Document:

Exhibit 10.1

Execution copy

	
  

 	
  

 	
  

 
	
 TO
 SUBSCRIBE, THE SUBSCRIBER MUST RETURN TO PARAMOUNT GOLD AND SILVER CORP., THE
 FOLLOWING:

 
	
 a.

 	
 o

 	
 Duly
 completed and executed Subscription Agreement (complete pages 1 and 2) no
 later than 48 hours prior to the Closing Time;

 
	
 b.

 	
 o

 	
 Subscription
 funds by certified cheque, bank draft or wire transfer in C$ payable to
 Paramount Gold and Silver Corp.; and 

 
	
 c.

 	
 o

 	
 Duly
 completed and executed Accredited Investor Certificate attached as Schedule
 “A”.

 

PARAMOUNT GOLD AND SILVER CORP.

SUBSCRIPTION AGREEMENT FOR UNITS

TO:     PARAMOUNT GOLD AND
SILVER CORP.

The
Subscriber (as hereinafter defined) hereby irrevocably subscribes for and
agrees to purchase from Paramount Gold and Silver Corp. (the “Company”) that number of units of the
Company (the “Units”) set out
below at a price of C$0.75 per Unit.
Each Unit is comprised of one common share of the Company (a “Unit Share”) and one non-transferable
common share purchase warrant of the Company (the “Warrants”). Each
Warrant shall entitle the holder thereof to acquire one common share of the
Company (a “Warrant Share”) at an
exercise price of C$1.05 during a term commencing on the date that is
6 months following the Closing Date (as defined hereunder) and ends on the
date that is 48 months following the Closing Date. The Subscriber agrees
to be bound by the terms and conditions set forth in the attached “Terms and
Conditions of Subscription for Units” including, without limitation, the
representations, warranties and covenants set forth in the applicable schedules
attached thereto which forms part of and is hereby incorporated by reference
into this Subscription Agreement. The Subscriber and the Company further agree
and acknowledge, as applicable, without limitation, (i) that the Company and
the Subscriber may each rely upon the other’s respective representations,
warranties and covenants contained in such documents, (ii) that the
representations and warranties of the Subscriber and the Company shall be true
and correct both as of the date of the execution of this Subscription Agreement
(as defined hereunder) and as of the Closing Date, and (iii) that such
representations and warranties of the Subscriber and the Company shall survive
Closing (as defined hereunder).

SUBSCRIPTION AND SUBSCRIBER INFORMATION

Please print all information (other than
signatures), as applicable, in the space provided below. Please also ensure all Schedules (as
applicable) are completed and executed.

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	 

 	
  

 	 

 
	
  

 	
 FCMI
 FINANCIAL CORPORATION

 	
  

 	
  

 	
 Number of Units: 12,000,000 x C$0.75

 
	
  

 	
 (Name of Subscriber)

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Henry Fenig

 	
  

 	
  

 	
 Aggregate Subscription Cost
 (C$):

 	
 C$9,000,000

 
	
  

 	
  

 	 

 	
  

 	
  

 	
  

 	 

 
	
  

 	
  

 	
 Authorized Signature

 	
  

 	
  

 	
  

 	
 (the “Subscription Amount”)

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Please
 complete if purchasing as agent for a principal (beneficial purchaser) (the
 “Disclosed Principal”) and not purchasing as a trust company, trust
 corporation or portfolio manager for accounts fully managed by it:

 
	
  

 	
 Executive Vice President

 	
  

 	
  

 
	
  

 	 

 	
  

 	
  

 
	
  

 	
 (Official Capacity or Title
 – if the Subscriber is not an individual)

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	 

 
	
  

 	
 Enrique (Henry) Fenig

 	
  

 	
  

 	
 (Name of Disclosed
 Principal)

 	
  

 
	
  

 	 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (Name of individual whose
 signature appears above if different than the name of the subscriber printed
 above.)

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	 

 
	
  

 	
 Suite 250, BCE Place, 181
 Bay Street

 	
  

 	
  

 	
 (Address of Disclosed
 Principal)

 	
  

 
	
  

 	 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (Subscriber’s Address,
 including Municipality and Province/State)

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	 

 
	
  

 	
 Toronto, Ontario, M5J 2T3

 	
  

 	
  

 	
 (Account Reference, if
 applicable)

 	
  

 
	
  

 	 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (Telephone
Number)                            (Email
 Address)

 	
  

 	
  

 	
  

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Account
 Registration Information:

 	
  

 	
  

 	
 Delivery
 Instructions as set forth below:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 NBCN Inc. ITF FCMI
 Financial Corporation

 	
  

 	
  

 	
 FCMI FINANCIAL CORPORATION

 
	
  

 	 

 	
  

 	
  

 	 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	 

 	
  

 	
  

 	 

 
	
  

 	
 (Name)

 	
  

 	
  

 	
 (Name)

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	 

 	
  

 	
  

 	 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2L-EE01-E

 	
  

 	
  

 	
  

 
	
  

 	 

 	
  

 	
  

 	 

 
	
  

 	
 (Account Reference, if
 applicable)

 	
  

 	
  

 	
 (Account Reference, if
 applicable)

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1410-1010,
 de la Gauchetiere St. West

 	
  

 	
  

 	
 Suite 250, BCE Place, 181
 Bay Street

 
	
  

 	 

 	
  

 	
  

 	 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Montreal,
 Quebec H3B 5J2

 	
  

 	
  

 	
 Toronto, Ontario M5J 2T3

 
	
  

 	 

 	
  

 	
  

 	 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	 

 	
  

 	
  

 	 

 
	
  

 	
 (Address, including Postal
 or Zip Code)

 	
  

 	
  

 	
 (Address)

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 (Contact
Name)                             (Telephone
 Number)

 

- 2 -

TERMS AND CONDITIONS
OF SUBSCRIPTION FOR

UNITS

ARTICLE 1 -
INTERPRETATION

	
  

 	
  

 
	
 1.1

 	
 Definitions

 

          Whenever
used in this Subscription Agreement, unless there is something in the subject
matter or context inconsistent therewith, the following words and phrases shall
have the respective meanings ascribed to them as follows:

“Business Day” means a day other than a
Saturday, Sunday or any other day on which the principal chartered banks
located in the City of Toronto are not open for business.

“Closing” shall have the meaning ascribed to
such term in Section 4.1.

“Closing Date” shall have the meaning
ascribed to such term in Section 4.1.

“Closing Time” shall have the meaning
ascribed to such term in Section 4.1.

“Common Shares” means the shares of common
stock, U.S.$0.001 par value, in the capital of the Company.

“Company” means Paramount Gold and Silver
Corp. and includes any successor corporation to or of the Company.

“Disclosed
Principal” shall have the meaning ascribed to such term on the face
page of this Subscription Agreement.

“Financial Advisor” means Dahlman Rose &
Company LLC, a broker-dealer registered pursuant to Section 15 of the U.S.
Exchange Act and an international dealer registered pursuant to the Securities
Act (Ontario) that has acted as financial advisor to the Company in
connection with the Offering.

“NI 45-106” means National Instrument 45-106
- Prospectus and Registration Exemptions
of the Canadian Securities Administrators.

“NYSEA” means the NYSE Alternext US.

“Offering” means the offering of up to
12,000,000 Units pursuant to this Subscription Agreement.

“Offering
Jurisdiction” means the Province of Ontario.

“person” means any individual (whether
acting as an executor, trustee, administrator, legal representative or
otherwise), corporation, firm, partnership, sole proprietorship, syndicate,
joint venture, trustee, trust, unincorporated organization or association, an
investment club, a government or an agency or political subdivision thereof and
every other form of legal or business entity of whatsoever nature or kind, and
pronouns have a similar extended meaning.

“Public Record” means the Company’s annual
report on Form 10 K for the year ended June 30, 2008, the quarterly reports
filed on Form 10 Q for the quarters ended September 30, 2008, and December 31,
2008, the Company’s definitive proxy statement dated January 8, 2009, the
Company’s final prospectus pursuant to Rule 424(b)(3) under the U.S. Securities
Act dated January 8, 2009 and each current report on Form 8 K filed since June 30,
2008.

“Registration Rights Agreement” means the
Registration Rights Agreement in the form annexed in this Agreement as Schedule
“B” to be entered into at the Closing between the Company and the Subscriber.

“Regulation S” means Regulation S under the
U.S. Securities Act.

“SEC” means the United States Securities and
Exchange Commission.

“Securities Laws” means, as applicable, the
securities laws, regulations, rules, rulings and orders in the Offering
Jurisdiction, the applicable policy statements issued by the securities
regulators in the Offering Jurisdiction, the securities laws of the United
States, any applicable States and any jurisdictions outside of Canada and the
United States, the regulations and rules thereunder and the forms prescribed
thereby and the rules of any applicable stock exchange. 

“Stock Exchanges” means the Toronto Stock
Exchange and the NYSEA.

“Subscriber” means the person purchasing the
Units as set out on the face page of this Subscription Agreement and includes,
as applicable, the Disclosed Principal for whom it is acting.

“Subscription Agreement” means this
subscription agreement (including any schedules hereto) and any instrument
amending this Subscription Agreement.

“Subscription Amount” shall have the meaning
ascribed to such term on the face page of this Subscription Agreement.

“United States” means the United States of
America, its territories and possessions, any State of the United States and
the District of Columbia.

“Units” shall have the meaning ascribed to
such term on the face page of this Subscription Agreement.

“Unit Shares” shall have the meaning
ascribed to such term on the face page of this Subscription Agreement.

“U.S.
Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

“U.S. Person” has the meaning set forth in
Rule 902(k) of Regulation S.

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

“Warrants” means the common share purchase
warrants of the Company that comprise part of the Units, as described on the
face page hereof, in the form annexed hereto as Schedule “C”.

“Warrant Shares” shall have the meaning
ascribed to such term on the face page of this Subscription Agreement.

	
  

 	
  

 
	
 1.2

 	
 Gender and Number

 

          Words
importing the singular number only shall include the plural and vice versa, words importing the masculine
gender shall include the feminine gender and words importing persons shall
include firms and corporations and vice
versa.

	
  

 	
  

 
	
 1.3

 	
 Currency

 

          Unless
otherwise specified, all dollar amounts in this Subscription Agreement,
including the symbols “$” and “C$”, are expressed in Canadian dollars.

- 2 -

	
  

 	
  

 
	
 1.4

 	
 Subdivisions and Headings

 

          The
division of this Subscription Agreement into Articles, Sections, Schedules and
other subdivisions and the inclusion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Subscription Agreement. The headings in this Subscription Agreement are not
intended to be full or precise descriptions of the text to which they refer.
Unless something in the subject matter or context is inconsistent therewith,
references herein to an Article, Section, Subsection, paragraph, clause or
Schedule are to the applicable article, section, subsection, paragraph, clause
or schedule of this Subscription Agreement.

