Document:

Exhibit 4.1

 

VISTA GOLD CORP.

- and -

COMPUTERSHARE TRUST COMPANY OF CANADA

 

 

 

WARRANT INDENTURE

 

Providing for the Issue of up to

649,684 Warrants

 

 

 

February 2, 2006

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE ONE INTERPRETATION

  	
  1

  
	
   

  	
  1.1

  	
  Definitions

  	
  1

  
	
   

  	
  1.2

  	
  Words Importing the Singular and Gender

  	
  5

  
	
   

  	
  1.3

  	
  Interpretation Not Affected by Headings

  	
  5

  
	
   

  	
  1.4

  	
  Day Not a Business Day

  	
  5

  
	
   

  	
  1.5

  	
  Time of the Essence

  	
  5

  
	
   

  	
  1.6

  	
  Currency

  	
  5

  
	
   

  	
  1.7

  	
  Applicable Law

  	
  5

  
	
   

  	
  1.8

  	
  English Language

  	
  5

  
	
   

  	
  1.9

  	
  Meaning of “outstanding” for Certain Purposes

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TWO ISSUE OF
  WARRANTS

  	
  6

  
	
   

  	
  2.1

  	
  Creation and Issue of Warrants

  	
  6

  
	
   

  	
  2.2

  	
  Terms of Warrants

  	
  6

  
	
   

  	
  2.3

  	
  Warrant Certificates

  	
  7

  
	
   

  	
  2.4

  	
  Issue in Substitution for Lost Warrants

  	
  8

  
	
   

  	
  2.5

  	
  Warrantholder not a Shareholder

  	
  8

  
	
   

  	
  2.6

  	
  Warrants to Rank Pari Passu

  	
  8

  
	
   

  	
  2.7

  	
  Signing of Warrant Certificates

  	
  8

  
	
   

  	
  2.8

  	
  Certification by the Trustee or Co-transfer
  Agent

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE THREE EXCHANGE AND
  OWNERSHIP OF WARRANTS

  	
  9

  
	
   

  	
  3.1

  	
  Exchange of Warrants

  	
  9

  
	
   

  	
  3.2

  	
  Charges for Exchange or Transfer

  	
  9

  
	
   

  	
  3.3

  	
  Ownership of Warrants

  	
  10

  
	
   

  	
  3.4

  	
  Registration and Transfer of Warrants

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FOUR EXERCISE OF
  WARRANTS

  	
  11

  
	
   

  	
  4.1

  	
  Method of Exercise of Warrants

  	
  11

  
	
   

  	
  4.2

  	
  Effect of Exercise of Warrants

  	
  12

  
	
   

  	
  4.3

  	
  Partial Exercise of Warrants

  	
  12

  
	
   

  	
  4.4

  	
  No Fractional Shares or Warrants

  	
  12

  
	
   

  	
  4.5

  	
  Accounting and Recording

  	
  12

  
	
   

  	
  4.6

  	
  Cancellation of Surrendered Warrants

  	
  13

  
	
   

  	
  4.7

  	
  Expiration of Warrants

  	
  13

  
	
   

  	
  4.8

  	
  Share Certificates

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FIVE ADJUSTMENT OF
  EXERCISE NUMBER

  	
  14

  
	
   

  	
  5.1

  	
  Definitions

  	
  14

  
	
   

  	
  5.2

  	
  Adjustment of Exercise Number

  	
  14

  
	
   

  	
  5.3

  	
  Subscription Rights Adjustment Rules

  	
  17

  
	
   

  	
  5.4

  	
  Postponement of Subscription

  	
  18

  
	
   

  	
  5.5

  	
  Notice of Certain Events

  	
  19

  
	
   

  	
  5.6

  	
  Protection of Trustee

  	
  19

  
	
   

  	
  5.7

  	
  Proceedings Prior to Any Action Requiring
  Adjustment

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE SIX RIGHTS AND
  COVENANTS

  	
  19

  
	
   

  	
  6.1

  	
  Purchase of Warrants

  	
  19

  
	
   

  	
  6.2

  	
  General Covenants of the Corporation

  	
  20

  
	
   

  	
  6.3

  	
  Trustee’s Remuneration and Expenses

  	
  21

  
	
   

  	
  6.4

  	
  No Dividends or Distributions

  	
  21

  
	
   

  	
  6.5

  	
  Performance of Covenants by Trustee

  	
  21

  

 

i

 

	
  ARTICLE SEVEN ENFORCEMENT

  	
  21

  
	
   

  	
  7.1

  	
  Suits by Warrantholders

  	
  21

  
	
   

  	
  7.2

  	
  Immunity of Shareholders, Directors and
  Officers

  	
  22

  
	
   

  	
  7.3

  	
  Limitation of Liability

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT MEETINGS OF
  WARRANTHOLDERS

  	
  22

  
	
   

  	
  8.1

  	
  Right to Convene Meetings

  	
  22

  
	
   

  	
  8.2

  	
  Notice

  	
  22

  
	
   

  	
  8.3

  	
  Chairman

  	
  22

  
	
   

  	
  8.4

  	
  Quorum

  	
  23

  
	
   

  	
  8.5

  	
  Power to Adjourn

  	
  23

  
	
   

  	
  8.6

  	
  Show of Hands

  	
  23

  
	
   

  	
  8.7

  	
  Poll

  	
  23

  
	
   

  	
  8.8

  	
  Voting

  	
  23

  
	
   

  	
  8.9

  	
  Regulations

  	
  24

  
	
   

  	
  8.10

  	
  Corporation and Trustee may be Represented

  	
  24

  
	
   

  	
  8.11

  	
  Powers Exercisable by Extraordinary Resolution

  	
  24

  
	
   

  	
  8.12

  	
  Meaning of “Extraordinary Resolution”

  	
  25

  
	
   

  	
  8.13

  	
  Powers Cumulative

  	
  26

  
	
   

  	
  8.14

  	
  Minutes

  	
  26

  
	
   

  	
  8.15

  	
  Instruments in Writing

  	
  26

  
	
   

  	
  8.16

  	
  Binding Effect of Resolutions

  	
  27

  
	
   

  	
  8.17

  	
  Holdings by Corporation Disregarded

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE NINE SUPPLEMENTAL
  INDENTURES AND SUCCESSOR COMPANIES

  	
  27

  
	
   

  	
  9.1

  	
  Provision for Supplemental Indentures for
  Certain Purposes

  	
  27

  
	
   

  	
  9.2

  	
  Correction of Manifest Errors

  	
  28

  
	
   

  	
  9.3

  	
  Amending Adjustment Provisions

  	
  28

  
	
   

  	
  9.4

  	
  Successor Companies

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TEN CONCERNING THE
  TRUSTEE

  	
  29

  
	
   

  	
  10.1

  	
  Trust Indenture Legislation

  	
  29

  
	
   

  	
  10.2

  	
  Rights and Duties of Trustee

  	
  29

  
	
   

  	
  10.3

  	
  Evidence, Experts and Advisers

  	
  30

  
	
   

  	
  10.4

  	
  Securities, Documents and Monies Held by
  Trustee

  	
  30

  
	
   

  	
  10.5

  	
  Action by Trustee to Protect Interests

  	
  30

  
	
   

  	
  10.6

  	
  Trustee not Required to Give Security

  	
  31

  
	
   

  	
  10.7

  	
  Protection of Trustee

  	
  31

  
	
   

  	
  10.8

  	
  Indemnification

  	
  32

  
	
   

  	
  10.9

  	
  Replacement of Trustee

  	
  32

  
	
   

  	
  10.10

  	
  Conflict of Interest

  	
  33

  
	
   

  	
  10.11

  	
  Acceptance of Trust

  	
  33

  
	
   

  	
  10.12

  	
  Trustee not to be Appointed Receiver

  	
  33

  
	
   

  	
  10.13

  	
  Third Party Interests

  	
  33

  
	
   

  	
  10.14

  	
  Compliance with Money Laundering Legislation

  	
  33

  
	
   

  	
  10.15

  	
  Compliance with Privacy Laws

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN GENERAL

  	
  34

  
	
   

  	
  11.1

  	
  Notice to Corporation and Trustee

  	
  34

  
	
   

  	
  11.2

  	
  Notice to Warrantholders

  	
  35

  
	
   

  	
  11.3

  	
  Satisfaction and Discharge of Indenture

  	
  35

  
	
   

  	
  11.4

  	
  Sole Benefit of Parties and Warrantholders

  	
  35

  
	
   

  	
  11.5

  	
  Discretion of Directors

  	
  36

  
	
   

  	
  11.6

  	
  Counterparts and Formal Date

  	
  36

  

 

ii

 

	
  SCHEDULE
  “A”

  	
  1

  

 

iii

 

THIS WARRANT INDENTURE dated as
of February 2, 2006,

 

BETWEEN:

 

VISTA GOLD CORP., a corporation continued under the laws of the
Yukon Territory, having an office at Suite 5, 7961 Shaffer Parkway, Littleton,
Colorado, U.S.A. 80127

 

(the “Corporation”)

 

AND:

 

COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company organized under
the laws of Canada, having an office at 510 Burrard Street, Vancouver,
British Columbia, V6C 3B9

 

(the “Trustee”)

 

WITNESSES
THAT WHEREAS:

 

A.                                                                                   the Corporation proposes to create
and issue up to 649,684 Warrants
exercisable by the holders thereof on the terms hereinafter set forth for the
acquisition of common shares in the capital of the Corporation;

 

B.                                                                                     the Corporation is duly authorized
to create and issue the Warrants to be issued as herein provided;

 

C.                                                                                     all things necessary have been done
and performed to make the Warrants, when certified by the Trustee and issued
and delivered as provided in this Indenture, legal, valid and binding upon the
Corporation with the benefits of and subject to the terms of this Indenture; and

 

D.                                                                                    the Trustee has agreed to enter into
this Indenture and to hold all rights, interests and benefits contained herein
for and on behalf of those persons who become holders of Warrants from time to
time issued pursuant to this Indenture;

 

NOW THEREFORE
in consideration of the premises and the covenants of the parties, the
Corporation hereby appoints the Trustee as trustee for the Warrantholders, to
hold all rights, interests and benefits contained herein for and on behalf of
those persons who become holders of Warrants from time to time issued pursuant
to this Indenture and it is hereby agreed and declared as follows:

 

ARTICLE ONE

 

INTERPRETATION

 

1.1                                                                               Definitions

 

In this Indenture and in the recitals and schedules hereto, unless
there is something in the subject matter or context inconsistent therewith, the
following phrases and words shall have the following meanings:

 

1

 

(a)                                  “Applicable Legislation” means the
provisions of any statute of Canada or a province thereof, and the regulations
under any such statute, relating to trust indentures or the rights, duties or
obligations of corporations and trustees under trust indentures as are from
time to time in force and applicable to this Indenture;

 

(b)                                 “board” means the Board of Directors of the
Corporation;

 

(c)                                  “business day” means a day that is not a
Saturday, Sunday, or civic or statutory holiday in the City of Vancouver,
British Columbia;

 

(d)                                 “Corporation” means Vista Gold Corp. and its
lawful successors from time to time as provided for in section 9.4;

 

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

 

(f)                                    “Convertible Security” means a security of
the Corporation (other than the Warrants) or any other issuer convertible into
or exchangeable for or otherwise carrying the right to acquire Shares;

 

(g)                                 “Co-transfer Agent” has the meaning
given in section 2.1;

 

(h)                                 “counsel” means a barrister or solicitor
(who may be an employee of the Corporation) or a firm of barristers and
solicitors (who may be counsel for the Corporation) in both cases acceptable to
the Trustee;

 

(i)                                     “Current Market Price” of the Shares at any
date means the weighted average trading price of the Shares on the Toronto
Stock Exchange or the American Stock Exchange as may be selected for that
purpose by the board or, if the Shares are not then listed on the Toronto Stock
Exchange or the American Stock Exchange, on such other Canadian or United
States stock exchange as may be selected for that purpose by the board, or, if
the Shares are not then listed on any Canadian or United States stock exchange,
in the over-the-counter market, during the ten most recent consecutive trading
days ending on a date not earlier than the fifth trading day before such date;
provided that the weighted average trading price shall be determined by
dividing that aggregate sale price of all Shares sold on the said exchange or
market, as the case may be, during the said ten consecutive trading days by the
total number of Shares so sold; and provided further that, if the Shares are
not listed and posted for trading on any stock exchange in Canada or the United
States or traded in the over-the-counter market, the Current Market Price shall
be determined by the board of directors in accordance with generally accepted
accounting principles;

 

(j)                                     “director” means a director of the
Corporation for the time being, and reference without more to action by the
directors means action by the directors of the Corporation as a board or,
whenever duly empowered, action by an executive committee of the board, in each
case by resolution duly passed;

 

(k)                                  “dividends” means dividends or distributions
(payable in cash or in securities, property or assets of equivalent value)
declared payable on the Shares;

 

2

 

(l)                                     “dividends paid in the ordinary course”
means such dividends or distributions declared payable on a Share in any fiscal
year of the Corporation to the extent that such dividends or distributions in
the aggregate do not exceed 5% of the applicable Exercise Price and for such
purposes the amount of any dividends or distributions paid in other than cash
or shares shall be the fair market value of such dividends or distributions as
determined by the directors;

 

(m)                               “Exercise Date” with respect to any Warrant
means the date on which the Warrant Certificate evidencing such Warrant is duly
surrendered in accordance with the provisions of section 4.1;

 

(n)                                 “Exercise Number” at any time, means that
number of Shares that Warrantholders are entitled to receive from time to time
for each Warrant held upon exercise of the rights attached to the Warrant as
that number may be adjusted by Article Five hereof and that number, as at the
date hereof, is equal to one Share for each Warrant;

 

(o)                                 “Exercise Price” has the meaning given in
section 2.2;

 

(p)                                 “Exercise Period” means the period
commencing on the date the Warrants are issued in accordance with Section 2.1
and ending at 4:30 p.m. (Vancouver time) on the Expiry Date;

 

(q)                                 “Expiry Date” means February 2, 2008;

 

(r)                                    “Extraordinary Resolution” has the meaning
given in sections 8.12 and 8.15;

 

(s)                                  “person” means an individual, a corporation,
a partnership, a trust or any unincorporated organization, and words importing
persons have a similar meaning;

 

(t)                                    “Provinces” means the provinces of British
Columbia and Ontario;

 

(u)                                 “Registrar” means a registrar, from time to
time, of the Warrants appointed pursuant to subsection 3.4(1);

 

(v)                                 “Registration Notice” has the meaning given
in section 2.3(2);

 

(w)                               “Registration Statement” means a
registration statement under the U.S. Securities Act relating to the Shares
pursuant to the terms of the subscription agreements of even date between the
Corporation and purchasers of units of the Corporation, each unit comprised of
one Share and one Warrant;

 

(x)                                   “Regulation S” means Regulation S under the
U.S. Securities Act;

 

(y)                                 “Securities Commissions” means,
collectively, the United States Securities and Exchange Commission and the
securities commission or other securities regulatory authority under each of
the applicable Securities Laws of the Provinces;

 

(z)                                   “Securities Laws” means, collectively, the
applicable securities laws of each of Canada, the United States, the Provinces
and the respective regulations made and forms prescribed thereunder together
with all applicable published rules, policy statements, notices, blanket orders
and rulings of the Securities Commissions;

 

3

 

(aa)                            “Shares” means fully paid and non-assessable
common shares without par value in the capital of the Corporation, provided
that if the exercise rights are subsequently adjusted or altered pursuant to
subsection 5.2(4) or (5), “Shares”
shall thereafter mean the shares or other securities or property that a
Warrantholder is entitled to on an exchange after the adjustment;

 

(bb)                          “shareholder” means an owner of record of
one or more Shares or shares of any other class or series of the Corporation;

 

(cc)                            “subsidiary of the Corporation” means a
corporation, more than 50% of the outstanding voting shares of which are owned,
directly or indirectly, other than by way of security only, by the Corporation
or by one or more subsidiaries of the Corporation; and, as used in this
definition, “voting shares” means shares of a class or classes ordinarily
entitled to vote for the election of a majority of the directors of a
corporation irrespective of whether or not shares of any other class or classes
shall have or might have the right to vote for directors by reason of the
happening of any contingency;

 

(dd)                          “this Warrant Indenture”, “this Indenture”, “herein”, “hereby”
and similar expressions mean or refer to this Warrant Indenture and any
indenture, deed or instrument supplemental or ancillary hereto; and the
expressions “Article”, “section”, “subsection”, “paragraph” or “clause”
followed by a number or letter mean and refer to the specified Article,
section, subsection, paragraph or clause of this Indenture;

 

(ee)                            “trading day” with respect to a stock
exchange means a day on which Shares may be traded through the facilities of
such stock exchange, and with respect to the over-the-counter market means a
day on which Shares may be traded through facilities of such over-the-counter
market;

 

(ff)                                “Transfer Agent” means the transfer agent
for the time being of the Shares;

 

(gg)                          “Trustee” means Computershare Trust Company
of Canada, or any lawful successor thereto in the trusts hereby created including
through the operation of section 10.9;

 

(hh)                          “United States” means the United States as
that term is defined in Regulation S;

 

(ii)                                  “U.S. Person” means a U.S. Person as that
term is defined in Regulation S;

 

(jj)                                  “U.S. Securities Act” means the United
States Securities Act of 1933, as amended;

 

(kk)                            “Warrant Certificates” means certificates
substantially in the form attached as Schedule “A” hereto or such other form as
may be approved under subsection 2.3(1) evidencing Warrants;

 

(ll)                                  “Warrantholders” or “holders” means the registered holders of
Warrants;

 

(mm)                      “Warrantholders’ Request” means an
instrument signed in one or more counterparts by a Warrantholder or
Warrantholders entitled to purchase, in the aggregate, not less than 25% of the
aggregate number of Shares that could be acquired pursuant to all the Warrants
then unexercised and outstanding requesting the Trustee to take some action or
proceeding specified therein;

 

4

 

(nn)                          “Warrants” means the warrants authorized to
be created by the Corporation under section 2.1 and issued and certified
under this Indenture entitling the holders thereof to acquire Shares and
includes warrants and rights evidenced by Warrant Certificates; and

 

(oo)                          “written order of the Corporation”, “written direction of the Corporation”, “written request of the Corporation”, “written consent of the Corporation” and “certificate of the Corporation” mean
respectively a written order, request, consent and certificate signed in the
name of the Corporation by any one director or officer and may consist of
one or more instruments so executed.

 

1.2                                                                                 Words
Importing the Singular and Gender

 

Words importing the singular include the plural and vice versa and
words importing a particular gender include all genders.

 

1.3                                                                                 Interpretation Not Affected by Headings

 

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

 

1.4                                                                                 Day Not a Business Day

 

In the event that the Expiry Date or any day on or before which any
action is required to be taken hereunder is not a business day, then the Expiry
Date shall be on or the action shall be required to be taken on or before the
next succeeding day that is a business day.

 

1.5                                                                                 Time of the Essence

 

Time shall be of the essence in all respects in this Indenture, the
Warrants and the Warrant Certificates.

 

1.6                                                                                 Currency

 

Except as otherwise stated, all dollar amounts herein are expressed in
lawful money of the United States.

 

1.7                                                                                 Applicable Law

 

This Indenture, the Warrants and the Warrant Certificates shall be
governed by, construed and enforced in accordance with the laws of the Province
of British Columbia and shall be treated in all respects as British Columbia
contracts.

 

1.8                                                                                 English Language

 

The
parties hereto have declared that they have required that this Indenture and
all other documents related hereto be in the English language.

 

Les
parties aux présentes déclarent qu’elles ont exigé que la présente convention,
de même que tous les documents s’y rapportant, soient rédigés en anglais.

 

5

 

1.9                                                                                 Meaning of “outstanding” for Certain Purposes

 

Except as provided in section 4.7, every Warrant Certificate
certified and delivered by the Trustee hereunder shall be deemed to be
outstanding until it has been surrendered to the Trustee pursuant to this
Indenture, provided however that:

 

(a)                                  where the number of Warrants that
has been exercised is less than the number represented by a Warrant Certificate
surrendered in connection with the exercise, only the unexercised Warrants
shall be deemed to be outstanding;

 

(b)                                 where a Warrant Certificate has been issued in substitution for a Warrant Certificate
that has been lost, stolen or destroyed, only the latest Warrant Certificate
issued shall be counted for the purpose of determining the Warrants
outstanding; and

 

(c)                                  for the
purpose of any provision of this Indenture entitling holders of outstanding
Warrants to vote, sign consents, requests or other instruments or take any
other action under this Indenture, Warrants owned legally or equitably by the
Corporation or any subsidiary of the Corporation shall be disregarded, except
that:

 

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

 

(ii)                                  Warrants so
owned that have been pledged in good faith other than to the Corporation or any
subsidiary of the Corporation shall not be so disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee’s right to vote the
Warrants in the pledgee’s discretion free from the control of the Corporation
or any subsidiary of the Corporation pursuant to the terms of the pledge.

