Document:

United States Securities & Exchange Commission EDGAR Filing

EXHIBIT 10.4

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MUST NOT TRADE THE SECURITIES BEFORE THE DATE THAT IS 4 MONTHS AND ONE DAY AFTER THE LATER OF (i) MARCH 30, 2007, AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY.

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND SUCH LAWS COVERING SUCH SECURITIES, OR THE CORPORATION RECEIVES AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION STATING THAT SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT. 

BROKER WARRANT

TO PURCHASE UP TO · SHARES OF COMMON STOCK OF

PARAMOUNT GOLD MINING CORP.

(a corporation existing under the laws of the State of Delaware)

THIS IS TO CERTIFY THAT for valuable consideration · (the "Agent") is entitled, at any time prior to 5:00 p.m., Toronto time, on March 29, 2009, upon and subject to the terms and conditions set forth herein (the whole being referred to herein as this "Broker Warrant Certificate" and the rights of the Agent represented by this Broker Warrant Certificate being referred to herein as this "Broker Warrant"), to subscribe in whole or in part for up to · shares of common stock, U.S.$0.001 par value, ("Common Shares" and which term shall include any other shares or securities to be issued in addition thereto or in substitution or replacement therefor as provided herein) in the capital of Paramount Gold Mining Corp. (the "Corporation"), a corporation incorporated under the laws of the State of Delaware, as constituted on the date hereof at a purchase price (the purchase price in effect from time to time being called the "Exercise Price") of U.S.$2.10 per Common Share, subject to adjustment in the events and in the manner set forth herein.  This Broker Warrant shall become wholly void and the unexercised portion of the subscription rights represented hereby will expire and terminate at 5:00 p.m., Toronto time, on March 29, 2009 (the "Expiry Time").  No fractional Common Shares will be issuable upon any exercise of this Broker Warrant and the Agent will not be entitled to any cash payment or compensation in lieu of a fractional Common Share.

All Common Shares which are to be issued upon the exercise of this Broker Warrant shall be issued to the Agent, upon payment therefor of the amount for which the Common Shares which may at the time be purchased pursuant to the provisions hereof, and the Agent shall be deemed to have become the holder of record of such Common Shares, on the date of delivery of this Broker Warrant Certificate together with payment for the Common Shares so subscribed for, unless the transfer books of the Corporation shall be closed on such date, in which event the Common Shares so subscribed for shall be deemed to be issued, and the Agent shall be deemed to have become the holder of record of such Common Shares, on the date on which such transfer books are reopened and such Common Shares shall be issued at the purchase price 

in effect on the date of delivery of this Broker Warrant Certificate together with payment for the Common Shares subscribed for by the Agent.

The Agent may purchase less than the number of Common Shares which the Agent is entitled to purchase hereunder on delivery of this Broker Warrant Certificate, in which event a new certificate, in form identical hereto but with appropriate changes, representing the right to purchase Common Shares not previously purchased, shall be issued to the Agent.

This Broker Warrant does not entitle the Agent to any rights or interest whatsoever as a shareholder of the Corporation or any other rights or interests except as expressly provided in this Broker Warrant Certificate.

This Broker Warrant is non-assignable and non-transferable.

If this Broker Warrant Certificate or any replacement hereof becomes stolen, lost, mutilated or destroyed, the Corporation shall, on such terms as it may in its discretion impose, acting reasonably, issue and deliver a new certificate, in form identical hereto but with appropriate changes, representing any unexercised portion of the subscription rights represented hereby to replace the certificate so stolen, lost, mutilated or destroyed.

By acceptance hereof, the Agent hereby represents and warrants to the Corporation that the Agent is acquiring this Broker Warrant as principal for its own account and not for the benefit of any other person.

All amounts of money referred to in this Broker Warrant Certificate are expressed in lawful money of the United States of America.

This Broker Warrant shall enure to the benefit of, and shall be binding upon, the Agent and the Corporation and their respective successors.

The above provisions are subject to the following:

1.

Exercise: 

(1)

Mechanics: In the event that the Agent desires to exercise the right to purchase Common Shares conferred hereby, the Agent shall (a) complete to the extent possible in the manner indicated and execute a subscription form in the form attached as schedule A to this Broker Warrant Certificate, (b) surrender this Broker Warrant Certificate to the Corporation in accordance with section 9 hereof, and (c) pay the amount payable on the exercise of such Broker Warrant in respect of the Common Shares subscribed for by certified cheque, bank draft or money order in lawful money of the United States of America payable to the Corporation or by transmitting same day funds in lawful money of the United States of America by wire to such account as the Corporation shall direct the Agent.  Upon such surrender and payment as aforesaid, the Agent shall be deemed for all purposes to be the holder of record of the number of Common Shares to be so issued and the Agent shall be entitled to delivery of a certificate or certificates representing such Common Shares and the Corporation shall cause such certificate or certificates to be delivered to the Agent at the address specified in the subscription form within three business days after such surrender and payment as aforesaid.  No fractional Common Shares will be issuable upon any exercise of the Broker Warrant and the Agent will not be entitled to any cash payment or compensation in lieu of a fractional Common Share.

(2)

Exercise Mechanics if Registration Statement Not Effective: Notwithstanding any provision to the contrary contained herein, if the issuance of Common Shares upon the exercise of Broker Warrants requires the maintenance of an effective registration statement (a "Registration Statement"), with respect to such Common Shares under the United States Securities Act of 1933, as amended (the "Securities Act"), in no event shall such Common Shares be issued unless the Common Shares are registered under the Securities Act pursuant to an effective Registration Statement; provided, however, that if the Registration Statement ceases to be effective, prior to the Expiry Time and for so long as the Registration Statement is not effective, subject to applicable law, a holder of any Broker Warrant may only exercise the right to purchase Common Shares issuable upon the exercise of the Broker Warrants the circumstances noted below: 

(a)

if the holder is a purchaser who is not (A) a resident of the United States or (B) a U.S. Person (a "U.S. Purchaser") (as such term is defined in the Securities Act) and the holder delivers a duly completed and executed Notice of Exercise (If Registration Statement Not Effective) in the form attached as schedule B to this Broker Warrant Certificate certifying that the holder: (A)(1) is not in the United States; (2) is not a U.S. Person and is not exercising the Broker Warrants for, or on behalf or benefit of, a U.S. Person or person in the United States; (3) did not execute or deliver the Broker Warrant exercise form in the United States; (4) agrees not to engage in hedging transactions with regard to the Common Shares prior to the expiration of the one-year distribution compliance period set forth in Rule 903(b)(3) of Regulation S under the Securities Act ("Regulation S"); (5) acknowledges that the Common Shares issuable upon exercise of the Broker Warrants are "restricted securities" as defined in Rule 144 of the Securities Act and upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Securities Act or applicable U.S. state laws and regulations, the certificates representing the Common Shares will bear a restrictive legend; and (6) acknowledges that the Corporation shall refuse to register any transfer of the Common Shares not made in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration under the Securities Act; and (B) neither the Corporation nor the holder has engaged in any "directed selling efforts" (as defined in Regulation S) in the United States; or 

(b)

in a transaction that does not require registration under the Securities Act or any applicable U.S. state laws and regulations and the holder has (A) delivered a duly completed and executed Notice of Exercise (If Registration Statement Not Effective) certifying that the holder is exercising the Broker Warrants pursuant to such exemptions and (B) furnished to the Corporation, prior to such exercise, an opinion of counsel of recognized standing in form and substance satisfactory to the Corporation to such effect. 

(3)

Legending if Registration Statement Not Effective: Unless the Broker Warrant is exercised pursuant to an effective Registration Statement, the certificate representing the Common Shares issued upon exercise of the Broker Warrant will bear legends restricting the transfer without registration under the U.S. Securities Act and applicable state securities laws and restricting transfer through the facilities of the Toronto Stock Exchange or the TSX Venture Exchange, substantially in the form set forth below: 

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR APPLICABLE STATE 

SECURITIES LAWS. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND SUCH LAWS COVERING SUCH SECURITIES, OR THE CORPORATION RECEIVES AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION STATING THAT SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT." 

If the Common Shares are also then listed on the Toronto Stock Exchange certificates representing the Common Shares will also bear the following legend:

"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."

or

If the Common Shares are also then listed on the TSX Venture Exchange will also bear the following legend:

"WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT BEFORE THE DATE THAT IS FOUR MONTHS AND ONE DAY AFTER THE LATER OF (I) MARCH 30, 2007 AND (II) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY."

