CONDITIONS                      | 14
|                                                                        |   
|SCHEDULE
      3 - INDEMNITY                                            | 22
|                                                                        |   
|SCHEDULE
      4 - THE OFFERING                                         | 25

i

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THIS AGREEMENTis dated 24 June 2004 and made

BETWEEN:

|(1) | CANACCORD CAPITAL (EUROPE) LIMITED(No. 2814897)
      whose registered office is at Brook House, 27 Upper Brook Street, London
      W1K 7QF, United Kingdom (Canaccord);                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                   
|(2) | KIRKLAND LAKE GOLD INC.(No. 235849-2), a
      corporation incorporated under the Canada Business Corporations Act whose
      principal office is located at Macassa Mine, Highway #66, Kirkland Lake,
      Ontario, Canada (the Company); and
|    |                                                                                                                                                                                                                                                   
|(3) | THE DIRECTORS OF THE COMPANYwhose names and
      addresses are set out in Schedule 1 (the
  Directors)                                                                                                                                         

BACKGROUND

|(A) | The Company is applying for admission on AIM, a market
      operated by London Stock Exchange plc (the London Stock
      Exchange), of its entire issued and outstanding and to be issued
      share capital.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                   
|(B) | Canaccord has agreed, on the terms set out in this
      Agreement to act as nominated adviser and broker to the
  Company.                                                                                       

OPERATIVE PROVISIONS

|1.  | INTERPRETATION                                                                                           
|--- | ---------------------------------------------------------------------------------------------------------
|    |                                                                                                          
|1.1 | For the purposes of this Agreement, a reference
        to a statutory provision includes a reference to:
|    |                                                                                                          
|    | (a)                                                                                                      
|    |                                                                                                          
|    | (b)                                                                                                      
|    |                                                                                                          
|    | (c)                                                                                                      
|    |                                                                                                          
|    | but does not include a substituted provision.                                                            
|    |                                                                                                          
|1.2 | In this Agreement reference to:                                                                          
|    |                                                                                                          
|    | (a)                                                                                                      
|    |                                                                                                          
|    | (b)                                                                                                      

1

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| | (c) | the singular includes a reference to the plural and vice
      versa; and
| | --- | -------------------------------------------------------------------------
| |     |                                                                          
| | (d) | one gender includes all
genders.                                         

|1.3 | Unless otherwise stated, a reference to a Clause or
      Schedule is a reference to a clause of, or schedule to, this Agreement and
      a reference to this Agreement includes its Schedules, such Schedules
      forming part of this Agreement.                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|1.4 | Clause headings in this Agreement and in the Schedules
      are for ease of reference only and do not affect its
  construction.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2.  | CONDITION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2.1 | The obligations of Canaccord under this Agreement are
      conditional upon the admission of the entire issued and outstanding and to
      be issued share capital of the Company to trading on AIM, becoming
      effective (Admission) pursuant to Rule 6 of the AIM Rules for
      Companies published from time to time by the London Stock Exchange (the
      AIM Rules).                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3.  | TERM                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3.1 | The Company hereby agrees to retain Canaccord, and
      Canaccord agrees to act, as its nominated adviser and broker for a period
      of one year commencing on the date of Admission (the Commencement
      Date).                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3.2 | Provided that this Agreement has not been terminated
      prior to the first anniversary of the Commencement Date in accordance with
      the terms hereof, the engagement of Canaccord as the Companys nominated
      adviser and broker on the terms set out in this Agreement shall continue
      thereafter unless and until terminated by the Company or Canaccord giving
      to the other not less than three months prior written notice. In the case
      of a termination, the Company shall give written notice of termination to
      the other parties to the Agreement.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3.3 | Notwithstanding the foregoing:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

2

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for the time being) in or in
connection with this Agreement is untrue, inaccurate or misleading in any
material respect and that representation or warranty is material in relation to
the business of the Company as a whole;

| | (b) | the Company shall be entitled to terminate Canaccord as
      its nominated adviser and broker at any time (whereupon this Agreement
      shall terminate automatically with immediate effect) upon written notice
      to Canaccord if:                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (i)                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (ii)                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                       
| | (c) | this Agreement shall terminate automatically with
      immediate effect if:                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (i)                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (ii)                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                       
| | (d) | this Agreement shall terminate automatically with
      immediate effect if the Companys shares cease to be admitted to trading
      on AIM;                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                       
| | (e) | Canaccord shall be entitled to resign at its sole
      discretion at any time on not less than 30 days prior written notice to
      the Company should it consider its name or reputation to be likely to be
      prejudiced by continuing as the Companys nominated adviser and/or
      broker.

|3.4 | Termination of this Agreement for any reason whatsoever
      pursuant to this Clause 3 shall be without prejudice to and shall not be
      by way of limitation of any claims otherwise available to any party
      arising out of the antecedent breach of any other party. Any of the
      provisions of this Agreement that are expressed to take effect in whole or
      in part on or
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

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|    | after termination or are capable of having effect after
      termination shall remain in full force and effect despite termination,
      including but not limited to Clause 4 hereof, paragraphs 4 and 5 of
      Schedule 2 and the indemnity contained in Schedule 3 shall continue in
      full force and effect notwithstanding any such termination.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                              
|4.  | FEES AND EXPENSES                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                              
|4.1 | The Company shall pay to Canaccord the following
      admission fees (the Admission Fees) (plus, if applicable, value
      added tax (VAT)):                                                                                                                                                                                                           

| | (a) | A corporate finance fee of £125,000 payable as
      follows:
| | --- | -------------------------------------------------------------
| |     |                                                              
| |     | (i)                                                          
| |     |                                                              
| |     | (ii)                                                         
| |     |                                                              
| |     | (iii)                                                        

|4.2 | The Company shall pay to Canaccord for its services under
      this Agreement in respect of the period ending on the first anniversary of
      the Commencement Date, a fee (the Nomad Fee) at the annual rate
      of £50,000, which amount shall be payable in two instalments at six
      monthly intervals, the first such instalment to be paid on the
      Commencement Date and the second instalment to be paid six months
      thereafter. In the event of termination of this Agreement, Canaccord shall
      not be liable to repay any part of its Nomad Fee which has been paid in
      advance.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.3 | In addition to the Nomad Fee, Canaccord shall be entitled
      to reimbursement of all costs, charges and expenses, reasonably incurred
      by it in connection with the performance of its services under this
      Agreement and (prior to its termination) the engagement letter dated 4 May
      2004 between the Company and Canaccord in respect of Canaccords
      appointment as nominated advisor and broker in connection with the
      Admission (the Engagement Letter).                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.4 | The Company and Canaccord shall prior to the expiration
      of the first anniversary of the Commencement Date, seek to agree in good
      faith the amount of the Nomad Fee for the next following 12 months
      thereafter, which shall not be less than £50,000 in any event.                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.5 | The Admission Fees and all costs, charges and expenses
      referred to in Clauses 4.1, 4.2 and 4.3 shall be payable, in each case, in
      pounds sterling together with VAT, if applicable, in accordance with the
      terms and conditions set out in Schedule 2.                                                                                                                                                                                                                                                                                                                                               