 

ARTICLE TWO

 

ISSUE OF
WARRANTS

 

2.1                                                                                 Creation and Issue
of Warrants

 

A total of up to 649,684 Warrants, each entitling
the holder thereof to acquire from the Corporation on exercise thereof, subject
to adjustment as provided for in section 2.2 and Article Five, one
Share, are hereby authorized to be created and issued by the Corporation upon
the terms and conditions herein set forth and the Warrant Certificates shall be
executed by the Corporation and certified by or on behalf of the Trustee, or by
such other person as the Corporation may from time to time appoint with the
approval of the Trustee (hereinafter referred to as the “Co-transfer Agent”), upon the written
direction of the Corporation and delivered by the Trustee in accordance with
section 2.3.

 

2.2                                                                                 Terms of Warrants

 

(1)                                  Subject to the
provisions of Articles Four and Five, each of the Warrants issued under
section 2.1 shall entitle the holder thereof to acquire from the
Corporation, the number of Shares equal to the Exercise Number at any time
during the Exercise Period, at an exercise price of U.S.$6.00 per Warrant (the “Exercise Price”).

 

6

 

(2)                                  Fractional
Warrants shall not be issued or otherwise provided for.

 

2.3                                                                                 Warrant Certificates

 

(1)                                  Warrants shall
be issued in registered form only and shall be evidenced only by Warrant
Certificates, which shall be substantially in the form attached as Schedule “A”
hereto, with such additions, variations or omissions as may be permitted by the
provisions of this Indenture or may from time to time be agreed upon between
the Corporation and the Trustee, shall be dated as of the date of the receipt
by the Trustee of the written direction referred to in section 2.1 above
(regardless of their actual dates of issue), shall bear such legends and
distinguishing letters and numbers as the Corporation shall, with the approval
of the Trustee, prescribe, and shall be issuable in any denomination excluding
fractions.

 

(2)                                  Each Warrant
Certificate as well as all certificates issued in exchange for or in
substitution of the foregoing securities shall bear a legend to the following
effect (the “Warrant Legend”):

 

“UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF
THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE JUNE 3, 2006.

 

NEITHER
THIS CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY NOR ANY SECURITIES
ISSUABLE UPON THE EXERCISE OF SUCH SECURITIES, NOR ANY INTEREST IN OR RIGHTS
UNDER SAME, HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE, AND
NEITHER THIS CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY NOR ANY
SECURITIES ISSUABLE UPON THE EXERCISE OF SUCH SECURITIES, NOR ANY INTEREST IN
OR RIGHTS UNDER SAME, MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE UNITED STATES STATE SECURITIES LAWS
COVERING ANY SUCH TRANSACTION, (B) RECEIPT BY THE CORPORATION OF AN ACCEPTABLE
LEGAL OPINION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C)
THE CORPORATION OTHERWISE SATISFYING ITSELF THAT SUCH TRANSACTION IS EXEMPT
FROM REGISTRATION.”,

 

except that all Warrant Certificates issued after June
2, 2006 will not bear the first paragraph of the Warrant
Legend and if the Corporation provides the Trustee with a written notice
advising the Trustee that the Registration Statement has been filed with and
declared effective by the United States Securities and Exchange Commission
(such notice, the “Registration Notice”),
all Warrant Certificates issued after the receipt by the Trustee of the
Registration Notice will bear a Warrant Legend with the second paragraph
thereof revised to read in its entirety as follows:

 

“NEITHER
THIS CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY, NOR ANY INTEREST IN OR
RIGHTS UNDER SAME, HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE, AND
NEITHER THIS CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY, NOR ANY
INTEREST IN OR

 

7

 

RIGHTS
UNDER SAME, MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE
TRANSFERRED OR DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE UNITED STATES SECURITIES LAWS COVERING ANY SUCH
TRANSACTION, (B) RECEIPT BY THE CORPORATION OF AN ACCEPTABLE LEGAL OPINION
STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE
CORPORATION OTHERWISE SATISFYING ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION.”.

 

(3)                                  The Trustee
shall maintain and make available to the Corporation lists of all persons who
are entitled to Warrant Certificates, and the Trustee shall mail or deliver
Warrant Certificates evidencing whole Warrants to those persons or as directed
by the Corporation.

 

2.4                                                                                 Issue in Substitution for Lost Warrants

 

(1)                                  If a Warrant
Certificate becomes mutilated or is lost, destroyed or stolen, the Corporation,
subject to applicable law and to subsection 2.4(2), shall issue and
thereupon the Trustee shall countersign or certify and deliver a new Warrant
Certificate of like date and tenor as the one mutilated, lost, destroyed or
stolen upon surrender of and in place of and upon cancellation of the mutilated
Warrant Certificate or in lieu of and in substitution for the lost, destroyed
or stolen Warrant Certificate and the substituted Warrant Certificate shall be
in a form approved by the Trustee and shall be entitled to the benefit hereof,
rank equally in accordance with its terms with all other Warrant Certificates
issued or to be issued hereunder and will bear the same legends as the Warrant
Certificate being replaced.

 

(2)                                  The applicant
for the issue of a new Warrant Certificate pursuant to this section 2.4
shall bear the cost of the issue thereof and in case of loss, destruction or
theft shall, as a condition precedent to the issue thereof, furnish to the
Corporation and to the Trustee such evidence of ownership and of the loss,
destruction or theft of the Warrant Certificate so lost, destroyed or stolen as
shall be satisfactory to the Corporation and to the Trustee in their
discretion, and if required, furnish an indemnity and surety bond in amount and
form satisfactory to them in their discretion, and pay the reasonable charges
of the Corporation and the Trustee in connection therewith.

 

2.5                                                                                 Warrantholder not a Shareholder

 

Nothing in this Indenture or in the holding of a Warrant evidenced by a
Warrant Certificate, or otherwise, shall be construed as conferring upon a
Warrantholder any right or interest whatsoever as a shareholder of the
Corporation, including but not limited to the right to vote at, to receive
notice of, or to attend meetings of shareholders or any other proceedings of
the Corporation or the right to receive any dividend and other distribution.

 

2.6                                                                                 Warrants to Rank Pari Passu

 

Except as otherwise provided herein, a Warrant shall rank pari passu with all other Warrants issued under this
Indenture, whatever may be the actual date of issue of the Warrant Certificates
that evidence them.

 

2.7                                                                                 Signing of Warrant Certificates

 

The
Warrant Certificates shall be signed by any one director or officer of the
Corporation and need not be under the seal of the Corporation.  The signatures of any of the director or
officer may be

 

8

 

mechanically reproduced in
facsimile and Warrant Certificates bearing those facsimile signatures shall be
binding upon the Corporation as if they had been manually signed by the director
or officer.  Notwithstanding that any of
the persons whose manual or facsimile signature appears on any Warrant
Certificate as an officer or director may no longer hold office at the date of
the Warrant Certificate or at the date of certification or delivery thereof,
any Warrant Certificate signed as aforesaid shall, subject to section 2.8,
be valid and binding upon the Corporation.

 

2.8                                                                                 Certification by the Trustee or Co-transfer Agent

 

(1)                                  The Trustee
shall certify Warrant Certificates upon the written direction of the
Corporation.  No Warrant Certificate
shall be issued or, if issued, shall be valid or entitle the holder to the
benefit hereof until it has been certified by manual signature by or on behalf
of the Trustee, or by manual signature by the Co-transfer Agent,
substantially in the form approved by the Corporation and the Trustee and the
certification by the Trustee or by the Co-transfer Agent upon any Warrant
Certificate shall be conclusive evidence as against the Corporation that the
Warrant Certificate so certified has been duly issued hereunder and that the
holder is entitled to the attributes and characteristics of the Warrants
provided for in this Indenture.

 

(2)                                  The
certification of the Trustee or of the Co-transfer Agent on Warrant Certificates
issued hereunder shall not be construed as a representation or warranty by the
Trustee or by the Co-transfer Agent as to the validity of this Indenture
or of the Warrant Certificates (except the due certification thereof) and the
Trustee or the Co-transfer Agent shall in no respect be liable or
answerable for the use made of the Warrants or any of them or of the
consideration therefor, except as otherwise specified herein.

 

ARTICLE THREE

 

EXCHANGE AND
OWNERSHIP OF WARRANTS

 

3.1                                                                                 Exchange of Warrants

 

(1)                                  Upon the
request of a Warrantholder one or more Warrant Certificates may, upon
compliance with the reasonable requirements of the Trustee, be exchanged for
one or more Warrant Certificates of different denominations evidencing, in the
aggregate, the same number of Warrants as the Warrant Certificate or Warrant
Certificates being exchanged.

 

(2)                                  Warrants may
be exchanged only at the principal transfer offices of the Trustee in the
Cities of Vancouver or Toronto, or at the principal transfer office of the Co-transfer
Agent designated by the Corporation or at any other place that is designated by
the Corporation with the approval of the Trustee.  Any Warrant Certificates tendered for
exchange shall be surrendered to the Trustee or to its agent or the Co-transfer
Agent and, upon issuance of new Warrants in exchange therefor, cancelled. The
Corporation shall sign all Warrant Certificates necessary to carry out
exchanges as aforesaid and those Warrant Certificates shall be certified by or
on behalf of the Trustee.

 

3.2                                                                                 Charges for Exchange or Transfer

 

For
each Warrant transferred or Warrant Certificate exchanged, the Trustee or the
Co-transfer Agent except as otherwise herein provided, may charge a
reasonable sum in respect of each Warrant transferred or Warrant Certificate
exchanged.  The party requesting the
transfer or exchange, as a condition precedent thereto, shall pay such charges
and shall pay or reimburse the Trustee, the Co-transfer Agent or the
Corporation for all exigible transfer taxes or governmental or other similar
transfer charges required to be paid in connection therewith.

 

9

 

3.3                                                                                 Ownership of Warrants

 

The Corporation and the Trustee and their respective agents may deem
and treat the person whose name any Warrant is registered as the absolute owner
of that Warrant for all purposes, and the Corporation and the Trustee and their
respective agents shall not be affected by any notice or knowledge to the
contrary except as required by statute or by order of a court of competent
jurisdiction.  The registered holder of
any Warrant shall be entitled to the rights evidenced by that Warrant free from
all equities or rights of set-off or counterclaim between the Corporation
and the original or any intermediate holder thereof and all persons may act
accordingly and the receipt from any holder for the Shares, Warrants or monies
obtainable pursuant thereto shall be a good discharge to the Corporation and
the Trustee for the same and neither the Corporation nor the Trustee shall be
bound to inquire into the title of any such registered holder.

 

3.4                                                                                 Registration and Transfer of Warrants

 

(1)                                  The
Corporation hereby appoints the Trustee as registrar of the Warrants.  The Corporation may hereafter, with the
consent of the Trustee, appoint one or more other additional registrars of the
Warrants, including any Co-transfer Agent.

 

(2)                                  The
Corporation shall cause a register to be kept by the Trustee, and the Trustee
agrees to maintain such a register, at its principal transfer office in the
cities of Vancouver and Toronto, in which shall be entered alphabetically the
names and addresses of the holders of Warrants and other particulars of the
Warrants held by them respectively and all transfers of Warrants and the date
and other particulars of each transfer. 
Such registration shall be noted on the Warrant Certificates by the
Trustee or other Registrar.  The
Corporation shall also cause a branch register containing the foregoing
information to be maintained by the Trustee in such other place or places as
the Corporation with the approval of the Trustee may designate.

 

(3)                                  No transfer of
a Warrant shall be valid unless made on any one of the registers upon surrender
of the Warrant Certificate to the Trustee or other Registrar accompanied by a
written instrument of transfer in form satisfactory to the Trustee or other
Registrar executed by the registered holder or his executors, administrator or
other legal representatives or his attorney duly appointed by an instrument in
writing in form and execution satisfactory to the Trustee or other Registrar
and upon compliance with such reasonable requirements as the Trustee or other
Registrar may prescribe.

 

(4)                                  The registers
referred to in this section 3.4 shall at all reasonable times be open for
inspection by the Corporation, by the Trustee and by any Warrantholder.

 

(5)                                  The registered
holder of a Warrant may at any time and from time to time have the registration
of the Warrant transferred from the register in which the registration thereof
appears to another authorized register upon compliance with such reasonable
requirements as the Trustee or other Registrar may prescribe.

 

(6)                                  Subject to
subsection 3.4(7), the holder of a Warrant may at any time and from time
to time have the Warrant transferred at any of the places at which a register
of transfers is kept pursuant to this section 3.4 in accordance with the
conditions herein, such reasonable requirements as the Registrar may prescribe
and all applicable securities legislation and requirements of regulatory
authorities, provided however that the transfer of Warrants shall be
accompanied by a transfer form.

 

(7)                                  Except as
required by law, neither the Trustee nor any other Registrar nor the
Corporation shall be charged with notice of or be bound to see to the execution
of any trust, whether express, implied or constructive, in respect of any
Warrant and may transfer any Warrant on the written direction of the person

 

10

 

registered as the holder thereof, whether named as trustee or otherwise,
as though that person were the beneficial owner thereof.

 

(8)                                  The register
required to be kept in the Cities of Vancouver and Toronto shall not be closed
at any time.  In the event that an office
of the Trustee or a Co-transfer Agent in any place is closed, notice of the
closing shall be given, in the manner provided in section 11.2, to the
Warrantholders.

 

(9)                                  The Trustee
and every other Registrar shall from time to time, when requested by the
Corporation, or by the Trustee furnish the Corporation, or the Trustee, as the
case may be, with a list of names and addresses of the holders of Warrants
entered on the register kept by such Trustee or other Registrar showing the
number of Warrants held by each such holder.

 

ARTICLE FOUR

 

EXERCISE OF
WARRANTS

 

4.1                                                                                 Method of Exercise of Warrants

 

(1)                                  The holder of any Warrants may, during the Exercise Period, exercise
the right thereby conferred to acquire Shares by surrendering to the Trustee at
its principal transfer office in the Cities of Vancouver or Toronto, or at any
other place or places that may be designated by the Corporation with the
approval of the Trustee, or to the Co-transfer Agent at its principal
transfer office designated by the Corporation, a Warrant Certificate or Warrant
Certificates representing the Warrants held by such holder that are to be
exercised, together with: (i) a duly completed and executed exercise form in
the form set out in Appendix ”A” to Schedule “A” hereto; and (ii) a
certified cheque, bank draft or money order in lawful money of the United
States payable to or to the order of the Corporation in an amount equal to the
Exercise Price multiplied by the number of Warrants being exercised. 
The Warrants shall only be deemed to have been surrendered upon personal
delivery thereof to, or if sent by mail or other means of transmission upon
actual receipt thereof by, the Trustee or the Co-transfer Agent at the
office specified in this section.  Any
such exercise shall be subject to the holder providing such assurances and
executing such documents as may, in the reasonable opinion of the Corporation
or the Trustee or the Co-transfer Agent, be required to ensure compliance
with all applicable securities legislation.

 

(2)                                  Any exercise form delivered pursuant
to subsection 4.1(1) shall be signed by the Warrantholder or the
Warrantholder’s executors or administrators or other legal representatives or
an attorney of the Warrantholder duly appointed by an instrument in writing
satisfactory to the Trustee or the Co-transfer Agent, as the case may be.  The exercise form attached to the Warrant
Certificate shall specify the number of Warrants being exercised, the person or
persons in whose name or names the Shares to be issued upon exercise are to be
issued, the person’s or persons’ address or addresses and the number of Shares
to be issued to each person if more than one is so specified.  If any of the Shares to be acquired are to be
issued to a person or persons other than the Warrantholder, the Warrantholder
shall pay to the Trustee or to its agent all exigible transfer taxes or
governmental or other charges required to be paid in respect of the transfer of
the Shares and the Corporation will not be required to issue or deliver any
certificate evidencing any Shares unless or until that amount has been so paid
or the Warrantholder has established to the satisfaction of the Corporation
that the taxes and charges have been paid or that no taxes or charges are
owing.

 

(3)                                  If at the time of exercise of the Warrants
there remain restrictions on resale under applicable Securities Laws on the
Shares acquired, the Corporation may, on the advice of counsel, endorse the
certificates representing the Shares and Warrants with respect to those
restrictions.

 

11

 

(4)                                  The Trustee shall record the
particulars of the Warrants exercised which particulars shall include the names
and addresses of the persons who become holders of Shares, if any, on exercise,
the Exercise Date and the Exercise Price. 
Within five business days of each Exercise Date, the Trustee shall
provide such particulars in writing to the Corporation and the Transfer Agent.

 

4.2                                                                                 Effect of Exercise of Warrants

 

(1)                                  Upon exercise
of the Warrants in accordance with section 4.1, and subject to
sections 2.2, 4.3, 4.4, and 5.4, the Corporation shall cause the holder
thereof to be entered forthwith on its register of shareholders as the holder
of the Shares and the Shares so acquired shall be deemed to have been issued,
and the person or persons to whom those Shares are to be issued shall be deemed
to have become the shareholder or shareholders of record of the Shares on the
Exercise Date unless the register of the Corporation shall be closed on that
date, in which case the Shares so acquired shall be deemed to be issued and the
person or persons shall be deemed to become the shareholder or shareholders of
record of the Shares on the date on which the register is reopened and the
Shares shall be issued on the later date.

 

(2)                                  Upon the due
exercise of the Warrants as aforesaid, the Corporation shall, forthwith cause
to be delivered to the Trustee as agent for the person or persons in whose name
or names the Shares and Warrants so acquired are to be issued as specified in the
exercise forms attached to the Warrant Certificates, certificates for the
appropriate number of Shares that the Warrantholders are entitled to pursuant
to the Warrants surrendered.  Upon
receipt by the Trustee of such certificates the Trustee shall cause such
certificates to be delivered forthwith in accordance with the written delivery
instructions of the holder, or in the absence of such instructions, by
registered mail without charge therefor, to the person or persons in whose name
or names the Shares have been issued at the addresses specified in the exercise
forms.

 

4.3                                                                                 Partial Exercise of Warrants

 

A Warrantholder may exercise any number of Warrants up to the aggregate
number of Warrants represented by the Warrant Certificates surrendered.  In the event of any exercise of a number of
Warrants less than the number which the holder is entitled to exercise, the
holder of the Warrants upon such exercise shall be entitled to receive, without
charge therefor, a new Warrant Certificate in respect of the balance of the
Warrants represented by the surrendered Warrant Certificate and which were not
then exercised and the Trustee shall issue a new Warrant Certificate upon
surrender of such Warrant Certificate, if satisfied that the new Warrant
Certificate is properly issuable.

 

4.4                                                                                 No Fractional Shares or Warrants

 

Notwithstanding anything herein contained including any adjustment
provided for in section 2.2 or Article Five, the Corporation shall
not be obliged to issue any fractional Shares or to distribute certificates
which evidence fractional Shares upon the exercise of one or more Warrants. To
the extent that the holder of one or more Warrants would otherwise have been
entitled to receive on the exercise or partial exercise thereof a fraction of a
Share that holder may exercise that right in respect of the fraction only in
combination with other Warrants that in the aggregate entitle the holder to
acquire a whole number of Shares.  If not
so exercised, the Corporation shall not pay any amounts to the holder in
satisfaction of the right to otherwise have received a fraction of a Share.

 

4.5                                                                                 Accounting and Recording

 

The Trustee shall record the particulars of the Warrants exercised,
including the name or names and addresses of the persons who become holders of Shares
and Warrants on exercise and the Exercise

 

12

 

Date.  Within three business days of each Exercise
Date, the Trustee shall provide those particulars in writing to the
Corporation.

 

4.6                                                                                 Cancellation of Surrendered Warrants

 

All Warrant Certificates surrendered to the Trustee shall be cancelled
by the Trustee and, upon request therefor of the Corporation, the Trustee shall
furnish the Corporation with a certificate identifying the Warrant Certificates
so cancelled and the number of Shares and Warrants which have been issued
pursuant to each.

