Document:

ex101.htm

PROMISSORY NOTE

Eagan, Minnesota

$125,000                                                           May 3, 2011

For Value Received, Minot 123, LLC,  a North Dakota  limited liability company (the “Company”), promises to pay to the order of Hypertension Diagnostics, Inc., a Minnesota corporation (“Holder”), pursuant to the terms herein, in lawful money of the United States of America, the principal sum of One Hundred Twenty Five Thousand Dollars ($125,000), together with interest in arrears on the unpaid principal balance remaining unpaid from time to time (computed on the basis of actual days elapsed in a 360-day year) at a rate equal to Eight Percent (8%) per annum, in the manner provided below, as evidenced by this Promissory Note (the “Note”).  In the event of an exercise of a Repayment Option, as provided herein, this Note shall be secured by the assets of the Company.   This Note is being issued pursuant to that certain Restructuring Agreement by and between the Company and Holder of even date herewith.

1.           PAYMENTS.

1.1           Repayment Option.   The proceeds from this Note shall be used to acquire a property located at 123 1st Street, Minot, North Dakota (the “M Building”).   The Company will use its best efforts to make M Building “Operational and Rentable” by the end of 45 calendar days from the date of this Note (the “Operational Date”).    Operational and Rentable shall mean that with respect to the M Building, the following systems are in working order or have otherwise been repaired and replaced to be in working order: elevators, electrical systems, boilers, coolers, controls, glass plate repairs, lighting replacement and repairs, pipes and plumbing, structural repairs and asbestos abatement to such a level that M Building shall be deemed rentable to third parties.   The determination of whether M Building is Operational and Rentable shall be made in the sole discretion and in good faith by the Board of Directors of the Holder, or any committee thereof, excluding any Board of Director of the Holder who has direct or indirect ownership interest in the Company (the “Independent Board”).  To the extent that the Independent Board believes that M Building is not Operational and Rentable, the Company agrees that this Note shall be repaid 90 days from the date of such determination by the Independent Board (the “Note Maturity Date”).   The obligation to repay the Note because of such determination that M Building is not Operational and Rentable shall be secured by a second mortgage on M Building which shall be second only to the first mortgage held by the seller of  M Building to the Company or any assignee thereof.

1.2            Principal and Interest.  To the extent that the Note must be repaid because the Independent Board has determined that M Building is not Operational and Rentable,  the principle and any accrued interest on the Note shall be payable on the Note Maturity Date.

1.3           M Building Deemed Operational and Rentable.  To the extent that the Independent Board determines that M Building is Operational and Rentable as provided in Section 1.1, this Note may be forgiven by the Independent Board of the Holder.

1.4           Prepayment.  At any time after the date hereof, the Company may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note, provided that each such prepayment is accompanied by the accrued interest on the amount of principal prepaid calculated to the date of such prepayment.  The Company shall provide Holder with not less than fifteen (15) days written notice prior to such prepayment.

2.           DEFAULT.

2.1           Events of Default.  The occurrence of any one or more of the following events with respect to Company shall constitute an event of default hereunder (“Event of Default”):

(a)           If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (a “Bankruptcy Law”), the Company shall (i) commence a voluntary case or proceeding; (ii) consent to the entry of an order for relief against it in an involuntary case; (iii) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (iv) make an assignment for the benefit of its creditors; or (v) admit in writing its inability to pay its debts as they become due;

(b)           If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for the Company or substantially all of the Company’s properties, or (iii) orders the liquidation of the Company, and in each case the order or decree is not dismissed within 90 days; or

(c)           Failure of the Company to pay when due any amounts owed hereunder.

(d)           The issuing of any mortgage or security interest on the M Building other than the $200,000 mortgage issued to the seller of the M Building to the Company.

2.2           Notice by the Company. The Company shall notify Holder in writing at the Holder’s address last shown in the Company’s records within five days after the occurrence of any Event of Default of which the Company acquires knowledge.

2.3           Remedies.  Upon the occurrence of an Event of Default hereunder (unless all Events of Defaults have been cured or waived by Holder), Holder may, at its option, (i) by written notice to the Company, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon, immediately due and payable regardless of any prior forbearance, (ii) exercise all rights under the Security Agreement, and/or (iii) exercise any and all rights and remedies available to it under applicable law, including, without limitation, the right to collect from the Company all sums due under this Note.  The Company shall pay all reasonable costs and expenses incurred by or on behalf of Holder in connection with Holder’s exercise of any or all of its rights and remedies under this Note, including, without limitation, reasonable attorneys’ fees.

3.           TRANSFERABILITY. The Holder is not prohibited from transferring its right, title and interest in this Note.

 

  

  

  

4.           MISCELLANEOUS.

4.1           Waiver.  The rights and remedies of Holder under this Note shall be cumulative and not alternative.  No waiver by Holder of any right or remedy under this Note shall be effective unless in a writing signed by Holder.  Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege and no single or partial exercise of any such right, power or privilege by Holder will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.  To the maximum extent permitted by applicable law, (a) no claim or right of Holder arising out of this Note can be discharged by Holder, in whole or in part by a waiver or renunciation of the claim or right unless in a writing, signed by Holder; (b) no waiver that may be given by Holder will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on the Company will be deemed to be a waiver of any obligation of the Company or of the right of Holder to take further action without notice or demand as provided in this Note.  The Company hereby waives presentment, demand, protest and notice of dishonor and protest.