(4)

Suspensions of Registration Statement, etc.: If any Common Shares issuable upon the exercise of Broker Warrants require the maintenance of a current Registration Statement, with respect to such Common Shares under the Securities Act, the Corporation shall have the authority to suspend the exercise of any or all Broker Warrants while such registration statement is not current. If no Registration Statement is effective at any time when any Broker Warrant is exercised, the Agent shall be notified forthwith by the transfer agent that the Agent is entitled, at his or her option, to exercise the Broker Warrant only in accordance with the conditions set forth in Sections 1(2)(a) and (b) and upon delivery of a Notice of Exercise (If Registration Statement Not Effective) to the Corporation. 

2.

Partial Exercise:  The Agent may from time to time subscribe for and purchase any lesser number of Common Shares than the number of Common Shares expressed in this Broker Warrant Certificate.  In the event that the Agent subscribes for and purchases any such lesser number of Common Shares prior to the Expiry Time, the Agent shall be entitled to receive a replacement certificate representing the unexercised balance of the Broker Warrants.

3.

Not a Shareholder:  The holding of the Broker Warrants shall not constitute the Agent a shareholder of the Corporation nor entitle the Agent to any right or interest in respect thereof except as expressly provided in this Broker Warrant Certificate.

4.

Covenants, Representations and Warranties:  The Corporation hereby represents and warrants that it is authorized to create and issue the Broker Warrants and covenants and agrees that it will cause the Common Shares from time to time subscribed for and purchased in the manner provided in this Broker Warrant Certificate and the certificate or certificates representing such Common Shares to be issued and that, at all times prior to the Expiry Time, it will reserve and there will remain unissued a sufficient number of Common Shares to satisfy the right of purchase provided for in this Broker Warrant Certificate.  The Corporation hereby further covenants and agrees that it will at its expense expeditiously use its best efforts to obtain the listing of such Common Shares (subject to issue or notice of issue) on each stock exchange or over-the-counter market on which the Common Shares may be listed from time to time.  All Common Shares which are issued upon the exercise of the right of purchase provided in this Broker Warrant Certificate, upon payment therefor of the amount at which such Common Shares may be purchased pursuant to the provisions of this Broker Warrant Certificate, shall be and be deemed to be fully paid and non-assessable shares and free from all taxes, liens and charges with respect to the issue thereof.  The Corporation hereby represents and warrants that this Broker Warrant Certificate is a valid and enforceable obligation of the Corporation, enforceable in accordance with the provisions of this Broker Warrant Certificate.

5.

Anti-Dilution Protection:

(1)

Definitions:  For the purposes of this section 5, unless there is something in the subject matter or context inconsistent therewith, the words and terms defined below shall have the respective meanings specified therefor in this subsection 5(1):

(a)

"Adjustment Period" means the period commencing on the date of issue of the Warrants and ending at the Expiry Time;

(b)

"Current Market Price" of the Common Shares at any date means the price per share equal to the weighted average price at which the Common Shares have traded on The Toronto Stock Exchange or the TSX Venture Exchange, as applicable, or, if the Common Shares are not then listed on The Toronto Stock Exchange or the TSX Venture Exchange, on such other Canadian stock exchange as may be selected by the directors of the Corporation for such purpose or, if the Common Shares are not then listed on any Canadian stock exchange, in the over-the-counter market or the OTC Bulletin Board, during the period of any 20 consecutive trading days ending not more than five business days before such date; provided that the weighted average price shall be determined by dividing the aggregate sale price of all Common Shares sold on the said exchange or market, as the case may be, during such 20 consecutive trading days by the total number of Common Shares so sold; and provided further that if the Common Shares are not then listed on any Canadian stock exchange or traded in the over-the-counter market or the 

OTC Bulletin Board, then the Current Market Price shall be determined by a firm of independent chartered accountants selected by the directors of the Corporation;

(c)

"director" means a director of the Corporation for the time being and, unless otherwise specified herein, a reference to action "by the directors" means action by the directors of the Corporation as a board or, whenever empowered, action by any committee of the directors of the Corporation;

(d)

"Offering" means the offering of up to 9,525,000 units in the capital of the Corporation pursuant to an agency agreement dated March 30, 2007 between the Corporation and Blackmont Capital Inc., Haywood Securities Inc., Canaccord Capital Corporation and Raymond James Ltd; and

(e)

"trading day" with respect to a stock exchange or over-the-counter market means a day on which such stock exchange or market is open for business.

(2)

Adjustments:  The Exercise Price and the number of Common Shares issuable to the Agent upon the exercise of the Broker Warrants shall be subject to adjustment from time to time in the events and in the manner provided as follows:

(a)

If at any time during the Adjustment Period the Corporation shall:

(i)

fix a record date for the issue of, or issue, Common Shares to the holders of all or substantially all of the outstanding Common Shares by way of a stock dividend;

(ii)

fix a record date for the distribution to, or make a distribution to, the holders of all or substantially all of the outstanding Common Shares payable in Common Shares or securities exchangeable for or convertible into Common Shares; 

(iii)

subdivide the outstanding Common Shares into a greater number of Common Shares; or

(iv)

consolidate the outstanding Common Shares into a lesser number of Common Shares,

(any of such events in subclauses 5(2)(a)(i), 5(2)(a)(ii), 5(2)(a)(iii) and 5(2)(a)(iv) above being herein called a "Common Share Reorganization"), the Exercise Price shall be adjusted on the earlier of the record date on which holders of Common Shares are determined for the purposes of the Common Share Reorganization and the effective date of the Common Share Reorganization to the amount determined by multiplying the Exercise Price in effect immediately prior to such record date or effective date, as the case may be, by a fraction:

A.

the numerator of which shall be the number of Common Shares outstanding on such record date or effective date, as the case may be, before giving effect to such Common Share Reorganization; and

B.

the denominator of which shall be the number of Common Shares which will be outstanding immediately after giving effect to such Common Share Reorganization (including in the case of a distribution of securities exchangeable for or convertible into Common Shares the number of Common Shares that would have been outstanding had such securities been exchanged for or converted into Common Shares on such date).

To the extent that any adjustment in the Exercise Price occurs pursuant to this clause 5(2)(a) as a result of the fixing by the Corporation of a record date for the distribution of securities exchangeable for or convertible into Common Shares, the Exercise Price shall be readjusted immediately after the expiry of any relevant exchange or conversion right to the Exercise Price which would then be in effect based upon the number of Common Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right.

(b)

If at any time during the Adjustment Period the Corporation shall fix a record date for the issue or distribution to the holders of all or substantially all of the outstanding Common Shares of rights, options or warrants pursuant to which such holders are entitled, during a period expiring not more than 45 days after the record date for such issue (such period being the "Rights Period"), to subscribe for or purchase Common Shares or securities exchangeable for or convertible into Common Shares at a price per share to the holder (or in the case of securities exchangeable for or convertible into Common Shares, at an exchange or conversion price per share) at the date of issue of such securities of less than 95% of the Current Market Price of the Common Shares on such record date (any of such events being called a "Rights Offering"), the Exercise Price shall be adjusted effective immediately after the record date for such Rights Offering to the amount determined by multiplying the Exercise Price in effect on such record date by a fraction:

(i)

the numerator of which shall be the aggregate of

A.

the number of Common Shares outstanding on the record date for the Rights Offering, and

B.

the quotient determined by dividing

(1)

either (a) the product of the number of Common Shares offered during the Rights Period pursuant to the Rights Offering and the price at which such Common Shares are offered, or, (b) the product of the exchange or conversion price of the securities so offered and the number of Common Shares for or into which the securities offered pursuant to the Rights Offering may be exchanged or converted, as the case may be, by 

(2)

the Current Market Price of the Common Shares as of the record date for the Rights Offering; and

(ii)

the denominator of which shall be the aggregate of the number of Common Shares outstanding on such record date and the number of 

Common Shares offered pursuant to the Rights Offering (including in the case of the issue or distribution of securities exchangeable for or convertible into Common Shares the number of Common Shares for or into which such securities may be exchanged or converted).

If by the terms of the rights, options, or warrants referred to in this clause 5(2)(b), there is more than one purchase, conversion or exchange price per Common Share, the aggregate price of the total number of additional Common Shares offered for subscription or purchase, or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered, shall be calculated for purposes of the adjustment on the basis of the lowest purchase, conversion or exchange price per Common Share, as the case may be.  Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such calculation.  To the extent that any adjustment in the Exercise Price occurs pursuant to this clause 5(2)(b) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants referred to in this clause 5(2)(b), the Exercise Price shall be readjusted immediately after the expiry of any relevant exchange, conversion or exercise right to the Exercise Price which would then be in effect based upon the number of Common Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right.