ARTICLE 2 -
SCHEDULES

	
  

 	
  

 
	
 2.1

 	
 Description of Schedules

 

          The
following are the Schedules attached to and incorporated in this Subscription
Agreement by reference and deemed to be a part hereof:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Schedule “A”

 	
 -

 	
 Accredited
 Investor Status Certificate

 
	
  

 
	
  

 	
 Schedule “B”

 	
 -

 	
 Form of
 Registration Rights Agreement

 
	
  

 
	
  

 	
 Schedule “C”

 	
 -

 	
 Form of
 Warrant Certificate

 

ARTICLE 3 -
SUBSCRIPTION FOR UNITS

	
  

 	
  

 
	
 3.1

 	
 Subscription for Units

 

          Subject
to the terms and conditions set forth herein, and in reliance on the
representations, warranties and covenants of the Company contained herein, the
Subscriber hereby confirms its subscription for and offer to purchase the Units
from the Company, on and subject to the terms and conditions set out in this
Subscription Agreement, for the Subscription Amount, which is payable as
described in Article 4 hereto.

	
  

 	
  

 
	
 3.2

 	
 Authorization and Issuance of Securities Comprising the Units

 

          The
securities comprising the Units shall be authorized and issued by the Company
and evidenced by certificates representing the Unit Shares and certificates
representing the Warrants to be dated as of the Closing Date.

	
  

 	
  

 
	
 3.3

 	
 Acceptance and Rejection of Subscription by the Company

 

          The
Subscriber acknowledges and agrees that the Company reserves the right, in its
absolute discretion, to reject this subscription for Units, at any time prior
to the Closing Time. If this subscription is rejected, any cheques or other
forms of payment delivered to the Company representing the Subscription Amount
will be promptly returned to the Subscriber without interest or deduction.

ARTICLE
4 - CLOSING

	
  

 	
  

 
	
 4.1

 	
 Closing

 

          Sale
of the Units and delivery of the certificates representing the Unit Shares and
the Warrants and payment of the Subscription Amount will be completed (the “Closing”) at the offices of the
Company’s
counsel, Gowling Lafleur Henderson LLP in at 10:00 a.m. (Toronto time) (the “Closing Time”) on March 18, 2009 or such
other place, date or time as the Company and the Subscriber may agree, but in
any event no later than March 31, 2009 (the “Closing Date”). If, prior to the
Closing Time, the terms and conditions contained in this Subscription Agreement
have been complied with to the satisfaction of the Subscriber, or waived by the
Subscriber, (a) the Subscriber shall (i) deliver to the Company at the Closing
Time a completed Subscription Agreement; and (ii) deliver to the Company the
aggregate Subscription Amount for the Units against delivery by the Company of
certificates representing the Unit Shares and Warrants and such other
documentation as may be required pursuant to the Subscription Agreement, and
(b) the Subscriber and the Company shall enter into the Registration Rights
Agreement.

- 3 -

          If,
prior to the Closing Time, the terms and conditions contained in this
Subscription Agreement (other than delivery by the Company to the Subscriber of
certificates representing the Unit Shares and Warrants) have not been complied
with to the satisfaction of the Subscriber, or waived by the Subscriber, the
Company and the Subscriber will have no further obligations under this
Subscription Agreement. Nothing in this final paragraph of Section 4.1 shall
release any party hereto from any liability that such party may have arising
out of any inaccuracy or misrepresentation made by such party in or pursuant to
this Agreement or any breach of this Agreement by such party.

	
  

 	
  

 
	
 4.2

 	
 Conditions of Closing

 

          Each
of the Subscriber and the Company acknowledge and agree that their respective
obligations hereunder are conditional on the accuracy of the representations
and warranties of the other party contained in this Subscription Agreement as
of the date of this Subscription Agreement, and as of the Closing Time as if
made at and as of the Closing Time, and the fulfillment of the following
additional conditions as soon as possible and in any event not later than the
Closing Time:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 payment by
 the Subscriber of the Subscription Amount by certified cheque, bank draft or
 wire transfer in Canadian dollars payable to the Company;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the
 Subscriber having properly completed, signed and delivered this Subscription
 Agreement and Schedule “A” hereto;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 execution
 and delivery of the Registration Rights Agreement by the parties;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 the approval
 for listing of the Unit Shares and the Warrant Shares on the NYSEA and the
 conditional approval for listing of the Unit Shares and the Warrant Shares on
 the Toronto Stock Exchange;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 execution
 and delivery by the Company of a Letter Agreement Regarding Board of
 Directors Representation in a form satisfactory to the Subscriber, acting
 reasonably;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 the
 Subscriber shall have received a title opinion respecting the Company’s San
 Miguel concessions and Temoris concessions in Mexico from the Company’s
 Mexican counsel in a form satisfactory to the Subscriber, acting reasonably;

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 the
 Subscriber shall have received legal opinions from Canadian and U.S. counsel
 to the Company in a form satisfactory to the Subscriber, acting reasonably;

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 the
 representations, warranties and covenants of the Company set forth in Article
 5 shall be true and correct at the Closing Time with the same force and
 effect as if made at and as of such time and the Company shall deliver to the
 Subscriber a certificate to that effect at the Closing Time;

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 the
 representations, warranties, covenants and acknowledgments of the Subscriber
 set forth in Article 6 shall be true and correct at the Closing Time with the
 same force and effect as if made at and as of such time and the Subscriber
 shall deliver to the Company a certificate to that effect at the Closing
 Time; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 the Closing
 Date shall be no later than March 31, 2009.

 

- 4 -

ARTICLE 5 -
REPRESENTATIONS AND WARRANTIES OF

THE COMPANY

	
  

 	
  

 
	
 5.1

 	
 Representations, Warranties and Covenants of the Company

 

          The
Company hereby represents and warrants to and covenants with the Subscriber as
follows and acknowledges that the Subscriber is relying on such representations
and warranties in connection with the transaction contemplated herein:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The Company
 and each of its subsidiaries has been duly incorporated and organized and is
 validly existing under their respective jurisdictions of incorporation, have
 all requisite power and capacity and all necessary authorizations, approvals,
 consents, orders, licenses, certificates and permits of and from all
 governmental bodies or any other person or entity to carry on its business as
 now conducted and to own, lease and operate their respective properties and
 assets except where the failure to obtain such authorizations, approvals,
 consents, orders, licenses, certificates and permits would not have a
 material adverse effect on the consolidated assets or properties, business,
 results of operations or condition (financial or otherwise) of the Company.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Upon written
 acceptance and delivery, this Subscription Agreement constitutes a binding
 obligation of the Company enforceable in accordance with its terms. Upon
 execution and delivery by the Company, each of the Warrant certificates
 representing the Warrants and the Registration Rights Agreement will be
 binding obligations of the Company enforceable in accordance with its
 respective terms.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 The offer
 and sale of the Units, the Unit Shares and the Warrants have been duly
 authorized by all necessary corporate action on the part of the Company and,
 upon issuance and delivery of the Unit Shares against payment of the
 Subscription Amount therefor in accordance with this Agreement, the Unit
 Shares will be validly issued, fully paid and non-assessable Common Shares of
 the company. The Warrant Shares have been duly reserved for issuance and,
 upon issuance and delivery of the Warrant Shares against payment of the
 warrant exercise price in accordance with the terms of the Warrants, the
 Warrant Shares will be validly issued, fully paid and non-assessable Common
 Shares of the Company. The Unit Shares and the Warrant Shares will conform in
 all respects to the description of the Common Shares set forth in the Public
 Record.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The Company
 has conducted and is conducting its business in compliance in all material
 respects with all applicable laws, rules, regulations, tariffs, orders and
 directives of each jurisdiction in which it carries on business (except when
 the failure to do so would not have a material adverse effect) and possesses
 all material certificates, authorities, permits or licences issued by the
 appropriate provincial, state, municipal, federal or other governmental or
 regulatory agency or body necessary to carry on the business currently as
 carried on, or contemplated to be carried on, by it, is in compliance in all
 material respects with such certificates, authorities, permits and licences
 and with all laws, regulations, tariffs, rules, orders and directives
 material to its operations, including, without limitation, all laws,
 regulations and statutes relating to mining claims, concessions, licenses,
 leases or other instruments and the Company has not received any notice of
 proceedings relating to the revocation or modification of any such
 certificates, authorities, permits, licences, mining claims, concessions,
 leases or other instruments conferring mineral rights which, singly or in the
 aggregate, if the subject of an unfavourable decision, order, ruling or
 finding, would materially and adversely affect the conduct of its business,
 operations, financial condition or income of the Company and it has not
 received notice of the revocation or cancellation of, or any intention to
 revoke or cancel, any such licence, permit, approval, consent, certificate,
 registration or authorization.

 

- 5 -

	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 The issue
 and sale of the Units by the Company does not and will not conflict with, and
 does not and will not result in a breach of, any of the terms of the
 Company’s incorporating documents or any material breach of any agreement or
 instrument to which the Company is a party or by which it is bound.

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 The Company
 is not a party to any actions, suits or proceedings which could materially
 affect its business or financial condition, and to the best of the Company’s
 knowledge, no such actions, suits or proceedings are contemplated or have
 been threatened.

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 There are no
 judgments against the Company which are unsatisfied, nor is the Company
 subject to any consent decrees or injunctions.

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 The
 execution, delivery and performance of this Agreement, the Registration
 Rights Agreement and the certificate evidencing the Warrants, the
 consummation of the transactions contemplated hereby and thereby and the
 issuance and sale of the Units, the Unit Shares, the Warrants and the Warrant
 Shares have been or will be at the Closing Date duly authorized by all
 necessary corporate action on the part of the Company, and the Company has
 full corporate power and authority to undertake the Offering. Without
 limiting the generality of the foregoing, the authorizations referred to in
 this paragraph include the approval by the Company’s board of directors of
 the Subscriber becoming an “interested stockholder” within the meaning of
 Section 203 of the Delaware General Corporation Law.

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 To the
 Company’s knowledge, it is not in default of any of the requirements of the
 Securities Laws or any of the administrative policies or notices of the Stock
 Exchanges.

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 Except for
 as provided in the Public Record, no person has any right, agreement or
 option, present or future, contingent or absolute, or any right capable of
 becoming such a right, agreement or option, for the issue or allotment of any
 unissued shares in the capital of the Company, or any other security
 convertible into or exchangeable for any such shares, or to require the
 Company to purchase, redeem or otherwise acquire any of the issued and
 outstanding shares in its capital.

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 Other than
 the Financial Advisor, there is no person acting or purporting to act on
 behalf of the Company in connection with the transactions contemplated herein
 who is entitled to any brokerage, finder’s fee or financial advisory fee. If
 any person establishes a claim that any fee or other compensation is payable
 by the Subscriber for services performed for or on behalf of the Company in
 connection with this subscription for the Units, the Company covenants to
 indemnify and hold harmless the Subscriber with respect thereto and with
 respect to all costs reasonably incurred in the defence thereof.

 
	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 The Company
 has filed, as part of the Public Record, all registration statements,
 prospectuses, reports, schedules, forms, statements and other documents
 required to be filed by it pursuant to the U.S. Securities Act or the U.S.
 Exchange Act with the SEC since June 30, 2008. None of the documents of the
 Public Record, as of their respective dates (and, if amended or superseded by
 a filing prior to the Closing Date, then on the date of such filing),
 contained any untrue statement of a material fact or omitted to state a
 material fact required to be stated therein or necessary to make the
 statements therein, in light of the circumstances under which they were made,
 not misleading.