 

4.7                                                                                 Expiration of Warrants

 

After the expiry of the Exercise Period, all rights under any Warrant
in respect of which the right of subscription and payment herein and therein
provided for shall not theretofore have been exercised shall wholly cease and
terminate and the Warrant shall be void and of no effect.

 

4.8                                                                                 Share Certificates

 

Certificates representing Shares issued upon the exercise of Warrants
shall bear the following legend (the “Share Legend”), except that all certificates representing
Shares issued after June 2, 2006 will not bear the first and second
paragraphs of the Share Legend and if the Corporation provides the Trustee with
a Registration Notice, all certificates representing Shares issued after the
receipt by the Trustee of the Registration Notice will not bear the third
paragraph of the Share Legend:

 

“UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF
THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE JUNE 3,
2006.

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE
FACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT
OF TRANSACTIONS ON TSX.

 

THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY APPLICABLE
STATE SECURITIES LAW.  NO INTEREST
THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE
TRANSFERRED OR DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE UNITED STATES STATE SECURITIES LAWS COVERING ANY
SUCH TRANSACTION, (B) RECEIPT BY THE CORPORATION OF AN ACCEPTABLE LEGAL OPINION
STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE
CORPORATION OTHERWISE SATISFYING ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION.”

 

13

 

The Trustee may remove the Share Legend (or any portion thereof) on any
particular certificate if:

 

(a)                                  in
the event that the Shares represented by the certificate are being sold (1) to
the Corporation, or (2) in accordance with Rule 144 under the U.S. Securities
Act or (3) pursuant to a registration statement filed with and declared
effective by the United States Securities and Exchange Commission, the Trustee
receives an opinion of counsel, of recognized standing reasonably satisfactory
to the Corporation, that such legend (or portion thereof) is no longer required
under applicable requirements of the U.S. Securities Act or state securities
laws; or

 

(b)                                 otherwise,
the Trustee receives an opinion of counsel, of recognized standing reasonably
satisfactory to the Corporation that such legend (or portion thereof) is no
longer required under applicable Securities Laws.

 

ARTICLE FIVE

 

ADJUSTMENT OF
EXERCISE NUMBER

 

5.1                                                                                 Definitions

 

In this Article the terms “record
date” and “effective date”
where used herein shall mean 4:30 p.m. (Vancouver time) on the relevant
date.

 

5.2                                                                                 Adjustment of Exercise Number

 

The Exercise Number (or the number and kind of Shares or securities to
be received upon exercise in the case of subsections 5.2(4) and 5.2(5)
below) shall be subject to adjustment from time to time in the events and in
the manner provided in section 5.3 and as follows:

 

(1)                                  If during the
Exercise Period the Corporation:

 

(a)                                  fixes the record date for the issue,
or issues to, all or substantially all of the holders of the Shares by way of a
stock dividend or otherwise Shares or Convertible Securities, other than (i)
the issue from time to time of Shares or Convertible Securities by way of stock
dividend to shareholders who elect to receive Shares or Convertible Securities
in lieu of cash dividends in the ordinary course or pursuant to a dividend
reinvestment plan or (ii) as dividends paid in the ordinary course; or

 

(b)                                 subdivides or redivides its
outstanding Shares into a greater number of Shares; or

 

(c)                                  combines, consolidates or reduces
its outstanding Shares into a smaller number of Shares

 

(any of
those events being herein called a “Share
Reorganization”),

 

the
Exercise Number shall be adjusted effective immediately after the record date
at which the holders of Shares are determined for the purposes of the Share
Reorganization or the effective date of the Share Reorganization if no record
date is fixed to a number that is the product of (1) the Exercise Number in
effect on the record date and (2) a fraction:

 

14

 

(i)                                     the numerator of which shall be the
number of Shares outstanding after giving effect to the Share Reorganization;
and

 

(ii)                                  the denominator of which shall be the number of
Shares outstanding on the record date, or effective date if no record date is
fixed, before giving effect to the Share Reorganization.

 

For the
purposes of determining the number of Shares outstanding at any particular time
for the purpose of this subsection 5.2(1) there shall be included that
number of Shares which would have resulted from the conversion at that time of
all outstanding Convertible Securities.

 

(2)                                  If during the
Exercise Period the Corporation fixes a record date for the issuance of rights,
options or warrants to all or substantially all the holders of the Shares
pursuant to which those holders are entitled to subscribe for, purchase or
otherwise acquire Shares or Convertible Securities within a period of not more
than 45 days from such record date at a price per share, or at a conversion
price per share, of less than 95% of the Current Market Price on such record
date (any such issuance being herein called a “Rights Offering” and Shares that may be acquired in exercise
of the Rights Offering, or upon conversion of the Convertible Securities
offered by the Rights Offering, being herein called the “Offered Shares”), the Exercise Number shall
be adjusted effective immediately after the applicable record date to an Exercise
Number that is the product of (1) the Exercise Number in effect on the record
date and (2) a fraction:

 

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

 

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

 

(A)                              the number of Shares outstanding on
the record date; and

 

(B)                                the number arrived at when (I)
either the product of (a) the number of Offered Shares so offered and (b) the
price at which such Offered Shares are offered, or the product of (c) the
conversion price of the Offered Shares so offered and (d) the maximum number of
Offered Shares for or into which the Convertible Securities so offered pursuant
to the Rights Offering may be converted, as the case may be, is divided by (II)
the Current Market Price of the Shares on the record date for the Rights
Offering.

 

If by
the terms of the rights, options, or warrants referred to in this
subsection 5.2(2), there is more than one purchase, conversion or exchange
price per Offered Share, the aggregate price of the total number of additional
Offered Shares offered for subscription or purchase, or the aggregate
conversion or exchange price of the Convertible Securities so offered, shall be
calculated for purposes of the adjustment on the basis of the lowest purchase, conversion
or exchange price per Offered Share, as the case may be.  Any Offered Shares owned by or held for the
account of the Corporation or a subsidiary of the Corporation shall be deemed
not to be outstanding for the purpose of any such computation; if all the
rights, options or warrants are not so issued or if all rights, options or
warrants are not exercised prior to the expiration thereof, the Exercise Number
shall be readjusted to the Exercise Number in effect immediately prior to the
record date, and the Exercise Number shall be further adjusted based upon the
number of Offered Shares (or Convertible Securities that are convertible into
Offered Shares) actually delivered upon the exercise of the rights, options or
warrants, as the

 

15

 

case
may be, but subject to any other adjustment required hereunder by reason of any
event arising after that record date.

 

(3)                                  If during the
Exercise Period the Corporation issues or distributes to all or substantially all
the holders of Shares, (i) shares of any class other than Shares, or (ii)
rights, options or warrants to acquire Shares or Convertible Securities other
than rights, options or warrants exercisable within 45 days from the date of
issue thereof at a price, or at a conversion price, of at least 95% of the
Current Market Price at the record date for such distribution, or (iii)
evidences of indebtedness, or (iv) any other cash, securities or other property
or assets and that issuance or distribution does not constitute a Share
Reorganization or a Rights Offering (any of those events being herein called a “Special Distribution”), the Exercise Number
shall be adjusted effective immediately after the record date at which the
holders of Shares are determined for purposes of the Special Distribution to an
Exercise Number that is the product of (1) the Exercise Number in effect on the
record date and (2) a fraction:

 

(i)                                     the numerator of which shall be the
product of (I) the sum of the number of Shares outstanding on the record date
plus the number of Shares which the Warrantholders would be entitled to receive
upon exercise of all their outstanding Warrants if they were exercised on the
record date and (II) the Current Market Price thereof on that date; and

 

(ii)                                  the denominator of which shall be:

 

(A)                              the product of (I) the sum of the
number of Shares outstanding on the record date plus the number of Shares which
the Warrantholders would be entitled to receive upon exercise of all their
outstanding Warrants if they were exercised on the record date and (II) the
Current Market Price thereof on the earlier of such record date and the date on
which the Corporation announces its intention to make such distribution;

less

 

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

 

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

 

(4)                                  If during the
Exercise Period there is a reorganization of the Corporation not otherwise
provided for in subsection 5.2(1) or a consolidation or merger or
amalgamation of the Corporation with or into another body corporate including a
transaction whereby all or substantially all of the Corporation’s undertaking
and assets become the property of any other corporation through sale, lease,
exchange or otherwise (any such event being herein called a “Capital Reorganization”) any holder of a
Warrant who has not exercised his right to exchange his Warrant for Shares
prior to the effective date of the Capital

 

16

 

Reorganization shall be entitled to receive and shall accept, upon the
exercise of his right at any time after the effective date of the Capital
Reorganization, in lieu of the number of Shares (and any other securities or
properties to which holders are entitled upon exercise of the Warrants) to
which he or she was theretofore entitled upon exercise of the Warrant, the aggregate
number of shares or other securities or property of the Corporation, or the
continuing, successor or purchasing corporation, as the case may be, under the
Capital Reorganization that the holder would have been entitled to receive as a
result of the Capital Reorganization if, on the effective date thereof, he or
she had been the holder of the number of Shares (and any other securities to
which holders are entitled upon exercise of the Warrants) to which immediately
before the transaction he or she was entitled upon exercise of the Warrants; no
Capital Reorganization shall be carried into effect unless all necessary steps
have been taken so that the holders of Warrants shall thereafter be entitled to
receive the number of shares or other securities or property of the
Corporation, or of the continuing, successor or purchasing corporation, as the
case may be, under the Capital Reorganization, subject to adjustment thereafter
in accordance with provisions the same, as nearly as may be possible, as those
contained in this section 5.2 and in section 5.3.  In addition, if necessary, as a result of any
such Capital Reorganization, appropriate adjustments shall be made in the
application of the provisions of this Indenture with respect to the rights and
interests thereafter of the Warrantholder to the end that the provisions shall
thereafter correspondingly be made applicable as nearly as may reasonably be
possible in relation to any shares or other securities or property thereafter
deliverable upon the exercise of the Warrants. 
Any such adjustments shall be made by and set forth in an indenture
supplemental hereto approved by action by the directors and shall for all
purposes be conclusively deemed to be an appropriate adjustment.

 

(5)                                  If the
Corporation reclassifies or otherwise changes the outstanding Shares, the
exercise right shall be adjusted effective immediately upon the
reclassification becoming effective so that holders of Warrants who exercise
their rights thereafter shall be entitled to receive such shares as they would
have received had the Warrants been exercised immediately prior to the
effective date, subject to adjustment thereafter in accordance with provisions
the same, as nearly as may reasonably be possible, as those contained in this
section 5.2 and in section 5.3.

 

5.3                                                                                 Subscription Rights Adjustment Rules

 

The following rules and procedures are applicable to adjustments made
pursuant to section 5.2:

 

(1)                                  The
adjustments and readjustments provided for in this Article Five are cumulative
and, subject to subsection 5.3(2), apply (without duplication) to
successive issues, subdivisions, combinations, consolidations, distributions
and any other events that require adjustment of the Exercise Number or the
number or kind of shares or securities purchasable hereunder.

 

(2)                                  No adjustment
in the Exercise Number is required unless the adjustment will result in a
change of at least 2% in the Exercise Number then in effect provided, however,
that any adjustments that, except for the provisions of this subsection 5.3(2)
would otherwise have been required to be made, are carried forward and taken
into account in any subsequent adjustment.

 

(3)                                  If at any time
after the Exercise Period the Corporation shall take any action affecting the
Shares, other than an action described in section 5.2, which in the
opinion of the directors would have a material adverse effect upon the rights
of Warrantholders, the Exercise Number shall be adjusted in such manner and at
such time by action by the directors, in their sole discretion, but subject to
the prior written consent of the Toronto Stock Exchange and the American Stock
Exchange, as may be equitable in the circumstances.  Failure of the taking of action by the
directors so as to provide for an adjustment prior to the

 

17

 

effective date of any action by the Corporation affecting the Shares
shall be deemed to be conclusive evidence that the directors have determined
that it is equitable to make no adjustment in the circumstances.

 

(4)                                  No adjustment
in the Exercise Number shall be made in respect of any event described in
paragraph 5.2(1)(a) or subsections 5.2(2) or 5.2(3) if the holders of
the Warrants are entitled to participate in the event on the same terms, mutatis mutandis, as if they had exercised
their Warrants immediately prior to the effective date or record date of the
event.  Any such participation is subject
to regulatory approval.

 

(5)                                  No adjustment
in the Exercise Number shall be made pursuant to section 5.2 in respect of
the issue of Shares, rights, options or warrants pursuant to:

 

(a)                                  this Indenture;

 

(b)                                 the exercise of director, officer
and employee options or options granted for services in accordance with the
rules of the Toronto Stock Exchange or the American Stock Exchange;

 

(c)                                  the
exercise of special rights to acquire Shares of the Corporation issued to
employees of a subsidiary of the Corporation as part of the acquisition by the
Corporation of options to acquire securities of such subsidiary held by such employees;

 

(d)                                 the exercise of Warrants; or

 

(e)                                  the issuance of Shares by the
Corporation pursuant to any agreements in effect as at the date of this
Indenture,

and any
such issue shall be deemed not to be a Share Reorganization, a Rights Offering
or a Special Distribution.

 

(6)                                  If a dispute
at any time arises with respect to adjustments of the Exercise Number, the
dispute shall be conclusively determined (as between the Corporation, the
Warrantholders, the Trustee and all transfer agents and shareholders of the
Corporation) by the auditors of the Corporation or if they are unable or
unwilling to act, by such firm of independent chartered accountants as may be
selected by the directors and any such determination shall be binding upon the
Corporation, the Warrantholders, the Trustee and all transfer agents and
shareholders of the Corporation.

 

(7)                                  If the
Corporation sets a record date to determine the holders of Shares for the
purpose of entitling them to receive any dividend or distribution or any
subscription or purchase rights and thereafter legally abandons its plans to
pay or deliver the dividend, distribution or subscription or purchase rights,
then no adjustment in the Exercise Number shall be required by reason of the
setting of the record date.

 

5.4                                                                                 Postponement of Subscription

 

In any case where the application of section 5.2 results in an
increase of the Exercise Number taking effect immediately after the record date
for or occurrence of a specific event, if any Warrants are exercised after that
record date or occurrence and prior to completion of the event or of the period
for which a calculation is required to be made, the Corporation may postpone
the issuance to the holder of the Warrants of the Shares to which the holder is
entitled by reason of the increase of the Exercise Number but the Shares shall
be so issued and delivered to that holder upon completion of that event or
period, with the number of those Shares calculated on the basis of the Exercise
Number on the Exercise Date adjusted for completion of that event or period,
and the Corporation shall forthwith after the Exercise Date deliver to the

 

18

 

person
or persons in whose name or names the Shares are to be issued an appropriate
instrument evidencing the person’s or persons’ right to receive the Shares.

 

5.5                                                                                 Notice of Certain Events

 

(1)                                  Upon the
occurrence of any event referred to in sections 5.2 or 5.3 that requires
an adjustment in the Exercise Number, the Corporation shall promptly thereafter:

 

(a)                                  file with the Trustee a certificate
of the Corporation specifying the particulars of the event and, if
determinable, the adjustment and a computation of the adjustment; and

 

(b)                                 give notice to the Warrantholders of
the particulars of the event and, if determinable, the adjustment.

 

(2)                                  If notice has
been given under subsection 5.5(1) and the adjustment is not then
determinable, the Corporation shall promptly after the adjustment is
determinable:

 

(a)                                  file with the Trustee a certificate
of the Corporation evidencing the computation of the adjustment; and

 

(b)                                 give notice to the Warrantholders of
the adjustment.

 

5.6                                                                                 Protection of Trustee

 

The Trustee shall not at any time be under any duty or responsibility
to any Warrantholder to determine whether any facts exist which may require any
adjustment contemplated by section 5.2, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed
in making the same.

 

5.7                                                                                 Proceedings Prior to Any Action Requiring Adjustment

 

As a condition precedent to the taking of any action which would
require an adjustment in any of the acquisition rights pursuant to any of the
Warrants, including the number of Shares which are to be received upon the
exercise of the Warrants, the Corporation shall take any corporate action which
may, in the opinion of counsel, be necessary in order that the Corporation has
unissued and reserved in its authorized capital and may validly and legally
issue as fully paid and non-assessable all the Shares which the holders of such
Warrants are entitled to receive on the full exercise thereof in accordance
with the provisions hereof.

 

ARTICLE SIX

 

RIGHTS AND
COVENANTS

 

6.1                                                                                 Purchase of Warrants

 

(1)                                  The
Corporation, when not in default under this Indenture, may purchase in the
market, by a private contract, by tender or otherwise, all or any portion of
the Warrants in such manner, from such persons and on such terms as the
Corporation and such persons may determine. 
All Warrants so purchased shall forthwith be delivered to the Trustee
and cancelled by it and no Warrants shall be issued in substitution therefor.

 

19

 

(2)                                  If, upon an
invitation for tenders, the number of Warrants tendered at the lowest price
exceeds the number of Warrants that the Corporation is prepared to accept at
that price, the Warrants to be purchased by the Corporation shall be selected
by the Trustee by lot, or in any other manner as the Trustee may deem
equitable, from the Warrants tendered by each tendering Warrantholder who
tendered at such lowest price.  For this
purpose, the Trustee may make, and from time to time amend, regulations with
respect to the manner in which Warrants may be so selected and regulations so
made shall be valid and binding upon all Warrantholders notwithstanding the
fact that, as a result thereof, the Warrants held by a holder or represented by
a Warrant Certificate become subject to purchase in part only.

 

6.2                                                                                 General Covenants of the Corporation

 

The Corporation covenants with the Trustee, for the benefit of the
Trustee and the Warrantholders that so long as any Warrants remain outstanding
and may be exercised for Shares:

 

(1)                                  The
Corporation will at all times maintain its existence, carry on and conduct its
business in a prudent manner in accordance with industry standards and good
business practice, keep or cause to be kept proper books of account in
accordance with applicable law, and if and whenever required in writing by the
Trustee, file with the Trustee copies of all annual financial statements of the
Corporation furnished to its shareholders during the term of this Indenture.

 

(2)                                  The
Corporation is duly authorized to create and issue the Warrants to be issued
hereunder and the Warrant Certificates when issued and certified as herein
provided will be legal, valid and binding obligations of the Corporation.

 

(3)                                  The
Corporation will cause the Shares from time to time subscribed for pursuant to
the exercise of the Warrants issued by the Corporation hereunder, in the manner
herein provided, to be duly issued in accordance with the Warrants and the
terms hereof.

 

(4)                                  The
Corporation will reserve and keep available a sufficient number of Shares for
issuance upon the exercise of Warrants issued by the Corporation hereunder.

 

(5)                                  Upon the exercise by the holder of
any Warrant of the right to purchase provided for therein and herein and, upon
payment of the Exercise Price applicable thereto for each Share in respect of
which the right of purchase is so exercised, all Shares issuable upon the
exercise of Warrants shall be issued as fully paid and non-assessable.

 

(6)                                  The
Corporation will cause the certificates representing the Shares from time to
time to be acquired pursuant to the exercise of the Warrants in the manner
herein provided, to be duly issued and delivered in accordance with the
Warrants and the terms hereof.

 

(7)                                  The
Corporation will use commercially reasonable efforts to maintain the listing of
the Shares on the Toronto Stock Exchange and the American Stock Exchange, and
will take all steps necessary to ensure that the Shares issuable upon exercise
of the Warrants will be listed and posted for trading on the Toronto Stock
Exchange and American Stock Exchange upon their issue.

 

(8)                                  The
Corporation will use commercially reasonable efforts to maintain its status as
a “reporting issuer” under applicable Securities Laws in the Provinces and as a
“reporting company” with the United States Securities and Exchange Commission
until the Expiry Date and for a period of 12 months thereafter and shall in a
timely fashion file or deposit all documents and reports with the relevant
securities commissions and similar securities authorities required to be filed
or deposited pursuant to the Securities Laws.

 

20

 

(9)                                  The
Corporation shall prepare and file under the Securities Laws any documents
required to be filed therewith relating to the proposed distribution of Shares
to holders of Warrants upon the exercise thereof.

 

(10)                            Generally, the
Corporation will well and truly perform and carry out all the acts or things to
be done by it as provided in this Indenture.

 

(11)                            If the
Corporation is a party to any transaction in which the Corporation is not the
continuing corporation, the Corporation shall use commercially reasonable
efforts to obtain all consents which may be necessary or appropriate under
Canadian and United States law to enable the continuing corporation to give
effect to the Warrants.