4

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|5.  | DUTIES OF THE NOMINATED ADVISER AND
  BROKER                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|5.1 | For the period during which Canaccord acts as the
      Companys nominated adviser and broker, it shall, without prejudice to its
      rights under paragraphs 3 and 6 of Schedule 2, but subject to paragraph
      6.14, release, without delay, to the Companys Regulatory Information
      Service, all information received from the Company required to be so
      released under the AIM Rules provided that such release is, in form and
      substance, acceptable to Canaccord. Canaccord will also, subject to
      receipt of the relevant documents from the Company and for so long as it
      remains the nominated adviser and broker of the Company, maintain a file
      relating to the Company, available at all times to the London Stock
      Exchange, containing the documents required to be available therein by the
      London Stock Exchange.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|5.2 | Canaccord will, as the Companys nominated adviser,
      provide general advice to the Company and the Directors in relation to
      matters concerning the AIM Rules, requirements of the London Stock
      Exchange and the Panel on Takeovers and Mergers and to other matters
      relevant to a company traded on AIM. Canaccord will otherwise carry out
      the responsibilities of nominated adviser as set out in the AIM Rules. Any
      further advice required and requested by the Company from Canaccord in
      relation to any specific transactions or matters over and above the
      foregoing shall be the subject of further specific fees to be agreed in
      advance between the Company and Canaccord in relation to each such
      specific transaction or matter.                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|5.3 | Canaccord will, as the Companys broker, carry out the
      responsibilities of its broker as set out in the AIM Rules.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|5.4 | Canaccord will keep confidential all information provided
      to it pursuant to clause 6 in accordance with the provisions set out in
      paragraph 5 of Schedule 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|6.  | DUTIES AND WARRANTIES OF THE COMPANY AND OF THE
      DIRECTORS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|6.1 | The Directors confirm that they have received copies of
      the AIM Rules setting out, inter alia, the continuing obligations
      of companies whose securities are traded on AIM and that they,
      collectively and individually, accept full responsibility for the
      Companys compliance with the AIM Rules. The Directors also confirm that
      they will procure that such continuing obligations (from time to time in
      force) will be observed by the Company and will use their best efforts to
      procure such observance by the Directors. The Company will and each
      Director will use its best efforts to procure that any future director of
      the Company undertakes with Canaccord to be bound by the terms of this
      Agreement as though he were a Director at the date of its execution and
      party hereto.                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Each of the Company and the Directors hereby undertakes
      to forthwith comply subject to applicable corporate and securities laws
      and prudent business judgment with all proper and reasonable directions
      given by Canaccord as a nominated adviser and broker in relation to
      compliance with the AIM Rules. For the avoidance of doubt, the
      obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

5

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|    | of each Director under this Clause 6.1 shall cease to
      have effect upon such Director ceasing to be a Director of the
    Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6.2 | The Directors confirm that Canaccord has advised them as
      to the nature of their responsibilities and obligations as directors of a
      company whose shares are to be admitted to AIM and to ensure compliance by
      the Company with the AIM Rules in accordance with Rule 37 and Schedule 6
      of the AIM Rules. In particular, each of the Directors agrees to disclose
      to the Company all information which it needs in order to comply with the
      requirements of Rule 15 and Schedule 5 of the AIM Rules (notification of
      changes in the interests of directors and significant shareholders in the
      securities of the Company) and each Director agrees not to deal in any
      securities of the Company admitted to trading on AIM (the AIM
      Securities) during a close period (as defined in the AIM Rules) or
      at any other time if to do so might constitute an offence under the
      Criminal Justice Act 1993 or constitute market abuse under the Financial
      Services and Markets Act 2000.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6.3 | Each Director undertakes to Canaccord that should he wish
      to dispose of any interest in an AIM Security through AIM during the
      period of time ending on the first anniversary of Admission, such Director
      shall:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6.4 | The Company undertakes with Canaccord that it will and
      each of the Directors (so long as he remains a director of the Company)
      undertakes to procure (insofar as he is able so to do) that the Company
      will at all times during the continuance of this Agreement:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

6

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| |     | Interims) within 90 days of the end of the
      relevant period or such shorter period as may be required under Canadian
      securities laws;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (c) | forthwith upon request, provide Canaccord with complete
      and accurate copies of all papers and other information laid before any
      board meeting and of the minutes of any board meeting;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (d) | not (nor shall any of its subsidiaries from time to time,
      nor shall any person (other than Canaccord) on its behalf, except as may
      be required by the London Stock Exchange or any other regulatory authority
      or under any applicable laws or by any provision of this Agreement) make
      any public announcement, public statement or public communication (other
      than any trade announcement in the ordinary course of business regarding
      the Company or any subsidiary or associate of the Company and other than
      in relation to the Accounts, Results Announcements and Interims) in
      relation to its business or the market for or value of its securities,
      whether in response to enquiries or otherwise, without first consulting
      with Canaccord about the form and contents of such public announcement,
      public statement or public communication. Any announcement, statement or
      communication which the Company is required to make by the London Stock
      Exchange or any other regulatory authority or under any applicable laws or
      by any provision of this Agreement as aforesaid shall be released as
      expeditiously as required and provided the Company has first used its best
      efforts in the circumstances (i) to consult Canaccord regarding the
      contents thereof, (ii) to provide Canaccord with a draft thereof, if any;
      and (ii) to provide Canaccord with an opportunity to comment on any such
      draft;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (e) | not enter into any commitment or agreement or arrangement
      or knowingly do or permit to be done on its behalf any other act or thing
      which, in any such case, gives rise to an obligation of the Company to the
      London Stock Exchange or to any other authority by virtue of any law, rule
      or regulation to which the Company is subject, to make any announcement
      regarding the same or which (without prejudice to the generality of the
      foregoing) gives rise to any obligation (whether contingent or otherwise)
      to allot or issue any share or loan capital of the Company or to grant any
      options to acquire shares of the Company or securities exchangeable or
      convertible into shares of the Company or cancellation of shares or
      options, without prior consultation with Canaccord;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (f) | notify Canaccord in advance of, and discuss with
      Canaccord, any matter which it may be necessary to make known to the
      investing public in order to enable the investing public to appraise the
      position of the Company and to avoid the establishment of a false or
      disorderly market in its securities;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (g) | forward to Canaccord for comment proofs of all documents
      to be sent to holders of any of the Companys securities;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (h) | comply with the AIM Rules and inform Canaccord forthwith
      upon becoming aware of any breach of the AIM Rules by the Company and/or
      any Director or a                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