 
	
  

 	
  

 	
  

 
	
  

 	
 (m)

 	
 Each of the
 financial statements (including the related notes and schedules) included or
 incorporated by reference in the Public Record were prepared in accordance
 with U.S. GAAP and present fairly in all material respects the financial
 condition and results of operations of the Company as of the respective dates
 thereof and for the respective periods covered thereby, all in conformity
 with U.S. GAAP consistently applied during the period involved except as
 otherwise noted therein, and subject, in the case of any unaudited interim
 financial statements, to the absence of notes and normal year-end
 adjustments. All such documents in the Public Record, as of their respective
 dates (and as of the date of any amendment to the respective document of the
 Public Record) complied as to form in all material respects with the
 applicable requirements of the U.S. Securities Act and the U.S. Exchange Act
 and the rules and regulations promulgated thereunder.

 

- 6 -

	
  

 	
  

 	
  

 
	
  

 	
 (n)

 	
 Except as
 disclosed in the Public Record filed prior to the date hereof, the Company
 has not incurred any liabilities that are of a nature that would be required
 to be disclosed on a balance sheet of the Company or the footnotes thereto
 prepared in conformity with U.S. GAAP.

 
	
  

 	
  

 	
  

 
	
  

 	
 (o)

 	
 The Company
 has not received any written notice from NYSEA to the effect that the Company
 is currently in material non-compliance with any listing or maintenance
 requirement of the NYSEA. To the Company’s knowledge, there are no facts or
 circumstances existing as of the date hereof that create a reasonable
 likelihood that the Common Shares will be delisted from the NYSEA or trading
 in such shares will be suspended.

 
	
  

 	
  

 	
  

 
	
  

 	
 (p)

 	
 None of the
 Company or any of its affiliates has made or will make any “directed selling
 efforts” (as defined in Rule 902(c) of Regulation S) in the United States
 regarding the Company or the securities subject to the Offering, or has
 engaged or will engage in any form of “general solicitation” or “general
 advertising” (as such terms are used in Rule 502(c) of Regulation D under the
 U.S. Securities Act) in connection with the offer or sale of the securities
 subject to the Offering including, but not limited to, 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 or in any other manner involving a public offering
 within the meaning of Section 4(2) of the U.S. Securities Act.

 
	
  

 	
  

 	
  

 
	
  

 	
 (q)

 	
 The current
 structure of this transaction and all transactions contemplated hereunder is
 not a scheme to avoid the registration requirements of the U.S. Securities
 Act.

 
	
  

 	
  

 	
  

 
	
  

 	
 (r)

 	
 The
 Subscriber is relying on the representations, warranties and covenants of the
 Company contained herein and the Company agrees to indemnify the Subscriber
 and its directors, officers and agents against all losses, claims, costs,
 expenses, damages or liabilities that any of them may suffer or incur as a
 result of or arising from reliance thereon.

 

ARTICLE 6 -
ACKNOWLEDGEMENTS, COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER

	
  

 	
  

 
	
 6.1

 	
 Acknowledgements, Representations, Warranties and Covenants of the
 Subscriber

 

          The
Subscriber hereby represents and warrants to, and covenants with, the Company
as follows and acknowledges that the Company is relying on such representations
and warranties in connection with the transactions contemplated herein:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The
 Subscriber certifies that it is incorporated in and maintains its principal
 place of business in the jurisdiction set out on the face page of this
 Subscription Agreement. Such address was not created and is not used solely
 for the purpose of acquiring the Units and the Subscriber was solicited to
 purchase the Units in such jurisdiction.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The
 Subscriber is neither a U.S. Person nor subscribing for the Units for the
 account or benefit of a U.S. Person or for resale in the United States and
 the Subscriber confirms that the Units have not been offered to the
 Subscriber in the United States and that this Subscription Agreement has not
 been signed in the United States. 

 

- 7 -

	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 The
 Subscriber has properly completed, executed and delivered to the Company this
 Subscription Agreement through which it subscribed for the Units including
 Schedule “A” hereto (dated as of the date hereof), as applicable and the
 information contained therein is true and correct.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The
 representations, warranties and covenants of the Subscriber contained in
 Schedule “A” hereto will be true and correct both as of the date of execution
 of this Subscription Agreement and as of the Closing Time.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 The
 Subscriber acknowledges that the Unit Shares, the Warrants and the Warrant
 Shares have not been registered under the U.S. Securities Act, are
 “restricted securities” as defined in Rule 144 under the U.S. Securities Act
 and may not be offered or sold in the United States or to a U.S. Person
 unless the securities are registered under the U.S. Securities Act and all
 applicable State securities laws or an exemption from such registration
 requirements is available, and further agrees that hedging transactions
 involving such securities may not be conducted unless in compliance with the
 U.S. Securities Act.

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 The
 Subscriber understands that the Company is the seller of the Units and the
 issuer of the underlying securities and that, for purposes of Regulation S, a
 “distributor” is any underwriter, dealer or other person who participates,
 pursuant to a contractual arrangement in the distribution of securities sold
 in reliance on Regulation S and that an “affiliate” is any partner, officer,
 director or any person directly or indirectly controlling, controlled by or
 under common control with any person in question. Except as otherwise
 permitted by Regulation S, the Subscriber agrees that it will not, during a
 six-month distribution compliance period, act as a distributor, either
 directly or through any affiliate, or sell, transfer, hypothecate or
 otherwise convey the Unit Shares, the Warrants or the Warrant Shares other
 than to a non-U.S. Person.

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 The
 Subscriber acknowledges and understands that in the event the Unit Shares,
 the Warrants or the Warrant Shares are offered, sold or otherwise transferred
 by the Subscriber to a non-U.S. Person prior to the expiration of a six-month
 distribution compliance period, the purchaser or transferee must agree not to
 resell such securities except in accordance with the provisions of Regulation
 S, pursuant to registration under the U.S. Securities Act, or pursuant to an
 available exemption from registration; and must further agree not to engage
 in hedging transactions with regard to such securities unless in compliance
 with the U.S. Securities Act.

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 The
 Subscriber will not offer, sell or otherwise dispose of the Unit Shares, the
 Warrants or the Warrant Shares in the United States or to a U.S. Person
 unless such offer, sale or disposition and such offer, sale or disposition is
 made in accordance with an exemption from the registration requirements under
 the U.S. Securities Act and the securities laws of all applicable states of
 the United States or the SEC has declared effective a registration statement
 in respect of such securities.

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 The
 execution and delivery of this Subscription Agreement, the performance and
 compliance with the terms hereof, the subscription for the Units and the
 completion of the transactions described herein by the Subscriber will not
 result in any material breach of, or be in conflict with, or constitute a
 material default under, or create a state of facts that, after notice or
 lapse of time, or both, would constitute a material default under any term or
 provision of the constating documents, by-laws or resolutions of the
 Subscriber.

 

- 8 -

	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 The
 Subscriber is subscribing for the Units as principal for its own account and
 not for the benefit of any other person (within the meaning of applicable
 Securities Laws) or if it is subscribing as agent for a Disclosed Principal,
 it has disclosed the name of the Disclosed Principal on the face page of this
 Subscription Agreement and acknowledges that the Company may be required by
 law to disclose to certain regulatory authorities the identity of each
 Disclosed Principal for whom the Subscriber is acting.

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 In the case
 of a subscription for the Units by the Subscriber acting as agent for a fully
 managed account or as agent for a Disclosed Principal, the Subscriber is duly
 authorized to execute and deliver this Subscription Agreement and all other
 necessary documentation in connection with such subscription on behalf of the
 fully managed account or Disclosed Principal, as applicable and this Subscription
 Agreement has been duly authorized, executed and delivered by or on behalf of
 and constitutes a legal, valid and binding agreement of, the fully managed
 account or Disclosed Principal, as applicable. This Subscription Agreement is
 enforceable in accordance with its terms against such fully managed account
 or Disclosed Principal.

 
	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 In the case
 of a subscription for the Units by the Subscriber acting as principal, this
 Subscription Agreement has been duly authorized, executed and delivered by,
 and constitutes a legal, valid and binding agreement of, the Subscriber. This
 Subscription Agreement is enforceable in accordance with its terms against
 the Subscriber.

 
	
  

 	
  

 	
  

 
	
  

 	
 (m)

 	
 The
 Subscriber is duly incorporated and is validly subsisting under the laws of
 its governing jurisdiction and has all requisite legal and corporate power
 and authority to execute and deliver this Subscription Agreement, to
 subscribe for the Units as contemplated herein and to carry out and perform
 its obligations under the terms of this Subscription Agreement, and the
 individual signing this Subscription Agreement has been duly authorized to
 execute and deliver this Subscription Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 (n)

 	
 There is no
 person acting or purporting to act on behalf of the Subscriber in connection
 with the transactions contemplated herein who is entitled to any brokerage,
 finder’s fee or financial advisory fee. If any person other than the
 Financial Advisor establishes a claim that any fee or other compensation is
 payable by the Company for services rendered for or on behalf of the
 Subscriber in connection with this subscription for the Units, the Subscriber
 covenants to indemnify and hold harmless the Company with respect thereto and
 with respect to all costs reasonably incurred in the defence thereof.

 
	
  

 	
  

 	
  

 
	
  

 	
 (o)

 	
 Insofar as
 such term is used in the Securities Laws, the Subscriber is at arm’s-length
 with the Company within the meaning of the Securities Laws.

 
	
  

 	
  

 	
  

 
	
  

 	
 (p)

 	
 If required
 by applicable Securities Laws or the Company, the Subscriber will execute,
 deliver and file, or assist the Company in filing, such reports, undertakings
 and other documents with respect to the issue and/or sale of the Unit Shares,
 the Warrants or the Warrant Shares as may be required by any securities
 commission, stock exchange or other regulatory authority.

 
	
  

 	
  

 	
  

 
	
  

 	
 (q)

 	
 The
 Subscriber has been advised to consult its own legal advisors with respect to
 trading in the Unit Shares and the Warrants and the Warrant Shares and with
 respect to the resale restrictions imposed by the Securities Laws of the
 jurisdiction in which the Subscriber resides and other applicable securities
 laws, and acknowledges that no representation has been made respecting the
 applicable hold periods imposed by the Securities Laws or other resale restrictions
 applicable to such securities that restrict the ability of the Subscriber (or
 others for whom it is contracting hereunder) to resell such securities, that
 the Subscriber (or others for whom it is contracting hereunder) is solely
 responsible to find out what these restrictions are and the Subscriber is
 solely responsible (and the Company is not in any way responsible) for
 compliance with applicable resale restrictions and the Subscriber is aware
 that it (or beneficial persons for whom it is contracting hereunder) may not
 be able to resell such securities except in accordance with limited
 exemptions under the Securities Laws and other applicable securities laws.
 Nothing in this paragraph (q) shall relieve the Company from its obligations
 under the Registration Rights Agreement.

 

- 9 -

	
  

 	
  

 	
  

 
	
  

 	
 (r)

 	
 The
 Subscriber has not received or been provided with a prospectus, registration
 statement or offering memorandum, within the meaning of the Securities Laws.
 The Subscriber has had access to and has reviewed, to the extent it deems
 necessary, the Public Record and the Subscriber’s decision to subscribe for
 the Units was based solely upon the representations, warranties, covenants
 and agreements of the Company contained in this Subscription Agreement
 (including the representations and warranties made herein with respect to the
 Public Record) and the Public Record.

 
	
  

 	
  

 	
  

 
	
  

 	
 (s)

 	
 The
 Subscriber is not purchasing the Units with knowledge of material information
 concerning the Company with respect to which the Company has not made “Public
 Disclosure” within the meaning of Regulation FD under the U.S. Exchange Act.