4.2           Notices.  Any notice required or permitted to be given hereunder shall be given by the Company to the Holder or the Holder to the Company in writing and shall be (a) personally delivered ; (b) sent by overnight courier of national reputation, or (c) transmitted by facsimile or electronic mailing.

4.3           Severability.  If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

4.4           Governing Law.  This Note will be governed by the laws of the State of Minnesota without regard to conflicts of laws principles.

4.5           Parties in Interest.  This Note shall bind the Company and its successors and assigns.  This Note shall not be assigned by Holder without the express prior written consent the Company, which consent may be granted or withheld in the Company’s reasonable discretion.

4.6           Authorization.  The Company is authorized to issue this Note and the issuance of this Note will not conflict with any contract or agreement of the Company.

4.7           Section Headings, Construction.  The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation.  All references to “section” or “Sections” refer to the corresponding Section or Sections of this Note unless otherwise specified.

All words used in this Note will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the words “hereof” and “hereunder” and similar references refer to this Note in its entirety and not to any specific section or subsection hereof.

 

 

  

  

  

In Witness Whereof, the Company has executed and delivered this Note as of the date first stated above.

 

	
                                                                                     

	 	 	 MINOT 123, LLC
	  	  	  
	 	  By:	
 /s/ Kenneth Brimmer

	  	  	
 Its ManagerManas Petroleum Corporation - Exhibit 10. - Filed by newsfilecorp.com

 

 

 

MANAS PETROLEUM CORPORATION

as the Corporation 

 

and

 

EQUITY FINANCIAL TRUST COMPANY

as the Warrant Agent 

 

 

	
       

       

	WARRANT INDENTURE 
	Providing for the Issue of Warrants 
	  
	
      Dated as of May 6, 2011 

       

TABLE OF CONTENTS 

	 	  	Page No. 
	 	  	  
	 	  	  
	ARTICLE 1 

      INTERPRETATION 
	Section 1.1 	Definitions 	2 
	Section 1.2 	Gender and Number. 	5 
	Section 1.3 	Headings, Etc. 	5 
	Section 1.4 	Day not a Business Day. 	5 
	Section 1.5 	Time of the Essence. 	5 
	Section 1.6 	Monetary References. 	5 
	Section 1.7 	Applicable Legislation. 	6 
	 	  	  
	ARTICLE 2 

      ISSUE OF WARRANTS 
	Section 2.1 	Creation and Issue of Warrants. 	6 
	Section 2.2 	Terms of Warrants. 	6 
	Section 2.3 	Warrantholder not a Shareholder. 	7 
	Section 2.4 	Warrants to Rank Pari Passu. 	7 
	Section 2.5 	Form of Warrants, Certificated Warrants. 	7 
	Section 2.6 	Book Entry Only Warrants. 	7 
	Section 2.7 	Warrant Certificate 	9 
	Section 2.8 	Legends. 	10 
	Section 2.9 	Register of Warrants 	12 
	Section 2.10 	Issue in Substitution for Warrant Certificates Lost, etc.
      	12 
	Section 2.11 	Exchange of Warrant Certificates. 	13 
	Section 2.12 	Transfer and Ownership of Warrants. 	13 
	Section 2.13 	Cancellation of Surrendered Warrants. 	14 
	 	  	  
	ARTICLE 3 

      EXERCISE OF WARRANTS 
	Section 3.1 	Right of Exercise 	14 
	Section 3.2 	Warrant Exercise. 	15 
	Section 3.3 	Transfer Fees and Taxes. 	16 
	Section 3.4 	Warrant Agency. 	16 
	Section 3.5 	Effect of Exercise of Warrant Certificates. 	17 
	Section 3.6 	Partial Exercise of Warrants; Fractions. 	17 
	Section 3.7 	Expiration of Warrants. 	17 
	Section 3.8 	Accounting and Recording. 	18 
	Section 3.9 	Securities Restrictions. 	18 

TABLE OF CONTENTS 
(continued) 

	 	  	Page No. 
	 	  	  
	ARTICLE 4 

      ADJUSTMENT OF NUMBER OF COMMON SHARES 

      AND EXERCISE PRICE 
	Section 4.1 	 Adjustment of Number of Common Shares and Exercise Price.
      	18 
	Section 4.2 	 Entitlement to Common Shares on Exercise of Warrant. 	22 
	Section 4.3 	 No Adjustment for Certain Transactions. 	22 
	Section 4.4 	 Determination by Auditors. 	22 
	Section 4.5 	 Proceedings Prior to any Action Requiring Adjustment. 	23 
	Section 4.6 	 Certificate of Adjustment. 	23 
	Section 4.7 	 Notice of Special Matters 	23 
	Section 4.8 	 No Action after Notice. 	23 
	Section 4.9 	 Other Action 	24 
	Section 4.10 	 Protection of Warrant Agent. 	24 
	Section 4.11 	 Other Adjustments. 	24 
	Section 4.12 	 Participation by Warrantholder. 	25 
	 	  	  
	ARTICLE 5 

      RIGHTS OF THE CORPORATION AND COVENANTS 
	Section 5.1 	 Optional Purchases by the Corporation. 	25 
	Section 5.2 	 General Covenants. 	25 
	Section 5.3 	 Warrant Agent’s Remuneration and Expenses. 	26 
	Section 5.4 	 Performance of Covenants by Warrant Agent. 	26 
	Section 5.5 	 Enforceability of Warrants. 	26 
	 	  	  
	ARTICLE 6 

      ENFORCEMENT 
	Section 6.1 	 Suits by Registered Warrantholders 	27 
	Section 6.2 	 Suits by the Corporation. 	27 
	Section 6.3 	 Immunity of Shareholders, etc. 	27 
	Section 6.4 	 Waiver of Default. 	27 
	 	  	  
	ARTICLE 7 

      MEETINGS OF REGISTERED WARRANTHOLDERS 
	Section 7.1 	 Right to Convene Meetings. 	28 
	Section 7.2 	 Notice. 	28 
	Section 7.3 	 Chairman. 	29 
	Section 7.4 	 Quorum. 	29 
	Section 7.5 	 Power to Adjourn. 	29 
	Section 7.6 	 Show of Hands. 	29 
	Section 7.7 	 Poll and Voting. 	29 

- ii - 

TABLE OF CONTENTS 
(continued) 

	 	  	Page No. 
	 	  	  