7

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| |     | future director of the Company and to request the advice
      and guidance of Canaccord in relation to all matters relevant to the
      Companys compliance with the AIM Rules;                                                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                       
| | (i) | ensure that at all times one of the Directors or the
      Company Secretary shall be authorised by the Company and responsible (on
      behalf of the Company) for communicating with Canaccord with regard to all
      matters which are the subject of this Agreement; and                       
| |     |                                                                                                                                                                                                                                                                                                       
| | (j) | forward to Canaccord, upon filing with the U.S.
      Securities and Exchange Commission, Canadian securities authorities or the
      Toronto Stock Exchange, any document required to be filed or delivered
      pursuant to Canadian or U.S. securities laws, including, without
      limitation:
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (i)                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (ii)                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (iii)                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (iv)                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (v)                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (vi)                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                       
| |     | (vii)                                                                                                                                                                                                                                                                                                 

|6.5 | Each of the Directors warrants and undertakes to Canaccord
        that the particulars concerning him provided to Canaccord in the directors
        questionnaire provided by Canaccord (together with the Toronto Stock Exchange
        Personal Information Form attached thereto) are true and accurate in all
        material respects and that there is nothing concerning him which is not
        contained therein and which is or might reasonably be expected to be material
        to be known to Canaccord in acting as nominated adviser and/or broker
        to the Company and that he has provided Canaccord with all information
        (in relation to himself) required to be disclosed by paragraph (f) of
        Schedule 2 of the AIM Rules.                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|6.6 | Subject to clause 6.7 below, the Company and each of
        the Directors (in relation to information and documents supplied by him
        and not by any other Director) severally (and not jointly) represent and
        warrant to Canaccord that all information and documents relating to the
        Company disclosed or supplied by that Director or the Company or any agent
        of any of them to Canaccord or its agents during the term of or in the
        course of the negotiations leading up to this Agreement, including without
        limitation the admission document prepared in accordance with the AIM
        Rules with respect to the Admission (the Admission Document),
        are true and accurate, and there is no fact not disclosed which would
        render any such information or documents untrue, inaccurate or misleading.

8

---

|6.7  | The Company represents and warrants and each of the
      Directors (in relation to himself and not any other Director) severally
      (and not jointly) represent and warrant to Canaccord that all information
      disclosed or supplied by a Director, in relation to himself, to Canaccord
      or Canaccords agents during the term of or in the course of the
      negotiations leading up to this Agreement, including without limitation
      the Admission Document is true and accurate, and that there is no fact not
      disclosed which would render any such information or documents untrue,
      inaccurate or misleading.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6.8  | The Company and each of the Directors (in relation to
      himself) shall provide Canaccord with all such information and documents
      as Canaccord may require to enable it to comply with its obligations to
      the London Stock Exchange under Rule 37 of the AIM Rules.                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6.9  | The Company and each of the Directors (in relation to
      himself) warrant that this Agreement has been duly authorised, executed
      and delivered by the Company and the Directors and is a legally binding
      obligation of them enforceable against them in accordance with its terms,
      subject to bankruptcy and insolvency laws and other laws generally
      affecting the enforceability of creditors rights, the availability of the
      equitable remedies of injunction and specific performance and the
      enforceability of rights to indemnity;                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6.10 | The Company and each of the Directors (in relation to
      himself) warrant that the execution and delivery of this Agreement, the
      fulfilment of its terms by the Company and the Directors do not and will
      not result in a breach of applicable laws of any jurisdiction of the
      articles, by-laws or resolutions of the Company or any agreement or
      instrument to which the Company is a party or by which it is contractually
      bound;                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6.11 | The Company and the Directors warrant that there are no
      actions, suits, proceedings or inquiries threatened in writing or, to the
      best of their knowledge, pending (and not commenced) in writing against or
      affecting the Company at law or in equity or before or by any federal,
      provincial or state, municipal or other governmental department,
      commission, board, bureau, agency or instrumentality , domestic or
      foreign;                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6.12 | The Company and the Directors warrant that the Company is
      a reporting issuer not in default in the provinces of British Columbia,
      Alberta or Ontario or has equivalent status within the meaning of the
      Securities Act(British Columbia), Securities Act(Alberta)
      and the Securities Act(Ontario);                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6.13 | The Company and the Directors warrant that the Company
      has complied, in all material respects, with the requirements of
      applicable Canadian and U.S. securities laws.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6.14 | Canaccord acknowledges that the Company is subject to
      timely disclosure obligations imposed by the Toronto Stock Exchange and
      Canadian and U.S. securities regulatory authorities and that the Company
      shall be required to comply with the obligations in Clauses 5 and 6 to
      provide information and documentation to Canaccord on a timely basis only
      to the extent that doing so would not cause the Company to breach
      applicable laws and regulations of the Toronto Stock Exchange or any other
      applicable securities                                                                                