(c)

If at any time during the Adjustment Period the Corporation shall fix a record date for the issue or distribution to the holders of all or substantially all of the outstanding Common Shares of:

(i)

shares of the Corporation of any class other than Common Shares;

(ii)

rights, options or warrants to acquire Common Shares or securities exchangeable for or convertible into Common Shares (other than rights, options or warrants pursuant to which holders of Common Shares are entitled, during a period expiring not more than 45 days after the record date for such issue, to subscribe for or purchase Common Shares or securities exchangeable for or convertible into Common Shares at a price per share (or in the case of securities exchangeable for or convertible into Common Shares at an exchange or conversion price per share) at the date of issue of such securities to the holder of at least 95% of the Current Market Price of the Common Shares on such record date);

(iii)

evidences of indebtedness of the Corporation; or

(iv)

any property or assets of the Corporation;

and if such issue or distribution does not constitute a Common Share Reorganization or a Rights Offering (any of such non-excluded events being herein called a "Special Distribution"), the Exercise Price shall be adjusted effective immediately after the record date for the Special Distribution to the amount determined by multiplying the Exercise Price in effect on the record date for the Special Distribution by a fraction:

A.

the numerator of which shall be the difference between

(1)

the product of the number of Common Shares outstanding on such record date and the Current Market Price of the Common Shares on such record date, and

(2)

the fair value, as determined by the directors of the Corporation, to the holders of Common Shares of the shares, rights, options, warrants, evidences of indebtedness or property or assets to be issued or distributed in the Special Distribution, and

B.

the denominator of which shall be the product obtained by multiplying the number of Common Shares outstanding on such record date by the Current Market Price of the Common Shares on such record date.

Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of such calculation.  To the extent that any adjustment in the Exercise Price occurs pursuant to this clause 5(2)(c) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants to acquire Common Shares or securities exchangeable for or convertible into Common Shares referred to in this clause 5(2)(c), the Exercise Price shall be readjusted immediately after the expiry of any relevant exercise, exchange or conversion right to the amount which would then be in effect based upon the number of Common Shares issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right.

(d)

If at any time during the Adjustment Period there shall occur:

(i)

a reclassification or redesignation of the Common Shares, a change of the Common Shares into other shares or securities or any other capital reorganization involving the Common Shares other than a Common Share Reorganization;

(ii)

a consolidation, amalgamation or merger of the Corporation with or into another body corporate which results in a reclassification or redesignation of the Common Shares or a change of the Common Shares into other shares or securities;

(iii)

the transfer of the undertaking or assets of the Corporation as an entirety or substantially as an entirety to another corporation or entity;

(any of such events being called a "Capital Reorganization"), after the effective date of the Capital Reorganization the Agent shall be entitled to receive, and shall accept, for the same aggregate consideration, upon exercise of the Broker Warrants, in lieu of the number of Common Shares to which the Agent was theretofor entitled upon the exercise of the Broker Warrants, the kind and aggregate number of shares and other securities or property resulting from the Capital Reorganization which the Agent would have been entitled to receive as a 

result of the Capital Reorganization if, on the effective date thereof, the Agent had been the registered holder of the number of Common Shares which the Agent was theretofore entitled to purchase or receive upon the exercise of the Broker Warrants.  If necessary, as a result of any such Capital Reorganization, appropriate adjustments shall be made in the application of the provisions of this Broker Warrant Certificate with respect to the rights and interests thereafter of the Agent to the end that the provisions shall thereafter correspondingly be made applicable as nearly  as may reasonably be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise of the Broker Warrants.

(e)

If at any time during the Adjustment Period any adjustment or readjustment in the Exercise Price shall occur pursuant to the provisions of clause 5(2)(a), 5(2)(b) or 5(2)(c) of this Broker Warrant Certificate, then the number of Common Shares purchasable upon the subsequent exercise of the Broker Warrants shall be simultaneously adjusted or readjusted, as the case may be, by multiplying the number of Common Shares purchasable upon the exercise of the Broker Warrants immediately prior to such adjustment or readjustment by a fraction which shall be the reciprocal of the fraction used in the adjustment or readjustment of the Exercise Price.

(3)

Rules:  The following rules and procedures shall be applicable to adjustments made pursuant to subsection 5(2) hereof:

(a)

Subject to the following clauses of this subsection 5(3), any adjustment made pursuant to subsection 5(2) hereof shall be made successively whenever an event referred to therein shall occur.

(b)

No adjustment in the Exercise Price shall be required unless such adjustment would result in a change of at least one per cent in the then Exercise Price and no adjustment shall be made in the number of Common Shares purchasable or issuable on the exercise of the Broker Warrants unless it would result in a change of at least one one-hundredth of a Common Share; provided, however, that any adjustments which except for the provision of this clause 5(3)(b) would otherwise have been required to be made shall be carried forward and taken into account in any subsequent adjustment.  Notwithstanding any other provision of subsection 5(2) hereof, no adjustment of the Exercise Price shall be made which would result in an increase in the Exercise Price or a decrease in the number of Common Shares issuable upon the exercise of the Broker Warrants (except in respect of the Common Share Reorganization described in subclause 5(2)(a)(iv) hereof or a Capital Reorganization described in subclause 5(2)(d)(ii) hereof).

(c)

No adjustment in the Exercise Price or in the number or kind of securities purchasable upon the exercise of the Broker Warrants shall be made in respect of any event described in section 5 hereof if the Agent is entitled to participate in such event on the same terms mutatis mutandis as if the Agent had exercised the Broker Warrants prior to or on the record date or effective date, as the case may be, of such event.

(d)

No adjustment in the Exercise Price or in the number of Common Shares purchasable upon the exercise of the Broker Warrants shall be made pursuant to subsection 5(2) hereof in respect of the issue from time to time of Common Shares pursuant to the warrant certificates and Broker Warrant Certificates issued pursuant to the Offering or pursuant to any stock option, stock purchase or stock bonus plan in effect from time to 

time for directors, officers or employees of the Corporation and/or any subsidiary of the Corporation and any such issue, and any grant of options in connection therewith, shall be deemed not to be a Common Share Reorganization, a Rights Offering nor any other event described in subsection 5(2) hereof.

(e)

If at any time during the Adjustment Period the Corporation shall take any action affecting the Common Shares, other than an action described in subsection 5(2) hereof, which in the opinion of the directors would have a material adverse effect upon the rights of holders of warrants, either or both the Exercise Price and the number of Common Shares purchasable upon exercise of Broker Warrants shall be adjusted in such manner and at such time by action by the directors, in their sole discretion,  as may be equitable in the circumstances.  Failure of the taking of action by the directors so as to provide for an adjustment prior to the effective date of any action by the Corporation affecting the Common Shares shall be deemed to be conclusive evidence that the directors have determined that it is equitable to make no adjustment in the circumstances.

(f)

If the Corporation shall set a record date to determine holders of Common Shares for the purpose of entitling such holders to receive any dividend or distribution or any subscription or purchase rights and shall, thereafter and before the distribution to such holders of any such dividend, distribution or subscription or purchase rights, legally abandon its plan to pay or deliver such dividend, distribution or subscription or purchase rights, then no adjustment in the Exercise Price or the number of Common Shares purchasable upon exercise of the Broker Warrant shall be required by reason of the setting of such record date.

(g)

In any case in which this Broker Warrant Certificate shall require that an adjustment shall become effective immediately after a record date for an event referred to in subsection 5(2) hereof, the Corporation may defer, until the occurrence of such event:

(i)

issuing to the Agent, to the extent that the Broker Warrants are exercised after such record date and before the occurrence of such event, the additional Common Shares or other securities issuable upon such exercise by reason of the adjustment required by such event; and

(ii)

delivering to the Agent any distribution declared with respect to such additional Common Shares or other securities after such record date and before such event;

provided, however, that the Corporation shall deliver to the Agent an appropriate instrument evidencing the right of the Agent upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price or the number of Common Shares purchasable upon the exercise of the Broker Warrants and to such distribution declared with respect to any such additional Common Shares issuable on the exercise of the Broker Warrants.

(h)

In the absence of a resolution of the directors fixing a record date for a Rights Offering, the Corporation shall be deemed to have fixed as the record date therefor the date of the issue of the rights, options or warrants issued pursuant to the Rights Offering.

(i)

If a dispute shall at any time arise with respect to adjustments of the Exercise Price or the number of Common Shares purchasable upon the exercise of the Broker Warrants, such 

disputes shall be conclusively determined by the auditors of the Corporation or if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by the directors and any such determination shall be conclusive evidence of the correctness of any adjustment made pursuant to subsection 5(2) hereof and shall be binding upon the Corporation and the Agent.