	Section 7.8 	Regulations. 	30 
	Section 7.9 	Corporation and Warrant Agent May be Represented. 	31 
	Section 7.10 	Powers Exercisable by Extraordinary Resolution. 	31 
	Section 7.11 	Meaning of Extraordinary Resolution. 	32 
	Section 7.12 	Powers Cumulative. 	33 
	Section 7.13 	Minutes. 	33 
	Section 7.14 	Instruments in Writing. 	33 
	Section 7.15 	Binding Effect of Resolutions. 	33 
	Section 7.16 	Holdings by Corporation Disregarded. 	34 
	 	  	  
	ARTICLE 8 

      SUPPLEMENTAL INDENTURES 
	Section 8.1 	Provision for Supplemental Indentures for Certain Purposes.
      	34 
	Section 8.2 	Successor Entities. 	35 
	 	  	  
	ARTICLE 9 

      CONCERNING THE WARRANT AGENT 
	Section 9.1 	Indenture Legislation. 	35 
	Section 9.2 	Rights and Duties of Warrant Agent. 	35 
	Section 9.3 	Evidence, Experts and Advisers. 	36 
	Section 9.4 	Documents, Monies, etc. Held by Warrant Agent. 	37 
	Section 9.5 	Actions by Warrant Agent to Protect Interest. 	37 
	Section 9.6 	Warrant Agent Not Required to Give Security. 	37 
	Section 9.7 	Protection of Warrant Agent. 	37 
	Section 9.8 	Replacement of Warrant Agent; Successor by Merger. 	39 
	Section 9.9 	Conflict of Interest. 	40 
	Section 9.10 	Acceptance of Agency 	40 
	Section 9.11 	Warrant Agent Not to be Appointed Receiver. 	40 
	Section 9.12 	Warrant Agent Not Required to Give Notice of Default. 	40 
	Section 9.13 	Anti-Money Laundering. 	41 
	Section 9.14 	Compliance with Privacy Code. 	41 
	 	  	  
	ARTICLE 10 

      GENERAL 
	Section 10.1 	Notice to the Corporation and the Warrant Agent. 	42 
	Section 10.2 	Notice to Registered Warrantholders. 	43 
	Section 10.3 	Ownership of Warrants. 	43 
	Section 10.4 	Counterparts. 	43 
	Section 10.5 	Satisfaction and Discharge of Indenture. 	44 

- iii - 

TABLE OF CONTENTS 
(continued) 

	 	  	Page No. 
	 	  	  
	Section 10.6 	Provisions of Indenture and Warrants for the Sole Benefit
      of Parties and Registered Warrantholders. 	44 
	Section 10.7 	Common Shares or Warrants Owned by the Corporation or its
      Subsidiaries - Certificate to be Provided. 	44 
	Section 10.8 	Severability 	45 
	Section 10.9 	Force Majeure 	45 
	Section 10.10 	Assignment, Successors and Assigns 	45 
	Section 10.11 	Rights of Rescission and Withdrawal for Holders 	45 

SCHEDULES 

	SCHEDULE
      “A” FORM OF WARRANT 
	SCHEDULE
      “B” EXERCISE FORM 

- iv - 

WARRANT INDENTURE

             THIS
WARRANT INDENTURE is dated as of May 6, 2011.

BETWEEN:

             MANAS
PETROLEUM CORPORATION, a corporation incorporated under the laws of the
State of Nevada (the “Corporation”), 

             -
and -

             EQUITY
FINANCIAL TRUST COMPANY, a trust company existing under the laws of Canada
(the “Warrant Agent”) 

             WHEREAS
the Corporation is proposing to issue up to 60,000,000 Warrants pursuant to
this Indenture; 

             AND
WHEREAS pursuant to this Indenture, each whole Warrant shall, subject to
adjustment, entitle the holder thereof to acquire one (1) Common Share upon
payment of the Exercise Price upon the terms and conditions herein set forth;

             AND
WHEREAS the Corporation is authorized under the laws applicable to it to
create and issue the Warrants as hereinafter provided; 

             AND
WHEREAS all acts and deeds necessary have been or will be done and performed
to make the Warrants, when created and issued as provided in this Indenture,
legal, valid and binding upon the Corporation with the benefits and subject to
the terms and conditions of this Indenture; 

             AND
WHEREAS the foregoing recitals are made as representations and statements of
fact by the Corporation and not by the Warrant Agent; 

             AND
WHEREAS the Warrant Agent has agreed to enter into this Indenture and to
hold all rights, interests and benefits contained herein for and on behalf of
those Persons who from time to time become holders of Warrants issued pursuant
to this Indenture; 

             NOW
THEREFORE, in consideration of the premises and mutual covenants hereinafter
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Corporation hereby appoints the Warrant
Agent as warrant agent to hold the rights, interests and benefits contained
herein for and on behalf of those persons who from time to time become the
holders of Warrants issued pursuant to this Indenture and the parties hereto
agree as follows: 

- 2 -

ARTICLE 1 

  INTERPRETATION

Section
1.1         
Definitions. 