9

---

|    | regulatory authority. Nothing in the foregoing shall be
      taken to mean that the Company is not bound to comply in full with the AIM
      Rules in a timely manner.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7.  | ADDITIONAL RIGHTS OF CANACCORD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7.1 | For the period during which Canaccord acts as the
      Companys nominated adviser and broker, the Company agrees that Canaccord
      shall be notified of all meetings of the board of directors of the Company
      at which any transactions described in Clause 6.4(e) will be considered
      and provided with minutes of all such meetings by the Company as soon as
      practicable thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7.2 | The Company acknowledges that, during the term of this
      Agreement, in relation to any takeover or other corporate activity
      proposed by the Company or any of its subsidiaries from time to time that
      Canaccord will be required to advise the Company in its capacity as
      nominated adviser and broker. The Company also agrees during the term of
      this Agreement to consider appointing (but shall not be bound to appoint)
      Canaccord for other advisory roles in relation to any such takeover or
      other corporate activity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7.3 | The Company agrees, that for the period commencing on 1
      July 2004 and ending on the first anniversary of Admission, in the absence
      of any conflict of interest which would disqualify Canaccord from so
      acting to offer Canaccord the opportunity to act as the Companys placing
      agent and/or underwriter on any fundraising on terms to be negotiated
      between Canaccord and the Company, whether institutional or from a
      strategic corporate partner and not to appoint any other adviser in
      relation to any proposed fundraising unless the offer shall have been
      first declined by Canaccord. For the avoidance of doubt if Canaccord
      declines the terms of such offer the Company shall not appoint any other
      adviser on terms more favourable than those terms offered to Canaccord
      without first re-offering such new terms to Canaccord. If Canaccord
      accepts an offer from the Company, it reserves the right to introduce
      another placing agent and/or underwriter to assist in any such
      transaction.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|8.  | INDEMNITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The provisions of Schedule 3 shall apply.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|9.  | ENTIRE AGREEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|9.1 | This Agreement and the Schedules set out the entire
      agreement of the parties hereto in relation to the appointment of
      Canaccord as the Companys nominated adviser and broker.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|9.2 | All other previous letters or agreements between any of
      the parties hereto relating to the appointment of Canaccord as nominated
      adviser and broker to the Company shall have no further effect (save for
      the Engagement Letter, which shall terminate and have no further effect
      concurrent with Admission).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

10

---

|10.  | ASSIGNMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | The Agreement, and the rights and obligations arising
      under it, shall not be assignable nor transferable without the prior
      written agreement of each of the other parties hereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|11.  | TERMS AND CONDITIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | The additional terms and conditions set out in Schedule 2
      of this Agreement shall be incorporated herein and in the event of any
      inconsistency between the terms of this Agreement and the additional terms
      and conditions set out in Schedule 2 this Agreement shall
  prevail.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|12.  | VARIATION OF TERMS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | No variation of any provision of this Agreement shall be
      effective unless made in writing and signed on behalf of Canaccord and by
      a director on behalf of the Company and the Directors if such variation
      affects their respective obligations under this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|13.  | COUNTERPARTS AND DELIVERY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | This Agreement may be entered into in any number of
      counterparts (and by facsimile) and by the parties to it on separate
      counterparts each of which when executed and delivered shall be an
      original, but all the counterparts shall together constitute one and the
      same instrument.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|14.  | NOTICES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|14.1 | Any notice or other communication required or authorised
      to be given by any party to another in connection with this Agreement
      shall be in writing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|14.2 | Subject to Clause 15 below, any notice or other
      communication to be given hereunder shall either by sent by facsimile
      transmission, by first class post or by registered airmail to the relevant
      address(es) of the relevant party referred to in this Agreement or any
      other address notified for this purpose and shall be conclusively deemed
      to have been given, if sent by facsimile transmission, at the time of
      printout of a transmission report showing that the correct number of pages
      has been sent without error (unless such notice would otherwise be deemed
      to be given on a day which is not a business day (which for the avoidance
      of doubt means a day other than a Saturday or Sunday when banks are open
      for business in the U.K. and Canada, (a Business Day)) or after
      5.30 pm (London time) on any Business Day, in which case it shall instead
      be deemed to have been given at 9.00 am (London time) on the next
      following Business Day. If sent by first class post notice shall deemed to
      be given on the third Business Day after the date of posting and in the
      case of registered airmail five Business Days from the date of posting.
      Subject to clause 15, a notice to the Directors or to any of them shall be
      sent to such Director(s) at the

11

---

|     | principal office of the Company for the time being or
      such other address notified for this purpose pursuant to this Clause
      14.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|15.  | GOVERNING LAW AND SERVICE OF PROCESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|15.1 | This Agreement shall be governed by and construed in
      accordance with English Law and the parties hereby irrevocably submit to
      the exclusive jurisdiction of the English courts in connection with any
      matter arising therefrom.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|15.2 | The Company and each of the Directors irrevocably appoint
      Field Fisher Waterhouse, 35 Vine Street, London EC3N 2AA as their process
      agent to receive on their behalf service of any process in any proceedings
      in England. Such service shall be deemed completed on delivery to Field
      Fisher Waterhouse, marked for the attention of Anthony Brockbank (whether
      or not such process is forwarded to and received by the Company or the
      appropriate Director (as the case may be). If for any reason either such
      process agent ceases to be able or willing to act as process agent, the
      Company and each of the Directors irrevocably agree to appoint a
      substitute process agent acceptable to Canaccord and to deliver to
      Canaccord a copy of the new process agent's acceptance of that appointment
      within 30 days of such acceptance.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|15.3 | The parties irrevocably consent to any process in a legal
      action or proceedings in connection with this Agreement being served on
      them in accordance with the provisions of this Agreement relating to the
      service of notices. Nothing contained in this Agreement shall affect the
      right to serve process in any other manner permitted by law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|16.  | THIRD PARTY RIGHTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     | Save for the provisions of Schedule 3 (which may be
      enforced by a Canaccord Associate as that term is defined in Schedule
      3), no term of this Agreement shall be enforceable under the Contracts
      (Rights of Third Parties) Act 1999 by a person who is not a party, but
      this does not affect any right or remedy of a third party which exists or
      is available apart from under that Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

EXECUTEDand DELIVEREDas a Deed by the Company
and under hand by the Directors and Canaccord on the day and year first before
written.

12

---

SCHEDULE 1 - THE DIRECTORS

Name
    AddressD Harry W Dobson
    Lylestane Farm Lauder, Berwickshire TD2
      6QY ScotlandBrian A Hinchcliffe
    62 Flint Avenue Larchmont, NY USA 10538Brian E Bayley
    4143 Ranger Crescent North Vancouver, BC
      Canada V7R 3K8S Paul Kostuik
    601  2288 Bellevue Avenue West Vancouver,
      BC Canada V7V 1C6George A Milton
    Feorus Kenmare West IrelandA Murray Sinclair
    1937 Knox Road Vancouver, BC Canada V6T
      1S5