 

6.3                                                                                 Trustee’s Remuneration and Expenses

 

The Corporation covenants that it will pay to the Trustee from time to
time such reasonable remuneration for its services hereunder as may be agreed
upon between the Corporation and the Trustee and will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in the administration or execution of
the trusts hereby created (including the reasonable compensation and the
disbursements of counsel and all other advisers and assistants not regularly in
its employ), both before any default hereunder and thereafter until all duties
of the Trustee under the trusts hereof have been finally and fully performed,
except any expense, disbursement or advance as may arise from the negligence,
wilful misconduct or bad faith of the Trustee or of persons for whom the
Trustee is responsible.

 

6.4                                                                                 No Dividends or Distributions

 

During the Exercise Period, the Corporation shall not pay any dividend
or make any distribution to all or substantially all of the holders of Shares
or declare any such dividend, or provide for any such distribution, payable to
all or substantially all the holders of Shares of record during that
period.  Such restrictions shall not
apply to stock dividends or distributions in respect of which an adjustment can
be made in the Exercise Number pursuant to paragraph 5.2(1)(a) or
subsections 5.2(2) or 5.2(3).

 

6.5                                                                                 Performance of Covenants by Trustee

 

If the Corporation fails to perform any of its covenants and
obligations contained in this Indenture, the Trustee may notify the
Warrantholders of the failure on the part of the Corporation or may itself
perform any of the said covenants capable of being performed by it, but shall
be under no obligation to do so or to notify the Warrantholders.  All sums expended or advanced by the Trustee
in so doing shall be repayable as provided in section 6.3.  No performance, expenditure or advance by the
Trustee shall be deemed to relieve the Corporation of any default or of its
continuing obligations hereunder.

 

ARTICLE SEVEN

 

ENFORCEMENT

 

7.1                                                                                 Suits by Warrantholders

 

All or any of the rights conferred upon any Warrantholder by any of the
terms of the Warrants, the Warrant Certificates or of this Indenture, or both
of them, may be enforced by the Warrantholder by appropriate legal proceedings,
but without prejudice to the right which is hereby conferred

 

21

 

upon
the Trustee to proceed in its own name to enforce each and all of the
provisions herein contained for the benefit of all Warrantholders, subject, in
each case, to the provisions of section 8.11.

 

7.2                                                                                 Immunity of Shareholders, Directors and Officers

 

The Trustee, and by their acceptance of the Warrant Certificates and as
part of the consideration for the issue of the Warrants, the Warrantholders,
hereby waive and release any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any past, present or future shareholder,
director or officer of the Corporation or of any of the subsidiaries of the
Corporation, or any subsidiary of the Corporation, in their capacity as such,
for the issue of Shares pursuant to any Warrants or on any covenant, agreement,
representation or warranty by the Corporation contained herein or in the
Warrant Certificates.

 

7.3                                                                                 Limitation of Liability

 

The obligations hereunder are not personally binding upon, nor shall
resort hereunder be had to, the private property of any of the past, present or
future directors, shareholders, officers, employees or agents of the
Corporation or any of the subsidiaries of the Corporation, or any subsidiary of
the Corporation, but only the property of the Corporation (or any successor
corporation) shall be bound in respect hereof.

 

ARTICLE EIGHT

 

MEETINGS OF WARRANTHOLDERS

 

8.1                                                                                 Right to Convene Meetings

 

The Trustee may at any time and from time to time and shall on receipt
of a written request of the Corporation or of a Warrantholders’ Request, and
upon being indemnified and funded to its reasonable satisfaction by the
Corporation or by one or more of the Warrantholders signing the Warrantholders’
Request against the costs that may be incurred in connection with the calling
and holding of the meeting, convene a meeting of the Warrantholders. In the
event of the Trustee failing, within 15 days after receipt of the written
request of the Corporation or Warrantholders’ Request and indemnity given as
aforesaid, to give notice convening a meeting, the Corporation or the
Warrantholders, as the case may be, may convene the meeting. Every meeting
shall be held in the City of Vancouver or at such other place as may be
approved or determined by the Trustee.

 

8.2                                                                                 Notice

 

At least 14 days notice of any meeting shall be given to the
Warrantholders in the manner provided in section 11.1(2) and a copy of the
notice shall be sent by mail to the Trustee unless the meeting has been called
by it, and to the Corporation unless the meeting has been called by it. Each
notice shall state the time when and the place where the meeting is to be held
and shall state briefly the general nature of the business to be transacted
thereat and it shall not be necessary for the notice to set out the terms of
any resolution to be proposed or any of the provisions of this Article Eight.  Any accidental omission in the notice of a
meeting shall not invalidate any resolution passed at the meeting.

 

8.3                                                                                 Chairman

 

An
individual (who need not be a Warrantholder) designated in writing by the
Trustee shall be chairman of the meeting, and if no individual is so
designated, or if the individual so designated is not present within 15 minutes
from the time fixed for the holding of the meeting, the Warrantholders present
in person or by proxy shall choose a person present to be chairman.

 

22

 

8.4                                                                                 Quorum

 

Subject to the provisions of
section 8.12, at any meeting of the Warrantholders a quorum shall consist
of one or more Warrantholders present in person or by proxy and holding in
aggregate at least 10% of the then outstanding Warrants. If a quorum of the
Warrantholders is not present within half an hour from the time fixed for
holding a meeting, the meeting, if summoned by the Warrantholders pursuant to a
Warrantholders’ Request, shall be dissolved; but, subject to section 8.12,
in any other case the meeting shall be adjourned to the same day in the next
week (unless that day is not a business day, in which event the meeting shall
be reconvened on the next day that is a business day) at the same time and
place and no notice of the adjournment need be given. At the adjourned meeting
the Warrantholders present in person or by proxy shall form a quorum and may
transact the business for which the meeting was originally convened,
notwithstanding the number of outstanding Warrants that such Warrantholders
hold.

 

8.5                                                                                 Power to Adjourn

 

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

 

8.6                                                                                 Show of Hands

 

Every question submitted to a
meeting shall be decided in the first place by a majority of the votes given on
a show of hands except that votes on an Extraordinary Resolution shall be given
in the manner hereinafter provided.  At
any meeting, unless a poll is duly demanded or required as herein provided, a
declaration by the chairman that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact.  Any Warrantholder present in person or by
proxy can demand a poll at any meeting in accordance with the provisions of
section 8.7.

 

8.7                                                                                Poll

 

On every Extraordinary
Resolution, and on any other question submitted to a meeting upon which a poll
is directed by the chairman or requested by one or more of the Warrantholders
acting in person or by proxy and holding in the aggregate not less than 5% of
the total number of the Warrants then outstanding, a poll shall be taken in
such manner as the chairman shall direct. 
Questions other than an Extraordinary Resolution shall be decided by a
majority of the votes cast on a poll. 
The results of a poll shall be deemed to be the decision of the meeting
at which the poll was demanded and shall be binding on all Warrantholders.

 

8.8                                                                                 Voting

 

On a show of hands, every
person who is present and entitled to vote, whether as a Warrantholder or as
proxy for one or more absent Warrantholders or both, shall have one vote.  On a poll each Warrantholder present in
person or represented by proxy, duly appointed by instrument in writing, shall
be entitled to one vote in respect of each Warrant then held by him.  A proxyholder need not be a Warrantholder.

 

23

 

8.9                                                                                 Regulations

 

The Trustee, or the
Corporation with the approval of the Trustee, may from time to time make or
vary such regulations as they think fit:

 

(a)                                  for the issue of voting certificates
by any bank, trust company or other depository satisfactory to the Trustee
stating that the Warrants specified therein have been deposited with the
depository by a named person and will remain on deposit until a specified date,
which voting certificates shall entitle the persons named therein to be present
and vote at the meeting of the Warrantholders and at any adjournment thereof
held before that date or to appoint a proxy or proxies to represent them and
vote for them at any such meeting and at any adjournment thereof held before
that date in the same manner and with the same effect as though the persons so
named in the voting certificates were the actual holders of the Warrants
specified therein;

 

(b)                                 for the deposit of voting
certificates or instruments appointing proxies at such place and time as the
Trustee, the Corporation or the Warrantholders convening the meeting, as the
case may be, may in the notice convening the meeting direct;

 

(c)                                  for the deposit of voting
certificates or instruments appointing proxies at some approved place or places
other than the place at which the meeting is to be held and enabling
particulars of the voting certificates or instruments appointing proxies to be
sent by mail, cable, telex or other means of prepaid, transmitted, recorded
communication before the meeting to the Corporation or to the Trustee at the
place where the same is to be held and for the voting of proxies so deposited
as though the instruments themselves were produced at the meeting;

 

(d)                                 for the form of instrument
appointing a proxy (which shall be in writing), the manner in which the same
shall be executed and the verification of any authority under which a person
executes a proxy on behalf of a Warrantholder; and

 

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

 

Any regulations so made shall be binding and effective
and the votes given in accordance therewith shall be valid and shall be
counted.  Save as the regulations may
provide, the only persons who shall be recognized at any meeting as the holders
of any Warrants, or as entitled to vote or, subject to section 8.10, be
present at the meeting in respect thereof, shall be persons who are the
registered holders of Warrants or their duly appointed proxyholders.

 

8.10                                                                           Corporation and Trustee may be Represented

 

The Corporation and the
Trustee, by their respective officers or directors, and the counsel to the
Corporation and the Trustee may attend any meeting of the Warrantholders, but
shall have no vote as such.

 

8.11                                                                           Powers Exercisable by Extraordinary Resolution

 

In addition to all other
powers conferred upon them by any other provisions of this Indenture or by law,
the Warrantholders at a meeting shall have the following powers exercisable
from time to time by Extraordinary Resolution (subject to regulatory approval,
if required):

 

24

 

(a)                                  power to agree to or sanction any
modification, abrogation, alteration, compromise or arrangement of the rights
of Warrantholders or the Trustee in its capacity as trustee hereunder or on
behalf of the Warrantholders against the Corporation, whether those rights
arise under this Indenture, the Warrant Certificates or otherwise which shall
be agreed to by the Corporation, and to authorize the Trustee to concur in and execute
any indenture supplement, except that in respect of a change in the Exercise
Period or the Exercise Price the amendment shall not be binding upon a
Warrantholder who does not consent thereto;

 

(b)                                 power to direct or authorize the
Trustee to enforce any of the obligations on the part of the Corporation
contained in this Indenture or the Warrants or to enforce any of the rights of
the Warrantholders in any manner specified in the Extraordinary Resolution or
to refrain from enforcing any such covenant or right;

 

(c)                                  power to waive and direct the
Trustee to waive any default on the part of the Corporation in complying with
any provisions of this Indenture or the Warrants, either unconditionally or
upon any conditions specified in the Extraordinary Resolution;

 

(d)                                 power to restrain any Warrantholder
from taking or instituting any suit, action or proceeding against the
Corporation for the enforcement of any of the obligations on the part of the
Corporation contained in this Indenture or the Warrant Certificates or to
enforce any of the rights of the Warrantholders;

 

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

 

(f)                                    power from time to time and at any
time, with the consent of the Corporation, not to be unreasonably withheld, to
remove the Trustee and appoint a successor trustee;

 

(g)                                 power to assent to any change in or
omission from the provisions contained in the Warrant Certificates and this
Indenture or any ancillary or supplemental instrument which may be agreed to by
the Corporation, and to authorize the Trustee to concur in and execute any
ancillary or supplemental indenture embodying the change or omission;

 

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

 

(i)                                     power to amend, alter or repeal any
Extraordinary Resolution previously passed or consented to by Warrantholders.

 

8.12                                                                           Meaning of “Extraordinary Resolution”

 

(1)                                  The expression
“Extraordinary Resolution” when
used in this Indenture means, subject as hereinafter in this section and in
sections 8.15 and 8.16 provided, a resolution proposed at a meeting of the
Warrantholders duly convened for that purpose and held in accordance with the
provisions of this Article Eight at which there are present in person or by
proxy one or more Warrantholders holding in aggregate not less than 51% of the
total number of Warrants then outstanding and passed by the affirmative votes
of 

 

25

 

Warrantholders holding in
aggregate not less than 66.67% of the total number of Warrants then outstanding
and represented at the meeting and voted on the poll upon the resolution.

 

(2)                                  If at any
meeting called for the purpose of passing an Extraordinary Resolution
Warrantholders holding in aggregate not less than 51% of the total number of
Warrants then outstanding are not present in person or by proxy within half an
hour after the time appointed for the meeting, then the meeting, if convened by
Warrantholders pursuant to a Warrantholders’ Request, shall be dissolved; but
in any other case it shall stand adjourned to such day, being not less than 15
or more than 60 days later, and to such place and time as may be appointed by
the chairman.  Not less than ten days’
notice shall be given to the Warrantholders of the time and place of the
adjourned meeting in the manner provided in section 11.1(2).  The notice shall state that at the adjourned
meeting the Warrantholders present in person or by proxy shall form a quorum
but it shall not be necessary to set forth the purposes for which the meeting
was originally called or any other particulars. At the adjourned meeting the
Warrantholders present in person or by proxy shall form a quorum,
notwithstanding the provisions of this subsection 8.12(2) to
the contrary, and may transact the business for which the meeting was
originally convened and a resolution proposed at the adjourned meeting and
passed by the requisite vote as provided in subsection 8.12(1) shall be an Extraordinary Resolution within the
meaning of this Indenture notwithstanding the number of Warrants held by those
Warrantholders voting.

 

(3)                                  Votes on an
Extraordinary Resolution shall always be given on a poll and no demand for a
poll on an Extraordinary Resolution shall be necessary.

 

8.13                                                                           Powers Cumulative

 

It is hereby declared and
agreed that any one or more of the powers or any combination of the powers in
this Indenture stated to be exercisable by the Warrantholders by Extraordinary
Resolution or otherwise may be exercised from time to time and the exercise of
any one or more of the powers or any combination of the powers from time to
time shall not prevent the Warrantholders from exercising that power or those
powers or combination of powers then or any other power or powers or
combination of powers thereafter from time to time.

 

8.14                                                                           Minutes

 

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

 

8.15                                                                           Instruments in Writing

 

All actions that may be taken
and all powers that may be exercised by the Warrantholders at a meeting held as
in this Article Eight provided may also be taken and exercised by one or more
Warrantholders who hold in the aggregate not less than 66.67% of the total
number of then outstanding Warrants, by an instrument in writing signed in one
or more counterparts by each Warrantholder in person or by attorney duly
appointed in writing and the expression “Extraordinary
Resolution” when used in this Indenture shall include a resolution
embodied in an instrument so signed.

 

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8.16                                                                           Binding Effect of Resolutions

 

Every resolution and every
Extraordinary Resolution passed in accordance with the provisions of this
Article Eight at a meeting of Warrantholders shall be binding upon all the
Warrantholders, except as provided in subsection 8.11(a), whether present
at or absent from the meeting, and whether voting for or against the resolution
or abstaining and every instrument in writing signed by Warrantholders in
accordance with section 8.15 shall be binding upon all the Warrantholders,
except as provided in subsection 8.11(a), whether signatories thereto or
not, and each and every Warrantholder and the Trustee (subject to the
provisions for its indemnity herein contained) shall be bound to give effect
accordingly to every resolution and instrument in writing passed or executed in
accordance with these provisions.

 

8.17                                                                           Holdings by Corporation Disregarded

 

In determining whether the
Warrantholders holding the requisite number of Warrants are present for the
purpose of obtaining a quorum or have voted or consented to any resolution,
Extraordinary Resolution, consent, waiver, Warrantholders’ Request or other
action under this Indenture, Warrants owned by the Corporation or any
subsidiary of the Corporation shall be deemed to be not outstanding.

 

ARTICLE NINE

 

SUPPLEMENTAL
INDENTURES AND SUCCESSOR COMPANIES

 

9.1                                                                                 Provision for Supplemental Indentures
for Certain Purposes

 

From time to time the
Corporation and the Trustee may, subject to the provisions hereof, and they
shall, when so directed hereby, execute and deliver by their proper officers or
directors, as the case may be, indentures or instruments supplemental hereto,
which thereafter shall form part hereof, for any one or more or all of the
following purposes:

 

(a)                                  setting forth any adjustments
resulting from the application of the provisions of Article Five;

 

(b)                                 adding to the provisions hereof such
additional covenants and enforcement provisions as, in the opinion of counsel,
are necessary or advisable, provided that the same are not in the opinion of
the Trustee, based on the opinion of counsel, prejudicial to the interests of
the Warrantholders as a group;

 

(c)                                  giving effect to any Extraordinary
Resolution passed as provided in Article Eight;

 

(d)                                 adding to, deleting or altering the
provisions hereof in respect of the transfer of Warrants, the exchange of
Warrants and the making of any modification in the form of a Warrant
Certificate which additions, deletions or alterations, in the opinion of the
Trustee, based on the opinion of counsel, do not affect the substance thereof;

 

(e)                                  making any additions to, deletions
from or alterations of the provisions of this Indenture which, in the opinion
of the Trustee, based on the opinion of counsel, do not materially and
adversely affect the interests of the Warrantholders and are necessary or
advisable in order to incorporate, reflect or comply with any Applicable
Legislation;

 

27

 

(f)                                    making provisions not inconsistent
with this Indenture as may be necessary or desirable with respect to matters or
questions arising hereunder or for the purpose of obtaining a listing or
quotation of the Shares issuable under the Warrants on a stock exchange, bourse
or over-the-counter market, provided that the provisions are not, in the
opinion of the Trustee, based on the opinion of counsel, prejudicial to the
interests of the Warrantholders as a group;

 

(g)                                 modifying any of the provisions of
this Indenture or relieving the Corporation from any of the obligations,
conditions or restrictions herein contained, provided that no such modification
or relief shall be or become operative or effective if in the opinion of the
Trustee, based on the opinion of counsel, the modification or relief impairs
any of the rights of the Warrantholders provided hereunder, or of the Trustee,
and provided that the Trustee may in its uncontrolled discretion decline to
enter into any supplemental indenture which in its opinion may not afford
adequate protection to the Trustee when the same shall become operative;

 

(h)                                 evidencing any succession, or
successive successions, of other bodies corporate to the Corporation and the
assumption by any successor of the obligations of the Corporation herein and in
the Warrant Certificates as provided hereafter in this Article Nine; and

 

(i)                                     for any other purpose not
inconsistent with the terms of this Indenture, including the correction or
rectification of any ambiguities, defective provisions, errors or omissions
herein, provided that, in the opinion of the Trustee, based on the opinion of
counsel, the rights of the Trustee and the Warrantholders provided hereunder,
are in no way prejudiced thereby.

 

9.2                                                                                 Correction of Manifest Errors

 

The Corporation and the
Trustee may correct typographical, clerical and other manifest errors in this
Indenture in writing provided that such corrections shall, in the opinion of
the Trustee based on advice from its counsel, in no way prejudice the rights of
the Trustee or of the Warrantholders hereunder, and the Corporation and the
Trustee may execute and deliver all such documents as may be necessary to
correct such errors.

 

9.3                                                                                 Amending Adjustment Provisions

 

The Corporation and the
Trustee may modify the adjustments resulting from the application of the
provisions of Article Five if a modification is required as a result of any
approval of the Toronto Stock Exchange or the American Stock Exchange
contemplated by the provisions of Article Five and the Corporation and the
Trustee may execute and deliver such documents as may be necessary to effect
the modification.

 

9.4                                                                                 Successor Companies

 

In the case of the
consolidation, amalgamation, arrangement, merger or transfer of the undertaking
or assets of the Corporation as an entirety or substantially as an entirety to
another entity (“successor corporation”),
the successor corporation resulting from the consolidation, amalgamation, arrangement,
merger or transfer (if not the Corporation) shall be bound by the provisions
hereof and all obligations for the due and punctual performance and observance
of each and every covenant and obligation contained in this Indenture to be
performed by the Corporation and, if requested by the Trustee, 

 

28

 

the successor corporation
shall by supplemental indenture satisfactory in form to the Trustee and
executed and delivered to the Trustee, expressly assume those obligations.

 

ARTICLE TEN

 

CONCERNING THE
TRUSTEE

 

10.1                                                                           Trust Indenture Legislation

 

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

 

(2)                                  The
Corporation and the Trustee agree that each will, at all times in relation to
this Indenture and any action to be taken hereunder, observe and comply with
and be entitled to the benefits of Applicable Legislation.