             In
this Indenture, including the recitals and schedules hereto, and in all
indentures supplemental hereto: 

“Adjustment Period” means the period from the Effective
Date up to and including the Expiry Time; 

“Applicable Legislation” means any statute of Canada or
a province thereof, and the regulations under any such named or other statute,
relating to warrant indentures or to the rights, duties and obligations of
warrant agents and corporations under warrant indentures, to the extent that
such provisions are at the time in force and applicable to this Indenture; 

“Auditors” means BDO Visura International or such other
firm of chartered accountants duly appointed as auditors of the Corporation,
from time to time; 

“Authenticated” means (a) with respect to the issuance
of a Warrant Certificate, one which has been duly signed by the Corporation and
authenticated by manual signature of an authorized officer of the Warrant Agent,
(b) with respect to the issuance of an Uncertificated Warrant, one in respect of
which the Warrant Agent has completed all internal procedures such that the
particulars of such Uncertificated Warrant as required by Section 2.7 are
entered in the register of holders of Warrants, “Authenticate”,
“Authenticating” and “Authentication” have the appropriate
correlative meanings; 

“Book Entry Only Participants” means institutions that
participate directly or indirectly in the Depository’s book entry registration
system for the Warrants; 

“Book Entry Only Warrants” means Warrants that are to be
held only by or on behalf of the Depository; 

“Business Day” means any day other than Saturday, Sunday
or a statutory or civic holiday, or any other day on which the banks are open
for business in the Province of Ontario and the State of Florida; 

“CDS Global Warrants” means Warrants representing all or
a portion of the aggregate number of Warrants issued in the name of the
Depository represented by an Uncertificated Warrant, or if requested by the
Depository or the Corporation, by a Warrant Certificate; 

“Certificated Warrant” means a Warrant evidenced by a
writing or writings substantially in the form of Schedule “A”, attached hereto;

“Common Shares” means, subject to Article 4, fully paid
and non-assessable shares of common stock of the Corporation as constituted at
the close of business on the Effective Date; provided that in the event of any
adjustment pursuant to the provisions of Article 4

- 3 -

hereof, “Common Shares” shall thereafter mean the shares
or other securities or property resulting from such adjustment; 

“Counsel” means a barrister and/or solicitor or a firm
of barristers and/or solicitors retained by the Warrant Agent or retained by the
Corporation, which may or may not be counsel for the Corporation and acceptable
to the Warrant Agent, acting reasonably; 

“Current Market Price” of the Common Shares at any date
means the price per share equal to the volume weighted average trading price at
which the Common Shares have traded on the TSX Venture Exchange or, if
the Common Shares are not then listed on the TSX Venture Exchange, on such other
Canadian stock exchange as may be selected by the Directors for such purpose or,
if the Common Shares are not then listed on any Canadian stock exchange, in the
over-the-counter market, during the period of any 20 consecutive Trading Days
ending not more than 5 Business Days before such date; provided that the
weighted average trading 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 the said 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, then the Current Market Price shall be determined by a firm of
independent chartered accountants selected by the Directors; 

“Depository” means CDS Clearing and Depository Services
Inc. or such other Person as is designated in writing by the Corporation to act
as depository in respect of the Warrants; 

“Dividends” means any dividends paid by the Corporation;

“Effective Date” means the date of this Indenture; 

“Exchange Rate” means the number of Common Shares
subject to the right of purchase under each Warrant and as at the date hereof is
equal to one Common Share for each Warrant held; 

“Exercise Date” means, in relation to Warrant, the
Business Day on which such Warrant is validly exercised or deemed to be validly
exercised in accordance with Article 3 hereof; 

“Exercise Notice” has the meaning set forth in Section
3.2(1); 

“Exercise Price” at any time means the price at which a
whole Common Share may be purchased by the exercise of a whole Warrant, which is
initially U.S.$0.70 per Common Share, payable in immediately available United
States funds, subject to adjustment in accordance with the provisions of Section
4.1; 

“Expiry Date” means May 6, 2014;

“Expiry Time” means 4:30 p.m. (Toronto time) on the
Expiry Date;

“Extraordinary Resolution” has the meaning set forth in
7.11; 

- 4 - 

“Issue Date” means May 6, 2011; 

“Person” means an individual, body corporate,
partnership, trust, agent, executor, administrator, legal representative or any
unincorporated organization; 

“register” means the one set of records and accounts
maintained by the Warrant Agent pursuant to Section 2.9: 

“Registered Warrantholders” means the persons who are
registered owners of Warrants as such names appear on the register, and for
greater certainty, shall include the Depository as the holder of Uncertificated
Warrants appearing on the register of the Warrant Agent; 

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

“Shareholders” means holders of Common Shares; 

“this Warrant Indenture”, “this Indenture”,
“this Agreement”, “hereto” “herein”, “hereby”,
“hereof” and similar expressions mean and refer to this indenture and any
indenture, deed or instrument supplemental hereto; and the expressions
“Article”, “Section”, “subsection” and “paragraph”
followed by a number, letter or both mean and refer to the specified article,
section, subsection or paragraph of this indenture; 

“Trading Day” means, with respect to a stock exchange, a
day on which such exchange is open for the transaction of business and with
respect to an over-the-counter market means a day on which shares may be traded
through the facilities of such over-the-counter market; 