 
	
  

 	
  

 	
  

 
	
  

 	
 (t)

 	
 The
 Subscriber acknowledges and agrees that no person has made any written or
 oral representations:

 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 that any
 person will resell or repurchase the Unit Shares, the Warrants or the Warrant
 Shares; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 that any
 person will refund the Subscription Amount; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 as to the
 future price or value of the Common Shares.

 

	
  

 	
  

 	
  

 
	
  

 	
 (u)

 	
 There are
 risks associated with the purchase of and investment in the Units and the
 Subscriber has such knowledge and experience that it is capable of evaluating
 the merits and risks of an investment in the Unit Shares, Warrants and
 Warrant Shares and fully understands the restrictions on resale of the Unit
 Shares, Warrants and Warrant Shares and is capable of bearing the economic
 loss of the investment in the Units.

 
	
  

 	
  

 	
  

 
	
  

 	
 (v)

 	
 The funds
 representing the Subscription Amount that will be advanced by the Subscriber
 to the Company hereunder, as applicable, will not represent proceeds of crime
 for the purposes of the Proceeds
 of Crime (Money Laundering) and Terrorist
 Financing Act (Canada) (the “PCMLTFA”)
 and the Subscriber acknowledges that the Company may in the future be
 required by law to disclose the Subscriber’s or Disclosed Principal’s name
 and other information relating to this Subscription Agreement and the
 Subscriber’s subscription hereunder, on a confidential basis, pursuant to the
 PCMLTFA. To the best of its knowledge (a) none of the funds representing the
 Subscription Amount to be provided by the Subscriber (i) has been or will be
 derived from or related to any activity that is deemed criminal under the law
 of Canada, the United States of America, or any other jurisdiction, or (ii)
 is being tendered on behalf of a person or entity who has not been identified
 to the Subscriber, and (b) it shall promptly notify the Company if the
 Subscriber discovers that any of such representations ceases to be true, and
 to provide the Company with appropriate information in connection therewith.

 

- 10 -

	
  

 	
  

 
	
 6.2

 	
 Additional Acknowledgments and Covenants of the Subscriber 

 

          The
Subscriber, on its own behalf and, if applicable, on behalf of others for whom
it is acting hereunder, hereby acknowledges, covenants and agrees as follows:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 No
 securities commission, agency, governmental authority, regulatory body, stock
 exchange or other regulatory body or similar regulatory authority has
 reviewed or passed on the merits for investment of the Unit Shares, the
 Warrants or the Warrant Shares nor has any such regulatory authority made any
 recommendation or endorsement with respect to the Unit Shares, the Warrants
 or the Warrant Shares.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The Units,
 Unit Shares, Warrants and Warrant Shares (if applicable) shall be subject to
 statutory resale restrictions under the securities laws of the jurisdiction
 in which the Subscriber resides and under other applicable securities laws,
 and the Subscriber covenants that it will not resell the Unit Shares, the
 Warrants or, if applicable, the Warrant Shares except in compliance with such
 laws and the Subscriber acknowledges that it is solely responsible (and the
 Company is not in any way responsible) for such compliance. Nothing in this
 paragraph (b) shall relieve the Company from its obligations under the
 Registration Rights Agreement.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 The ability
 to transfer the Unit Shares, the Warrants and the Warrant Shares is limited
 by, among other things, applicable Securities Laws and the Company shall
 refuse, and shall instruct its transfer agent to refuse to register any
 transfer that does not comply with applicable Securities Laws. The Company
 agrees that upon delivery by the Subscriber to the Company of an opinion of
 counsel of recognized standing in the jurisdiction in which any of the Unit
 Shares, the Warrants or the Warrant Shares are proposed to be sold, that such
 transfer may be effected in compliance with applicable Securities Laws,
 unless the Company reasonably believes that such opinion is incorrect,
 unclear or otherwise defective for such purpose, such opinion shall be
 conclusive, as against the Company, with respect to such proposed transfer
 and that the Company shall instruct its transfer agent to register any such
 transfer to which such opinion relates.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The certificates
 representing the Unit Shares, the Warrants and if applicable, the Warrant
 Shares, if issued prior to the date that is four months following the Closing
 Date, will bear a legend substantially in the following form and with the
 necessary information inserted:

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 “UNLESS
 PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
 TRADE THE SECURITY BEFORE [four months and
 one day from the Closing Date].” and

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “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
 certificates representing the Unit Shares, the Warrants and the Warrant
 Shares will bear a legend substantially in the following form:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  “THE SECURITIES REPRESENTED HEREBY [IF WARRANTS, ADD “AND THE
 SECURITIES ISSUABLE UPON THE EXERCISE HEREOF”] HAVE NOT BEEN REGISTERED UNDER
 THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). UNLESS
 REGISTERED UNDER THE 1933 ACT, THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED
 OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED
 STATES IN COMPLIANCE WITH REGULATION S UNDER THE 1933 ACT, (C) IN COMPLIANCE
 WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT
 PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH
 APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT
 REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE LAWS, AND THE
 HOLDER HAS, PRIOR TO SUCH SALE UNDER (C) OR (D) ABOVE, FURNISHED TO THE
 COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE
 REASONABLY SATISFACTORY TO THE COMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT
 CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES
 IN CANADA. THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE
 SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN
 COMPLIANCE WITH THE 1933 ACT.”

 	
  

 

- 11 -

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 The Company
 is relying on the representations, warranties and covenants of the Subscriber
 contained herein and in the applicable Schedule(s) attached hereto to
 determine the Subscriber’s eligibility to subscribe for the Units under
 applicable Securities Laws and the Subscriber agrees to indemnify the Company
 and its directors, officers and agents against all losses, claims, costs,
 expenses, damages or liabilities that any of them may suffer or incur as a
 result of or arising from reliance thereon. The Subscriber undertakes to
 immediately notify the Company of any change in any statement or other
 information relating to the Subscriber set forth in such applicable Schedules
 which takes place prior to the Closing Time.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 The Company
 is relying on an exemption from the requirement to provide the Subscriber
 with a prospectus or registration statement under the Securities Laws and, as
 a consequence of acquiring the Units pursuant to such exemption:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 certain
 protections, rights and remedies provided by the Securities Laws, including
 statutory rights of rescission and certain statutory remedies against an issuer,
 underwriters, auditors, directors and officers that are available to
 investors who acquire securities offered by a prospectus, may not be
 available to the Subscriber, or, if applicable, others for whom the
 Subscriber is contracting hereunder,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 the common
 law may not provide investors with an adequate remedy in the event that the
 Subscriber or, if applicable, others for whom the Subscriber is contracting
 hereunder, suffers investment losses in connection with securities acquired
 in a private placement,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 the
 Subscriber, or, if applicable, others for whom it is contracting hereunder,
 may not receive information that would otherwise be required to be given
 under the Securities Laws, and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 the Company
 is relieved from certain obligations that would otherwise apply under the
 Securities Laws.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Nothing in
 this paragraph (f) shall constitute a waiver by Subscriber of any rights
 which Subscriber may have under applicable Securities Laws.

 

- 12 -

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 The
 Subscriber is solely responsible for obtaining such legal, investment, tax
 and other professional advice as it considers appropriate in connection with
 the execution, delivery and performance of this Subscription Agreement and
 the transactions contemplated under this Subscription Agreement and, without
 limiting the generality of the foregoing, the Company’s counsel are acting
 solely as counsel to the Company and not as counsel to the Subscriber.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 There is no
 government guarantee or insurance covering the Unit Shares, the Warrants or
 the Warrant Shares.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 There are
 risks associated with the purchase of the Units and the Subscriber may lose
 his, her or its entire investment. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 The Company
 is collecting the Subscriber’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 or federal legislation or laws in
 effect from time to time), and, if applicable, the personal information of
 each beneficial purchaser for whom it is contracting hereunder, for the
 purpose of completing this Subscription Agreement. The Subscriber
 acknowledges and consents on its own behalf that, and if applicable, on
 behalf of each Disclosed Principal, to the Company and Disclosed Principal
 retaining such personal information for as long as permitted or required by
 law or business practices. The Subscriber, on its own behalf and, if
 applicable, on behalf of each beneficial purchaser for whom it is contracting
 hereunder, further acknowledges and consents to the fact that the Company may
 be required by the Securities Laws, the rules and policies of any stock
 exchange or the rules of the Investment Dealers Association of Canada to
 provide regulatory authorities with any personal information provided under
 this Subscription Agreement. The Subscriber represents and warrants, as
 applicable, that it has the authority to provide the consents and
 acknowledgements set out in this paragraph on behalf of each Disclosed
 Principal. In addition to the foregoing, the Subscriber agrees and
 acknowledges that the Company, may use and disclose its personal information,
 or that of each Disclosed Principal, as follows:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 for internal
 use with respect to managing the relationships between and contractual
 obligations of the Company and the Subscriber or any Disclosed Principal;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)

 	
 for
 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;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)

 	
 for disclosure
 to professional advisers of the Company in connection with the performance of
 their professional services;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vii)

 	
 for
 disclosure to a court determining the rights of the parties under this
 Subscription Agreement; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (viii)

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

 

- 13 -

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 No Canadian
 broker-dealer would be permitted, under the U.S. Securities Act, to execute a
 transaction in the Unit Shares, Warrants or Warrant Shares on a Canadian
 stock exchange if that member knows that the purchaser is in the United
 States or a U.S. Person or is acting for the account or benefit of a U.S.
 Person. Also, the Canadian broker-dealer must make reasonable efforts to
 ascertain whether a purchaser is in the United States or is a U.S. Person or
 is acting for the account or benefit of a U.S. Person and implement measures
 designed to assure reasonable compliance with this requirement.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 If the
 Subscriber is resident in or otherwise subject to the Securities Laws
 applicable in the Province of Ontario, the information provided by the
 Subscriber on the face page of this Subscription Agreement identifying the
 name, address and telephone number of the Subscriber, the number of Units
 being purchased hereunder and the Subscription Amount as well as the Closing
 Date and the exemption that the Company is relying on in selling the Units to
 the Subscriber will be disclosed to the Ontario Securities Commission, and
 such information is being indirectly collected by the Ontario Securities
 Commission under the authority granted to it under applicable securities
 legislation in the Province of Ontario. This information is being collected
 for the purposes of the administration and enforcement of the securities
 legislation of the Province of Ontario. Each Subscriber (for certainty
 including each Disclosed Principal) hereby authorizes the indirect collection
 of such information by the Ontario Securities Commission. In the event the
 Subscriber has any questions with respect to the indirect collection of such
 information by the Ontario Securities Commission, the Subscriber should contact
 the Ontario Securities Commission, Administrative Assistant to the Director
 of Corporate Finance at (416) 593-8086 or in person or writing at Suite
 1900, Box 55, 20 Queen Street West, Toronto, Ontario M5H 3S8.

 

ARTICLE 7 -
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

	
  

 	
  

 
	
 7.1

 	
 Survival of Representations, Warranties and Covenants of the Company

 

          The
representations, warranties and covenants of the Company contained in this
Subscription Agreement shall survive the Closing and, notwithstanding such Closing
or any investigation made by or on behalf of the Subscriber with respect
thereto, shall continue in full force and effect for the benefit of the
Subscriber.