13

---

SCHEDULE 2 - ADDITIONAL TERMS AND CONDITIONS

|1. | Application                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | These are the additional terms and conditions on and
      subject to which Canaccord will provide to the Directors and the Company
      the services described in the nominated adviser and broker agreement of
      which these additional terms and conditions form part (the
      Agreement). Where there is any conflict between the express terms
      of the main body of the Agreement and these terms and conditions, the main
      body of the Agreement will prevail. References to the Engagement
      in this Schedule 2 and in Schedule 3 are references to the engagement of
      Canaccord as the Companys nominated adviser and broker on the terms and
      conditions set out in the Agreement and (prior to its termination) the
      Engagement Letter.                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2. | Canaccords Advice                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company agrees that any advice rendered by Canaccord
      is provided solely for the purposes of the Engagement and for the
      Companys and the Directors benefit and may not be used or relied on for
      any other purpose without Canaccords prior written consent. No reference
      to Canaccord or to Canaccords advice is to be made in any publication
      made by the Company or by any subsidiary or associated company of the
      Company (together the Group) or on behalf of any such company,
      without Canaccords prior consent unless required by any legal or
      regulatory obligation. Unless it is agreed otherwise Canaccord will not be
      responsible for giving or obtaining specialist advice or services in areas
      which are outside Canaccords expertise such as legal (other than
      compliance with the AIM Rules), accounting, taxation or actuarial matters.
      Where specialist advice is obtained by the Company in areas which are
      outside Canaccords expertise, Canaccord will be entitled to rely on such
      advice without having any responsibility to verify its accuracy.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3. | Provision of Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company agrees that it will provide all information
      concerning the business and affairs of the Group which it reasonably
      believes is relevant to Canaccord for the provision of the services
      pursuant to the Agreement and to provide all such other information as
      Canaccord may reasonably request. The Company undertakes that all
      information so provided will be true, accurate and complete in all
      material respects, will not be misleading, and will not contain any
      material omissions. The Company agrees with Canaccord that Canaccord will
      not be responsible for the verification of any such information and shall
      accept no responsibility for its accuracy. The Company undertakes that
      every statement of opinion or intention therein of the Company will be
      honestly held and fairly based and that if anything occurs within a
      reasonable time thereafter to render any such statement untrue, unfair or
      misleading, it will promptly notify Canaccord and take all such steps as
      Canaccord may reasonably require to correct such statement.             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company will ensure that any financial promotion
      which Canaccord is asked to approve on behalf of the Company for the
      purposes of complying with the Financial                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

14

---

|    | Services and Markets Act 2000 and any other document or
      announcement issued to the London Stock Exchange, shareholders or
      otherwise:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3.1 | is true, accurate and complete in all material respects
      and is not misleading and all expressions of opinion, intention or
      expectation it contains are made on reasonable grounds, and that there are
      no facts known to the Company the omission of which would make any such
      advertisement, document or announcement misleading; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3.2 | contains all information required by and otherwise
      complies with all applicable laws and regulations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company accepts that Canaccord is entitled to require
      the Company to make such modifications or amendments thereto as Canaccord
      considers necessary or desirable or to withhold its approval to, or refuse
      to issue, any such document or announcement in its absolute
    discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | If requested by Canaccord to do so, the Company shall
      provide such evidence as Canaccord may reasonably require confirming that
      any document or announcement which it is asked to approve or issue is true
      and complete in all material respects and not misleading and complies with
      all applicable law. The Company will be responsible for the accuracy and
      completeness of such document or announcement and shall be responsible for
      verifying the information contained in it.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company agrees to inform Canaccord of any significant
      steps which the Company or any of its agents or advisers propose to take
      in respect of the Companys business or the Engagement and will ensure
      that Canaccord is appropriately informed of all material developments in
      relation thereto which arise during the term of the Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.  | Fee and Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | In consideration of Canaccord accepting the Engagement
      the Company agrees to pay the Admission Fees, the Nomad Fee, costs,
      charges and expenses referred to in Clause 4 of the main body of the
      Agreement and this Schedule within fourteen days of the date of receipt of
      the invoice in respect thereof, including (without limitation) all
      reasonable out- of-pocket expenses properly incurred by Canaccord
      (including but not limited to travel and hotel expenses), all stamp duty
      and stamp duty reserve tax and any related fines, costs, penalties or
      interest otherwise payable by Canaccord (except on securities transactions
      for its own account or where such arise due to the negligence or default
      of Canaccord), all fees and expenses payable to the London Stock Exchange
      or any other exchange or regulatory body, the reasonable fees and
      out-of-pocket expenses of all legal, accountancy, and other professional
      advisers including the reasonable fees and out-of- pocket expenses of
      Canaccords legal advisers and of receiving bankers and registrars, and
      printing, posting and advertising expenses properly incurred by Canaccord.
      Interest will accrue on any overdue amount at the rate of four per cent.
      over the base rate for the time being of Barclays Bank
  plc.

15

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|    | The Company will promptly upon request by Canaccord
      reimburse to Canaccord the amount of any such reasonable out-of-pocket
      costs, charges and expenses which Canaccord may have paid on behalf of the
      Company in connection with, or during the course of, the Engagement and
      Canaccord is hereby authorised to deduct from any amounts received or held
      by it on the Companys behalf the amount(s) of any such reasonable,
      out-of-pocket costs, charges and expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Where any such amount is reimbursed to Canaccord, the
      Company will in addition pay to Canaccord in respect of VAT:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.1 | if any reimbursement constitutes part of the
      consideration for any supply of services to the Company, such amount as
      equals any input tax payable by Canaccord in respect of the same costs or
      expenses for which Canaccord is unable to take any credit or make any
      recovery, together with the amount of any VAT for which Canaccord is
      properly liable in respect of that supply, and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.2 | if any costs or expenses constitute disbursements
      incurred by Canaccord as agent on behalf of the Company, any VAT
      thereon.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5.  | Confidentiality                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Each of Canaccord and the Company undertakes to keep
      confidential any information concerning the business, affairs, directors
      or employees of the other which comes into its possession during the
      Engagement and not to use any such information for any purpose other than
      that for which it was provided. This obligation of confidentiality shall
      not apply to information which (a) is or becomes public otherwise than
      through a breach of that obligation (b) is obtained from any third party
      otherwise than in breach of any duty of confidentiality owed by that third
      party or (c) is required to be disclosed by order of any court of
      competent jurisdiction or the requirement of any relevant regulatory body
      or by any applicable law or regulation nor where disclosure is necessary
      in connection with the Engagement. The Company acknowledges and accepts
      that Canaccord or a Canaccord Associate (as defined in Schedule 3) may be
      required or that it may be appropriate for Canaccord or a Canaccord
      Associate to disclose information and deliver documentation relating to
      the Company and the Engagement to governmental or regulatory agencies and
      authorities and expressly authorises any such disclosure and delivery. All
      correspondence or documentation written by or contributed to by Canaccord
      or a Canaccord Associate in relation to the Engagement and in Canaccords
      custody or control will remain the sole property of Canaccord.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company acknowledges and accepts that Canaccord may
      be prohibited from disclosing, or that it may be inappropriate for
      Canaccord to disclose, information to the Company by reason of law or
      duties of confidentiality owed to other persons.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Canaccord will not disclose confidential client
      information outside of the Canaccord Group (as defined in paragraph 8
      below) unless required to do so by law or a regulatory authority, to
      facilitate the business you have asked us to undertake or with your
      consent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