(j)

As a condition precedent to the taking of any action which would require an adjustment pursuant to subsection 5(2) hereof, including the Exercise Price and the number or class of Common Shares or other securities which are to be received upon the exercise thereof, the Corporation shall take any action which may, in the opinion of counsel to the Corporation, be necessary in order that the Corporation may validly and legally issue as fully paid and non-assessable shares all of the Common Shares or other securities which the Agent is entitled to receive in accordance with the provisions of this Broker Warrant Certificate.

(4)

Notice:  At least 21 days prior to the earlier of the record date or effective date of any event which requires or might require an adjustment in any of the rights of the Agent under this Broker Warrant Certificate, including the Exercise Price or the number of Common Shares which may be purchased under this Broker Warrant Certificate, the Corporation shall deliver to the Agent a certificate of the Corporation specifying the particulars of such event and, if determinable, the required adjustment and the calculation of such adjustment.  In case any adjustment for which a notice in this subsection 5(4) has been given is not then determinable, the Corporation shall promptly after such adjustment is determinable deliver to the Agent a certificate providing the calculation of such adjustment.  The Corporation hereby covenants and agrees that the register of transfers and share transfer books for the Common Shares will be open, and that the Corporation will not take any action which might deprive the Agent of the opportunity of exercising the rights of subscription contained in this Broker Warrant Certificate, during such 21 day period.

6.

Further Assurances:  The Corporation hereby covenants and agrees that it will do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, all and every such other act, deed and assurance as the Agent shall reasonably require for the better accomplishing and effectuating of the intentions and provisions of this Broker Warrant Certificate.

7.

Time of Essence:  Time shall be of the essence of this Broker Warrant Certificate.

8.

Governing Laws:  This Broker Warrant Certificate shall be construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

9.

Notices:  All notices or other communications to be given under this Broker Warrant Certificate shall be delivered by hand or by telecopier and, if delivered by hand, shall be deemed to have been given on the delivery date and, if sent by telecopier, on the date of transmission if sent before 5:00 p.m. on a business day or, if such day is not a business day, on the first business day following the date of transmission.

Notices to the Corporation shall be addressed to:

Paramount Gold Mining Corp.

Suite 100

346 Waverley Street

Ottawa, Ontario

K2P 0W5

Attention:  

President and Chief Executive Officer

Telecopier:  

613-248-4971

Notices to the Agent  shall be addressed to:

Raymond James Ltd.

Suite 5300

Scotia Plaza

40 King Street West

Toronto, Ontario

M5H 3Y2

Attention:

David Greifenberger

Telecopier:

416-777-7114

The Corporation and the Agent may change its address for service by notice in writing to the other of them specifying its new address for service under this Broker Warrant Certificate.

10.

Legends on Common Shares:  Any certificate representing Common Shares issued upon the exercise of the Warrants prior to the earlier of (i) the date that the Corporation becomes a reporting issuer in Canada, and (ii) the date which is four months and one day after the date hereof will bear the following legend:

"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND ONE DAY AFTER THE LATER OF (I) MARCH 30, 2007; AND (II) THE DATE THAT THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY."  

provided that 

(a)

if the Corporation becomes a reporting issuer in Canada by filing a prospectus and four months and one day have elapsed since the date hereof, the certificates representing the Common Shares may be exchanged for certificates bearing no such legend, or 

(b)

if the Corporation becomes a reporting issuer in Canada after the date hereof by any other means other than as set out in subsection 10(a) above, subsequent to the date that is four months and one day after the later of (i) the date hereof, and (ii) the date the Corporation becomes a reporting issuer in any province or territory of Canada, the certificates representing the Common Shares may be exchanged for certificates bearing no such legend.

11.

Lost Certificate:  If this Broker Warrant Certificate or any replacement hereof becomes stolen, lost, mutilated or destroyed, the Corporation shall, on such terms as it may in its discretion impose, acting reasonably, issue and deliver a new certificate, in form identical hereto but with appropriate changes, representing any unexercised portion of the subscription rights represented hereby to replace the certificate so stolen, lost, mutilated or destroyed.

12.

Language:  The parties hereto acknowledge and confirm that they have requested that this Broker Warrant Certificate as well as all notices and other documents contemplated hereby be drawn up in the English language.  Les parties aux présentes reconnaissent et confirment qu'elles ont exigé que la présente convention ainsi que tous les avis et documents qui s'y rattachent soient rédigés en langue anglaise.

IN WITNESS WHEREOF the Corporation has caused this Broker Warrant Certificate to be signed by an authorized officer as of the _____ day of March, 2007.

		
	PARAMOUNT GOLD MINING CORP.

	By:

	 

	 
	Authorized Signatory

Schedule A

TO:

PARAMOUNT GOLD MINING CORP.

SUBSCRIPTION FORM

The undersigned hereby subscribes for _______________ shares  of common stock, U.S.$0.001 par value ("Common Shares") in the capital of Paramount Gold Mining Corp. (the "Corporation") (or such other number of common shares or other securities to which such subscription entitles the undersigned in lieu thereof or in addition thereto pursuant to the provisions of the broker warrant certificate (the "Broker Warrant Certificate") dated the 30th day of March, 2007 issued by the Corporation) at the purchase price of U.S.$2.10 per Common Share (or at such other purchase price as may be in effect under the provisions of the Broker Warrant Certificate) and on and subject to the other terms and conditions specified in the Broker Warrant Certificate and hereunder and encloses herewith a certified cheque, bank draft or money order in lawful money of the United States of America payable to the Corporation or has transmitted same day funds in lawful money of United States of America by wire to such account as the Corporation directed the undersigned in payment of the subscription price.

The undersigned ins an "accredited investor" as defined in Regulation D promulgated under the United States Securities Act of 1933, as amended (the "Securities Act") or is a not U.S. Person or a person within the United States and that the Common Shares are not being subscribed for on behalf of a U.S. Person (as such term is defined for the purposes of the Securities Act.

The undersigned hereby directs that the Common Shares subscribed for be registered and delivered as follows:

			
	Name in Full

	Address

	Number of Common Shares

	 
	 
	 

	 
	 
	 

DATED this ___ day of _____________, 200__.

		
	 
	RAYMOND JAMES LTD.

	By:

	 

	 
	 

Schedule B

NOTICE OF EXERCISE 

(If Registration Statement Not Effective) 

TO: PARAMOUNT GOLD MINING CORP.

The undersigned holder of the within Broker Warrant Certificate, hereby exercises certain Broker Warrants (the "Exercised Warrants") evidenced thereby and hereby subscribes for a number of Common Shares of Paramount Gold Mining Corp. (the "Corporation") equal to such number of Common Shares or number or amount of other securities or property, or combination thereof, to which such exercise entitles him under the provisions of the Broker Warrant at an aggregate price equal to the product of the Exercise Price and the number of Exercised Warrants, and on the terms specified in such Broker Warrant Certificate, and in payment therefor, delivers herewith a bank draft, certified cheque or money order payable to Paramount Gold Mining Corp..  Capitalized terms not defined herein shall have the definitions set forth in the Broker Warrant Certificate. 

The undersigned represents that it (A) has had access to such current public information concerning the Corporation as it considered necessary in connection with its investment decision and (B) understands that the securities issuable upon exercise hereof have not been registered under the United States Securities Act of 1933, as amended (the "1933 Act").   

The undersigned represents and warrants that it: [CHECK ONE ONLY] 

____ A. is not a U.S. Purchaser and it (1) is not in the United States; (2) is not a U.S. Person and is not exercising the Broker Warrants for, or on behalf or benefit of, a U.S. Person or person in the United States; (3) did not execute or deliver the Subscription Form in the United States; (4) agrees not to engage in hedging transactions with regard to the Common Shares prior to the expiration of the one-year distribution compliance period set forth in Rule 903(b)(3) of Regulation S; (5) acknowledges that the Common Shares issuable upon exercise of the Broker Warrant are "restricted securities" as defined in Rule 144 of the 1933 Act and upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. state laws and regulations, the certificates representing the Common Shares will bear a restrictive legend; and (6) acknowledges that the Corporation shall refuse to register any transfer of the Common Shares not made in accordance with the provisions of Regulation S, pursuant to registration under the 1933 Act, or pursuant to an available exemption from registration under the 1933 Act; and (B) it holder has not engaged in any "directed selling efforts" (as defined in Regulation S) in the United States. 

____B. the undersigned is delivering a written opinion of United States counsel or a written confirmation from the Corporation to the effect that the Common Shares to be delivered upon exercise hereof have been registered under the 1933 Act or are exempt from registration thereunder. 

The undersigned holder understands that the certificate representing the Corporation's Common Shares is issued upon exercise of this Broker Warrants will bear a legend restricting the transfer without registration under the 1933 Act and applicable state securities laws substantially the form set forth in Section 1(3) of the Broker Warrant Certificate. 