 

10.2                                                                           Rights and Duties of Trustee

 

(1)                                  In the
exercise of the rights, duties and obligations prescribed or conferred by the
terms of this Indenture, the Trustee shall act honestly and in good faith with
a view to the best interests of the Warrantholders and shall exercise that
degree of care, diligence and skill that a reasonably prudent trustee would
exercise in comparable circumstances.

 

(2)                                  No provision
of this Indenture will be construed to relieve the Trustee from liability for
its own gross negligence or wilful misconduct.

 

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

 

(4)                                  The Trustee
may, before commencing any such act, action or proceeding, or at any time
during the continuance thereof require the Warrantholders at whose instance it
is acting to deposit with the Trustee the Warrant Certificates held by them,
for which Warrant Certificates the Trustee shall issue receipts.

 

(5)                                  Every
provision of this Indenture that by its terms relieves the Trustee of liability
or entitles it to rely upon any evidence submitted to it is subject to the
provisions of Applicable Legislation, and of this section 10.2 and
sections 10.3 and 10.8.

 

10.3                                                                           Evidence, Experts and Advisers

 

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

 

29

 

(2)                                  In the
exercise of its rights and duties hereunder the Trustee may, if it is acting in
good faith, rely as to due execution and as to the truth of the statements and
the accuracy of the opinions expressed therein, upon statutory declarations,
opinions, reports, certificates or other evidence furnished to the Trustee
pursuant to any provision hereof or pursuant to a request of the Trustee.

 

(3)                                  The Trustee
may employ or retain such counsel, accountants, engineers, appraisers, or other
experts or advisers as it may reasonably require for the purpose of discharging
its duties hereunder and may pay reasonable remuneration for all services so
performed by any of them payable by the Corporation in accordance with
section 6.3, without taxation of costs of any counsel, and shall not be
responsible for any misconduct on the part of any of them who has been selected
with due care by the Trustee.

 

(4)                                  The Trustee
may as a condition precedent to any action to be taken by it under this
Indenture require such opinions, statutory declarations, reports, certificates
or other evidence as it, acting reasonably, considers necessary or advisable in
the circumstances.

 

10.4                                                                           Securities, Documents and Monies Held
by Trustee

 

Any securities, documents of
title or other instruments that may at any time be held by the Trustee subject
to the trusts hereof may be placed in the deposit vaults of the Trustee or of
any of the Canadian Imperial Bank of Commerce, BMO Bank of Montreal, Bank of
Nova Scotia, The Toronto-Dominion Bank, RBC Royal Bank and HSBC Bank Canada or
deposited for safekeeping with any of those Canadian chartered banks.  Unless herein otherwise expressly provided,
any money so held pending the application or withdrawal thereof under any
provision of this Indenture shall be deposited in the name of the Trustee in
any of the foregoing Canadian chartered banks at the rate of interest, if any,
then current on similar deposits or, with the consent of the Corporation, be:

 

(a)                                  deposited in the deposit department
of the Trustee or of any other loan or trust company authorized to accept
deposits under the laws of Canada or a province thereof whose short term debt
obligations or deposits have a rating of at least R1 as rated by Dominion Bond
Rating Service, or

 

(b)                                 invested in securities issued or
guaranteed by the Government of Canada or a province thereof or in obligations
maturing not more than one year from the date of investment of or guaranteed by
any of the foregoing Canadian chartered banks.

 

Unless the Corporation is in default hereunder, all
interest or other income received by the Trustee in respect of deposits and
investments will belong to the Corporation.

 

10.5                                                                           Action by Trustee to Protect
Interests

 

The Trustee shall have power
to institute and to maintain such actions and proceedings as it may consider
necessary or expedient to preserve, protect or enforce its interests and the
interests of the Warrantholders.

 

10.6                                                                           Trustee not Required to Give Security

 

The Trustee shall not be
required to give any bond or security in respect of the execution of the trusts
and powers of this Indenture or otherwise in respect of the premises contained
herein.

 

30

 

10.7                                                                           Protection of Trustee

 

By way of supplement to the
provisions of any law from time to time applicable to trustees, it is expressly
declared and agreed as follows:

 

(1)                                  The Trustee
shall not be liable for or by reason of any representations, statements of fact
or recitals in this Indenture or in the Warrant Certificates (except the
representation contained in section 10.10 or by virtue of the
certification by the Trustee of the Warrant Certificates) or required to verify
the same, but all those statements or recitals are and shall be deemed to be
made by the Corporation.

 

(2)                                  Nothing herein
contained shall impose any obligation on the Trustee to see to or to require
evidence of the registration (or filing or renewal thereof) of this Indenture
or any instrument ancillary or supplemental hereto.

 

(3)                                  The Trustee
shall not be bound to give notice to any person or persons of the execution
hereof.

 

(4)                                  The Trustee
shall not incur any liability or responsibility whatever or be in any way
responsible for the consequence of any breach on the part of the Corporation of
any of the covenants or warranties herein contained or of any acts of any
director, officer, employee or agent of the Corporation.

 

(5)                                  The Trustee
shall not be bound to give any notice or to do or take any act, action or
proceeding by virtue of the powers conferred on it hereby unless and until it
has been required to under the terms hereof nor shall the Trustee be required
to take notice of any default of the Corporation hereunder unless and until
notified in writing of the default (which notice must specify the nature of the
default) and, in the absence of that notice, the Trustee may for all purposes
hereunder conclusively assume that no default by the Corporation hereunder has
occurred. The giving of any notice shall in no way limit the discretion of the
Trustee hereunder as to whether any action is required to be taken in respect
of any default hereunder.

 

(6)                                  The Trustee
shall not be accountable with respect to the validity or value (or the kind or
amount) of any Shares or Warrants or other securities or property which may at
any time be issued or delivered upon the exercise of the rights attaching to
any Warrant.

 

(7)                                  The Trustee is
not responsible for any failure of the Corporation to make any cash payment or
to issue, transfer or deliver Shares or certificates for the same upon the
surrender or deemed surrender of any Warrant Certificates for the purpose of
the exercise of the Warrants represented by such Warrant Certificates.

 

10.8                                                                           Indemnification

 

Without limiting any
protection or indemnity of the Trustee under any other provision hereof, or
otherwise at law, the Corporation hereby agrees to indemnify and hold harmless
the Trustee, its directors, officers, employees and agents (collectively, the “Indemnified Parties”) from and against any
and all liabilities, losses, damages, penalties, claims, actions, suits, costs,
expenses and disbursements, including reasonable legal or advisor fees and
disbursements, of whatever kind and nature which may at any time be imposed on,
incurred by or asserted against the Indemnified Parties in connection with the
performance of its duties and obligations hereunder, other than such liabilities,
losses, damages, penalties, claims, actions, suits, costs, expenses and
disbursements arising by reason of the gross negligence or fraud of the
Indemnified Parties.  This provision
shall survive the resignation or removal of the Trustee, or the termination of
the Indenture.  The Indemnified Parties
shall not be under any obligation to prosecute or to defend any action or suit
in respect of the relationship which, in the opinion of their 

 

31

 

counsel, may involve them in
expense or liability, unless the Corporation shall, so often as required,
furnish the Indemnified Parties with satisfactory indemnity and funding against
such expense or liability.

 

10.9                                                                           Replacement of Trustee

 

(1)                                  The Trustee
may resign its trust and be discharged from all further duties and liabilities
hereunder, except as provided in this Article Ten, by giving to the
Corporation and the Warrantholders not less than 90 days’ notice in writing or,
if a new Trustee has been appointed such shorter notice as the Corporation may
accept as sufficient. The Warrantholders by Extraordinary Resolution shall have
power at any time, with the consent of the Corporation, not to be unreasonably
withheld, to remove the Trustee and to appoint a new Trustee.  In the event of the Trustee resigning or
being removed as aforesaid or being dissolved, becoming bankrupt, going into
liquidation or otherwise becoming incapable of acting hereunder, the
Corporation shall forthwith appoint a new Trustee unless a new Trustee has
already been appointed by the Warrantholders; failing that appointment by the
Corporation, the retiring Trustee or any Warrantholder may apply to the Supreme
Court of British Columbia, on such notice as the Court may direct, for the
appointment of a new Trustee; but any new Trustee so appointed by the
Corporation or by the Court shall be subject to removal as aforesaid by the
Warrantholders and the Corporation.  Any
new Trustee appointed under any provision of this section 10.9 shall be a
corporation authorized to carry on the business of a trust company in the
provinces of British Columbia and Ontario and, if required by the Applicable
Legislation of any other province, in that other province.  On any appointment, the new Trustee shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named herein as Trustee without any further assurance,
conveyance, act or deed; but there shall be immediately executed, at the
expense of the Corporation, all such conveyances or other instruments as may,
in the opinion of counsel, be necessary or advisable for the purpose of
assuring such powers, rights, duties and responsibilities of the new Trustee.

 

(2)                                  Upon the
appointment of a new Trustee, the Corporation shall promptly give notice
thereof to the Warrantholders.

 

(3)                                  Any
corporation into or with which the Trustee may be merged or consolidated or
amalgamated, or any corporation succeeding to the trust business of the
Trustee, shall be the successor to the Trustee hereunder without any further
act on its part or any of the parties hereto provided that the corporation
would be eligible for appointment as a new Trustee under subsection 10.9(1).

 

(4)                                  Any Warrant
Certificates certified but not delivered by a predecessor Trustee may be
certified by the new or successor Trustee in the name of the predecessor or new
or successor Trustee.

 

10.10                                                                     Conflict of Interest

 

(1)                                  The Trustee
represents to the Corporation that at the time of the execution and delivery
hereof no material conflict of interest exists between the Trustee’s role as a
fiduciary hereunder and its role in any other capacity and agrees that in the
event of a material conflict of interest arising hereafter it will, within 90
days after ascertaining that it has a material conflict of interest, either
eliminate the same or assign its trust hereunder to a successor Trustee
approved by the Corporation and meeting the requirements set forth in
subsection 10.9(1).  Notwithstanding the
foregoing provisions of this subsection 10.10(1), if any such material
conflict of interest exists or hereafter shall exist, the validity and
enforceability of this Indenture and the Warrant Certificate shall not be
affected in any manner whatsoever by reason thereof.

 

(2)                                  Subject to
subsection 10.10(1), the Trustee, in its personal or any other capacity,
may buy, lend upon and deal in securities of the Corporation, may act as
registrar and transfer agent for the Shares and trustee for the Warrants under
the Warrant Indenture and generally may contract and enter into financial 

 

32

 

transactions with the
Corporation or any subsidiary of the Corporation, all without being liable to
account for any profit made thereby.

 

10.11                                                                     Acceptance of Trust

 

The Trustee hereby accepts the
trusts in this Indenture declared and provided for, agrees to perform the same
upon the terms and conditions herein set forth and agrees to hold all rights,
interests and benefits contained herein for and on behalf of those persons who
become holders of Warrants from time to time issued pursuant to this Indenture.

 

10.12                                                                     Trustee not to be Appointed Receiver

 

The Trustee and any person
related to the Trustee shall not be appointed a receiver, a receiver and
manager or liquidator of all or any part of the assets or undertaking of the
Corporation.

 

10.13                                                                     Third Party Interests

 

The Corporation hereby represents to the Trustee that
any account to be opened by, or interest held by, the Trustee in connection
with this Indenture, for or to the credit of the Corporation, either:  (i) is
not intended to be used by or on behalf of any third party; or (ii) is intended to be used by or on behalf
of a third party, in which case the Corporation agrees to complete and execute
forthwith a declaration in the Trustee’s prescribed form as to the particulars
of such third party.

 

10.14                                                                     Compliance with Money Laundering Legislation

 

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

 

10.15                                                                     Compliance with Privacy Laws

 

The parties acknowledge that federal and/or provincial legislation that addresses the
protection of individuals’ personal information (collectively, “Privacy Laws”) applies to obligations and
activities under this Indenture.  Despite
any other provision of this Indenture, neither party shall take or direct any
action that would contravene, or cause the other to contravene, applicable
Privacy Laws. The Corporation shall, prior to transferring or causing to be
transferred personal information to the Trustee, obtain and retain required
consents of the relevant individuals to the collection, use and disclosure of
their personal information, or shall have determined that such consents either
have previously been given upon which the parties can rely or are not required
under the Privacy Laws. The Trustee shall use commercially reasonable efforts
to ensure that its services hereunder comply with Privacy Laws. Specifically,
the Trustee agrees: (a) to have a designated chief privacy officer; (b)
to maintain policies and procedures to
protect personal information and to receive and respond to any privacy
complaint or inquiry; (c) to use personal information solely for the purposes
of providing its services under or ancillary to this Indenture and not to use
it for any other purpose except with the consent of or direction from the
Corporation or the individual involved; (d) not to sell or otherwise improperly
disclose personal information to any third 

 

33

 

party; and (e) to employ administrative,
physical and technological safeguards to reasonably secure and protect personal
information against loss, theft, or unauthorized access, use or modification.

 

ARTICLE
ELEVEN

 

GENERAL

 

11.1                                                                           Notice to Corporation and Trustee

 

(1)                                  Unless herein
otherwise expressly provided, any notice to be given hereunder to the
Corporation or the Trustee shall be given in writing and shall be deemed to be
validly given if delivered or if sent by registered letter, postage prepaid or
if transmitted by telecopy:

 

(a)                                  if to the Corporation:

 

Vista Gold Corp. 

Suite 5, 7961 Shaffer Parkway

Littleton, Colorado

U.S.A. 80127

 

Attention:  Chief Financial Officer

 

Telecopier
No.:  (720) 981-1186

 

(b)                                 if to the Trustee:

 

Computershare Trust Company of
Canada

510 Burrard Street

Vancouver, British Columbia

V6C 3B9

 

Attention:  Corporate Trust Services

 

Telecopier No.:  (604) 661-9403

 

and any notice given in accordance with the foregoing
shall be deemed to have been received on the date of delivery or, if mailed, on
the fifth business day following the day of the mailing of the notice or, if
transmitted by telecopy, on the day following the transmission.

 

(2)                                  The
Corporation or the Trustee, as the case may be, may from time to time notify
the other in the manner provided in subsection 11.1(1) of a change of
address which, from the effective date of the notice and until changed by like
notice, shall be the address of the Corporation or the Trustee, as the case may
be, for all purposes of this Indenture.

 

(3)                                  If, by reason
of a strike, lockout or other work stoppage, actual or threatened, involving
postal employees, any notice to be given to the Trustee or to the Corporation
hereunder could reasonably be considered unlikely to reach or to be delayed in
reaching its destination, the notice shall be valid and effective only if it is
delivered to an officer of the party to which it is addressed or if it is
delivered to that party at the appropriate address provided in subsection 11.1(1)
by cable, telegram, telex, telecopy or other means of prepaid, transmitted, or
written communication and any notice delivered in accordance with the foregoing
shall be deemed to have been received on the date of delivery to the officer or
if delivered by cable, telegram, 

 

34

 

telex, telecopy or other means
of prepaid, transmitted, recorded communication, on the first business day
following the date of the sending of the notice by the person giving the
notice.

 

11.2                                                                           Notice to Warrantholders

 

(1)                                  Unless herein
otherwise expressly provided, any notice to be given hereunder to
Warrantholders shall be written and shall be deemed to be validly given if the
notice is sent by prepaid mail, addressed to the holder or delivered by hand or
transmitted by telecopy (or so mailed to certain holders and so delivered to
other holders and so telecopied to other holders) at their respective addresses
and telecopy numbers appearing on the register maintained by the Trustee; and
if in the case of joint holders of any Warrants more than one address or
telecopy number appears on the register in respect of that joint holding, the
notice shall be addressed or delivered, as the case may be, only to the first
address or telecopier number, as the case may be, so appearing.  Any notice so given shall be deemed to have
been received on the day of delivery by hand or telecopy or, if mailed, on the
next business day following the day of mailing of the notice.  Accidental error or omission in giving notice
or accidental failure to mail notice to any Warrantholder shall not invalidate
any action or proceeding founded thereon.

 

(2)                                  If, by reason
of strike, lock-out or other work stoppage, actual or threatened, involving
postal employees, any notice to be given to the Warrantholders hereunder could
reasonably be considered unlikely to reach or be delayed in reaching its
destination, the notice shall be valid and effective if published or
distributed once in the Report on Business section of the national edition of
The Globe and Mail newspaper, or, in the event of a disruption in the
circulation of that newspaper, once in a daily newspaper in the English
language approved by the Trustee of general circulation in the City of Toronto
and Vancouver; provided that in the case of a notice convening a meeting of the
holders of Warrants, the Trustee may require such additional publications of
that notice, in the same or in other cities or both, as it may deem necessary
for the reasonable protection of the holders of Warrants or to comply with any
applicable requirement of law or any stock exchange.  Any notice so given shall be deemed to have
been given on the day on which it has been published in all of the cities in
which publication was required (or first published in a city if more than one
publication in that city is required). 
In determining under any provision hereof, the date when notice of any
meeting or other event must be given, the date of giving notice shall be included
and the date of the meeting or other event shall be excluded.

 

11.3                                                                           Satisfaction and Discharge of
Indenture

 

Upon the earlier of (i) the
date by which certificates representing Shares shall have been delivered to
Warrantholders to the full extent of the rights attached to all Warrants
theretofore certified hereunder and the monies to be paid hereunder, if any,
have been paid and (ii) the Expiry Date; this Indenture shall cease to be of
further effect and the Trustee, on demand of and at the cost and expense of the
Corporation and upon delivery to the Trustee of a certificate of the
Corporation stating that all conditions precedent to the satisfaction and
discharge of this Indenture have been complied with and upon payment to the
Trustee of the fees and other remuneration payable to the Trustee, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture.

 

11.4                                                                           Sole Benefit of Parties and
Warrantholders

 

Nothing in this Indenture or
in the Warrant Certificates, expressed or implied, shall give or be construed
to give to any person other than the parties hereto and the Warrantholders any
legal or equitable right, remedy or claim under this Indenture, or under any
covenant or provision therein contained, all such covenants and provisions
being for the sole benefit of the parties hereto and the Warrantholders.

 

35

 

11.5                                                                           Discretion of Directors

 

Any matter provided herein to
be determined by the directors will be determined acting reasonably in their
sole discretion, and a determination so made will be conclusive.

 

11.6                                                                           Counterparts and Formal Date

 

This Indenture may be executed
in several original or facsimile counterparts, each of which when so executed
shall be deemed to be an original and the counterparts together shall
constitute one and the same instrument and notwithstanding their date of
execution shall be deemed to bear the date as of February 2, 2006.

 

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

 

	
   

  	
  VISTA GOLD CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPUTERSHARE TRUST COMPANY OF CANADA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

36

 

SCHEDULE “A”

 

UNLESS PERMITTED UNDER CANADIAN SECURITIES
LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE
JUNE 3, 2006.

 

NEITHER THIS
CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY NOR ANY SECURITIES ISSUABLE
UPON THE EXERCISE OF SUCH SECURITIES, NOR ANY INTEREST IN OR RIGHTS UNDER SAME,
HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”) OR UNDER THE SECURITIES LAWS OF
ANY STATE, AND NEITHER THIS CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY
NOR ANY SECURITIES ISSUABLE UPON THE EXERCISE OF SUCH SECURITIES, NOR ANY
INTEREST IN OR RIGHTS UNDER SAME, MAY BE SOLD,
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED OR DISPOSED OF
WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
UNITED STATES STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION, (B) RECEIPT
BY THE CORPORATION OF AN ACCEPTABLE LEGAL OPINION STATING THAT SUCH TRANSACTION
IS EXEMPT FROM REGISTRATION, OR (C) THE CORPORATION OTHERWISE SATISFYING ITSELF
THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.

 

WARRANT

to
acquire common shares of

 

VISTA GOLD CORP.

(continued under the laws of the
Yukon Territory)

 

	
  Warrant Certificate

  	
   

  	
   

  
	
  No.

  	
   

  	
  Certificate for 

  	
   

  	
   

  
	
   

  	
   

  	
  Warrants, each entitling the
  holder to acquire one 

  Share of Vista Gold Corp.