	
  

 	
  

 
	
 7.2

 	
 Survival of Representations, Warranties and Covenants of the
 Subscriber

 

          The
representations, warranties and covenants of the Subscriber contained in this
Subscription Agreement shall survive the Closing and, notwithstanding such
Closing or any investigation made by or on behalf of the Company with respect
thereto and notwithstanding any subsequent disposition by the Subscriber of any
of the Unit Shares, the Warrants or the Warrant Shares, and shall continue in
full force and effect for the benefit of the Company.

ARTICLE 8 –
FINANCIAL ADVISOR’S FEE

	
  

 	
  

 
	
 8.1

 	
 Financial Advisory Fee

 

          The
Subscriber understands that, in connection with the issue and sale of the Units
pursuant to the Offering, the Financial Advisor will receive from the Company
on Closing a Financial Advisory Fee equal to 7% of the gross proceeds from the
Offering. The Company will also issue to the Financial Advisor that number of
share purchase warrants (“Financial Advisor’s
Warrants”) equal to 7% of the Units sold to the Subscriber. Each
Financial Advisor’s Warrant will entitle the Financial Advisor to acquire a
Common Share at the same price and over the same term as the Warrants and will
be evidenced by a form of Financial Advisor’s Warrant.

- 14 -

ARTICLE 9 -
MISCELLANEOUS

	
  

 	
  

 
	
 9.1

 	
 Further Assurances

 

          Each
of the parties hereto upon the request of each of the other parties hereto,
whether before or after the Closing Time, shall do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged and delivered all such
further acts, deeds, documents, assignments, transfers, conveyances, powers of
attorney and assurances as may reasonably be necessary or desirable to complete
the transactions contemplated herein.

	
  

 	
  

 
	
 9.2

 	
 Notices

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Any notice,
 direction or other instrument required or permitted to be given to any party
 hereto shall be in writing and shall be sufficiently given if delivered personally,
 or transmitted by facsimile tested prior to transmission to such party, as
 follows:

 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 in the case
 of the Company, to:

 

	
  

 	
  

 	
  

 
	
  

 	
 Paramount
 Gold and Silver Corp.

 
	
  

 	
 346 Waverley
 Street, Suite 110

 
	
  

 	
 Ottawa, ON
 K2P 0W5 

 
	
  

 	
  

 
	
  

 	
 Attention:

 	
 President
 and Chief Executive Officer

 
	
  

 	
 Fax:

 	
 (613)
 248-4971

 

	
  

 	
  

 
	
  

 	
 with a copy
 to (which shall not constitute notice):

 

	
  

 	
  

 	
  

 
	
  

 	
 Gowling
 Lafleur Henderson LLP

 
	
  

 	
 Bentall 5

 
	
  

 	
 550 Burrard
 Street, Suite 2300

 
	
  

 	
 P.O. Box 30

 
	
  

 	
 Vancouver, BC V6C 2B5

 
	
  

 	
  

 
	
  

 	
 Attention:

 	
 Brett Kagetsu

 
	
  

 	
 Fax:

 	
 (604) 443-5627

 

	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 in the case
 of the Subscriber, at the address specified on the face page hereof, with a
 copy to (which shall not constitute notice):

 

	
  

 	
  

 	
  

 
	
  

 	
 Ogilvy
 Renault LLP

 
	
  

 	
 Suite 3800,
 P.O. Box 84

 
	
  

 	
 Royal Bank
 Plaza, South Tower

 
	
  

 	
 200 Bay
 Street

 
	
  

 	
 Toronto, ON
 M5J 2Z4

 
	
  

 	
  

 
	
  

 	
 Attention:

 	
 Pierre
 Soulard

 
	
  

 	
 Fax:

 	
 (416)
 216-3930

 

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Any such
 notice, direction or other instrument, if delivered personally, shall be
 deemed to have been given and received on the day on which it was delivered,
 provided that if such day is not a Business Day then the notice, direction or
 other instrument shall be deemed to have been given and received on the first
 Business Day following such day and if transmitted by fax, shall be deemed to
 have been given and received on the day of its transmission, provided that if
 such day is not a Business Day or if it is transmitted or received after the
 end of normal business hours then the notice, direction or other instrument
 shall be deemed to have been given and received on the first Business Day
 following the day of such transmission.

 

- 15 -

	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Any party hereto
 may change its address for service from time to time by notice given to each
 of the other parties hereto in accordance with the foregoing provisions.

 

	
  

 	
  

 
	
 9.3

 	
 Time of the Essence

 

          Time
shall be of the essence of this Subscription Agreement and every part hereof.

	
  

 	
  

 
	
 9.4

 	
 Costs and Expenses

 

          The
Company will bear the reasonable legal fees and disbursements of legal counsel
to the Subscriber incurred in connection with this Subscription Agreement and
the transactions herein contemplated.

	
  

 	
  

 
	
 9.5

 	
 Applicable Law

 

          Except
as set forth in the next succeeding sentence, this Subscription Agreement shall
be construed and enforced in accordance with, and the rights of the parties
shall be governed by, the laws of the Province of Ontario and the laws of
Canada applicable therein. Notwithstanding the foregoing, all matters relating
to or arising under the Securities Laws of the United States shall be governed
by and construed in accordance with such laws, and all matters relating to or
arising under the law of the State of Delaware shall be governed by and
construed in accordance with such laws. Any and all disputes arising under this
Subscription Agreement, whether as to interpretation, performance or otherwise,
shall be subject to the non-exclusive jurisdiction of the courts of the
Province of Ontario and each of the parties hereto hereby irrevocably attorns
to the jurisdiction of the courts of such province.

	
  

 	
  

 
	
 9.6

 	
 Entire Agreement

 

          This
Subscription Agreement, including the schedules hereto, constitutes the entire
agreement between the parties with respect to the transactions contemplated
herein and cancels and supersedes any prior understandings, agreements,
negotiations and discussions between the parties. There are no representations,
warranties, terms, conditions, undertakings or collateral agreements or
understandings, express or implied, between the parties hereto other than those
expressly set forth in this Subscription Agreement or in any such agreement,
certificate, affidavit, statutory declaration or other document as aforesaid.
This Subscription Agreement may not be amended or modified in any respect
except by written instrument executed by each of the parties hereto.

	
  

 	
  

 
	
 9.7

 	
 Counterparts

 

          This
Subscription Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same Subscription Agreement. Counterparts may be
delivered either in original or faxed form and the parties adopt any signature
received by a receiving fax machine as original signatures of the parties.

	
  

 	
  

 
	
 9.8

 	
 Assignment

 

          This
Subscription Agreement may not be assigned by either party except with the
prior written consent of the other parties hereto.

- 16 -

	
  

 	
  

 
	
 9.9

 	
 Enurement

 

          This
Subscription Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, successors (including any
successor by reason of the amalgamation or merger of any party), administrators
and permitted assigns.

	
  

 	
  

 
	
 9.10

 	
 Language

 

          It
is the express wish of the Subscriber that the Subscription Agreement and any
related documentation be drawn up in English. Il est de la volonté expressed du
souscripteur que la convention de souscription ainsi que tout document connexe
soient rédigés en langue anglaise. 

          The
Company hereby accepts the subscription for Units as set forth on the face page
of this Subscription Agreement on the terms and conditions contained in the
Subscription Agreement (including all applicable schedules) this 12th day of
March, 2009.

	
  

 	
  

 	
  

 
	
  

 	
 PARAMOUNT GOLD AND SILVER CORP.

 
	
  

 	
  

 
	
  

 	
 Per:

 	
 /s/
 Christopher Crupi

 
	
  

 	
  

 	 

 
	
  

 	
  

 	
 Authorized
 Signing Officer

 

- 17 -

SCHEDULE “A”

ACCREDITED INVESTOR
STATUS CERTIFICATE

TO BE COMPLETED BY ONTARIO ACCREDITED INVESTORS

The categories listed herein contain certain
specifically defined terms. If you are unsure as to the meanings of those
terms, or are unsure as to the applicability of any category below, please
contact your broker and/or legal advisor before completing this certificate.
Capitalized terms used but not otherwise defined herein shall have the meanings
attributed thereto in the subscription agreement to which this certificate is
attached.

	
  

 	
  

 
	
 TO:

 	
 Paramount Gold and Silver
 Corp. (the “Company”)

 

In connection
with the purchase by the undersigned Subscriber of the Units, the Subscriber,
hereby represents, warrants, covenants and certifies to the Company (and
acknowledges that the Company and its counsel are relying thereon) that:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the Subscriber is resident
 in or otherwise subject to the securities laws of one of the Province of
 Ontario;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the Subscriber is
 purchasing the Units as principal for its own account and not for the benefit
 of any other person or is deemed to be purchasing as a principal under
 National Instrument 45-106 – Prospectus
 and Registration Exemptions (“NI 45-106”);

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the Subscriber is an
 “accredited investor” within the meaning of NI 45-106 on the basis that the
 undersigned fits within one of the categories of an “accredited investor”
 reproduced below beside which the undersigned has indicated the undersigned
 belongs to such category; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 the Subscriber was not
 created or used solely to purchase or hold securities as an accredited
 investor as described in paragraph (m) below; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 upon execution of this
 Schedule “A” by the Subscriber, this Schedule “A” shall be incorporated into
 and form a part of the subscription agreement to which this Schedule “A” is
 attached.

 

(PLEASE CHECK THE
BOX OF EACH APPLICABLE CATEGORY OF ACCREDITED INVESTOR)

	
  

 	
  

 	
  

 
	
 o

 	
 (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;

 

A-1

	
  

 	
  

 	
  

 
	
 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 $1,000,000;

 
	
  

 	
  

 	
  

 
	
 o

 	
 (k)

 	
 an individual whose net
 income before taxes exceeded $200,000 in each of the two most recent calendar
 years or whose net income before taxes combined with that of a spouse
 exceeded $300,000 in each of the two 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 $5,000,000;

 
	
  

 	
  

 	
  

 
	
 x

 	
 (m)

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

 
	
  

 	
  

 	
  

 
	
 o

 	
 (n)

 	
 an investment fund that
 distributes or has distributed its securities only to (i) a person that is or
 was an accredited investor at the time of the distribution, (ii) a person
 that acquires or acquired securities in the circumstances referred to in
 sections 2.10 [Minimum amount investment]
 and 2.19 [Additional investment in
 investment funds] of NI 45-106, or (iii) a person described in
 paragraph (i) or (ii) that acquires or acquired securities under section 2.18
 [Investment fund reinvestment]
 of NI 45-106;

 
	
  

 	
  

 	
  

 
	
 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 (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 (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

 	
 (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

 

A-2

	
  

 	
  

 	
  

 
	
 o

 	
 (v)

 	
 a person that is
 recognized or designated by the securities regulatory authority or, except in
 Ontario and Québec, the regulator as (i) an accredited investor, or (ii) an
 exempt purchaser in Alberta or British Columbia.