Name: 

Please print or type name and address (including postal code) 

Address: 

Number of Broker Warrant being Exercised: 

DATED this      day of                     ,          

Signature guaranteed by: 

Name of registered holder (please print) 

	
	 

	Signature of or on behalf of registered holder

	 

	Office, Title or other Authorization (if holder not an individual)TRANSITION THERAPEUTICS INC

EXHIBIT 10.5

	
	TO SUBSCRIBE, EACH SUBSCRIBER MUST RETURN TO THE AGENTS, THE FOLLOWING:

a.

 ̈

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

b.

 ̈

Subscription funds by certified cheque or bank draft in US$ payable to the Agent through which you subscribed for Units; and 

c.

 ̈

Duly completed and executed Accredited Investor Certificate for the jurisdiction in which you are resident (in Schedule "B" or

Schedule "C".

PARAMOUNT GOLD MINING CORP.

SUBSCRIPTION AGREEMENT FOR UNITS

TO:

PARAMOUNT GOLD MINING CORP.

AND TO:

BLACKMONT CAPITAL INC.

AND TO:

BLACKMONT CAPITAL CORP.

AND TO:

HAYWOOD SECURITIES INC.

AND TO:

CANACCORD CAPITAL CORPORATION

AND TO:

RAYMOND JAMES LTD.

The Subscriber (as hereinafter defined) hereby irrevocably subscribes for and agrees to purchase from Paramount Gold Mining Corp. (the "Company") that number of units of the Company (the "Units") set out below at a price of US$2.10 per Unit.  Each Unit is comprised of one common share of the Company (a "Unit Share") and one-half of one common share purchase warrant of the Company (the "Warrants").  Each whole Warrant shall entitle the holder thereof to acquire one common share of the Company (a "Warrant Share") at an exercise price of US$2.90 for 24 months following the Closing Date (as defined hereunder). 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 further agrees and acknowledges, as applicable, without limitation, (i) that the Company and the Agents (as defined hereunder) may rely upon the Subscriber’s representations, warranties and covenants contained in such documents, (ii) that such representations and warranties of the Subscriber 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 shall survive Closing (as defined hereunder).

The Subscriber acknowledges that the Company has granted to the Agents an over allotment option (the "Over Allotment Option") which may be exercised by the Agents for a period of 30 days following the Closing Date.  The Agents, at their sole discretion may exercise the Over Allotment Option to increase the size of the Offering (as defined hereunder) by up to 15%.

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.

			
	                                                                                                                   

	 
	Number of Units:                                                                                xUS$2.10

	(Name of Subscriber)

	 
	 

	 
	 
	 

	By:                                                                                                             

        Authorized Signature

	 
	Aggregate Subscription Cost (US$):                                                                   

                                                          (the "Subscription Amount")

	 
	 
	 

	 
	 
	 

	

                                                                                                                   

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

                                                                                                                   

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

                                                                                                                   

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

                                                                                                                   

                                                                                                                   

(Telephone Number)

                                        (Email Address)

                                                                                                                   

(Social Security No. (For individual U.S. Subscribers)

                                                                                                                   

(U.S. Tax ID No. (For non-individual U.S. Subscribers)

	

	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:

                                                                                                                             

(Name of Disclosed Principal)

                                                                                                                             

(Address of Disclosed Principal)

                                                                                                                             

(Account Reference, if applicable)

			
	

Account Registration Information:

                                                                                                                  

                                                                                                                  

(Name)

                                                                                                                  

                                                                                                                  

(Account Reference, if applicable)

                                                                                                                  

                                                                                                                  

                                                                                                                  

(Address, including Postal or Zip Code)

	 
	

Delivery Instructions as set forth below:

                                                                                                                            

                                                                                                                            

(Name)

                                                                                                                            

                                                                                                                            

(Account Reference, if applicable)

                                                                                                                            

                                                                                                                            

                                                                                                                            

(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:

"Agency Agreement" means the agency agreement to be dated as of the Closing Date, to be entered into between the Company and the Agents in respect of the Offering.

"Agents" means Blackmont Capital Inc., Blackmont Capital Corp., Haywood Securities Inc., Canaccord Capital Corporation and Raymond James Ltd. collectively.

"Blue Sky Laws" means the securities laws of any State.

"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.

"Compensation Options" shall have the meaning ascribed to such term in Section 8.1.

"Compensation Shares" means the Common Shares issuable upon the exercise of the Compensation Options.

"Company" means Paramount Gold Mining Corp. and includes any successor corporations to or of the Company.

"

Disclosed Principal

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

"Exchange Act"

 means the United States

Securities Exchange Act of 1934

, as amended.

"

Final Receipt

" means the final receipt for the Prospectus issued by the securities regulatory authorities in one or more of the Provinces or Territories of Canada.

"Institutional Accredited Investor" means an "accredited investor", as defined in Rule 501(a)(1), (2), (3) and (7) of the U.S. Securities Act.

"Non-Registered Shares" shall have the meaning ascribed to such term in Section 3.2.

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

–3–

"Offering" means the offering of up to 9,525,000 Units pursuant to this Subscription Agreement and the Agency Agreement.

"Offering Jurisdictions" means the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Nova Scotia collectively.

"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.

"Prospectus" means the (final) non-offering prospectus of the Company to be filed in any of the Offering Jurisdictions to cause the Company to become a reporting issuer in an Offering Jurisdiction.

"Public Record" means the Company’s annual report on Form 10-KSB for the year ended June 30, 2006, as amended, the quarterly reports filed on Form 10-QSB for the quarters ended September 30, 2006, and December 31, 2006 as amended, and the current reports filed on Form 8-K since June 30, 2006.

"Registration Statement" means the registration statement or statements of the Company that may be filed with the SEC in order to register the Registrable Securities.

"Registrable Securities" means the Unit Shares, the Warrant Shares and the Compensation Shares.

"Regulation D" means Regulation D under the U.S. Securities Act.

"Regulation S" means Regulation S under the U.S. Securities Act.

"Rule 144"

 means Rule 144 under the U.S. Securities Act.

"Rule 144A"

 means Rule 144A 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 Jurisdictions, the applicable policy statements issued by the securities regulators in the Offering Jurisdictions, 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.

"State" means any one of the 50 states of the United States or the District of Columbia.

"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.

"Term Sheet" means the term sheet in respect of the Offering attached hereto as Schedule "A".

–4–

"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. Institutional Accredited Investor Status Certificate" means the certificate attached hereto as Schedule "C" which is required to be completed by a Subscriber who is resident in the United States

"U.S. Person" has the meaning set forth in Rule 902(k) of Regulation S under the U.S. Securities Act.

"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.

"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 symbol "$", are expressed in United States dollars.

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"

-

Term Sheet

Schedule "B"

-

Accredited Investor Status Certificate

Schedule "C"

-

U.S. Institutional Accredited Investor Status Certificate

–5–

ARTICLE 3- SUBSCRIPTION AND DESCRIPTION OF UNITS 

3.1

Subscription for Units

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 Units

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.  The Term Sheet, a copy of which is attached hereto as Schedule "A", summarizes the terms of the Offering.  As part of the Offering, the Company shall:

(a)

use its best efforts to (i) file a Prospectus and obtain the Final Receipt, and (ii) file a resale Registration Statement and have such Registration Statement declared effective by the SEC to register the resale of the Registrable Securities, in each case within 180 days of the Closing Date; and

(b)

use its best efforts to obtain conditional approval for the listing of the Common Shares on either the Toronto Stock Exchange or the TSX Venture Exchange within 120 days of the Closing Date, provided that such final listing approval shall not be obtained by the Company until the Final Receipt described above has been issued.

If the Company does not meet its obligations pursuant to (a) above within 180 days of the Closing Date, the Company shall thereafter pay to the Subscriber 1% per month of the total Subscription Amount to a maximum of 12% on a pro-rata basis and payable quarterly, until the earlier of the (i) obtaining the Final Receipt and the effective date of the Registration Statement or (ii) 12 months following the 181st day after the Closing Date.  Notwithstanding anything herein to the contrary, to the extent that the registration of any or all of the Registrable Securities by the Company on a registration statement is prohibited (the "Non-Registered Shares") as a result of rules, regulations, positions or releases issued or actions taken by the SEC pursuant to its authority with respect to Rule 415 under the U.S. Securities Act and the Company has registered at such time the maximum number of Registrable Securities permissible upon consultation with the SEC, then the liquidated damages described in this Section 3.2 shall not be applicable to such Non-Registered Shares.