16

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|   | The information held on the Company and the Directors is
      confidential and will only be disclosed under the terms of the Data
      Protection Act 1998 (the DPA). By signing this Agreement, the
      Company and the Directors will be consenting to the transmittal of such
      information outside of the European Union and the European Economic Area
      where that is permitted by the DPA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6. | Approval of Documents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company agrees that it will not, and it will procure
      that none of its officers, directors, employees, representatives and
      agents from time to time, subsidiaries, holding company (if any) and each
      of the subsidiaries of such holding company and each of their respective
      officers, directors, employees, representatives and agents from time to
      time (together referred to as Company Associates) will, publish
      or permit or procure the publication of any document, statement or
      communication in connection with or relating to the Engagement without the
      prior consent of Canaccord such consent not to be unreasonably withheld or
      delayed. Canaccord will not be responsible for ensuring the truth,
      accuracy, completeness or fairness of any statement or publications made
      by or on behalf of the Company or any of its other advisers in connection
      with the Engagement hereunder, this being the sole responsibility of the
      Company and its directors. Save where such have been issued or approved by
      Canaccord, the Company will ensure that every announcement, public
      statement or document made or published by the Company or any Company
      Associate or on its behalf relating to the Engagement will comply with all
      applicable laws and regulations. If for any reason any such document,
      statement or communication is made without the consent or approval of
      Canaccord the Company acknowledges that Canaccord will be entitled to
      publish any documents, statements or communications as it thinks fit in
      Canaccords interests.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|7. | Powers of Canaccord                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The appointment by the Company of Canaccord in connection
      with the Engagement confers on Canaccord all powers, authorities and
      discretion on the Companys behalf which are necessary for, reasonably
      incidental to, or customary in the provision of the services to be
      provided pursuant to the Engagement. The Company hereby agrees to ratify
      and confirm everything which Canaccord will lawfully and reasonably do in
      the exercise of any powers, authorities and discretions expressly
      conferred upon it for the purposes of the Engagement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|8. | Material Interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Canaccord is part of a group of companies (the
      Canaccord Group). This group is involved in a range of investment
      and other financial businesses. Canaccord operates as a separate entity
      within this group, and as such has rules and procedures which prohibit the
      disclosure of confidential information about its clients to other members
      of the Canaccord Group for use in their businesses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company accepts that Canaccord, in agreeing to
      provide services to it, does not require any other member of the Canaccord
      Group to restrict its activities in any way nor                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

17

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|    | to provide the Company or Canaccord with any information
      whatsoever about, or derived from, those activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | So far as Canaccords own activities are concerned,
      potential conflicts may on occasion arise between its duties to the
      Company and to other of its clients and between its duties to the Company
      and its own interests. Canaccord has established, as permitted under the
      rules of The Financial Services Authority, Chinese Wall procedures and
      an independence policy designed to ensure that in providing corporate
      finance services to any particular client, the individuals are insulated
      from information known to individuals working in other
divisions.                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company accepts that Canaccord and any member of the
      Canaccord Group may, for reasons such as are described above, have
      interests or duties which conflict with the Companys interests and would
      otherwise conflict with the duties owed by Canaccord to the Company.
      Canaccord will be obliged to disregard any such interest when it is acting
      for the Company. The Company also accepts that, in acting for it,
      Canaccord will not be required to disclose to it, nor to use for its
      benefit, any information known to Canaccord which (i) belongs to or is
      confidential to another client of Canaccord or (ii) belongs to or is
      confidential to any other member of the Canaccord Group or (iii) which
      belongs to or is confidential to the Canaccord Group and relates to some
      other part of its business than the provision of corporate finance
      services.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|9.  | Companys Money                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Funds belonging to the Company which come under the
      custody or control of Canaccord during the provisions of its services
      hereunder will unless otherwise agreed with the Company be treated by
      Canaccord as clients money for the purposes of the Financial Services
      Authority Client Asset Rules where those Rules require Canaccord to do
      so.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10. | Authorisation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Except where the Company expressly instructs Canaccord
      otherwise, Canaccord is entitled to assume that instructions (whether or
      not in writing and howsoever communicated) have been properly authorised
      by the Company if they are given or purport to be given by an individual
      or person who is or purports to be and is reasonably believed by Canaccord
      to be a director, employee or authorised agent of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|11. | Legal and Regulatory Requirements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company undertakes that it has and it will maintain
      all necessary consents and authorisations required by it for Canaccord to
      carry out the Engagement. The Company agrees that it will comply and will
      procure that all Company Associates will comply with all relevant laws and
      regulations in any relevant jurisdiction in relation to the Engagement
      applicable to it and them including, in relation to the United Kingdom, if
      and to the extent so applicable the Companies Acts, the Financial Services
      and Markets Act 2000, the Public Offers of Securities Regulations 1995,
      the Criminal Justice Act 1993, the City Code on Takeovers and Mergers, the
      Substantial Acquisitions Rules, the                                                                                                                                                                             