“Uncertificated Warrant” means any Warrant which is not
a Certificated Warrant;

“United States” means the United States of America, its
commonwealths, territories and possessions, any state of the United States, and
the District of Columbia; 

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

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

“U.S. Warrantholder” means any Warrantholder that (i) is
a U.S. Person or (ii) acquired warrants while in the United States or (iii)
acquired warrants for the account or benefit of any U.S. Person or any other
person in the United States or (iv) is in the United States at the relevant time
of any action specified in this Indenture; 

“Warrants” means the Common Share purchase warrants
  created by and authorized by and issuable under this Indenture, to be issued
  and countersigned hereunder in certificated form and/or held through the book
  entry registration system on a no certificate issued basis, entitling the holder
  or holders thereof to purchase up to 60,000,000 Common Shares (subject to adjustment
  as herein provided) at the Exercise Price prior to the Expiry Time and, where
  the context so requires, also means the warrants issued and Authenticated hereunder,
  whether by way of Warrant Certificate or Uncertificated Warrant;

- 5 - 

“Warrant Agency” means the principal office of the
Warrant Agent in the City of Toronto or such other place as may be designated in
accordance with Section 3.4; 

“Warrant Agent” means Equity Financial Trust Company, in
its capacity as warrant agent of the Warrants, or its successors from time to
time; 

“Warrant Certificate” means a certificate, substantially
in the form set forth in Schedule “A” hereto, representing those Certificated
Warrants issued and countersigned hereunder; 

“Warrantholders”, or “holders” means the Persons
entered in the register maintained by the Warrant Agent pursuant to Section 2.9;

“Warrantholders’ Request” means an instrument signed in
one or more counterparts by Registered Warrantholders holding in the aggregate
not less than 50% of the aggregate number of all Warrants then unexercised and
outstanding, requesting the Warrant Agent to take some action or proceeding
specified therein; and 

“written order of the Corporation”, “written request
of the Corporation” and “certificate of the Corporation” mean,
respectively, a written order, request, consent and certificate signed in the
name of the Corporation by any two duly authorized signatories of the
Corporation and may consist of one or more instruments so executed. 

Section 1.2        
 Gender and Number. 

             Words
importing the singular number or masculine gender shall include the plural
number or the feminine or neuter genders, and vice versa. 

Section
1.3         
Headings, Etc. 

             The
division of this Indenture into Articles and Sections, the provision of a Table
of Contents and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of this Indenture or of
the Warrants. 

Section
1.4          Day not
a Business Day. 

             If
any day on or before which any action or notice is required to be taken or given
hereunder is not a Business Day, then such action or notice shall be required to
be taken or given on or before the requisite time on the next succeeding day
that is a Business Day. 

Section
1.5          Time of
the Essence. 

             Time
shall be of the essence of this Indenture. 

Section
1.6          Monetary
References. 

             Whenever
any amounts of money are referred to herein, such amounts shall be deemed to be
in lawful money of Canada unless otherwise expressed. 

- 6 - 

Section
1.7         
Applicable Legislation. 

             This
Indenture, the Warrants, the Warrant Certificates (including all documents
relating thereto, which by common accord have been and will be drafted in
English) shall be construed in accordance with the laws of the Province of
British Columbia and the federal laws applicable therein and shall be treated in
all respects as British Columbia contracts. Each of the parties hereto, which
shall include the Warrantholders, irrevocably attorns to the exclusive
jurisdiction of the courts of the Province of British Columbia with respect to
all matters arising out of this Indenture and the transactions contemplated
herein. 

ARTICLE 2 

  ISSUE OF WARRANTS 

Section
2.1          Creation
and Issue of Warrants. 

             A
maximum of 60,000,000 Warrants are hereby created and authorized to be issued in
accordance with the terms and conditions hereof. By written order of the
Corporation, the Warrant Agent shall issue, Authenticate and deliver Warrant
Certificates to Registered Warrantholders and record the name of the Registered
Warrantholders on the Warrant register. Registration of interests in Warrants
held by the Depository may be evidenced by a position appearing on the register
for Warrants of the Warrant Agent for an amount representing the aggregate
number of such Warrants outstanding from time to time. 

Section
2.2          Terms of
Warrants. 

	(1) 	
      Subject to the applicable conditions for exercise set out
      in Article 3 having been satisfied and subject to adjustment in accordance
      with Section 4.1, each Warrant shall entitle each Warrantholder thereof,
      upon exercise at any time after the Issue Date and prior to the Expiry
      Time, to acquire one (1) Common Share upon payment of the Exercise
      Price.

	 	 
	(2) 	
      No fractional Warrants shall be issued or otherwise
      provided for hereunder and Warrants may only be exercised in a sufficient
      number to acquire whole numbers of Common Shares. If the number of
      Warrants to which a Warrantholder would otherwise be entitled is not a
      whole number, then the number of Warrants to be issued to such
      Warrantholder shall be rounded up to the next whole number and the
      Warrantholder shall not be entitled to any compensation in respect of such
      fractional Warrant.

	 	 
	(3) 	
      Each Warrant shall entitle the holder thereof to such
      other rights and privileges as are set forth in this Indenture.

	 	 
	(4) 	
      The number of Common Shares which may be purchased
      pursuant to the Warrants and the Exercise Price therefor shall be adjusted
      upon the events and in the manner specified in Section
  4.1.