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, in whole or in part, at any time prior to the Closing Time. If this subscription is rejected in whole, any cheques or other forms of payment delivered to the Agents representing the Subscription Amount will be promptly returned to the Subscriber by the Agent through which the Subscriber subscribed for the Units without interest or deduction. If this subscription is accepted only in part a cheque, representing any refund of the Subscription Amount for that portion of the subscription for the Units which is not accepted, will be promptly delivered by the Agent through which the Subscriber subscribed for the Units 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 21, 

–6–

2007 or such other place, date or time as the Company and the Agents may agree (the "Closing Date"). If, prior to the Closing Time, the terms and conditions contained in this Subscription Agreement and the Agency Agreement have been complied with to the satisfaction of the Agents, or waived by the Agents, the Agents shall (i) deliver to the Company at the Closing Time all completed Subscription Agreements, including this Subscription Agreement; and (ii) deliver to the Company the aggregate Subscription Amount for the Units sold pursuant to the Agency Agreement 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 Agreements and the Agency Agreement.

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) and the Agency Agreement have not been complied with to the satisfaction of the Agents, or waived by the Agents, none of the Agents, the Company and the Subscriber will have further obligations under this Subscription Agreement.

4.2

Conditions of Closing

The Subscriber acknowledges and agrees that the obligations of the Company hereunder are conditional on the accuracy of the representations and warranties of the Subscriber 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 or bank draft in United States dollars payable to the Agent through which the Subscriber subscribed for the Units; and

(b)

the Subscriber having properly completed, signed and delivered this Subscription Agreement and Schedule "B" or Schedule "C" hereto, as applicable to:

Blackmont Capital Inc.

BCE Place, 181 Bay St.

Suite 900

Toronto, Ontario  M5J 2T3

Attention:  Michael Chow

Fax:  

 (416) 864-9151

4.3

Authorization of the Agents

The Subscriber irrevocably authorizes any one of the Agents in the sole discretion thereof, to act as the Subscriber’s representative at the Closing, and hereby appoints any one of the Agents, with full power of substitution, as its true and lawful attorney with full power and authority in the Subscriber’s place and stead:

(a)

to receive the certificates representing the Unit Shares and the Warrants, to execute in the Subscriber’s name and on its behalf all closing receipts and required documents, to complete and correct any errors or omissions in any form or document provided by the Subscriber, including this Subscription Agreement and the schedules hereto, in connection with the subscription for the Units and to exercise any rights of termination contained in the Agency Agreement;

(b)

to approve any opinion, certificate or other document addressed to the Subscriber;

–7–

(c)

to extend such time periods and to waive, in whole or in part, any representations, warranties, covenants or conditions for the Subscriber’s benefit contained in this Subscription Agreement and the Agency Agreement or any ancillary or related document;

(d)

to terminate or not deliver this Subscription Agreement if any condition precedent is not satisfied, in such manner and on such terms and conditions as the Agents in their sole discretion may determine prior to the acceptance of this Subscription Agreement by the Company; and

(e)

without limiting the generality of the foregoing, to negotiate, settle, execute, deliver and amend the Agency Agreement.

ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF 

THE COMPANY

5.1

Representations, Warranties and Covenants of the Company

The Company hereby agrees with the Subscriber that the representations and warranties made by the Company to the Agents in the Agency Agreement shall be true and correct in all material respects as of the Closing Date.  The Subscriber shall have the benefit of the representations, warranties and covenants made by the Company to the Agents and set forth in the Agency Agreement to the extent that they have not been varied, amended altered or waived in whole or in part by the Agents. Such representations, warranties and covenants are hereby incorporated by reference such that they form an integral part of this Subscription Agreement and shall survive the closing of the Offering and shall continue in full force and effect for the benefit of the Subscriber in accordance with the Agency Agreement.

The Company will use it best efforts to (i) file a Prospectus and obtain the Final Receipt, and (ii) file the resale Registration Statement and have such Registration Statement declared effective by the SEC to register the resale of the Registrable Securities, in each case, within 180 days of the Closing Date.

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 and the Agents as follows and acknowledges that the Company and the Agents are relying on such representations and warranties in connection with the transactions contemplated herein:

(a)

The Subscriber certifies that it is resident 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)

If the Subscriber is not a person in the United States or a U.S. Person, or not purchasing the Units on behalf of a person in the United States or a U.S. Person:

(i)

the Subscriber has properly completed, executed and delivered to the Agent through which it subscribed for the Units Schedule "B" hereto (dated as of the date hereof), as applicable and the information contained therein is true and correct;

–8–

(ii)

the representations, warranties and covenants of the Subscriber contained in Schedule "B" hereto will be true and correct both as of the date of execution of this Subscription Agreement and as of the Closing Time;

(iii)

the Subscriber is not a U.S. Person nor subscribing for the Units for the account 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;

(iv)

the Subscriber acknowledges that the Unit Shares, the Warrants and the Warrant Shares have not been registered 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; 

(v)

the Subscriber understands that the Company is the seller of the Units and 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 one year 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;

(vi)

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 one year 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; and

(vii)

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 the Company has consented to 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.

(c)

If the Subscriber is a person in the United States or a U.S. Person, or is purchasing the Units on behalf of a person in the United States or a U.S. Person, the Subscriber:

(i)

or each beneficial purchaser as to which the Subscriber exercises sole investment discretion for whom it is purchasing, is acquiring the Units to be held for investment purposes only and not with a view to resale, distribution or 

–9–

other disposition of the Unit Shares, and the Warrants and the Warrant Shares, or any portion thereof, and without any present intention of selling, offering to sell or otherwise disposing of or distributing such securities, or any portion thereof, in any transaction other than a transaction complying with the registration requirements of the U.S. Securities Act and applicable Blue Sky Laws, or pursuant to an exemption therefrom;

(ii)

is aware that the Unit Shares and the Warrants have not been registered under the U.S. Securities Act and the sale contemplated hereby is being made in reliance on a private placement exemption to Institutional Accredited Investors, or each beneficial purchaser as to which the Subscriber exercises sole investment discretion for whom it is purchasing, satisfies one or more of the categories set out in Schedule "C" hereto;

(iii)

acknowledges that the representations, warranties and covenants contained in Schedule "C" hereto will be true and correct both as of the date of execution of this Subscription Agreement and as of the Closing Time;

(iv)

is not purchasing the Units as a result of any "general solicitation or general advertising" (as such term is defined in Regulation D), including any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or any seminar or meeting where the attendees have been invited by general solicitation or general advertising;

(v)

understands that the Warrants may not be sold or transferred in the United States or by or on behalf of a U.S. Person unless an exemption is available from the registration requirements of the U.S. Securities Act and applicable state securities laws;

(vi)

understands that if it decides to offer, sell, pledge or otherwise transfer the Warrants and, prior to the applicable Registration Statement becoming effective, the Unit Shares and the Warrant Shares, such securities may be offered, sold or otherwise transferred only: (A) to the Company; (B) in compliance with Rule 904 under Regulation S, (C) in accordance with Rule 144 or Rule 144A under the U.S. Securities Act, if available, and in compliance with applicable local laws and regulations, or (D) in a transaction that does not otherwise require registration under the U.S. Securities Act or any applicable state securities laws if an opinion of counsel, of recognized standing reasonably satisfactory to the Company, has been provided to the Company to that effect; and

(vii)

consents to the Company making a notation on its records or giving instructions to any transfer agent of the Company in order to implement the restrictions on transfers set forth and described herein, and the Subscriber understands and acknowledges that the Company may instruct the registrar and transfer agent of the Company not to record a transfer without first being notified by the Company that it is satisfied that such transfer is exempt from or not subject to registration under the U.S. Securities Act.

(d)

If the Subscriber is not a person described in paragraph 6.1(c) above, the subscription for the Units by the Subscriber does not contravene any of the applicable securities legislation in the jurisdiction in which the Subscriber resides and does not give rise to 

–10–

any obligation of the Company or the Agents to prepare and file a prospectus, offering memorandum or similar document or to register the Unit Shares, the Warrants or the Warrant Shares or to be registered with, or to file any report or notice with, any governmental or regulatory authority, other than a Report of Exempt Distribution on Form 45-106F1 with the securities regulatory authority in the applicable Offering Jurisdictions and a Form D with the SEC, and, if requested by the Company, the Subscriber will provide the Company with evidence of the foregoing.

(e)

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, the Securities Laws or any other laws applicable to the Subscriber, any agreement to which the Subscriber is a party, or any judgment, decree, order, statute, rule or regulation applicable to the Subscriber.

(f)

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.

(g)

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.

(h)

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.