 

For
the purposes hereof, the following definitions are included for convenience: 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 “Canadian financial
 institution” means (i) 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 (ii) 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;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 “control person” has the
 same meaning as in securities legislation except in Manitoba, Newfoundland
 and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince
 Edward Island and Québec where control person means any person that holds or
 is one of a combination of persons that holds (i) a sufficient number of any
 of the securities of an issuer so as to affect materially the control of the
 issuer, or (ii) more than 20% of the outstanding voting securities of an
 issuer except where there is evidence showing that the holding of those securities
 does not affect materially the control of the issuer;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 “eligibility adviser”
 means (a) a person that is registered as an investment dealer or in an
 equivalent category of registration under the securities legislation of the
 jurisdiction of a purchaser and authorized to give advice with respect to the
 type of security being distributed, and (b) in Saskatchewan or Manitoba, also
 means a lawyer who is a practicing member in good standing with a law society
 of a jurisdiction of Canada or a public accountant who is a member in good
 standing of an institute or association of chartered accountants, certified
 general accountants or certified management accountants in a jurisdiction of
 Canada provided that the lawyer or public accountant must not (i) have a
 professional, business or personal relationship with the issuer, or any of
 its directors, executive officers, founders, or control persons, and (ii)
 have acted for or been retained personally or otherwise as an employee,
 executive officer, director, associate or partner of a person that has acted
 for or been retained by the issuer or any of its directors, executive
 officers, founders or control persons within the previous 12 months;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 “entity”
 means a company, syndicate, partnership, trust or unincorporated
 organization;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 “financial
 assets” means cash, securities, or any a contract of insurance, a deposit or
 an evidence of a deposit that is not a security for the purposes of
 securities legislation;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 “founder”
 means, in respect of an issuer, a person who, (i) acting alone, in
 conjunction, or in concert with one or more persons, directly or indirectly,
 takes the initiative in founding, organizing or substantially reorganizing
 the business of the issuer, and (ii) at the time of the trade is actively
 involved in the business of the issuer;

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 “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;

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 “investment
 fund” means a mutual fund or a non-redeemable investment fund, and, for
 greater certainty in British Columbia, includes an employee venture capital
 corporation that does not have a restricted constitution, and is registered
 under Part 2 of the Employee Investment
 Act (British Columbia), R.S.B.C. 1996 c. 112, and whose business
 objective is making multiple investments and a venture capital corporation
 registered under Part 1 of the Small
 Business Venture Capital Act (British Columbia), R.S.B.C. 1996 c.
 429 whose business objective is making multiple investments;

 

A-3

	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 “mutual
 fund” means an issuer whose primary purpose is to invest money provided by
 its security holders and whose securities entitle the holder to receive on
 demand, or within a specified period after demand, an amount computed by
 reference to the value of a proportionate interest in the whole or in part of
 the net assets, including a separate fund or trust account, of the issuer;

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 “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;

 

	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 “related
 liabilities” means (i) liabilities incurred or assumed for the purpose of
 financing the acquisition or ownership of financial assets or (ii)
 liabilities that are secured by financial assets; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 “spouse” means an
 individual who (i) is married to another individual and is not living
 separate and apart within the meaning of the Divorce
 Act (Canada), from the other individual, (ii) is living with
 another individual in a marriage-like relationship, including a marriage-like
 relationship between individuals of the same gender, or (iii) in Alberta, is
 an individual referred to in paragraph (i) or (ii), or is an adult
 interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and

 
	
  

 	
  

 	
  

 
	
  

 	
 (m)

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

 

In
NI 45-106 a person or company is an affiliate of another person or company if
one of them is a subsidiary of the other, or if each of them is controlled by
the same person.

In NI 45-106 a
person (first person) is considered to control another person (second person)
if (a) the first person, directly or indirectly, beneficially owns or exercises
control or direction over securities of the second person carrying votes which,
if exercised, would entitle the first person to elect a majority of the
directors of the second person, unless that first person holds the voting
securities only to secure an obligation, (b) the second person is a
partnership, other than a limited partnership, and the first person holds more
than 50% of the interests of the partnership, or (c) the second person is a
limited partnership and the general partner of the limited partnership is the
first person.

The
foregoing representations contained in this certificate are true and accurate
as of the date of this certificate and will be true and accurate as of the
Closing Time (as defined in the subscription agreement to which this Schedule
“A” is attached) and the Subscriber acknowledges that this accredited investor status
certificate is incorporated into and forming part of the subscription agreement
to which it is attached. If any such representations shall not be true and
accurate prior to the Closing Time, the undersigned shall give immediate
written notice of such fact to the Company prior to the Closing Time.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Dated: March
 12, 2009

 	
  

 	
 Signed: 

 	
 /s/ Henry
 Fenig

 
	
  

 	
  

 	
  

 	
  

 	 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Henry Fenig

 
	
  

 	 

 	
  

 	 

 
	
  

 	
 Witness (if
 Subscriber is an individual)

 	
  

 	
 Print the
 name of Subscriber

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Executive
 Vice President

 
	
  

 	 

 	
  

 	 

 
	
  

 	
 Print Name
 of Witness

 	
  

 	
 If
 Subscriber is a corporation,

 
	
  

 	
  

 	
  

 	
 print name
 and title of authorized signing officer

 

A-4

SCHEDULE “B”

FORM OF REGISTRATION
RIGHTS AGREEMENT

[see Exhibit 10.2]

SCHEDULE “C”

FORM OF WARRANT
CERTIFICATE

[see Exhibit 4.1]Exhibit 10.2

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

          THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) dated as
of March 19, 2009, is entered into by and between Paramount Gold and Silver
Corp., a Delaware corporation (the “Company”) and FCMI
Financial Corporation, an Ontario corporation (the “Investor”).

          WHEREAS,
the Investor is purchasing units of the Company (the “Units”)
where each Unit is comprised of one common stock of the Company, U.S.$0.001 par
value per share (the “Common Stock”), and
one non-transferable common share purchase warrant of the Company (the “Warrants”), where each Warrant
entitles the holder to
acquire one Common Stock of the Company (a “Warrant Share”),
pursuant to a Subscription Agreement between Investor and the Company dated
March 12, 2009 ( the “Subscription Agreement”);
and 

          WHEREAS,
it is a condition to Investor’s obligation to purchase the Units pursuant to
the Subscription Agreement that Investor and the Company shall enter into this
Agreement.

          NOW
THEREFORE, in consideration of the premises and mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

          SECTION 1.     Certain Definitions. As used in this
Agreement, the following terms shall have the following respective meanings:

                    1.1     “Commission” means the United States
Securities and Exchange Commission, or any other United States federal agency
at the time administering the Securities Act.

                    1.2     “Exchange Act” means the United States
Securities Exchange Act of 1934, as amended, or any similar United States
federal statute, and the rules and regulations of the Commission issued under
such Act, as they each may, from time to time, be in effect.

                    1.3     “Registrable Shares” means (i) the Unit
Shares, (ii) the Warrant Shares, and (iii) any other shares of Common Stock of
the Company issued in respect of the shares described in clauses (i) and (ii)
above because of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events; provided, however, that
shares of Common Stock that are Registrable Shares shall cease to be
Registrable Shares (x) upon any sale by the holders thereof pursuant to a
Registration Statement, Section 4(1) of the Securities Act or Rule 144 under
the Securities Act or (y) upon any sale in any manner to a person or entity
other than a person who, by virtue of Section 12 of this Agreement, is entitled
to the rights provided by this Agreement.

                    1.4     “Registration Expenses” means the expenses
described in Section 5.

                    1.5     “Registration Statement” means a registration
statement filed by the Company with the Commission for a public offering and
sale of securities of the Company (other than a registration statement on Form
S-8 or Form S-4, or their successors, any other form for a limited purpose, any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation or a registration
statement on Form S-3 solely for the purpose of registering initial issuance
(but not the resale by recipients thereof) of shares issued in a
non-underwritten offering in connection with a merger, combination or
acquisition).

                    1.6     
“Securities Act” means the United States
Securities Act of 1933, as amended, or any similar United States federal
statute, and the rules and regulations of the Commission issued under such Act,
as they each may, from time to time, be in effect.

                    1.7     
“Stockholders” means the Investor and any
persons or entities to whom the rights granted under this Agreement are
transferred by the Investor or their successors or assigns pursuant to Section
12 hereof.

                    1.8     
“Unit Shares” has the meaning set forth in the
Subscription Agreement.

                    1.9     
“Warrant Shares” has the meaning set forth in
the Subscription Agreement.

          SECTION 2.     Required Registrations.

                    2.1     Requested Registrations. Commencing at any time following six (6) months
after the date hereof, one or more Stockholders may request, in writing, that
the Company effect the registration under the Securities Act of Registrable
Shares owned by one or more Stockholders, so long as the anticipated aggregate
gross proceeds in any such registration are anticipated to exceed CDN$5,000,000
(based upon the average of the last sale prices of the Common Stock for the 15
trading days immediately prior to the date of the written notice of the
Stockholders requesting such registration); provided, however,
that the Company may delay any such demand registration for up to ninety (90)
days if the Board of Directors of the Company determines that such delay is
required to avoid disclosure of material nonpublic information until the
expiration of such period of time; and provided, further, that
the Company may not exercise this deferral right more than once in any twelve
(12)-month period. Upon receipt of any such request, the Company shall promptly
give written notice of such proposed registration to all Stockholders. Such
other Stockholders shall have the right, by giving written notice to the
Company within ten (10) days after the Company provides its notice, to elect to
have included in such registration such of their Registrable Shares as such
Stockholders may request in such notice of election. Thereupon, the Company
shall, as expeditiously as possible, use all reasonable efforts to effect the
registration of all Registrable Shares that the Company has been requested so
to register. If available, the Registrable Shares will be registered on a Form
S-3 to be filed by the Company. The Company shall not be required to effect more
than one (1) such registration statement in any twelve (12)-month period.

                    2.2     
Deferral of Requested Registration. If the Company shall furnish to the
Stockholders requesting a registration statement pursuant to this Section 2,
a certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such registration statement to be filed and it is therefore essential to
defer the filing of such registration statement, then the Company may at its
own discretion direct that such request be delayed for a period not in excess
of ninety (90) days from the effective date of such offering or the date of
commencement of such other material activity, as the case may be; such right to
delay a request to be exercised by the Company not more than once in any twelve
(12) month period.

2

                    2.3     
Limitation on Registrations. The Company shall not be required to effect
any registration within one hundred eighty (180) days after the effective date
of any other Registration Statement of the Company.

                    2.4     
Underwritten Offering at the Company’s Discretion. Except insofar as one
or more brokers or dealers engaged by the Stockholders in connection with the
offer and sale of Registrable Shares pursuant to a registration statement filed
pursuant to this Agreement may be deemed to be acting as “underwriters” as defined
in the Securities Act and, therefore, required to be identified as such in the
prospectus included in such registration statement, nothing in this Agreement
shall require that any registration requested by the Investor or any other
Stockholder pursuant to Section 2 be effected as an underwriting. If the
Investor desires to distribute the Registrable Shares by means of an
underwriting, the Investor shall so advise the Company in its request delivered
pursuant to Section 2.1. If the Company agrees, in its discretion, to
effect such registration as an underwriting, the right of Investor and any such
other Stockholders to effect or participate in such registration shall be
conditioned on their participation in such underwriting. Upon receipt of any
notice from Investor contemplated by this Section 2.4 and the Company’s
agreement that the requested registration shall be underwritten, the Company
shall promptly give written notice of such proposed registration to all
Stockholders. Such other Stockholders shall have the right, by giving written
notice to the Company within ten (10) days after the Company provides its
notice, to elect to have included in such registration such of their
Registrable Shares as such Stockholders may request in such notice of election;
provided, however, that in the event of such an underwritten
public offering, if the managing underwriter advises the Company in writing
that marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise all of the Stockholders
participating in the offering and the number of Registrable Shares that may be
included in the registration and underwriting shall be allocated among the
Stockholders participating in the offering in proportion, as nearly as practicable,
to the respective amounts of Registrable Shares held by such Stockholders at
the time of the filing of the Registration Statement. All Stockholders
proposing to distribute their securities through any such underwriting shall
enter into an underwriting agreement in customary form with an underwriter or
underwriters that is/are mutually agreeable to the Company and a
majority-in-interest of the Stockholders participating in the underwriting.