- 7 -

	(5) 	
      Subject to Section 2.11 hereof, the number of Warrants
      represented by any Warrant Certificate or any Warrant Certificates may be
      split, combined or exchanged for a Warrant Certificate or Warrant
      Certificates representing the same number of Warrants in the
    aggregate.

	 	 
	(6) 	
      The Corporation shall issue Common Shares upon the
      exercise of Warrants in accordance with the provisions
  hereof.

Section 2.3        
Warrantholder not a Shareholder.

             Except
as may be specifically provided herein, nothing in this Indenture or in the
holding of a Warrant Certificate, entitlement to a Warrant or otherwise, shall,
in itself, confer or be construed as conferring upon a Warrantholder any right
or interest whatsoever as a Shareholder of the Corporation, including, but not
limited to, the right to vote at, to receive notice of, or to attend, meetings
of Shareholders or any other proceedings of the Corporation, or the right to
Dividends and other allocations. 

Section 2.4        
Warrants to Rank Pari Passu.

             All
Warrants shall rank equally and without preference over each other, whatever may
be the actual date of issue thereof. 

Section
2.5          Form of
Warrants, Certificated Warrants. 

             The
Warrants may be issued in both certificated and uncertificated form. All
Warrants issued in certificated form shall be evidenced by the Warrant
Certificates (including all replacements issued in accordance with this
Indenture), substantially in the form set out in Schedule “A” hereto, which
shall be dated as of the Issue Date, shall bear such distinguishing letters and
numbers as the Corporation may, with the approval of the Warrant Agent,
prescribe, and shall be issuable in any denomination excluding fractions. All
Warrants issued to the Depository may be in either a certificated or
uncertificated form, such uncertificated form being evidenced by a book position
on the register of Warrantholders to be maintained by the Warrant Agent in
accordance with Section 2.6. 

Section 2.6        
Book Entry Only Warrants.

	(1) 	
      Registration of beneficial interests in and transfers of
      Warrants held by the Depository shall be made only through the book entry
      registration system and no Warrant Certificates shall be issued in respect
      of such Warrants except where physical certificates evidencing ownership
      in such securities are required or as set out herein or as may be
      requested by the Depository, as determined by the Corporation, from time
      to time. Except as provided in this Section 2.6 and as required pursuant
      to Section 3.2(3), owners of beneficial interests in any CDS Global
      Warrants shall not be entitled to have Warrants registered in their names
      and shall not receive or be entitled to receive Warrants in definitive
      form or to have their names appear in the register referred to in Section
      2.9 herein.

- 8 -

	(2) 	
      Notwithstanding any other provision in this Indenture, no
      CDS Global Warrants may be exchanged in whole or in part for Warrants
      registered, and no transfer of any CDS Global Warrants in whole or in part
      may be registered, in the name of any Person other than the Depository for
      such CDS Global Warrants or a nominee thereof unless:

	 	 	 
		(a) 	
      the Depository notifies the Corporation that it is
      unwilling or unable to continue to act as depository in connection with
      the Book Entry Only Warrants and the Corporation is unable to locate a
      qualified successor;

	 	 	 
		(b) 	
      the Corporation determines that the Depository is no
      longer willing, able or qualified to discharge properly its
      responsibilities as holder of the CDS Global Warrants and the Corporation
      is unable to locate a qualified successor;

	 	 	 
		(c) 	
      the Depository ceases to be a clearing agency or
      otherwise ceases to be eligible to be a depository and the Corporation is
      unable to locate a qualified successor;

	 	 	 
		(d) 	
      the Corporation determines that the Warrants shall no
      longer be held as Book Entry Only Warrants through the
  Depository;

	 	 	 
		(e) 	
      Required pursuant to Section 3.2(3);

	 	 	 
		(f) 	
      such right is required by Applicable Legislation, as
      determined by the Corporation and the Corporation’s Counsel; or

	 	 	 
		(g) 	
      the Warrant is to be Authenticated to or for the account
      or benefit of a Person in the United States or a U.S. Person;

	 	 	 
		
      following which Warrants for those holders requesting the
      same shall be issued to the beneficial owners of such Warrants or their
      nominees as directed by the Depository. The Corporation shall provide a
      certificate of the Corporation giving notice to the Warrant Agent of the
      occurrence of any event outlined in this Section 2.6(2).

	 	 	 
	(3) 	
      Subject to the provisions of this Section 2.6, any
      exchange of CDS Global Warrants for Warrants which are not CDS Global
      Warrants may be made in whole or in part in accordance with the provisions
      of Section 2.11, mutatis mutandis. All such Warrants issued in exchange
      for a CDS Global Warrant or any portion thereof shall be registered in
      such names as the Depository for such CDS Global Warrants shall direct and
      shall be entitled to the same benefits and subject to the same terms and
      conditions (except insofar as they relate specifically to CDS Global
      Warrants) as the CDS Global Warrants or portion thereof surrendered upon
      such exchange.

	 	 	 
	(4) 	
      Every Warrant Authenticated upon registration of transfer
      of a CDS Global Warrant, or in exchange for or in lieu of a CDS Global
      Warrant or any portion thereof, whether pursuant to this Section 2.6, or
      otherwise, shall be Authenticated in the form of, and shall be, a CDS
      Global Warrant, unless such Warrant is registered in the name of a person
      other than the Depository for such CDS Global Warrant or a nominee
      thereof.

- 9 -

	(5) 	
      Notwithstanding anything to the contrary in this
      Indenture, subject to Applicable Legislation, the CDS Global Warrant will
      be issued as an Uncertificated Warrant, unless otherwise requested in
      writing by the Depositary or the Corporation.