(i)

If the Subscriber is:

(i)

a corporation, 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;

(ii)

a partnership, syndicate or other form of unincorporated organization, the Subscriber has the necessary legal capacity and authority to execute and deliver this Subscription Agreement and to observe and perform its covenants and 

–11–

obligations hereunder and has obtained all necessary approvals in respect thereof, and the individual signing this Subscription Agreement has been duly authorized to execute and deliver this Subscription Agreement; or

(iii)

an individual, the Subscriber is of the full age of majority and is legally competent to execute this Subscription Agreement and to observe and perform his or her covenants and obligations hereunder.

(j)

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

(k)

The Subscriber is not, with respect to the Company or any of its affiliates, a "control person" as defined under the Securities Laws and the purchase of the Units hereunder and the exercise or deemed exercise of the Warrants will not result in the Subscriber becoming a control person.

(l)

The Subscriber and any beneficial purchaser for whom it is contracting hereunder is at arm's-length with the Company within the meaning of the Securities Laws.

(m)

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.

(n)

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 neither the Company nor the Agents are 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.

(o)

The Subscriber has not received or been provided with a prospectus, registration statement or offering memorandum, within the meaning of the Securities Laws, and the Subscriber’s decision to subscribe for the Units was not based upon, and the Subscriber has not relied upon, any verbal or written representations as to facts made by or on behalf of the Company or the Agents.  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 this Subscription Agreement, the Term Sheet attached hereto as Schedule "A" and the Public Record (any such information having been obtained by the Subscriber without independent investigation 

–12–

or verification by the Agents).  The Subscriber is not relying upon the Agents to conduct any due diligence investigation on its behalf concerning the business, financial position, condition or prospects of the Company and agrees that the Agents assume no responsibility or liability of any nature whatsoever for the accuracy, adequacy or completeness of the Public Record or as to whether all information concerning the Company required to be disclosed by the Company has been publicly disclosed.

(p)

The Subscriber is not purchasing the Units with knowledge of material information concerning the Company that has not been generally disclosed.

(q)

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.

(r)

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.

(s)

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 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.

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)

The Company is a United States company incorporated under the laws of the State of Delaware and is not a reporting issuer in any jurisdiction of Canada and accordingly the securities offered hereunder will be subject to an indefinite hold period. Notwithstanding section 5.1 hereof, there is no assurance that the Company will ever become a reporting issuer in any jurisdiction of Canada.

(b)

It has received and reviewed a copy of the Term Sheet setting out the principal terms of the Offering and acknowledges that the Units subscribed for by it hereunder form part 

–13–

of a larger issuance and sale by the Company of up to 9,525,000 Units at a subscription price of US$2.10 per Unit on a "best efforts" basis through the Agents.

(c)

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.

(d)

The Units 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 neither the Company nor the Agents are in any way responsible) for such compliance.

(e)

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 the Securities Laws.

(f)

The certificates representing the Unit Shares, the Warrants and if applicable, the Warrant Shares, if issued prior to receipt of the Final Receipt, 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 THE DATE THAT IS FOUR MONTHS AND ONE DAY AFTER THE LATER OF (i) [THE CLOSING DATE]; AND (ii) THE DATE THAT THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY."  

provided that 

(i)

if the Company becomes a reporting issuer in Canada after the Closing Date by filing a Prospectus and four months and one day have elapsed since the Closing Date, the certificates representing the Unit Shares, the Warrants and, if applicable, the Warrant Shares may be exchanged for certificates bearing no such legend, or 

(ii)

if the Company becomes a reporting issuer in Canada after the Closing Date by any other means other than as set out in subsection 6.2(f)(i) above, subsequent to the date that is four months and one day after the later of (i) the Closing Date, and (ii) the date the Company becomes a reporting issuer in any province or territory of Canada, the certificates representing the Unit Shares, the Warrants and, if applicable, the Warrant Shares may be exchanged for certificates bearing no such legend.

–14–

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 HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR APPLICABLE STATE SECURITIES LAWS.  THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND SUCH LAWS COVERING SUCH SECURITIES, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS.  THE SECURITIES REPRESENTED BY THE CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT."

(g)

The Agents and/or their directors, officers, employees, agents and representatives assume no responsibility or liability of any nature whatsoever for the accuracy or adequacy of any such publicly available information concerning the Company or as to whether all information concerning the Company that is required to be disclosed or filed by the Company under the Securities Laws has been so disclosed or filed.

(h)

The Company and the Agents are relying on the representations, warranties and covenants contained herein and in the applicable Schedules 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, the Agents and each of their 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.

(i)

The Company and the Agents are 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, will 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, if it suffers investment losses in connection with securities acquired in a private placement,

–15–

(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.

(j)

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:

(i)

the Company's counsel are acting solely as counsel to the Company and not as counsel to the Subscriber;

(ii)

the Agents' counsel are acting solely as counsel to the Agents and not as counsel to the Subscriber, and

(iii)

the Agents are acting solely as financial advisors to, and agents of, the Company and not as financial advisors to the Subscriber, or as agents of, the Subscriber, except insofar as is necessary at the Closing to deliver payment for the Units to the Company on behalf of the Subscriber and to accept and deliver the certificates representing the Unit Shares and the Warrants to the Subscriber after the Closing.

(k)

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

(l)

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

(m)

The Company and the Agents are 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 beneficial purchaser for whom it is contracting hereunder, to the Company and the Agents 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 or the Agents 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 beneficial purchaser for whom it is contracting hereunder.  In addition to the foregoing, the Subscriber agrees and acknowledges that the Company or the Agents, as the case may be, may use and 

–16–

disclose its personal information, or that of each beneficial purchaser for whom it is contracting hereunder, as follows:

(i)

for internal use with respect to managing the relationships between and contractual obligations of the Company, the Agents and the Subscriber or any beneficial purchaser for whom it is contracting hereunder;

(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 or the Agents 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 your 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.

(n)

If the Company obtains approval for the listing of the Common Shares on a Canadian stock exchange prior to the effectiveness of the Registration Statement such securities may trade on such Canadian stock exchange on a restricted basis.  No Canadian broker-dealer would be permitted, under the U.S. Securities Act, to execute a transaction in those securities 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.

(o)

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 

–17–

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 and the Agents.

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 or the Agents 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 and the Agents.

ARTICLE 8 - COMMISSION

8.1

Commission to the Agents

The Subscriber understands that, in connection with the issue and sale of the Units pursuant to the Offering, the Agents will receive from the Company on Closing a cash commission equal to 6% of the gross proceeds from the Offering. The Company will also issue to the Agent compensation options (the "Compensation Options"). Each Compensation Option will entitle the holder to acquire one Compensation Share for US$2.10 for a period of 24 months following the Closing Date.  

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.

–18–

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 Mining 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

1 First Canadian Place

Suite 1600

100 King Street West

Toronto, Ontario

M5X 1G5

Attention:

Henry Harris

Fax: 

(416) 862-7661

and to:

Jeffrey Klein

2600 North Military Trail

Suite 270

Boca Raton, Florida 33431

Fax:

(561) 241-4943

(ii)

in the case of the Subscriber, at the address specified on the face page hereof,

with a copy to the Agents at:

Blackmont Capital Inc.

BCE Place, 181 Bay St.

Suite 900

Toronto, Ontario

M5J 2T3

Attention:

[Rick Vernon]

Fax:

(416) 864-9151

and to:

–19–

Haywood Securities Inc.

Suite 2910-181 Bay Street

Bay Wellington Tower, BCE Place

Toronto, Ontario

M5J 2T3

Attention:

John Willett

Fax:

(416) 507-2350

and to:

Canaccord Capital Corporation

BCE Place, 161 Bay Street 

Suite 3000, P.O. Box 416

Toronto, Ontario

M5J 2S1

Attention:

Jens Mayer

Fax:

(416) 869-3876

and to:

Raymond James Ltd.

5300-40 King Street West

Scotia Plaza, P.O. Box 415

Toronto, Ontario

M5H 3Y2

Attention:

David Greifenberger

Fax:

(416) 777-7020

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

Fraser Milner Casgrain LLP

1 First Canadian Place

39th Floor

100 King Street West

Toronto, Ontario

M5X 1B2

Attention:

Sander Grieve

Fax:

(416) 863-4592

and to:

Dorsey & Whitney LLP

Canada Trust Tower, BCE Place

161 Bay Street, Suite 4310

Toronto, Ontario

M5J 2S1

Attention:

Gil Cornblum

Fax:

(416) 367-7371

–20–

(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.

(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

All costs and expenses (including, without limitation, the fees and disbursements of legal counsel) incurred in connection with this Subscription Agreement and the transactions herein contemplated shall be paid and borne by the party incurring such costs and expenses.

9.5

Applicable Law

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. 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.

–21–

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       day of       , 2007.

			
	 
	PARAMOUNT GOLD MINING CORP.