  

 

THIS IS TO
CERTIFY THAT, for value received,

 

(the “Holder”)
is the registered Holder of the number of common share purchase warrants (the “Warrants”) of the Corporation specified
above, and is entitled, on exercise of these Warrants upon and subject to the
terms and conditions set forth herein and in the Warrant Indenture hereinafter
referred to, to purchase at any time before 4:30 p.m. (Vancouver time) on
February 2, 2008 (the “Expiry Date”), one fully paid and
non-assessable common share without par value in the capital of the Corporation
as constituted on the date hereof (a “Share”)
for each Warrant by surrendering to the Trustee at its principal transfer
office in the Cities of Vancouver or Toronto with this certificate an exercise
form in the form attached hereto duly completed and executed, accompanied by
cash, a certified cheque, bank draft or money order in lawful money of the
United States of America payable to or to the order of the Corporation at par
in the city where this Warrant Certificate is so surrendered in an amount equal
to the purchase price of the Shares so subscribed for.

 

Surrender of this Warrant
Certificate, the duly completed exercise form and payment as provided above
will be deemed to have been effected only on personal delivery thereof to, or
if sent by mail or other means of transmission on actual receipt thereof by,
the Trustee at the Cities of Vancouver and Toronto.

 

A-1

 

Subject to adjustment thereof
in the events and in the manner set forth in the Warrant Indenture hereinafter
referred to, the exercise price (the “Exercise
Price”) upon the exercise of a Warrant shall be U.S.$6.00 per
Warrant.

 

Certificates for the Shares
subscribed for will be mailed to the persons specified in the exercise form at
their respective addresses specified therein or, if so specified in the
exercise form, delivered to such persons at the office where this Warrant Certificate
is surrendered.  If fewer Shares are
purchased than the number that can be purchased pursuant to this Warrant
Certificate, the Holder hereof will be entitled to receive without charge a new
Warrant Certificate in respect of the balance of the Shares not so
purchased.  No fractional Shares will be
issued upon exercise of any Warrant.

 

This Warrant Certificate
evidences Warrants of the Corporation issued or issuable under the provisions
of a warrant indenture (which indenture together with all other instruments
supplemental or ancillary thereto is herein referred to as the “Warrant Indenture”) dated as of February 2, 2006 between the Corporation and
the Trustee, as trustee, to which Warrant Indenture reference is hereby made
for particulars of the rights of the Holders of Warrants, the Corporation and
the Trustee in respect thereof and the terms and conditions on which the
Warrants are issued and held, all to the same effect as if the provisions of
the Warrant Indenture were herein set forth, to all of which the Holder by
acceptance hereof assents.  The
Corporation will furnish to the Holder, on request and without charge, a copy
of the Warrant Indenture.

 

On presentation at the
principal transfer office of the Trustee in the Cities of Vancouver or Toronto
as specified below, subject to the provisions of the Warrant Indenture and on
compliance with the reasonable requirements of the Trustee, one or more Warrant
Certificates may be exchanged for one or more Warrant Certificates entitling
the Holder thereof to purchase in the aggregate an equal number of Shares as
are purchasable under the Warrant Certificate or Certificates so exchanged.

 

The Warrant Indenture contains
provisions for the adjustment of the number and kind of Shares issuable upon
the exercise of Warrants in the events and in the manner set forth therein.

 

The Warrant Indenture also
contains provisions making binding on all Holders of Warrants outstanding
thereunder resolutions passed at meetings of Holders of Warrants held in
accordance with the provisions of the Warrant Indenture and instruments in
writing signed by Holders of Warrants entitled to purchase a specific majority
of the Shares that can be purchased pursuant to such Warrants.

 

Nothing contained in this
Warrant Certificate, the Warrant Indenture or elsewhere shall be construed as
conferring upon the Holder hereof any right or interest whatsoever as a Holder
of Shares or any other right or interest except as herein and in the Warrant
Indenture expressly provided.

 

Warrants are issuable only as
fully registered Warrants.  Warrants may
only be transferred in compliance with the conditions of the Warrant Indenture
on one of the registers to be kept by and at the principal offices of the
Trustee in Vancouver or Toronto, and by the Trustee or such other registrar as
the Corporation, with the approval of the Trustee, may appoint at such other
place or places, if any, as may be designated, upon surrender of this Warrant
Certificate to the Trustee or other registrar accompanied by a written
instrument of transfer in form and execution satisfactory to the Trustee or
other registrar and upon compliance with the conditions prescribed in the
Warrant Indenture and with such reasonable requirements as the Trustee or other
registrar may prescribe and upon the transfer being duly noted thereon by the
Trustee or other registrar.

 

A-2

 

In the event of any
discrepancy between anything contained in this Warrant Certificate and the
terms and conditions of the Warrant Indenture, the terms and conditions of the
Warrant Indenture shall govern.

 

Time is of the essence hereof.

 

This Warrant Certificate will
not be valid for any purpose until it has been countersigned by or on behalf of
the Trustee from time to time under the Warrant Indenture.

 

The parties hereto have
declared that they have required that these presents and all other documents
related hereto be in the English language. 
Les parties aux présentes déclarent qu’elles ont exigé que la présente
convention, de même que tous les documents s’y rapportant, soient rédigés en
anglais.

 

IN WITNESS WHEREOF Vista Gold
Corp. has caused this Warrant Certificate to be duly executed as of the     day
of                       ,
200    .

 

	
   

  	
  VISTA GOLD CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
  Countersigned and Registered by:

  	
   

  
	
   

  	
   

  
	
  COMPUTERSHARE TRUST COMPANY OF CANADA

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
					

 

A-3

 

APPENDIX “A”

 

EXERCISE FORM

TO:                            Vista Gold Corp.

c/o Computershare Trust Company of Canada

510 Burrard Street

Vancouver, British Columbia

V6C 3B9

 

Attention:                                         Stock Transfer Department

 

The undersigned holder of the
within Warrants hereby exercises                         
of the Warrants represented hereby and the right provided for in such exercised
Warrants to receive the common shares of Vista Gold Corp. issuable pursuant to
such Warrants.

 

The undersigned hereby
irrevocably directs that the said common shares be issued and delivered as
follows:

 

	
  Name(s) in Full

  	
   

  	
  Address(es) (include
  Postal/Zip Code)

  	
   

  	
  Numbers(s) of 

  common shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(Please print in full the name in which certificates
are to be issued.  If any of the
securities are to be issued to a person or persons other than the Warrantholder,
the Transfer of Warrants form must be completed and the Warrantholder must pay
to the Trustee all exigible transfer taxes or other government charges.)

 

The undersigned represents, warrants and certifies as
follows:  the undersigned (i) is an “accredited
investor” (as such term is defined in Rule 501(a) of Regulation D under the
U.S. Securities Act of 1933, as amended (an “Accredited Investor”)), exercising
the Warrant for its own account or the account of an Accredited Investor over
which it exercises sole investment discretion, and (ii) has had access to such
current public information concerning Vista Gold Corp. as it considered
necessary in connection with its investment decision.

 

	
  DATED this             
  day of                           ,
                            .

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness or Signature Guarantee*

  	
   

  	
  Signature of Registered Holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name of Registered Holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address of Registered Holder

  
				

 

*  If the
underlying securities are to be issued to a person other than the registered
holder then the signature must be guaranteed by a Schedule I Canadian Chartered
Bank or a guarantee under the North American STAMP, SEMP or MSP Medallion
Programs.

 

	
  o

  	
   

  	
  Please check box
  if these certificates are to be delivered to the office where this Warrant
  Certificate is surrendered, failing which the certificates will be mailed to
  the address shown on the register.

  

 

A-4

 

APPENDIX “B”

 

TRANSFER OF WARRANTS

 

FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

                                                                                                           (name)                                                         (the
“transferee”)

 

 

(address)

 

                       
of the Warrants registered in the name of the undersigned represented by the
within certificate.

 

The
undersigned hereby certifies that the Warrants are being sold, assigned or
transferred in

accordance with applicable securities laws covering any such transaction.

 

DATED the
           day of                    ,                    .

 

 

	
  Signature
  of Warrantholder

  	
   

  
	
  Guaranteed by:

  	
  (Signature of Warrantholder)

  	
   

  
				

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  *

  	
   

  
	
   

  	
   

  	
   

  
	
  

  

  
	
   

  	
   

  	
  *
  Authorized Signature Number

  

 

NOTE:  The signature to this transfer must
correspond with the name as recorded on the Warrants in every particular
without alteration or enlargement or any change whatever.  The signature of the person executing this
transfer must be guaranteed by a Schedule I Canadian Chartered Bank or a
guarantee under the North American STAMP, SEMP or MSP Medallion Programs.

 

A-5Exhibit
10.1

 

SUBSCRIPTION AGREEMENT

 

A completed and originally executed copy of
this Subscription Agreement, payment in accordance with Section 5 of this
Subscription Agreement, the Confirmation of Status as U.S. “Accredited Investor”
attached as Schedule “A” and if the Purchaser is a resident of any Canadian
jurisdiction, the Confirmation of Status as Canadian “Accredited Investor”
attached as Schedule “B”, must be delivered by no later than 4:30 p.m.
(Vancouver time) on January 30, 2006 to:

 

Vista
Gold Corp.

Suite 5 · 7961 Shaffer Parkway

Littleton, Colorado · USA 80127

Attention: Gregory Marlier

Tel: (720) 981-1185

Fax: (720) 981-1186

	
  Issuer:
  Vista Gold Corp.

  	
   

  	
  Issue:               Units, each unit consisting of one Share (as defined below) and
  one Warrant (as defined below)

  
	
   

  	
   

  	
   

  
	
  Price
  per Unit: U.S.$5.05

  	
   

  	
  Total
  Subscription Price: U.S.$

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Number
  of Units:

  	
   

  	
   

  	
   

  	
   

  
							

 

	
  Name and
  Address of Purchaser:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Address: 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Street
  Address) 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (City and
  State/Province or Country) 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Zip
  Code/Postal Code)

  

 

Alternate Registration
Instructions for Certificates:  If other than in the name of the Purchaser:

 

	
  Name:

  	
   

  	
   

  	
  Address: 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Street
  Address) 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (City and
  State/Province or Country) 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Zip
  Code/Postal Code)

  

 

Delivery Instructions:  The name and address
(including contact name and telephone number) of the person to whom the
certificates representing the Shares and Warrants are to be delivered, if other than the Purchaser:

 

	
  Name:

  	
   

  	
   

  	
  Address: 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Street
  Address) 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (City and
  State/Province or Country) 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Zip
  Code/Postal Code)

  

 

Number and type of securities of Vista Gold Corp.
presently held directly and indirectly:

 

	
  Type of Security

  	
   

  	
  Number

  
	
   

  	
   

  	
   

  
	
  Common shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Convertible security
  (including warrants)

  	
   

  	
   

  

 

 

TO:                                                                          VISTA GOLD CORP.

 

1.                                                                                       Subscription.  The undersigned (the “Purchaser”)
hereby tenders to Vista Gold Corp. (the “Corporation”)
this subscription offer which, upon acceptance by the Corporation, will
constitute an agreement (the “Subscription Agreement”)
of the Purchaser with the Corporation to purchase from the Corporation and, on
the part of the Corporation, to sell to the Purchaser, the Units (as defined
below) set out on the cover page hereof (the “Purchaser’s
Units”) at the price of U.S.$5.05 per Unit (the “Purchase Price”), all on the terms and subject to the
conditions set forth in this Subscription Agreement.  Each Unit will consist of one Share (as
defined below) and one Warrant (as defined below).

 

2.                                                                                       Acknowledgement.  The Purchaser acknowledges
that the Purchaser’s Units will be issued in connection with the creation and
issuance of an aggregate of up to 649,684 Units for an aggregate subscription
price of up to U.S.$3,280,904.20 to be sold by the Corporation by private
placement (the “Offering”).  In addition, the Purchaser acknowledges that
the definitive terms and conditions and form of the Warrants will be set forth
in the Warrant Indenture (as defined below).

 

3.                                                                                       Definitions.  In this Subscription Agreement, unless the
context otherwise requires:

 

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

 

(b)                                 “1934 Act” means the Securities Exchange Act of 1934, as
amended, of the United States;

 

(c)                                  “affiliate”, “associate”, “distribution”
and “insider” have the respective meanings
ascribed to them in the Securities Act
(British Columbia);

 

(d)                                 “Closing” means the completion of
the issue and sale by the Corporation, and the purchase by the Purchasers, of
the Units;

 

(e)                                  “Closing Date” means February 1,
2006 or such other date as the Corporation and the Purchaser may agree;

 

(f)                                    “Closing Time” means 9:00 a.m.
(Vancouver time) on the Closing Date or such other time as the Corporation and
the Purchaser may agree;

 

(g)                                 “Exchanges” means the Toronto Stock
Exchange and the American Stock Exchange;

 

(h)                                 “Financial Statements”
means the
audited annual financial statements of the Corporation as at and for the year
ended December 31, 2004 and the unaudited financial statements of the
Corporation as at and for the nine month period ended September 30, 2005;

 

(i)                                     “International Jurisdiction” means a country
other than Canada or the United States;

 

(j)                                     “International Securities Laws” means any
securities laws having application to the Purchaser and the purchase by the
Purchaser of the Purchaser’s Units other than the laws of Canada or the United
States, and all regulatory notices, orders, regulations, policies and other
instruments incidental thereto;

 

1

 

(k)                                  “MI 45-102” means Canadian Multilateral Instrument 45-102 Resale of Securities;

 

(l)                                     “Public Record” means the prospectuses, annual
reports, quarterly reports, current reports, annual information forms, offering
memoranda, proxy statements, material change reports, press releases and
technical reports filed by or on behalf of the Corporation with the Exchanges,
any applicable Canadian securities regulatory authority and the SEC during the
12 months preceding the date hereof;

 

(m)                               “Purchasers” means all purchasers
of the Units, including the Purchaser hereunder;

 

(n)                                 “Registration Statement”
means a registration statement under the 1933 Act relating to the Shares and
the Warrant Shares;

 

(o)                                 “Regulation S” means
Regulation S under the 1933 Act;

 

(p)                                 “Reporting Provinces”
means the Provinces of British Columbia and Ontario;

 

(q)                                 “SEC” means the United
States Securities and Exchange Commission;

 

(r)                                    “Securities” means
collectively, the Units, the Shares, the Warrants and the Warrant Shares;

 

(s)                                  “Shares” means common shares
without par value in the capital of the Corporation;

 

(t)                                    “Trustee” means
Computershare Trust Company of Canada;

 

(u)                                 “Underlying Securities”
means collectively, the Shares, the Warrants and the Warrant Shares;

 

(v)                                 “Unit” means one Share
and one Warrant;

 

(w)                               “United States” means the United
States as that term is defined in Regulation S;

 

(x)                                   “U.S. Person” means a U.S. person
as that term is defined in Regulation S;

 

(y)                                 “Warrant Indenture”
means the indenture to be dated as of the Closing Date, and to be entered into
between the Corporation and the Trustee pursuant to which the Warrants will be
issued;

 

(z)                                   “Warrant Shares” means
the Shares issuable upon exercise of the Warrants in accordance with their
terms; and

 

(aa)                            “Warrants” means the
common share purchase warrants of the Corporation comprising part of the Units
to be issued by the Corporation hereunder and having the characteristics
described in section 4 below.

 

2

 

4.                                                                                       Warrant Indenture.  The Warrants will be
represented and governed by the Warrant Indenture.  The Warrant Indenture will contain provisions
to the following effect:

 

(a)                                  Right to Shares - Each
whole Warrant will be exercisable to acquire, subject to adjustment as set out
in the Warrant Indenture, one Warrant Share at any time from the Closing Date
until 4:30 p.m. (Vancouver time) on the day which is 24 months after the
Closing Date at the price of U.S.$6.00 per Warrant Share (in this Section 4,
the “Exercise Price”).

 

(b)                                 Adjustment Provisions - The number of Warrant Shares issuable on the exercise of a Warrant
and the Exercise Price will be subject to adjustment in certain events,
including the subdivision, consolidation, change or reclassification of Shares,
the issue of the Shares by way of stock dividends other than dividends paid in
the ordinary course, and the distribution to all or substantially all the
holders of the Shares of rights entitling them to subscribe for or purchase
Shares at a price that is less than 95% of the then current market price of the
Shares.

 

(c)                                  Amendment of Warrant Indenture - The Corporation and the Trustee may amend or correct the Warrant
Indenture or any supplemental indenture or the rights of the holders of the
Warrants in certain ways which, in general, do not affect the substance thereof
or do not prejudice the holders of Warrants. 
Otherwise, the Corporation and the Trustee may only amend the Warrant
Indenture or any supplemental indenture or the rights of the holders of the
Warrants with approval of the holders of the Warrants given by resolution
passed at a meeting at which a quorum is present pursuant to the terms of the
Warrant Indenture by the affirmative votes of holders of 66.67% of the Warrants
voted at the meeting or consented to in writing by the holders of 66.67% of the
Warrants then outstanding.

 

(d)                                 Dividends - Warrants
that are exercised will not be entitled to any cash or stock dividends or any
other distributions paid or declared but unpaid on the Shares during the period
from the Closing Date to the time of such exercise.

 

(e)                                  Other Provisions - The
provisions of the Warrant Indenture and the attributes and characteristics of
the Warrants represented thereby will be substantially as described herein.

 

5.                                                                                       Delivery and Payment.  The Purchaser agrees that
the following shall be delivered to the Corporation, at the address and by the
date and time set out on the cover page hereof, or such other place, date or
time as the Corporation may advise:

 

(a)                                  a completed and duly signed copy of this Subscription Agreement;

 

(b)                                 a completed and duly signed copy of the Confirmation of Status as
U.S. “Accredited Investor” attached hereto as Schedule
“A”;

 

(c)                                  if the Purchaser is a resident of any
Canadian jurisdiction, a completed and duly signed
copy of the Confirmation of Status as Canadian “Accredited Investor” attached
hereto as Schedule “B”;

 

(d)                                 all other documentation as may be required by applicable securities
laws; and

 

3

 

(e)                                  a certified cheque or bank draft in United States currency made
payable to the Corporation in
accordance with the instructions provided by the Corporation, representing the
aggregate Purchase Price for the Purchaser’s Units, or such other method of
payment against delivery of the Units as the Corporation may accept.

 

The Purchaser
acknowledges and agrees that such undertakings, questionnaires and other
documents, when executed and delivered by the Purchaser, will form part of and
will be incorporated into this Subscription Agreement with the same effect as
if each constituted a representation and warranty or covenant of the Purchaser
hereunder in favour of the Corporation. 
The Purchaser consents to the filing of such undertakings,
questionnaires and other documents and personal information as may be required
to be filed with any stock exchange or securities regulatory authority in
connection with the transactions contemplated hereby.

 

6.                                                                                       Closing.  The transactions contemplated hereby will be
completed at the Closing at the offices of Borden Ladner Gervais LLP in
Vancouver, British Columbia, Canada or at such other location as determined by
the Corporation.  The Purchaser
acknowledges that the Purchaser’s Units will be available for delivery to it at
the Closing against payment of the amount of the aggregate Purchase Price for
the Purchaser’s Units.