	 	 	 
	(6) 	
      The rights of beneficial owners of Warrants who hold
      securities entitlements in respect of the Warrants through the book entry
      registration system shall be limited to those established by applicable
      law and agreements between the Depository and the Book Entry Only
      Participants and between such Book Entry Only Participants and the
      beneficial owners of Warrants who hold securities entitlements in respect
      of the Warrants through the book entry registration system, and such
      rights must be exercised through a Book Entry Only Participant in
      accordance with the rules and procedures of the Depository.

	 	 	 
	(7) 	
      Notwithstanding anything herein to the contrary, neither
      the Corporation nor the Warrant Agent nor any agent thereof shall have any
      responsibility or liability for:

	 	 	 
		(a) 	
      the electronic records maintained by the Depository
      relating to any ownership interests or any other interests in the Warrants
      or the depository system maintained by the Depository, or payments made on
      account of any ownership interest or any other interest of any person in
      any Warrant represented by an electronic position in the book entry
      registration system (other than the Depository or its nominee);

	 	 	 
		(b) 	
      for maintaining, supervising or reviewing any records of
      the Depository or any Book Entry Only Participant relating to any such
      interest; or

	 	 	 
		(c) 	
      any advice or representation made or given by the
      Depository or those contained herein that relate to the rules and
      regulations of the Depository or any action to be taken by the Depository
      on its own direction or at the direction of any Book Entry Only
      Participant.

	 	 	 
	(8) 	
      The Corporation may terminate the application of this
      Section 2.6 in its sole discretion upon written notice to the Warrant
      Agent in which case all Warrants shall be evidenced by Warrant
      Certificates registered in the name of a Person other than the
      Depository.

Section 2.7        
Warrant Certificate.

	(1) 	
      For Warrants issued in certificated form, the form of
      certificate representing Warrants shall be substantially as set out in
      Schedule “A” hereto or such other form as is authorized from time to time
      by the Warrant Agent. Each Warrant Certificate shall be Authenticated
      manually on behalf of the Warrant Agent. Each Warrant Certificate shall be
      signed by any two duly authorized signatories of the Corporation; whose
      signature shall appear on the Warrant Certificate and may be printed,
      lithographed or otherwise mechanically reproduced thereon and, in such
      event, certificates so signed are as valid and binding upon the
      Corporation as if it had been signed manually. Any Warrant Certificate
      which has two signatures as hereinbefore provided shall be valid
      notwithstanding that one or more of the persons whose signature is
      printed,

- 10 -

lithographed or mechanically reproduced
no longer holds office at the date of issuance of such certificate. The Warrant
Certificates may be engraved, printed or lithographed, or partly in one form and
partly in another, as the Warrant Agent may determine. 

	(2) 	
      The Warrant Agent shall upon the written order of the
      Corporation, Authenticate Warrants and will reflect them on the register
      of Warrants and the Corporation shall, and hereby acknowledges that it
      shall, thereupon be deemed to have duly and validly issued such Warrants
      under this Indenture. Such Authentication shall be conclusive evidence
      that such Warrants have been duly issued hereunder and that the holder or
      holders are entitled to the benefits of this Indenture. The register shall
      be final and conclusive evidence as to all matters relating to Warrants
      with respect to which this Indenture requires the Warrant Agent to
      maintain records or accounts.

	 	 
	(3) 	
      Any Warrant Certificate or Uncertificated Warrant validly
      issued in accordance with the terms of this Indenture in effect at the
      time of issue of such Warrant Certificate or Uncertificated Warrant shall,
      subject to the terms of this Indenture and Applicable Legislation, validly
      entitle the holder to acquire Common Shares, notwithstanding that the form
      of such Warrant Certificate may not be in the form currently required by
      this Indenture.

	 	 
	(4) 	
      No Warrant shall be considered issued and shall be valid
      or obligatory or shall entitle the holder thereof to the benefits of this
      Indenture, until it has been Authenticated by the Warrant Agent.
      Authentication by the Warrant Agent shall not be construed as a
      representation or warranty by the Warrant Agent as to the validity of this
      Indenture or of such Warrant Certificates or Uncertificated Warrants
      (except the due Authentication thereof) or as to the performance by the
      Corporation of its obligations under this Indenture and the Warrant Agent
      shall in no respect be liable or answerable for the use made of the
      Warrants or any of them or of the consideration thereof. Authentication by
      the Warrant Agent shall be conclusive evidence as against the Corporation
      that the Warrants so Authenticated have been duly issued hereunder and
      that the holder thereof is entitled to the benefits of this
    Indenture.

Section 2.8        
Legends.

	(1) 	
      Neither the Warrants nor the Common Shares issuable upon
      exercise of the Warrants have been or will be registered under any United
      States state securities laws. Each Warrant Certificate shall bear or be
      deemed to bear the following legends or such substantially similar
      variations thereof as the Corporation may prescribe from time to
    time:

“THE SECURITIES REPRESENTED HEREBY AND
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
THESE SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT THESE
SECURITIES MAY BE OFFERED,

- 11 - 

SOLD, PLEDGED OR OTHERWISE
TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY”
IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. 

THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS WARRANT MAY NOT BE
EXERCISED IN THE UNITED STATES OR BY OR FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON OR ANY OTHER PERSON WITHIN THE UNITED STATES. “UNITED STATES” AND “U.S.
PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.” 

		
      The Warrant Agent and the Corporation, acting reasonably,
      shall be entitled to request any other documents that they may require for
      the removal of the legend set forth above.