                    2.5     
Ineligibility for Form S-3. In the event that Form S-3 is not available
for the registration of the resale of Registrable Shares hereunder, the Company
shall (i) register the resale of the Registrable Shares on another
appropriate form reasonably acceptable to the Investor and (ii) undertake
to register the Registrable Shares on Form S-3 as soon as such form is
available, provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Shares has been declared
effective by the Commission. 

          SECTION
3.      Company Registration.

                    3.1     
Subject to Section 3.2, below, at any time and from time to time that
the Company proposes to file a Registration Statement (including for this
purpose a registration effected by the Company for itself or for any other
holders of the Company’s stock), it will, prior to such filing, promptly give
written notice to all Stockholders of its intention to do so and, upon written
request of one or more Stockholders given within twenty (20) days after the
Company provides such notice, the Company shall use all reasonable efforts to
cause to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition all Registrable Shares that the Company
has been requested by such notifying Stockholder or Stockholders to register.

3

                    3.2     
In connection with any offering under this Section 3 involving an
underwriting, the Company shall not be required to include any Registrable
Shares in such underwriting unless the Stockholders participating in such
registration accept the terms of the underwriting as reasonably agreed upon
between the Company and the underwriters selected by it and agree to
participate in such underwriting and to enter into the related underwriting
agreement. If, in the good faith opinion of the managing underwriter, the
registration of all, or part of, the Registrable Shares that the holders have
requested to be included would materially and adversely affect such public
offering, then the Company shall be required to include in the underwriting
only that number of Registrable Shares, if any, that the managing underwriter
in good faith believes may be sold without causing such adverse effect; provided,
however, that no persons or entities other than the Company, the person
(if any) holding Common Stock requesting the Company to file the Registration
Statement, the Stockholders and persons or entities holding registration rights
granted in accordance with Section 12 hereof shall be permitted to
include securities in the offering. Notwithstanding the foregoing, no reduction
shall reduce the amount of securities of the Stockholders included in the
registration below twenty-five percent (25%) of the total amount of securities
proposed to be included by the Stockholders in such registration unless such
reduction is required in writing by the underwriters and in such case such
reduction shall be made only to the amount so required. 

          SECTION
4.     Obligations of the Company.
If and whenever the Company is required by the provisions of this Agreement to
use all reasonable efforts to effect the registration of any of the Registrable
Shares under the Securities Act, the Company shall:

                    4.1     
Prepare and file with the Commission a Registration Statement with respect to
such Registrable Shares and use its reasonable best efforts to cause that
Registration Statement to become and remain effective until the completion of
the distribution;

                    4.2     
As expeditiously as reasonably practicable, prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective, and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such Registration Statement;

                    4.3     
As expeditiously as reasonably practicable, furnish to each selling Stockholder
such reasonable numbers of copies of the Registration Statement, each amendment
and supplement thereto, prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as the selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Stockholder;

4

                    4.4     
As expeditiously as reasonably practicable, use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Stockholder; provided, however, that the Company
shall not be required in connection with this Section 4.4 to qualify as
a foreign corporation or execute a general consent to service of process in any
jurisdiction where it is not conducting business;

                    4.5     
In the event of any underwritten public offering by the Company in a
registration pursuant to Section 3 or that the Company agrees to
undertake pursuant to Section 2.4, enter into and perform its obligations under
an underwriting agreement, in usual and customary form, with the managing
underwriter(s) of such offering. Each Stockholder participating in such
underwriting shall also enter into and perform its obligations under such an
agreement;

                    4.6     
Promptly notify each selling Stockholder of Registrable Shares covered by such
Registration Statement, and each underwriter, if any, after it shall receive
notice thereof, of the time when such Registration Statement has become
effective or such supplement to any prospectus forming a part of such
Registration Statement has been filed;

                    4.7     
Promptly notify each selling Stockholder of Registrable Shares covered by such
Registration Statement, and each underwriter, if any, of any request by the
Commission for the amending or supplementing of such Registration Statement or
prospectus or for additional information;

                    4.8     
Prepare and promptly file with the Commission, and promptly notify each selling
Stockholder of Registrable Shares covered by such Registration Statement, and
each underwriter, if any, of such amendment or supplement to such Registration
Statement or prospectus, as then in effect, as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event has
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading
in light of the circumstances in which they were made;

                    4.9     
Promptly notify each selling Stockholder of Registrable Shares covered by such
Registration Statement, and each underwriter, if any, after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such Registration Statement or the
initiation or threatening of any proceeding for that purpose and promptly use
all reasonable best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued;

                    4.10    
At any time when a Registration Statement is effective under the Securities
Act, promptly notify each selling Stockholder of Registrable Shares covered by
such Registration Statement, and each underwriter, if any, of the happening of
any event as a result of which the prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing. The Company shall promptly prepare a supplement or amendment to
such prospectus so that it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing;

5

                    4.11    
Use its best efforts to furnish, on the date that such Registrable Shares are
delivered to the underwriters for sale, if such securities are being sold
through underwriters, (i) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to each selling
Stockholder of Registrable Shares covered by such Registration Statement and
(ii) a copy of a letter dated as of such date, from the independent registered
public accountants of the Company, in form and substance as is customarily
given by independent registered public accountants to underwriters in an underwritten
public offering addressed to the underwriters and to each selling Stockholder
of Registrable Shares covered by such Registration Statement; provided, however,
that if the Company decides not to proceed with an offering, the Company’s
obligations under this Subsection 4.11 shall not apply;

                    4.12    
If the Company has delivered preliminary or final prospectuses to the selling
Stockholders and after having done so the prospectus is amended to comply with
the requirements of the Securities Act, the Company shall promptly notify the
selling Stockholders and, if requested, the selling Stockholders shall
immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares;

                    4.13    
Provide a transfer agent and registrar for all Registrable Shares registered
hereunder and a CUSIP number for all such Registrable Shares not later than the
effective date of such registration;

                    4.14    
Apply for listing and list the Registrable Shares being registered on all
securities exchanges (including any “national securities exchange” as defined
in the Exchange Act) on which securities (a) of the class being registered or
(b) convertible into or exchangeable or exercisable for securities of such
class are then listed;

                    4.15    
Keep Stockholders’ counsel advised as to the initiation and progress of any
registration under Sections 2 and 3 hereof;

                    4.16    
Permit any Stockholder to review drafts of such registration statement and to
comment on and furnish to the Company in writing for insertion therein material
relating to such Stockholder and such Stockholder’s Registrable Shares to be
registered thereunder which, in the reasonable judgment of such Stockholder and
its counsel, should be included therein; and

                    4.17    
Comply with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable but no
later than 15 months after the effective date of the Registration Statement, an
earnings statement covering a period of 12 months beginning after the effective
date of the registration statement, in a manner which satisfies the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder.

6

          SECTION
5.     Allocation of Expenses.
The Company will pay all Registration Expenses (as defined below) of all
registrations under this Agreement. For purposes of this Section 5, the
term “Registration Expenses” shall mean all
expenses incurred by the Company in complying with this Agreement, including,
without limitation, all registration and filing fees, exchange listing fees,
printing expenses, fees and disbursements of counsel for the Company, state
Blue Sky fees and expenses, and the expense of any special audits incident to
or required by any such registration, but excluding underwriting discounts,
selling commissions and the fees and expenses of selling Stockholders’ own
counsel (except that, solely in connection with registrations to be effected as
underwritings, Registration Expenses shall include the reasonable fees and
expenses of one counsel selected to represent all selling Stockholders in
connection with such registrations to be effected as underwritings).

          SECTION
6.     Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, the Company will, to the extent
permitted by law, indemnify and hold harmless each selling Stockholder
(including each member, partner, officer or director thereof), each underwriter
of such seller of such Registrable Shares, and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act or
the Exchange Act against any expenses, losses, claims, damages or liabilities,
joint or several, to which such seller, underwriter or controlling person may
become subject under the Securities Act, the Exchange Act, state securities or
Blue Sky laws or otherwise, including any of the foregoing incurred in
connection with the settlement of any commenced or threatened litigation,
insofar as such expenses, losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or any violation or alleged violation by the Company of
the Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities laws in connection with the offering covered by such Registration
Statement; and the Company will reimburse such seller, underwriter and each
such controlling person for any legal or any other expenses reasonably incurred
by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
final prospectus, or any such amendment or supplement, in reasonable reliance
upon and in conformity with information furnished (or not furnished in the case
of an omission or alleged omission) to the Company, in writing, by or on behalf
of any seller, underwriter or controlling person specifically for use in the
preparation thereof.

7

          (b)     
In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, each selling Stockholder, severally
and not jointly, will indemnify and hold harmless the Company, each of the
Company’s directors and officers, each underwriter, if any, each person, if
any, who controls the Company or any such underwriter within the meaning of the
Securities Act or the Exchange Act, any other seller of Registrable Shares or
any such seller’s partners, directors or officers, and each person, if any, who
controls such seller within the meaning of the Securities Act and the Exchange
Act, against any expenses, losses, claims, damages or liabilities, joint or
several, to which the Company, such directors and officers, underwriter,
selling Stockholder or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
including any of the foregoing incurred in connection with the settlement of
any commenced or threatened litigation, insofar as such expenses, losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement under which such Registrable
Shares were registered under the Securities Act, any preliminary prospectus or
final prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and each
such Seller of Registrable Shares will reimburse the Company and each other
person entitled to indemnification for any legal or any other expenses
reasonably incurred by the Company and each other person entitled to
indemnification in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, that any such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of such seller, specifically for use
in connection with the preparation of such Registration Statement, prospectus,
amendment or supplement; provided, however, that the obligations
of such Stockholders under this Section 6(b) shall be limited to an
amount equal to the net proceeds received by each such selling Stockholder of
Registrable Shares sold as contemplated herein; and provided, further,
however, that no such Stockholder will be liable for any amount paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of such Stockholder, which consent
shall not be unreasonably withheld, conditioned or delayed.

          (c)     
Each party entitled to indemnification under this Section 6 (the “Indemnified Party”) shall give
notice to the party
required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom; provided,
however, that counsel for the Indemnifying Party, who shall conduct the
defense of such claim or litigation, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld); and, provided, further,
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Agreement, except to the extent that the Indemnifying Party’s ability to defend
against such claim or litigation is impaired as a result of such failure to
give notice. The Indemnified Party may participate in such defense at such
party’s expense; provided, however, that the Indemnifying Party
shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential conflicts of interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party. Each Indemnified
Party shall furnish such information regarding itself or the claim in question
as an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with the defense of such claim and litigation
resulting therefrom.