 

7.                                                                                       Representations and Warranties of the
Corporation. 
By accepting this offer, the Corporation represents and warrants to the
Purchaser as follows:

 

(a)                                  the Corporation has been duly incorporated and is validly subsisting
and in good standing under the Business Corporations Act
(Yukon Territory), and has all requisite corporate power and capacity to enter
into and carry out its obligations under this Subscription Agreement;

 

(b)                                 on the Closing Date, the Corporation will have taken all corporate
steps and proceedings necessary to approve the transactions contemplated
hereby, including the execution and delivery of this Subscription Agreement;

 

(c)                                  the outstanding Shares are listed and posted for trading on the
Exchanges;

 

(d)                                 no order ceasing or suspending trading in the securities of the
Corporation nor prohibiting the sale of such securities has been issued to the
Corporation or its directors, officers or promoters and, to the best of the
knowledge of the Corporation, no investigations or proceedings for such
purposes are pending or threatened;

 

(e)                                  prior to the Closing Date, the Corporation will have obtained all
required approvals from the Exchanges in order to permit the completion of the
transactions contemplated hereby;

 

(f)                                    the Corporation is a
reporting issuer in good standing under the securities laws of the Reporting
Provinces and is a reporting company under the 1934 Act, and no material change
relating to the Corporation has occurred with respect to which the requisite
material change report has not been filed under any applicable securities laws
in the Reporting Provinces and no such disclosure has been made on a
confidential basis;

 

(g)                                 the Corporation has full
corporate power and authority to undertake the Offering, to issue the
Securities, and at the Closing Time, the Shares and the Warrants will be duly
and validly created, authorized and issued, and all Warrant Shares issuable
upon exercise of 

 

4

 

the Warrants will be duly and validly authorized, allotted and
reserved for issuance upon exercise of the Warrants and will, upon exercise of
the Warrants be issued as fully-paid and non-assessable Shares;

 

(h)                                   the Corporation and its subsidiaries are
the beneficial owners of or have the right to acquire the interests in the
properties, business and assets referred to in the Public Record, and any and
all agreements pursuant to which the Corporation or its subsidiaries holds or
will hold any such interests in properties, business or assets are in good
standing in all material respects according to their terms, and the properties
are in good standing in all material respects under the applicable statutes and
regulations of the jurisdictions in which they are situated;

 

(i)                                     the Public Record is in
all material respects accurate and omits no facts, the omission of which makes
the Public Record or any particulars therein, misleading or incorrect;

 

(j)                                     except as disclosed in
the Public Record, no actions, suits, inquiries or proceedings are pending or,
to the knowledge of the Corporation, are contemplated or threatened to which
the Corporation or its subsidiaries is a party or to which the property of the
Corporation or its subsidiaries is subject that would result individually or in
the aggregate in any material adverse change in the operations, business or
condition (financial or otherwise) of the Corporation or its subsidiaries;

 

(k)                                  the Financial Statements
present fairly, in all material respects, the financial position of the
Corporation and its subsidiaries on a consolidated basis as at the dates set
out therein and the results of their operations and the changes in their
financial position for the periods then ended, in accordance with Canadian generally
accepted accounting principles;

 

(l)                                     except as disclosed in
the Public Record, there has not been any material change in the assets,
liabilities or obligations (absolute, accrued, contingent or otherwise) of the
Corporation or its subsidiaries, as set forth in the Financial Statements, and
there has not been any material adverse change in the business, operations or
condition (financial or otherwise) or results of the operations of the
Corporation or its subsidiaries, since September 30, 2005 and since that date
there have been no material facts, transactions, events or occurrences which
could materially adversely affect the business of the Corporation or its
subsidiaries;

 

(m)                               the Corporation and its
subsidiaries have conducted and are conducting their businesses in material
compliance with all applicable laws, by-laws, rules and regulations of each
jurisdiction in which their businesses are carried on and hold all licences,
registrations, permits, consents or qualifications (whether governmental, regulatory
or otherwise) required in order to enable their businesses to be carried on as
now conducted or as proposed to be conducted, and all such licences,
registrations, permits, consents and qualifications are valid and subsisting
and in good standing and neither the Corporation nor its subsidiaries has
received any notice of proceedings relating to the revocation or modification
of any such license, registration, permit, consent or qualification which, if
the subject of an unfavourable decision, ruling or finding, would materially
adversely affect the conduct of the business, operations, condition (financial
or otherwise) or income of the Corporation or its subsidiaries;

 

5

 

(n)                                 the Corporation has
taken or will take all steps as may be necessary for it to comply with the
requirements of the applicable securities laws of the Reporting Provinces, the
United States and such other jurisdictions in which the Units are sold, and the
Corporation is entitled to avail itself of the applicable prospectus and
registration exemptions available under the applicable securities laws of the
Reporting Provinces and the United States in respect of the offer and sale of
the Units;

 

(o)                                the Corporation has
filed all documents that it is required to file under the continuous disclosure
provisions of applicable securities laws in Canada and the United States,
including annual and interim financial information and annual reports, press
releases disclosing material changes and material change reports, and all periodic reports required by Section 13(a)
of the 1934 Act and the rules and regulations thereunder; and

 

(p)                                no
form of general solicitation or general advertising as such terms are used in
Rule 502(c) under the 1933 Act (including advertisements, articles, notices or
other communications published in any newspaper, magazine or similar media or
broadcast over radio or television, or any seminar or meeting whose attendees
had been invited by general solicitation or general advertising) was or is
being used by the Corporation in respect of or in connection with the offer and
sale of the Units.

 

8.                                                                                       Covenants of the Corporation.  The Corporation covenants
and agrees with the Purchaser as follows:

 

(a)                                  within 30 business days following the Closing, the Corporation will
file the Registration Statement with the SEC and the Corporation will use
commercially reasonable efforts to have the Registration Statement declared
effective by the SEC within six months from the Closing Date, provided that the
Corporation will in no way be liable or responsible to the Purchaser if
notwithstanding such efforts such declaration does not occur within the
foregoing time period or at all;

 

(b)                                 the Corporation will comply with all filing and other disclosure
requirements under all applicable securities laws;

 

(c)                                  the Corporation will use
commercially reasonable efforts to maintain the listing of the Shares on the
Exchanges until the expiry date of the Warrants and for a period of 12 months
thereafter; and

 

(d)                                 the Corporation will use
commercially reasonable efforts to maintain its status as a reporting issuer
under applicable securities legislation in the Reporting Provinces and as a
reporting company with the SEC, from the date hereof until the expiry date of
the Warrants and for a period of 12 months thereafter.

 

9.                                                                                       Conditions for the Benefit of the Purchaser.  The obligations of the
Purchaser to complete the purchase of the Purchaser’s Units as contemplated
hereby shall be conditional upon the fulfilment at or before the Closing Time,
for the exclusive benefit of the Purchaser, of each of the following
conditions:

 

(a)                                  the representations and warranties of the Corporation will be true
and correct in all material respects as at the Closing Date with the same force
and effect as if such representations and warranties had been made at and as of
the Closing Date;

 

6

 

(b)                                 the Corporation will have, in all material respects, performed and
complied with all covenants and agreements contained in this Subscription
Agreement to be performed or complied with, or caused to be performed or
complied with, by the Corporation at or prior to the Closing;

 

(c)                                  all necessary corporate action will have been taken by the
Corporation to authorize the execution and delivery of this Subscription
Agreement, and to consummate the transactions contemplated by this Subscription
Agreement; and

 

(d)                                 the Purchaser shall have received an opinion of legal counsel to the
Corporation addressing matters related to this Subscription Agreement and the
transactions contemplated thereby.

 

10.                                                                                 Conditions for the Benefit of the Corporation.  The acceptance of this
offer and the obligation of the Corporation to complete the issue and sale of
the Purchaser’s Units as contemplated hereby shall be conditional upon the
fulfilment at or before the Closing Time, for the exclusive benefit of the
Corporation, of each of the following conditions:

 

(a)                                  the representations and warranties of the Purchaser will be true and
correct in all material respects as at the Closing Date with the same force and
effect as if such representations and warranties had been made at and as of the
Closing Date;

 

(b)                                 the Purchaser will have, in all material respects, performed and
complied with all covenants and agreements contained in this Subscription
Agreement to be performed or complied with, or caused to be performed or
complied with, by the Purchaser at or prior to the Closing; and

 

(c)                                  all necessary corporate action, if any, will have been taken by the
Purchaser to authorize the execution and delivery of this Subscription
Agreement and to consummate the transactions contemplated by this Subscription
Agreement.

 

11.                                                                                 Acceptance or Rejection.  The Corporation will have
the right to accept or reject this offer at any time at or prior to the Closing
Time.  The Purchaser acknowledges and
agrees that the acceptance of this offer will be conditional upon the sale of
the Purchaser’s Units to the Purchaser being exempt from any prospectus or offering
memorandum requirements of all applicable securities laws.  The Corporation will be deemed to have
accepted this offer upon the Corporation’s execution of the acceptance form at
the end of this Subscription Agreement and the delivery at the Closing of the
certificates representing Shares and Warrants to, or upon the direction of, the
Purchaser.

 

12.                                                                                 Purchaser’s Acknowledgements. The
Purchaser acknowledges and agrees that as the sale of the Purchaser’s Units
will not be qualified by a prospectus, such sale is subject to the condition
that the Purchaser (or, if applicable, any others for whom the Purchaser is
contracting hereunder) sign and return to the Corporation all relevant
documentation required by applicable Canadian and United States securities laws
and the rules, regulations and policies of the Exchanges.  The Purchaser acknowledges
and agrees that the Corporation may be required to provide to applicable
securities regulatory authorities or the Exchanges the identities of the
beneficial purchasers of the Units and the identities of all persons having a
greater than a 10% beneficial interest in the Purchaser.  Notwithstanding that the Purchaser may be
purchasing Units as an agent on behalf of an undisclosed principal, the
Purchaser agrees to provide, on request, particulars as to the identity of such
undisclosed principal as 

 

7

 

may be
required by the Corporation in order to comply with the foregoing or any other
applicable laws, rules, regulations or policies.

 

In addition, the Purchaser acknowledges:

 

(a)                                  no securities commission or other regulatory authority has reviewed
or passed upon the merits of the Securities;

 

(b)                                 there is no government or other insurance covering the Securities;

 

(c)                                  there are risks,
including those set forth in the Public Record, associated with the purchase of
the Securities;

 

(d)                                 there are restrictions
on the Purchaser’s ability to resell the Securities and it is the
responsibility of the Purchaser to find out what those restrictions (whether
U.S., Canadian or otherwise) are and to comply with them before selling the
Securities;

 

(e)                                  the Corporation has advised the Purchaser that it is relying on an
exemption from the requirements under applicable securities laws to provide the
Purchaser with a prospectus and to sell the Securities through a person
registered to sell securities under the applicable securities laws, and other
applicable legislation, and that as a consequence of acquiring these securities
pursuant to these exemptions, certain protections, including statutory rights
of rescission or damages, will not be available to the Purchaser;

 

(f)                                 none of the Securities to be issued and
delivered to the Purchaser hereunder have been registered under the 1933 Act,
and accordingly the Securities are subject to restrictions on transferability
and resale and may not be offered, sold, gifted, pledged, hypothecated,
transferred, assigned or otherwise disposed of unless registered under the 1933
Act or pursuant to an exemption from the registration requirements of the 1933
Act.  The certificates representing the
Warrants shall bear the following legend, which legend shall remain on the said
certificates until compliance with the terms thereof:

 

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

 

NEITHER THIS
CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY NOR ANY SECURITIES ISSUABLE
UPON THE EXERCISE OF SUCH SECURITIES, NOR ANY INTEREST IN OR RIGHTS UNDER SAME,
HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE, AND NEITHER THIS
CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY NOR ANY SECURITIES ISSUABLE
UPON THE EXERCISE OF SUCH SECURITIES, NOR ANY INTEREST IN OR RIGHTS UNDER SAME,
MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED
OR DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE UNITED STATES STATE 

 

8

 

SECURITIES
LAWS COVERING ANY SUCH TRANSACTION, (B) RECEIPT BY THE CORPORATION OF AN
ACCEPTABLE LEGAL OPINION STATING THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION, OR (C) THE CORPORATION OTHERWISE SATISFYING ITSELF THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION .”,

 

and the
certificates representing the Shares and the Warrant Shares shall bear the
following legend, which legend shall remain on the said certificates until
compliance with the terms thereof, provided that if Warrant Shares are not
issued within four months of the Closing Date the first and second paragraphs
of the following legend shall not appear on the certificates representing the
Warrant Shares:

 

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

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO
STOCK EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH
THE FACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY
ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN
SETTLEMENT OF TRANSACTIONS ON TSX.

 

THE SECURITIES
EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAW.  NO INTEREST THEREIN MAY BE SOLD,
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED OR DISPOSED OF
WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
UNITED STATES STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION, (B) RECEIPT
BY THE CORPORATION OF AN ACCEPTABLE LEGAL OPINION STATING THAT SUCH TRANSACTION
IS EXEMPT FROM REGISTRATION, OR (C) THE CORPORATION OTHERWISE SATISFYING ITSELF
THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.”;

 

(g)                                 the first trade in any Canadian
jurisdiction, with the exception of Quebec, of the Securities acquired by the
Purchaser may only be made in accordance with the following rules:

 

(i)                                     the Corporation is and has been a reporting issuer in a jurisdiction
of Canada for the four months immediately preceding the trade;

 

(ii)                                  at least four months have elapsed from the distribution date of the
Units;

 

9

 

(iii)                               the certificates representing the Securities were issued carrying
the legend as required in section 2.5(2)3(a) of MI 45-102;

 

(iv)                              the trade is not a “control distribution” within the meaning of MI
45-102;

 

(v)                                 no unusual effort is made to prepare the
market or to create a demand for the Securities;

 

(vi)                              no extraordinary commission or other
consideration is paid in respect of the trade, and

 

(vii)                           if the Purchaser is an insider of the
Corporation, the Purchaser has no reasonable grounds to believe that the
Purchaser is in default of any securities laws.

 

13.                                                                                 Purchaser’s Representations and Warranties.  The Purchaser represents
and warrants to the Corporation, as representations and warranties that are
true as of the date of this offer and will be true as of the Closing Date,
that:

 

(a)                                  Authorization and Effectiveness - if the Purchaser is a
corporation, the Purchaser is a valid and subsisting corporation,
has the necessary corporate capacity and authority to execute and deliver this
offer and to observe and perform its covenants and obligations hereunder and
has taken all necessary corporate action in respect thereof, or, if the Purchaser is a partnership, syndicate or other
form of unincorporated organization, the Purchaser has the necessary
legal capacity and authority to execute and deliver this offer and to observe
and perform its covenants and obligations hereunder and has obtained all
necessary approvals in respect thereof, and, in either case, upon acceptance by
the Corporation, this offer will constitute a legal, valid and binding contract
of the Purchaser enforceable against the Purchaser in accordance with its terms;

 

(b)                                 Residence - the
Purchaser is a resident of the jurisdiction referred to under “Name and Address
of Purchaser” on the cover page hereof;

 

(c)                                  Purchasing as Principal - except to the extent contemplated in paragraph (e)
below, the Purchaser is purchasing the Purchaser’s Units as principal (as
defined in all applicable securities laws) for its own account and not for the
benefit of any other person;

 

(d)                                 Purchasing for Investment Only - except to the extent contemplated in paragraph (e) below,
the Purchaser is purchasing the Purchaser’s Units for investment only and not
with a view to any resale, distribution or other disposition in violation of
Canadian, United States federal or state, or other securities laws;

 

(e)                                  Purchasing as Agent or Trustee - in the case of the
purchase by the Purchaser of the Purchaser’s Units as agent or trustee for any
principal, each beneficial purchaser of the Purchaser’s Units for
whom the Purchaser is acting, is purchasing its Purchaser’s Units as principal
for its own account, and not for the benefit of any other person, for
investment only and not with a view to any resale, distribution or other
disposition, and the Purchaser has due and proper authority to act as agent or
trustee for and on behalf of such beneficial purchaser in connection with the
transactions contemplated hereby;

 

10

 

(f)                                    Purchaser Has Benefit of Statutory or Other
Exemptions - the Purchaser, and any
beneficial purchaser referred to in paragraph (e) above, is an “accredited
investor” within the meaning of Rule 501(a) of Regulation D under the 1933 Act
(and has initialled and executed Schedule “A”
hereto to confirm its representation and warranty regarding the specific
category or categories under which it so qualifies), and

 

(i)                                     if resident in any Canadian jurisdiction, is an “accredited investor” within the meaning of National
Instrument 45-106 Registration and
Prospectus Exemptions (and has completed and duly signed Schedule “B” hereto to confirm its representation
and warranty regarding the specific category or categories under which it so
qualifies), and has not been created, and is not being used, solely to purchase
or hold securities as an “accredited investor”, or

 

(ii)                                  if resident in an International Jurisdiction

 

(A)                              is knowledgeable of, or has been independently advised as to, the
International Securities Laws, if any, which apply to the Purchaser and the
purchase by the Purchaser of the Purchaser’s Units (and the issuance of the
Underlying Securities),

 

(B)                                is purchasing the Purchaser’s Units pursuant to an exemption from
any prospectus, registration or similar requirements under International
Securities Laws, or, if such is not applicable, the Purchaser is permitted to
purchase the Purchaser’s Units under International Securities Laws without the
need to rely on exemptions,

 

(C)                                International Securities Laws do not (or will not) require the
Corporation to make any filings or seek any approvals of any kind whatsoever
from any regulatory authority of any kind whatsoever in the International
Jurisdiction with respect to the purchase by the Purchaser of the Purchaser’s
Units (or the issuance to the Purchaser of the Purchaser’s Units or the
Underlying Securities), and

 

(D)                               the distribution of the Units (and the Underlying Securities) to the
Purchaser by the Corporation complies (or will comply) with all International
Securities Laws, or

 

(iii)                                 has
status as an exempt purchaser or the equivalent under the securities
legislation applicable to it, which status has the effect of eliminating any
requirement for a prospectus (or equivalent document) in respect of the
purchase of Units by the Purchaser and
has provided the Corporation with a copy of the document evidencing or
confirming such status, or

 

(iv)                              is
purchasing pursuant to a statutory, regulatory or other exemption, or an
exemption order permitting such purchase, which exemption or order has the
effect of eliminating any requirement for a prospectus (or equivalent document)
or the involvement of a registrant in respect of the purchase of Units by the
Purchaser and has provided the
Corporation with a copy of the document evidencing such exemption or exemption
order;

 

11

 

(g)                                 Corporation or Unincorporated Organization - if the Purchaser, or any
beneficial purchaser referred to in paragraph (e) above, is a corporation
or a partnership, syndicate, trust or other form of unincorporated organization
and resident in any
Canadian jurisdiction, each member thereof is an “accredited investor” within
the meaning of National Instrument 45-106 Registration
and Prospectus Exemptions;

 

(h)                                 No Undisclosed Information - the Purchaser’s Units are not being purchased by the
Purchaser as a result of any material information concerning the Corporation
that has not been publicly disclosed and the Purchaser’s decision to tender
this offer and acquire the Purchaser’s Units has not been made as a result of
any oral or written representation as to fact or otherwise made by or on behalf
of the Corporation or any other person and is based entirely upon currently
available public information concerning the Corporation;

 

(i)                                     Opportunity to Ask Questions – the Purchaser, and any beneficial purchaser referred to in
paragraph (e) above, has been afforded by the Corporation the opportunity
to ask questions and receive answers concerning the terms and conditions of the
Offering and verification of the accuracy of the currently available public
information concerning the Corporation;

 

(j)                                     Investment Suitability
- the Purchaser, and any beneficial purchaser referred to in
paragraph (e) above, has such knowledge and experience in financial and
business affairs as to be capable of evaluating the merits and risks of the
investment hereunder in the Purchaser’s Units (and the Underlying Securities)
and is able to bear the economic risk of loss of such investment;

 

(k)                                  Purchaser at Arm’s Length to Corporation – the Purchaser, and any beneficial purchaser referred to in
paragraph (e) above, is not a director or officer of the Corporation or any
affiliate or associate thereof, does not beneficially own, directly or
indirectly, more than 10% of the Shares of the Corporation or any affiliate or
associate thereof, and is otherwise at arm’s length to the Corporation and its
affiliates and associates;

 

(l)                                     Source of Subscription Funds –

 

(i)                                     to the best of the Purchaser’s knowledge, none of the subscription
funds used for the purchase of the Purchaser’s Units (in this Section 13, the “Subscription Funds”) (A) will represent
proceeds of crime for the purposes of the Proceeds
of Crime (Money Laundering) and Terrorist Financing Act (Canada),
(B) have been or will be derived from or related to any activity that is deemed
criminal under the laws of Canada, the United States or any other jurisdiction,
or (C) are being tendered on behalf of a person or entity who has not been
identified to the Purchaser, and

 

(ii)                                  the Purchaser shall promptly notify the Corporation if the Purchaser
discovers that any of the representations in paragraph (l)(i) above ceases to
be true, and to provide the Corporation with appropriate information in
connection therewith; and

 

(m)                               Compliance with Anti-Money Laundering
Legislation – if the Purchaser is a financial
institution (including, without limitation, broker-dealers and investment
companies such 

 

12

 

as United
States and offshore unregistered hedge funds, funds-of-funds, commodity pools,
private equity funds and venture capital funds):

 

(i)                                     it seeks to comply with all applicable laws concerning money
laundering and related activities, including without limitation, the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
of the United States (popularly known as the “USA
Patriot Act”),

 

(ii)                                  in furtherance of such efforts, to the best of its knowledge based
on appropriate diligence and investigation, none of the Subscription Funds has
been or will be derived from or related to any activity that is deemed criminal
under the laws of Canada or the United States, and

 

(iii)                               it will promptly notify the Corporation if the Purchaser discovers
that any of the representations in this paragraph (m) ceases to be true, and to
provide the Corporation with appropriate information in connection therewith.