18

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|     | instructions of the Panel on Take-overs and Mergers and
      the Rules and Regulations of the London Stock Exchange (including the AIM
      Rules).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | The Company undertakes to obtain appropriate advice in
      respect of all laws and regulations which may be applicable to it in the
      UK or any other jurisdiction in connection with the Engagement and to
      communicate such advice to Canaccord if it is or may be relevant to the
      carrying out by Canaccord of its services to the Company.                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | In carrying out its obligations to the Company pursuant
      to the Agreement, Canaccord is subject to (as well as the range of
      applicable laws) a number of rules and regulations and the requirements of
      a number of regulators. Particular examples are the rules and regulations
      of the London Stock Exchange, the Panel on Takeovers and Mergers, The
      Financial Services Authority and the Bank of England. The Company agrees
      that Canaccords duties to it will not restrict Canaccords freedom to
      take all steps which Canaccord considers to be necessary to comply with
      the laws, rules and regulations applicable to Canaccord.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|12.  | Conduct of the Engagement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|12.1 | The Company agrees that it will inform Canaccord in
      advance of any significant steps which the Company or any of its agents or
      advisers propose to take in respect of the Engagement and will ensure that
      Canaccord is fully informed of all material developments which arise
      during the course of the Engagement. In particular the Company will
      consult Canaccord before:                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|12.2 | The Company agrees that it will take all such steps, give
      all such undertakings and do or procure to be done all such things as may
      be necessary to comply with the requirements of the London Stock Exchange
      in connection with, or during the course of, the Engagement.                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|13.  | Transactions in Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | Any transactions in investments undertaken by Canaccord
      for or on behalf of the Company will be undertaken subject to the Rules of
      the Financial Services Authority and the rules and customs of the exchange
      or market and any clearing house on or through which such transactions are
      undertaken, settled or executed.                                                                                                                                                                                                                                                                                                                                     

19

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|14. | Use of Sub-Agents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Canaccord may in providing services to the Company
      hereunder employ such sub-agents (including any Canaccord Associate as
      defined in Schedule 3) as it may reasonably determine and on such terms
      and on such conditions as it may reasonably determine and the fees and
      expenses of any such sub-agent will be paid or reimbursed by the Company
      pursuant to paragraph 4 above.                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|15. | Status of the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Company will be treated by Canaccord as an
      intermediate customer (as defined by the Rules of the Financial Services
      Authority) in respect of the Engagement.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|16. | Illegality                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | If any part of the Agreement is or becomes or is declared
      illegal, invalid or unenforceable for any reason whatsoever by any court
      of competent jurisdiction, such part will be deemed to be deleted,
      provided always that if any such deletion substantially affects or alters
      the commercial basis of these terms and conditions, the parties will
      negotiate in good faith to amend and modify them as may be necessary or
      desirable in the circumstances.                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|17. | Amendments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | These terms and conditions are subject to change at any
      time by Canaccord sending to the Company a written notice describing the
      relevant change(s) and such change(s) will become effective on the date
      specified in the notice, which will be on or after the date on which the
      notice is deemed to be received by the Company. No such change will affect
      any legal rights or obligations which may have previously accrued to or
      been incurred by Canaccord or the Company.                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|18. | Force Majeure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | In the event of any failure, interruption or delay in the
      performance of any persons obligations hereunder resulting from acts,
      events or circumstances not reasonably in that persons control,
      including, but not limited to, industrial disputes, acts or regulations of
      any governmental or supranational bodies or authorities, breakdown,
      failure or malfunction of any telecommunications or computer services,
      that person will not be liable or have any responsibility of any kind for
      any loss or damage incurred or suffered by any other person as a result
      thereof.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|19. | Recording of telephone conversations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Canaccord may use voice recording procedures when
      receiving instructions on orders or when giving advice. Such recordings
      will be the sole property of Canaccord and will be kept confidential other
      than to assist in the resolution of any relevant dispute or as required by
      law or other regulatory authority. In either case, where
  reasonably                                                                                                                                                                                                                                                     

20

---

|     | practicable, Canaccord will endeavour to give prior
      notice of such disclosure to the Company.                                                                                                                                                                                                                                                                                                                            
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                
|20.  | City directories                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | Unless advised to the contrary, Canaccord may nominate
      the Company for inclusion as a client of Canaccord in reputable
      directories of financial advisory and stockbroking relationships and when
      requested so to do, the Company agrees to consent to its inclusion
      therein.                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                
|21.  | Money Laundering Regulations                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                
|21.1 | The Company agrees that it will provide to Canaccord such
      evidence of its identity and that of any Company Associate and any of
      their respective directors, shareholders, promoters and controllers as
      Canaccord may reasonably require in order to comply with Canaccords
      obligations under any legislation and regulations against money
      laundering, terrorism and drug trafficking.          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                
|21.2 | Canaccord may terminate the Engagement if the Company
      fails to comply with any of the provisions of paragraph 22.1 and may at
      any time make such disclosures to any relevant competent authority as
      Canaccord sees fit as a result of any such failure or otherwise if it
      suspects that the Company or any other company or person referred to in
      paragraph 22.1 is involved in money laundering.

21

---

SCHEDULE 3 - INDEMNITY

|1.  | In consideration of the services to be provided by
      Canaccord in connection with the Engagement the Company (and for the
      avoidance of doubt not the Directors in their personal capacity) hereby
      irrevocably agrees with Canaccord for itself and, on the basis that
      Canaccord shall enjoy an absolute discretion as to the enforcement of any
      claim under this indemnity, as trustee for each and every Canaccord
      Associate (as defined in paragraph 5 below) to indemnify and to hold
      Canaccord and each Canaccord Associate harmless from and against all or
      any losses, charges, expenses, claims, actions, damages, liabilities,
      demands or proceedings whatsoever brought or established against Canaccord
      or any Canaccord Associate by any person, government, governmental agency
      or regulatory body whatsoever and against all losses, costs, charges,
      expenses or taxes which Canaccord or any Canaccord Associate may suffer or
      incur (including but not limited to all such losses, costs, charges or
      expenses suffered or incurred in (i) responding to, disputing or defending
      any claim, action, liability, demand or proceedings as aforesaid
      (including the aggregate amount paid in reasonable settlement of any
      actions, suits, proceedings or claims); (ii) appealing against any
      judgment, award or decision of any court, tribunal, arbitrator or
      regulatory or other authority; (iii) connection with any investigation
      conducted by on or behalf of any authority; (iv) establishing its right to
      be indemnified pursuant to this paragraph; and (v) in seeking advice as to
      any claim, action, liability, demand, proceedings or investigation
      aforesaid) and which in any such case arises, directly or indirectly, out
      of or in connection with:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|1.1 | any publication, statement or communication not
      containing or being alleged not to contain all information required to be
      stated therein or being alleged to be untrue, inaccurate, incomplete or
      misleading or as having been made negligently or otherwise without the
      required standard of skill and care or reasonableness; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|1.2 | the provision by Canaccord or any sub-agent appointed by
      Canaccord of services to the Company or any Company Associate pursuant to
      the Engagement or otherwise arising by reason of or in connection with the
      Engagement; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|1.3 | any breach by the Company of any of its obligations
      under, or any of the terms and conditions of, the Agreement; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|1.4 | any breach or alleged breach of the laws or regulations
      of any country including any rule or regulation which does not have the
      force of law,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | and which does not in any such case arise from (i) the
      finally judicially determined fraud, negligence or wilful default of
      Canaccord or the Canaccord Associate concerned; or (ii) a material breach
      by Canaccord or the Canaccord Associate concerned of its duties or
      obligations under the Engagement, the Financial Services and Markets Act
      2000 or the Rules of the Financial Services Authority.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2.  | All sums payable to Canaccord or any Canaccord Associate
      under the Agreement will be paid free and clear of all deductions or
      withholdings unless the deduction or withholding is required by law, in
      which event the Company will pay such additional amount as
  will                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