8

          (d)     
In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in this Section 6 is due in
accordance with its terms but for any reason is held to be unavailable to an
Indemnified Party in respect to any expenses, losses, claims, damages and
liabilities referred to herein, then the Indemnifying Party shall, in lieu of
indemnifying such Indemnified Party, contribute to the amount paid or payable
by such Indemnified Party as a result of such expenses, losses, claims, damages
or liabilities to which such party may be subject in proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and the Indemnified Party on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Indemnifying Party and the Indemnified Party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of
material fact related to information supplied by the Indemnifying Party or the
Indemnified Party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Investor agree that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 6(d): (i) in no case shall the Investor be liable or
responsible for any amount in excess of the net proceeds received by the
Investor from the offering of Registrable Shares and (ii) the Company shall be
liable and responsible for any amount in excess of such proceeds; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution for any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party or parties under this Section, notify such party or parties from
whom such contribution may be sought, but the omission so to notify such party
or parties from contribution may be sought shall not relieve such party from
any other obligation it or they may have thereunder or otherwise under this
Section. No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its prior written consent, which
consent shall not be unreasonably withheld.

          (e)     
The obligations of the Company and the Stockholders under this Section 6
shall survive completion of any offering of Registrable Shares in any
Registration Statement and the termination of this Agreement.

          SECTION
7.     Indemnification with Respect to
Underwritten Offering. In the event that Registrable Shares are
sold pursuant to a Registration Statement in an underwritten offering pursuant
to Section 2, the Company agrees to enter into an underwriting agreement
containing customary representations and warranties with respect to the
business and operations of an issuer of the securities being registered and
customary covenants and agreements to be performed by such issuer, including
without limitation customary provisions with respect to indemnification by the
Company of the underwriters of such offering.

9

          SECTION
8.     Information by Holder.
As a condition to be included in any registration statement, each holder of
Registrable Shares included in any registration shall furnish to the Company
such information regarding such holder and the distribution proposed by such
holder as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Agreement.

          SECTION
9.     Rule 144 Requirements.
At all times after the date hereof that Investor or any transferee under Section
12 holds any Registrable Shares (regardless of whether such Registrable
Shares are “restricted securities” as defined in Rule 144 under the Securities
Act), the Company shall:

                         (a)     
comply with the requirements of Rule 144(c) under the Securities Act with
respect to making and keeping available current public information about the
Company;

                         (b)     
use its best efforts to file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); and

                         (c)     
furnish to any holder of Registrable Shares promptly after receipt of a written
request (i) a written statement by the Company as to its compliance with the
requirements of said Rule 144(c), and the reporting requirements of the
Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents of the Company as such
holder may reasonably request to avail itself of any similar rule or regulation
of the Commission allowing it to sell any such securities without registration,
including, without limitation, Rules 144 and 144A.

          SECTION
10.    Selection of Underwriter.
The Company shall have the right to designate the managing underwriter in any
underwritten offering effected by the Company pursuant to or as contemplated by
this Agreement. In the case of a registration pursuant to Section 2
which the Company agrees to effect as an underwriting, such designation shall
be subject to the approval of the holders of a majority of the Registrable
Shares requested to be included in such offering, such approval not to be
unreasonably withheld or delayed.

          SECTION
11.    Successors and Assigns.
Except as provided in Section 12, the provisions of this Agreement shall
be binding upon, and inure to the benefit of, the respective successors,
assigns, heirs, executors and administrators of the parties hereto.

10

          SECTION
12.    Transfers of Certain Rights.

                    12.1    
Amount. The rights granted to the Investor under this Agreement may be
transferred only to (a) an affiliate (as defined in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act), member, partner or stockholder
of the Investor, or (b) any transferee who acquires at least ten percent (10%)
(as adjusted for stock splits, stock dividends, recapitalization and the like)
of the Unit Shares or Warrants (and Warrant Shares) held by the transferor at
the time of the transfer, in each case provided that such transferee delivers
to the Company a written instrument in accordance with Section 12.2 and
containing the representation that the transfer is exempt from registration
under the Securities Act. In the event of such transfer, such affiliate,
member, partner, stockholder or other transferee shall be deemed to be an
Investor for all purposes of this Agreement and may again transfer such rights
to any other person or entity that acquires Unit Shares, Warrant Shares or
Warrants from such affiliate, member, partner, stockholder or other transferee,
in accordance with, and subject to, the provisions of Section 12.1(a), 12.2
and 12.3.

                    12.2    
Transferees. Any transferee to whom rights under this Agreement are
transferred shall, as a condition to such transfer, deliver to the Company a
written instrument by which such transferee agrees to be bound by the
obligations imposed upon the Investor under this Agreement to the same extent
as if such transferee were an Investor hereunder.

                    12.3    
Subsequent Transferees. A transferee to whom rights are transferred
pursuant to this Section 12 may not again transfer such rights to any
other person or entity, other than as provided in Sections 12.1 or 12.2
above. 

          SECTION
13.    Miscellaneous.

                    13.1    
Counterparts; Facsimile Signatures. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
and all of which together shall constitute one and the same document. This
Agreement may be executed by facsimile signatures.

                    13.2    
No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities that is inconsistent with, grants
any rights equal or superior to, or violates the rights granted to the holders
of Registrable Shares in this Agreement without first obtaining the prior
written consent of the Investor, which consent will not be unreasonably
withheld.

                    13.3    
Adjustments Affecting Registrable Shares. The Company will not take any
action, or permit any change to occur, with respect to its securities that
would adversely affect the ability of the holders of Registrable Shares to
include such Registrable Shares in a registration undertaken pursuant to this
Agreement or that would adversely affect the marketability of such Registrable
Shares in any such registration (including, without limitation, effecting a
stock split or a combination of shares).

                    13.4    
Remedies. Any person having rights under any provision of this Agreement
will be entitled to enforce such rights specifically to recover damages caused
by reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.

                    13.5    
Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended and the Company may take action
herein prohibited, or omit to perform any act herein required to be performed
by it, if, but only if, the Company has obtained the written consent of holders
of a majority of the Registrable Shares then in existence.

11

                    13.6    
Governing Law. This Agreement shall be governed by and construed under
the laws of the State of New York (without reference to the choice of law or
conflicts of law provisions thereof).

                    13.7    
Notices. All notices, requests, consents, and other communications under
this Agreement shall be in writing and shall be deemed delivered (i) two
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid, (ii) one business day after being sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, or (iii) on the business day of transmittal if sent by fax or
electronic mail with confirmation of delivery confirmed, in each case to the
intended recipient as set forth below:

                    If
to the Company, at:

	
  

 	
  

 	
  

 
	
  

 	
 Paramount
 Gold and Silver Corp.

 
	
  

 	
 346 Waverley
 Street, Suite 110

 
	
  

 	
 Ottawa, ON
 K2P 0W5

 
	
  

 	
  

 
	
  

 	
 Attention:

 	
 President
 and Chief Executive Officer

 
	
  

 	
 Fax:

 	
 (613)
 248-4971

 
	
  

 	
 Email:

 	
 chriscrupi@rogers.com

 

or at such
other address or addresses as may have been furnished in writing by the Company
to the Investor, with copies (which shall not constitute notice) to:

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Burns &
 Levinson LLP

 	
 and to:

 	
 Gowling
 Lafleur Henderson LLP

 
	
 125 Summer
 Street

 	
  

 	
 Bentall 5

 
	
 Boston, MA
 02110-1624

 	
  

 	
 550 Burrard
 Street, Suite 2300

 
	
  

 	
  

 	
  

 	
 P.O. Box 30

 
	
 Attn:

 	
 Susan K.
 Shapiro

 	
  

 	
 Vancouver,
 BC V6C 2B5

 
	
 Fax:

 	
 617-345-3299

 	
  

 	
  

 
	
 Email:

 	
 Sshapiro@burnslev.com

 	
  

 	
 Attn: 

 	
 Brett
 Kagetsu

 
	
  

 	
  

 	
  

 	
 Fax: 

 	
 614-443-5627

 
	
  

 	
  

 	
  

 	
 Email: 

 	
 Brett.Kagetsu@gowlings.com

 

                    If
to the Investor, at:

	
  

 	
  

 
	
  

 	
 FCMI
 Financial Corporation

 
	
  

 	
 181 Bay
 Street

 
	
  

 	
 Toronto, ON
 M5J 2T3

 
	
  

 	
 Attention:
 Henry Fenig

 
	
  

 	
 Fax: (416)
 364-0572

 

or at such
other address or addresses as may have been furnished in writing by the
Investor to the Company, with copies (which shall not constitute notice ) to:

12

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Baker &
 McKenzie LLP

 	
 and to:

 	
 Ogilvy
 Renault LLP

 
	
 1114 Avenue
 of the Americas

 	
  

 	
 Suite 3800,
 Royal Bank Plaza, South Tower

 
	
 New York, NY
 10036

 	
  

 	
 200 Bay
 Street, P.O. Box 84

 
	
  

 	
  

 	
 Toronto,
 Ontario, M5J 2Z4

 
	
 Attn:

 	
 Robert A.
 Grauman

 	
  

 	
  

 
	
 Fax:

 	
 212-310-1687

 	
  

 	
 Attn:

 	
 Pierre
 Soulard

 
	
 Email:

 	
 Robert.a.grauman@bakernet.com

 	
 Fax:

 	
 (416)
 216-3930

 
	
  

 	
  

 	
  

 	
 Email:

 	
 psoulard@ogilvyrenault.com

 

          If
to any other transferee to whom shares were transferred pursuant to Section
12, at such address or addresses as may have been furnished to the Company
in writing. 

          Any
party may give any notice, request, consent or other communication under this
Agreement using any other means (including, without limitation, personal
delivery, messenger service, facsimile, first class mail or electronic mail),
but no such notice, request, consent or other communication shall be deemed to
have been duly given unless and until it is actually received by the party for
whom it is intended.

                    13.8    
Severability. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement or any provision of the other Agreements
shall not in any way be affected or impaired thereby.

                    13.9    
Titles and Subtitles. The titles of the sections of this Agreement are
for convenience of reference only and are not to be considered in construing
this Agreement.

                    13.10   
No Registration of Warrants. The registration rights contained herein
apply only to the Company’s Common Stock, and the Company shall not be
obligated to register any Warrants. 

                    13.11   
Expenses. The Company shall pay, and hold the Investor and all holders of
Registrable Shares harmless against liability for the payment of the reasonable
fees and expenses incurred with respect to the enforcement of the rights
granted under this Agreement (but not for the amendment of this Agreement).

                    13.12   
Complete Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings relating to such subject
matter.

[SIGNATURES ON FOLLOWING PAGES]

13

          IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above. 

	
  

 	
  

 	
  

 
	
  

 	
 COMPANY

 
	
  

 	
  

 	
  

 
	
  

 	
 PARAMOUNT
 GOLD AND SILVER CORP.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/
 Christopher Crupi

 
	
  

 	
  

 	 

 
	
  

 	
 Name:
 Christopher Crupi

 
	
  

 	
 Title:
 President and Chief Executive Officer

 

 [SIGNATURES CONTINUE ON NEXT PAGE]

COUNTERPART SIGNATURE PAGE TO

REGISTRATION RIGHTS AGREEMENT

	
  

 	
  

 	
  

 
	
  

 	
 INVESTOR:

 
	
  

 	
  

 	
  

 
	
  

 	
 FCMI
 FINANCIAL CORPORATION

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Henry
 Fenig

 
	
  

 	
  

 	 

 
	
  

 	
 Name: Henry
 Fenig

 
	
  

 	
 Title:
 Executive Vice President

 

COUNTERPART SIGNATURE PAGE TO

REGISTRATION RIGHTS AGREEMENT

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