 

The Purchaser
acknowledges and agrees that the foregoing representations and warranties are
made by it with the intention that they may be relied upon in determining its
eligibility or (if applicable) the eligibility of others on whose behalf it is
contracting hereunder to purchase the Purchaser’s Units under relevant
securities legislation.  The Purchaser
further agrees that by accepting delivery of the Purchaser’s Units on the
Closing Date, it will be representing and warranting that the foregoing
representations and warranties are true and correct as at the Closing Date with
the same force and effect as if they had been made by the Purchaser at the time
of the Closing and that they will survive the purchase by the Purchaser of the
Purchaser’s Units and will continue in full force and effect notwithstanding
any subsequent disposition by the Purchaser of the Purchaser’s Units.

 

14.                                                                                 No Broker.  Neither the Corporation nor the Purchaser has
engaged in connection with this Subscription Agreement any finder, broker,
agent or third party to whom a fee, payment, commission, reimbursement, cost or
compensation of any kind is payable by the Corporation, except that the
Purchaser may pay commissions, fees or other costs to a broker or other third
party in connection with the purchase of the Units.

 

15.                                                                                 Resale Restrictions.  The Purchaser understands
and acknowledges that the Purchaser’s Units and Underlying Securities will be
subject to certain resale restrictions under applicable securities laws and the
Purchaser agrees to comply with such restrictions.  The Purchaser also acknowledges that it has
been advised to consult its own legal advisors with respect to applicable resale
restrictions and that it is solely responsible (and the Corporation is not in
any manner responsible) for complying with such restrictions.  Without limiting the foregoing, in
particular, the Purchaser (or if applicable, any others for whom the Purchaser is contracting
hereunder) acknowledges that the Purchaser has been independently advised as to
or is aware of the restrictions with respect to trading in, and the restricted
period or statutory hold period applicable to, the Shares, the Warrants and the
Warrant Shares imposed by the securities laws of the jurisdiction in which the
Purchaser resides or to which the Purchaser is subject and by the rules,
regulations and policies of the Exchanges, that a suitable legend or legends
will be placed on the certificates representing the Shares, the Warrants and,
if necessary, the Warrant Shares to reflect the applicable restricted period
and statutory hold period to which the Shares, the Warrants and, if applicable,
the Warrant Shares are subject, and that the Purchaser is hereby advised that
during such period, as applicable, such securities cannot be traded through the
facilities of the Exchanges as such securities are not freely transferable and
consequently delivery of the certificate representing such 

 

13

 

securities will not constitute “good delivery” in settlement of
transactions on either Exchange and that the Exchanges will deem the Purchaser
to be responsible for any loss incurred on a sale made by the Purchaser in such
securities.

 

16.                                                                                 No Revocation.  The Purchaser agrees that this offer is made
for valuable consideration and may not be withdrawn, cancelled, terminated or
revoked by the Purchaser.

 

17.                                                                                 Indemnity.  The Purchaser agrees to indemnify and hold
harmless the Corporation and its directors, officers, employees, agents,
advisers and shareholders from and against any and all loss, liability, claim,
damage and expense whatsoever (including, but not limited to, any and all fees,
costs and expenses whatsoever reasonably incurred in investigating, preparing
or defending against any claim, law suit, administrative proceeding or
investigation whether commenced or threatened) arising out of or based upon any
representation or warranty of the Purchaser contained herein being untrue in
any material respect or any breach or failure by the Purchaser to comply with
any covenant or agreement made by the Purchaser herein.

 

18.                                                                                 Collection of Personal Information.  The Purchaser acknowledges and consents to
the fact that the Corporation is collecting the Purchaser’s personal
information (as that term is defined under applicable privacy legislation,
including, without limitation, the Personal
Information Protection and Electronic Documents Act (Canada) and any
other applicable similar, replacement or supplemental provincial, federal or
state legislation or laws in effect in Canada or the United States from time to
time), (or if applicable, any others for whom the Purchaser is contracting
hereunder) for the purposes of fulfilling the transactions contemplated
hereby.  The Purchaser further
acknowledges and consents to the fact that the Corporation may be required by
law to provide securities regulatory authorities or other regulatory agencies
pursuant to the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act (Canada) with any such
personal information.  The Purchaser, and
if applicable, any others for whom the Purchaser is contracting hereunder
acknowledges and consents to the Corporation retaining such personal information
for as long as permitted or required by law or business practices.  The Purchaser and, if applicable, any others
for whom it is contracting hereunder, further acknowledges and consents to the
fact that the Corporation may be required by applicable securities laws, the
rules, regulations and policies of any stock exchange, securities regulatory
authority or other regulatory body, or the rules of the Investment Dealers
Association of Canada to provide regulatory authorities with any personal
information provided by the Purchaser in this Subscription Agreement.  The Purchaser represents and warrants that it
has the authority to provide the consents and acknowledgements set out in this
section on behalf of any others for whom it is contracting hereunder.  In addition to the foregoing, the Purchaser
agrees and acknowledges that the Corporation may use and disclose the Purchaser’s
personal information, or that of any others for whom the Purchaser is
contracting hereunder, as follows:

 

(a)                                  for
internal use with respect to managing the relationships between and contractual
obligations of the Corporation and the Purchaser or any beneficial purchaser
for whom it is contracting hereunder;

 

(b)                                 for
use and disclosure for income tax related purposes, including without
limitation, where required by law, disclosure to Canada Revenue Agency;

 

(c)                                  disclosure
to securities regulatory authorities and other regulatory bodies with
jurisdiction with respect to reports of trades and similar regulatory filings;

 

14

 

(d)                                 disclosure
to a governmental or other authority to which the disclosure is required by
court order or subpoena compelling such disclosure and where there is no
reasonable alternative to such disclosure;

 

(e)                                  disclosure
to professional advisers of the Corporation in connection with the performance
of their professional services;

 

(f)                                    disclosure
to any person where such disclosure is necessary for legitimate business
reasons and is made with the Purchaser’s prior written consent;

 

(g)                                 disclosure
to a court determining the rights of the parties under this Subscription
Agreement; and

 

(h)                                 for
use and disclosure as otherwise required or permitted by law.

 

19.                                                                                 Modification.
Neither this Subscription Agreement nor any provision hereof shall be modified,
changed, discharged or terminated except by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is
sought.  Notwithstanding the foregoing,
the Purchaser hereby constitutes the Corporation as its agent to correct, on
behalf of the Purchaser, any manifest errors or typographical errors contained
herein.

 

20.                                                                                 Assignment.  The terms and provisions of this Subscription
Agreement shall be binding upon and enure to the benefit of the Purchaser, the
Corporation and their respective successors and assigns; provided that, except
as herein provided, this Subscription Agreement shall not be assignable by any
party without the prior written consent of the other parties.  The benefit and obligations of this Subscription
Agreement insofar as they apply to the Purchaser, shall pass with any
assignment or transfer of the Shares and Warrants in accordance with their
terms.

 

21.                                                                                 Miscellaneous.  All representations, warranties, agreements
and covenants made or deemed to be made by the Purchaser herein will survive
the execution and delivery, and acceptance, of this offer and the Closing. This
Subscription Agreement may be executed in any number of counterparts, each of
which when delivered, either in original or facsimile form, shall be deemed to
be an original and all of which together shall constitute one and the same
document.

 

22.                                                                                 Governing Law.  This Subscription Agreement shall be governed
by and construed in accordance with the laws of the Province of British Columbia
and the federal laws of Canada applicable therein.  The Purchaser on its own behalf and, if
applicable, on behalf of others for whom it is contracting hereunder, hereby
irrevocably attorns to the jurisdiction of the courts of the Province of
British Columbia with respect to any matters arising out of this Subscription
Agreement.

 

23.                                                                                 Facsimile Subscriptions.  The Corporation shall be
entitled to rely on delivery by facsimile machine of an executed copy of this
Subscription Agreement, including the completed schedules hereto, and
acceptance by the Corporation of such facsimile copy shall be legally effective
to create a valid and binding agreement between the Purchaser and the
Corporation in accordance with the terms hereof.

 

24.                                                                                 Entire Agreement and Headings.  This Subscription Agreement
(including the schedules hereto) contains the entire agreement of the parties
hereto relating to the subject matter hereof and there are no representations,
covenants or other agreements relating to the subject matter hereof except as
stated or referred to herein.  This
Subscription Agreement may be amended or modified in any 

 

15

 

respect by
written instrument only.  The headings
contained herein are for convenience only and shall not affect the meanings or
interpretation hereof.

 

25.                                                                                 Time of Essence.  Time shall be of the essence of this
Subscription Agreement.

 

26.                                                                                 Language.  The
Purchaser acknowledges its consent and requests that all documents evidencing
or relating in any way to its purchase of the Purchaser’s Units be drawn up in
the English language only.  Nous reconnaissons par les présentes avoir consenti
et demandé que tous les documents faisant foi ou se rapportant de quelque
manière à notre achat soient rédigés en anglais seulement.

 

27.                                                                                 Effective Date.  This Subscription Agreement
is intended to and shall take effect on the Closing Date, notwithstanding its
actual date of execution or delivery by any of the parties.

 

                                                                                                IN WITNESS WHEREOF the
undersigned has executed this Subscription Agreement on the         
day of                                 ,
2006.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature of Purchaser (if an individual)

  	
  Name of Purchaser (if not an individual)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Per:

  	
   

  	
   

  
	
  Name of Purchaser (if an individual)

  	
   

  	
  Authorized Signatory 

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title: 

  

 

ACCEPTANCE

 

                                                                                                The foregoing is acknowledged, accepted and agreed to this       
day of                      ,
2006.

 

	
   

  	
  VISTA
  GOLD CORP. 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Per: 

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title: 

  

 

16

 

Schedule “A”

 

- Confirmation of Status as U.S. “Accredited
Investor”

(within the meaning of Rule 501(a) of Regulation D under the United States Securities Act of 1933)

 

By initialling
where indicated below, the Purchaser is confirming its representation and
warranty regarding the category or categories under which it qualifies as an “accredited
investor” within the meaning of Rule 501(a) of Regulation D under the United
States Securities Act of 1933:

 

[MARK BELOW THE CATEGORY OR CATEGORIES WHICH DESCRIBES YOU]

 

	
  (a)

  	
   

  	
  Natural
  Person - Net Worth Test. The Purchaser is a natural person whose total personal net worth,
  either individually or jointly with such person’s spouse, at the time of his
  purchase, exceeds U.S.$1,000,000.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Natural
  Person - Income Test. The Purchaser is a natural
  person who had individual income in excess of U.S.$200,000, or joint income
  with the person’s spouse in excess of U.S.$300,000, in each of the two most
  recent years and reasonably expects to reach the same income level in the
  current year.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Business
  and Non-profit Entities. The Purchaser is
  an organization described in section 501(c)(3) of the United States Internal
  Revenue Code, a corporation, a Massachusetts or similar business trust or a
  partnership, none of which has been formed for the specific purpose of
  acquiring the Units, and each having total assets in excess of
  U.S.$5,000,000.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Bank. The Purchaser is a bank as defined in section 3(a)(2) of the
  United States Securities Act of 1933
  or a savings and loan association or other institution specified in section
  3(a)(5)A of the United States Securities
  Act of 1933 whether acting in its individual or fiduciary
  capacity.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Broker
  or Dealer. The Purchaser is a broker or
  dealer registered pursuant to section 15 of the United States Securities Exchange Act of 1934.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  Public
  Employee Plan. The Purchaser is a plan
  established and maintained by a state, its political subdivisions, or any
  agency or instrumentality of a state or its political subdivisions, for the
  benefit of its employees, if such plan has total assets in excess of
  U.S.$5,000,000.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  Employee
  Benefit Plan. The Purchaser is an employee
  benefit plan within the meaning of Title I of the United States Employee Retirement Income Security Act of 1974,
  if the investment decision is made by a plan fiduciary, as defined in section
  3(21) of such act, which is either a bank, savings and loan association,
  insurance company or registered investment adviser or if the employee benefit
  plan has total assets in excess of U.S.$5,000,000 or, if a self-directed
  plan, with investment decisions made solely by persons that are accredited
  investors.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (h)

  	
   

  	
  Trust. The Purchaser is a trust, with total assets in excess of
  U.S.$5,000,000, not formed for the specific purpose of acquiring the
  securities offered, whose purchase is directed by a sophisticated person as
  described in Rule 506(b)(2)(ii) of Regulation D under the United States Securities Act of 1933.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  Insurance
  Company. The Purchaser is an insurance
  company as defined in section 2(13) of the United States Securities Act of 1933.

  	
   

  	
  o

  

 

A-1

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (j)

  	
   

  	
  Investment
  Company. The Purchaser is an investment
  company registered under the United States Investment
  Company Act of 1940 or a business development company as defined
  in section 2(a)(48) of that Act.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (k)

  	
   

  	
  SBIC. The Purchaser is a Small Business Investment Company licensed by
  the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (l)

  	
   

  	
  Private
  Business Development Company. The
  Purchaser is a private business development company as defined in section
  202(a)(22) of the United States Investment
  Advisers Act of 1940.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (m)

  	
   

  	
  Director
  or Officer. The Purchaser is a director or
  an executive officer of the Corporation.

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (n)

  	
   

  	
  Entity
  Owned by Accredited Investors. The
  Purchaser is an entity in which all of the equity owners are accredited
  investors and described in one or more of the categories set forth in
  paragraphs (a) through (m) above.

  	
   

  	
  o

  

 

	
  DATED
                ,
  2006

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature of
  Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name of
  Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address of
  Purchaser

  

 

A-2

 

Schedule “B”

 

- Confirmation of Status as Canadian “Accredited
Investor”

(within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions)

 

By
initialling where indicated below, the Purchaser is confirming its
representation and warranty regarding the category or categories under which it
qualifies as an “accredited investor” within the meaning of National Instrument
45-106 Prospectus and Registration
Exemptions:

 

[MARK BELOW THE CATEGORY OR CATEGORIES WHICH DESCRIBES YOU]

 

	
  (a)

  	
   

  	
  a Canadian financial institution, or a Schedule III
  bank;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  the Business Development Bank of Canada incorporated
  under the Business Development Bank of
  Canada Act (Canada);

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  a subsidiary of any person referred to in paragraphs
  (a) or (b), if the person owns all of the voting securities of the
  subsidiary, except the voting securities required by law to be owned by
  directors of that subsidiary;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  a person registered under the securities legislation
  of a jurisdiction of Canada as an adviser or dealer, other than a person
  registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and
  Labrador);

  	
   

  	
  o

  
	
  (e) 

  	
   

  	
  an individual registered or formerly registered
  under the securities legislation of a jurisdiction of Canada as a
  representative of a person referred to in paragraph (d); 

  	
   

  	
  o 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  the Government of Canada or a jurisdiction of
  Canada, or any crown corporation, agency or wholly owned entity of the
  Government of Canada or a jurisdiction of Canada;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  a municipality, public board or commission in Canada
  and a metropolitan community, school board, the Comité de gestion de la taxe
  scolaire de l’île de Montréal or an intermunicipal management board in
  Québec;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (h)

  	
   

  	
  any national, federal, state, provincial,
  territorial or municipal government of or in any foreign jurisdiction, or any
  agency of that government;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  a pension fund that is regulated by either the
  Office of the Superintendent of Financial Institutions (Canada) or a pension
  commission or similar regulatory authority of a jurisdiction of Canada;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (j)

  	
   

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

  	
   

  	
  o

  

 

B-1

 

	
  (k)

  	
   

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

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (l)

  	
   

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

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (m)

  	
   

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

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (n)

  	
   

  	
  an investment fund that distributes or has
  distributed its securities only to:

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)                  a person that is or was an accredited investor at the time of the
  distribution;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)               a person that acquires or acquired securities under certain
  minimum purchase and additional invesment exemptions specified in the
  Instrument; or

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)            a person described in paragraph (i) or (ii) that acquires or
  acquired securities under the investment fund    reinvestment exemption specified in the
  Instrument;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (o)

  	
   

  	
  an investment fund that distributes or has
  distributed securities under a prospectus in a jurisdiction of Canada for
  which the regulator or, in Québec, the securities regulatory authority, has
  issued a receipt;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (p)

  	
   

  	
  a trust company or trust corporation registered or
  authorized to carry on business under the Trust
  and Loan Companies Act (Canada) or under comparable legislation in
  a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a
  fully managed account managed by the trust company or trust corporation, as
  the case may be;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (q)

  	
   

  	
  a person acting on behalf of a fully managed account
  managed by that person, if that person:

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)                  is registered or authorized to carry on business as an adviser or
  the equivalent under the securities legislation of a jurisdiction of Canada
  or a foreign jurisdiction; and

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)               in Ontario, is purchasing a security that is not a security of an
  investment fund;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (r)

  	
   

  	
  a registered charity under the Income Tax Act (Canada) that, in regard
  to the trade, has obtained advice from an eligibility adviser or an adviser
  registered under the securities legislation of the jurisdiction of the
  registered charity to give advice on the securities being traded;

  	
   

  	
  o

  

 

B-2

 

	
  (s)

  	
   

  	
  an entity organized in a foreign jurisdiction that
  is analogous to any of the entities referred to in paragraphs (a) to (d) or
  paragraph (i) in form and function;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (t)

  	
   

  	
  a person in respect of which all of the owners of
  interests, direct, indirect or beneficial, except the voting securities
  required by law to be owned by directors, are persons that are accredited
  investors;

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (u)

  	
   

  	
  an investment fund that is advised by a person
  registered as an adviser or a person that is exempt from registration as an
  adviser; or

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  a person that is recognized or designated by the
  securities regulatory authority or, except in Ontario and Québec, the
  regulator as:

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)                  an accredited investor; or

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)               an exempt purchaser in Alberta or British Columbia after September
  14, 2005.

  	
   

  	
   

  

 

Note: A summary of the meanings of certain of the terms
used in this certificate follows the signature block below.

 

DATED                           ,
2006

 

	
   

  	
   

  
	
   

  	
  Signature of
  Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name of
  Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address of
  Purchaser

  

 

For the purposes of this certificate, the following definitions
are included for convenience:

 

“Canadian
financial institution” means

 

(a)                                  an association governed by
the Cooperative Credit Associations Act
(Canada) or a central cooperative credit society for which an order has been
made under section 473(1) of that Act, or

 

(b)                                 a bank, loan corporation,
trust company, trust corporation, insurance company, treasury branch, credit
union, caisse populaire, financial services cooperative, or league that, in
each case, is authorized by an enactment of Canada or a jurisdiction of Canada
to carry on business in Canada or a jurisdiction of Canada;

 

“financial
assets” means

 

(a)                                  cash;

 

(b)                                 securities; or

 

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

 

“foreign jurisdiction” means a country other than Canada or a political
subdivision of a country other than Canada;

 

B-3

 

“fully
managed account” means an account of a client for which a person makes
the investment decisions if that person has full discretion to trade in
securities for the account without requiring the client’s express consent to a
transaction;

 

“Instrument” means National
Instrument 45-106 Prospectus and
Registration Exemption;

 

“jurisdiction” means a province or territory of Canada except when used in the term
foreign jurisdiction;

 

“investment
fund” means a mutual fund or a non-redeemable investment fund, and, for
greater certainty in British Columbia, includes certain employee venture
capital corporations and venture capital corporations mentioned in National
Instrument 81-106 Investment Fund Continuous
Disclosure;

 

“non-redeemable
investment fund” means an issuer

 

(a)                                  whose primary purpose is to
invest money provided by its securityholders;

 

(b)                                 that does not invest;

 

(i)                                     for the purpose of
exercising or seeking to exercise control of an issuer, other than an issuer
that is a mutual fund or a non-redeemable investment fund; or

 

(ii)                                  for the purpose of being
actively involved in the management of any issuer in which it invests, other
than an issuer that is a mutual fund or a non-redeemable investment fund; and

 

(c)                                  that is not a mutual fund;

 

“person” includes

 

(a)                                  an individual;

 

(b)                                 a corporation;

 

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

 

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

 

“related
liabilities” means

 

(a)                                  liabilities incurred or assumed for the
purpose of financing the acquisition or ownership of financial assets; or

 

(b)                                 liabilities that are secured by financial
assets;

 

“Schedule III bank” means an authorized foreign bank
named in Schedule III of the Bank Act
(Canada);

 

“spouse” means, an individual who

 

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

 

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

 

(c)                                  in Alberta, is an individual referred to
in paragraph (a) or (b), or is an adult interdependent partner within the meaning
of the Adult Interdependent Relationships
Act (Alberta); and

 

“subsidiary” means an issuer that is
controlled directly or indirectly by another issuer and includes a subsidiary
of that subsidiary.

 

B-4

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