	  

	 
	 

	                                                                                   

	 
	 

	 
	Per:

	 

	 
	 
	Authorized Signing Officer

–22–

SCHEDULE "A" – TERM SHEET

PRIVATE PLACEMENT OF UNITS

		
	Issuer:

	Paramount Gold Mining Corp. (the "Company")

	 
	 

	Offering:

	Best efforts private placement of units ("Units"), each Unit consisting of one common share of the Company (a "Unit Share") and one half of one common share purchase warrant (each whole warrant a "Warrant"), with each Warrant entitling the holder thereof to purchase one common share of the Company (a "Warrant Share") at a price of US$2.90 for 24 months following the Closing. 

	 
	 

	Amount:

	Up to US$20,002,500

	 
	 

	Price:

	US$2.10

	 
	 

	Over Allotment:

	At the option of the Agents, for a period of 30 days from the closing of the Offering, the size of the Offering may be increased by up to 15%.

	 
	 

	Use of Proceeds:

	Proceeds will be used to develop the Company’s Mexican and South American projects.

	 
	 

	Selling

Jurisdictions:

	The private placement will be marketed to qualified investors in each of the Provinces of Ontario, Manitoba, Alberta, Nova Scotia, British Columbia and Saskatchewan and may also be offered in certain foreign jurisdictions under applicable exemptions and in the United States on a private placement basis to "accredited investors" (as defined in Regulation D under the US Securities Act), as the Company and the Agents shall mutually agree.  Subscribers in the various provinces of Canada must be "accredited investors" (as defined under applicable securities laws, rules or policies in such provinces). 

	 
	 

	Resale

Restrictions:

	The common shares will become free trading for Canadian purchasers once the Company files (and the applicable securities regulatory authority declares effective) (i) a prospectus (the "Canadian Prospectus") with a securities commission in a jurisdiction of Canada to become a reporting issuer in the jurisdiction of Canada (assuming that four months have elapsed from the date of the closing of the Offering); and (ii) a resale registration statement (the "Registration Statement") with the Securities and Exchange Commission of the United States (the "SEC") to register the resale of the Unit Shares, the Warrant Shares and the common shares of the Company underlying the Agent’s Compensation Options (as defined below). 

The Unit Shares will become free trading for purchasers in the United States once the Company files and becomes effective on a resale Registration Statement in the United States.

	 
	 

–23–

		
	Liquidity

Incentive:

	If both the Canadian Prospectus and the Registration Statement are not declared effective within 180 days of Closing, the Company shall thereafter pay each subscriber a cash amount equal to 1% per month of the total subscription amount paid by each subscriber to a maximum of 12%, on a pro-rata basis and payable quarterly, until the earlier of the effective date of both the Canadian Prospectus and the Registration Statement or 12 months following the 181st day subsequent to Closing.  Notwithstanding anything herein to the contrary, to the extent that the registration of any or all of the Registrable Securities by the Company on a registration statement is prohibited (the "Non-Registered Shares") as a result of rules, regulations, positions or releases issued or actions taken by the SEC pursuant to its authority with respect to Rule 415 under the U.S. Securities Act and the Company has registered at such time the maximum number of Registrable Securities permissible upon consultation with the SEC, then the liquidated damages described herein shall not be applicable to such Non-Registered Shares.

	 
	 

	Eligibility:

	The Unit Shares and the Warrants will not be eligible for RRSPs, RRIFs, RESPs, and DPSPs.

	 
	 

	Listing:

	The Company is an SEC registrant and its Common Shares are quoted on the OTC Bulletin Board under the symbol "PGDP". The Company shall make an application to list its common shares, including the Unit Shares and Warrant Shares, on either the Toronto Stock Exchange or the TSX Venture Exchange.  The Company shall use its best efforts to obtain conditional approval for such a listing within 120 days after Closing, with final approval for such listing not to be obtained by the Company before the effective date of the Canadian Prospectus. The Warrants will not be listed on any stock exchange.

	 
	 

	Commission:

	A cash commission of 6% of the gross proceeds raised pursuant to the Private Placement will be payable to the Agents at Closing.  At Closing, the Agents will also be granted non-transferable options ("Agent’s Compensation Options") to acquire common shares of the company in an amount that is equal to 6% of the number of Units sold pursuant to the Offering.  Each Agent’s Compensation Option will entitle the holder to acquire one common share of the Company at the Offering Price for 24 months from Closing.

	 
	 

	Closing:

	On or about March 21, 2007

	 
	 

	Lead Agent:

	Blackmont Capital Inc., Cannacord Capital Corporation, Haywood Securities Inc., Raymond James Ltd.

–24–

SCHEDULE "B"

ACCREDITED INVESTOR STATUS CERTIFICATE

TO BE COMPLETED BY BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO AND NOVA SCOTIA 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 Mining 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 provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario or Nova Scotia;

(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 "B" by the Subscriber, this Schedule "B" shall be incorporated into and form a part of the subscription agreement to which this Schedule "B" is attached.

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

		
	 ̈

	(a)

a Canadian financial institution, or a Schedule III bank;

	 ̈

	(b)

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

	 ̈

	(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;

	 ̈

	(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);

	 ̈

	(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);

	 ̈

	(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;

–25–

		
	 ̈

	(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;

	 ̈

	(h)

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

	 ̈

	(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;

	 ̈

	(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;

	 ̈

	(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;

	 ̈

	(l)

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

	 ̈

	(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;

	 ̈

	(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)

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;

	 ̈

	(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;

	 ̈

	(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;

	 ̈

	(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;

	 ̈

	(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;

	 ̈

	(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;

–26–

		
	 ̈

	(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

	 ̈

	(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 

–27–

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;

(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.

–28–

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 B 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:   

	____________________

	 
	Signed:  

	________________________________

	 
	 
	 

	_________________________________

Witness (if Subscriber is an individual)

	 
	__________________________________________

Print the name of Subscriber

	 
	 
	 

	_________________________________

Print Name of Witness

	 
	__________________________________________

If Subscriber is a corporation,

print name and title of authorized signing officer

–29–

SCHEDULE "C"

UNITED STATES INSTITUTIONAL ACCREDITED INVESTOR CERTIFICATE

		
	TO:

	Paramount Gold Mining Corp.

	AND TO:

	Blackmont Capital Corp.

CERTIFICATE

Capitalized terms not otherwise defined herein shall have the meanings attributed thereto in the subscription agreement to which this certificate is attached.

In connection with the purchase of units (the "Units") of Paramount Gold Mining Corp. (the "Company"), the undersigned hereby represents, warrants and certifies that:

1.

the Subscriber (or if the Subscriber is acting on behalf of a principal, then for the principal for whom the Subscriber is acting) satisfies one or more of the following categories of "accredited investor" as that term is defined in Rule 501(a) of the Securities Act of 1933, as amended (the "U.S. Securities Act"), by virtue of the Subscriber being:

[please check one]

         Category 1.

Any bank as defined in Section 3(a)(2) of the U.S. Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934; any insurance company as defined in Section 2(a)(13) of the U.S. Securities Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of US$5,000,000; or any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"), if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of US$5,000,000, or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors

         Category 2.

A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940

         Category 3.

An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Units, with total assets in excess of US$5,000,000

         Category 4.

A trust that: (a) has total assets in excess of US$5,000,000, (b) was not formed for the specific purpose of acquiring the Units, and (c) is directed in its purchases of securities by a person who has such knowledge and experience in financial and business matters that he/she is capable of evaluating the merits and risks of an investment in the Units

         Category 5.

An entity in which all of the equity owners satisfy the requirements of one or more of the foregoing categories

2.

(a) if the undersigned is the Subscriber, he or she is making the above statement based on personal knowledge of his or her financial situation and has reviewed personal financial documentation with an accountant, financial advisor or other financial professional, if necessary, to determine that the above statement is true; or (b) if the undersigned is other than the Subscriber, he or she is making the above statement based on a review, if necessary, of the financial statements of the Subscriber for the most recently completed financial year and any interim financial statements prepared since the end of such financial year and has undertaken such other review and due diligence necessary to determine and certify that the Subscriber is an "accredited investor" as that term is defined in Rule 501(a) of the U.S. Securities Act; and

–30–

3.

the Subscriber understands that the Company is relying on this certificate as evidence of the Subscriber’s status as an "accredited investor" in accordance with Rule 501(a) of the U.S. Securities Act.

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.  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:   

	____________________

	 
	Signed:  

	________________________________

	 
	 
	 

	_________________________________

Witness (if Subscriber is an individual)

	 
	__________________________________________

Print the name of Subscriber

	 
	 
	 

	_________________________________

Print Name of Witness

	 
	__________________________________________

If Subscriber is a corporation,

print name and title of authorized signing officer

–31–

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