22

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|    | be required to ensure that the net amount received by
      Canaccord or that Canaccord Associate will equal the full amount which
      would have been received by it had no such deduction or withholding been
      made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3.  | If the United Kingdom Inland Revenue or any other taxing
      authority brings into charge to tax any sum payable to Canaccord or any
      Canaccord Associate by way of reimbursement pursuant to the Agreement then
      the amount so payable will be grossed up by such amount as will ensure
      that after deduction of the tax so chargeable there will be left a sum
      equal to the amount that would otherwise be payable hereunder as a result
      of such reimbursement or indemnity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.  | No claim will be made against Canaccord or any Canaccord
      Associate to recover any loss or damage which the Company may suffer or
      incur by reason of the carrying out by Canaccord of its obligations under
      the Agreement provided that such loss or damage does not arise from the
      finally judicially determined negligence or wilful default of Canaccord or
      the Canaccord Associate concerned.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|5.  | References herein to Canaccord Associate(s) are
      to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|5.1 | Canaccord's officers, directors and employees from time
      to time;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|5.2 | Canaccords subsidiaries and holding companies (if any)
      and each of the subsidiaries of any such holding companies and each of
      their respective officers, directors and employees from time to time;
      and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|5.3 | (to the extent that they are not included in
      sub-paragraphs 5.1 and 5.2 of this paragraph 5) persons connected with
      Canaccord (as such expression is defined in the Rules of The Financial
      Services Authority) as regards any transaction contemplated by the
      Engagement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|6.  | If Canaccord or any Canaccord Associate receives notice
      of any claim in connection with the Engagement, Canaccord will, upon
      becoming aware of the same, insofar as may be consistent with the terms of
      any relevant insurance policy, and provided that any action taken as
      hereafter mentioned will not in Canaccords view be (i) prejudicial to any
      obligation of confidentiality or other legal obligation which Canaccord or
      any Canaccord Associate owes to any third party; or (ii) against the best
      interests of any Canaccord Associate give written notice to the Company
      and subject to Canaccord and all Canaccord Associates being indemnified to
      Canaccords reasonable satisfaction against all liabilities, losses, costs
      and expenses which might be incurred as a result of taking such action as
      hereafter mentioned, Canaccord will, and so far as it is able procure that
      each Canaccord Associate will, give such information in relation to the
      claim, fact or circumstance as the Company may reasonably request and
      (insofar as is practicable in the circumstances) will consult with and
      have regard to the Companys views expressed in writing in relation
      thereto.

23

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|7. | This indemnity is in addition to any rights which
      Canaccord or any Canaccord Associate may have by virtue of any other
      existing or future deed or document or at common law, statute or otherwise
      including, but not limited to, any right of contribution.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                              
|8. | This indemnity will be governed by and construed in
      accordance with the laws of England and the Company irrevocably submits to
      the exclusive jurisdiction of the English courts in connection with any
      matter arising therefrom.                           

24

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SCHEDULE 4 - THE OFFERING

|Issuer:          | Kirkland Lake Gold Inc. (the Company).                                                                                                                                                                                                                                                                                                                                                                                              
|---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Agent:           | Canaccord Capital (Europe) Limited.                                                                                                                                                                                                                                                                                                                                                                                                   
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Offering:        | Placing of New Common Shares, by way of an Institutional
      Placing.                                                                                                                                                                                                                                                                                                                                                               
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Amount:          | Up to £10 million on a reasonable endeavours basis, or
      such other amount as agreed between the Company and the Agent.                                                                                                                                                                                                                                                                                                           
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Price:           | In the context of the market, as mutually agreed by the
      Company and the Agent.                                                                                                                                                                                                                                                                                                                                                  
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Jurisdiction:    | Sales to European investors, under applicable
      regulations.                                                                                                                                                                                                                                                                                                                                                                      
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Admission:       | The Common Shares of the Company are currently listed on
      the Toronto Stock Exchange in Canada (TSX : KLG). Prior to the Offering,
      the Company intends to admit its shares to trading on the Alternative
      Investment Market, subject to approval by the London Stock Exchange.                                                                                                                                        
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Commission:      | The Company will pay cash commission of 6.0 per cent. on
      the gross proceeds of the Offering, payable on Closing. The Agent will be
      entitled to broker warrants equal to 5 per cent. of the securities of the
      Company sold pursuant to the Offering. Each broker warrant will entitle
      the holder to acquire one common share of the Company at the Offering
      price for a period of 18 months from Closing.
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Use of Proceeds: | The proceeds will be used, inter alia, to provide
      working capital for the Company.                                                                                                                                                                                                                                                                                                                                              
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Syndicate:       | As mutually agreed by the Company and Canaccord,
      additional placing agents may be invited to participate in a syndicate to
      place shares in the Company pursuant to the Offering. In the event of a
      syndicate being formed Canaccord will not be required to allocate more
      than 25 per cent. of the shares to be placed to syndicate members.                                                                  
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Closing Date:    | 31 July 2004 or such other date as mutually agreed by the
      Company and the Agent.                                                                                                                                                                                                                                                                                                                                                

25

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|Signed by                                  | ) |       
|------------------------------------------ | - | ------
|duly authorised for and on behalf of       | ) |       
|CANACCORD CAPITAL (EUROPE) LIMITED         | ) |       
|                                           |   |       
|                                           |   |       
|EXECUTEDand DELIVERED                      | ) |       
|as a DEEDby KIRKLAND LAKE GOLD INC.        | ) |       
|acting by its duly authorised signatories: | ) |       
|                                           |   | Title:
|                                           |   |       
|                                           |   |       
|                                           |   |       
|                                           |   | Title:

Signed byD Harry W Dobson

****Signed byBrian A
Hinchcliffe

Signed by Brian E Bayley

Signed byS Paul Kostuik

Signed byGeorge A Milton

Signed by A Murray Sinclair

26

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