	 	 
	(2) 	
      Each CDS Global Warrant originally issued in Canada and
      held by the Depository, and each such CDS Global Warrant issued in
      exchange therefor or in substitution thereof shall bear or be deemed to
      bear the following legend or such substantially similar variations thereof
      as the Corporation may prescribe from time to
time:

“UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC.
(“CDS”) TO MANAS PETROLEUM CORPORATION (THE “ISSUER”) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN
RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS (AND ANY PAYMENT IS MADE TO CDS
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF,
CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO
HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE.” 

	(3) 	
      Notwithstanding any other provisions of this Indenture,
      in processing and registering transfers of Warrants, no duty or
      responsibility whatsoever shall rest upon the Warrant Agent to determine
      the compliance by any transferor or transferee with the terms of the
      legend contained in subsections 2.8(1) or 2.8(2), or with the relevant
      securities laws or regulations and the Warrant Agent shall be entitled to
      assume that

- 12 - 

all transfers made pursuant to the
terms and conditions of this Indenture are legal and proper. 

Section
2.9          Register
of Warrants 

	(1) 	
      The Warrant Agent shall maintain records and accounts
      concerning the Warrants, whether certificated and uncertificated, which
      shall contain the information called for below with respect to each
      Warrant, together with such other information as may be required by law or
      as the Warrant Agent may elect to record. All such information shall be
      kept in one set of accounts and records which the Warrant Agent shall
      designate (in such manner as shall permit it to be so identified as such
      by an unaffiliated party) as the register of the holders of Warrants. The
      information to be entered for each account in the register of Warrants at
      any time shall include (without limitation):

	 	 	 
		(a) 	
      the name and address of the holder of the Warrants, the
      date of Authentication thereof and the number Warrants;

	 	 	 
		(b) 	
      whether such Warrant is a Certificated Warrant or an
      Uncertificated Warrant and, if a Warrant Certificate, the unique number or
      code assigned to and imprinted thereupon and, if an Uncertificated
      Warrant, the unique number or code assigned thereto if any;

	 	 	 
		(c) 	
      whether such Warrant has been cancelled; and

	 	 	 
		(d) 	
      a register of transfers in which all transfers of
      Warrants and the date and other particulars of each transfer shall be
      entered.

	 	 	 
		
      The register shall be available for inspection by the
      Corporation and or any Warrantholder during the Warrant Agent’s regular
      business hours on a Business Day and upon payment to the Warrant Agent of
      its reasonable fees. Any Warrantholder exercising such right of inspection
      shall first provide an affidavit in form satisfactory to the Corporation
      and the Warrant Agent stating the name and address of the Warrantholder
      and agreeing not to use the information therein except in connection with
      an effort to call a meeting of Warrantholders or to influence the voting
      of Warrantholders at any meeting of Warrantholders.

	 	 	 
	(2) 	
      The Warrant Agent shall place a prominent notation in the
      warrant register in accordance with Section 2.8.

Section 2.10      
 Issue in Substitution for Warrant Certificates Lost,
etc.

	(1) 	
      If any Warrant Certificate becomes mutilated or is lost,
      destroyed or stolen, the Corporation, subject to Applicable Legislation,
      shall issue and thereupon the Warrant Agent shall certify and deliver a
      new Warrant Certificate of like tenor and of like date and bearing the
      same legend, if applicable, as the one mutilated, lost, destroyed or
      stolen in exchange for and in place of and upon cancellation of such
      mutilated Warrant Certificate, or in lieu of and in substitution for such
      lost, destroyed or stolen

- 13 -

Warrant Certificate, and the
substituted Warrant Certificate shall be in a form approved by the Warrant Agent
and the Warrants evidenced thereby shall be entitled to the benefits hereof and
shall rank equally in accordance with its terms with all other Warrants issued
or to be issued hereunder. 

	(2) 	
      The applicant for the issue of a new Warrant Certificate
      pursuant to this Section 2.10 shall bear the cost of the issue thereof and
      in case of loss, destruction or theft shall, as a condition precedent to
      the issuance thereof, furnish to the Corporation and to the Warrant Agent
      such evidence of ownership and of the loss, destruction or theft of the
      Warrant Certificate so lost, destroyed or stolen as shall be satisfactory
      to the Corporation and to the Warrant Agent, in their discretion, acting
      reasonably, and such applicant may also be required to furnish an
      indemnity and surety bond in amount and form satisfactory to the
      Corporation and the Warrant Agent, in their discretion, acting reasonably,
      and shall pay the reasonable charges of the Corporation and the Warrant
      Agent in connection therewith.

	 	 
	(3) 	
      The Corporation shall cause the Warrant Agent to place a
      prominent notation in the warrant register in accordance with Section
      2.8(1).

Section 2.11      
Exchange of Warrant Certificates.

	(1) 	
      Any one or more Warrant Certificates representing any
      number of Warrants may, upon compliance with the reasonable requirements
      of the Warrant Agent (including compliance with applicable securities
      legislation), be exchanged for one or more other Warrant Certificates
      representing the same aggregate number of Warrants, and bearing the same
      legend, if applicable, as represented by the Warrant Certificate or
      Warrant Certificates so exchanged.

	 	 
	(2) 	
      Warrant Certificates may be exchanged only at the Warrant
      Agency or at any other place that is designated by the Corporation with
      the approval of the Warrant Agent. Any Warrant Certificate from the holder
      (or such other instructions, in form satisfactory to the Warrant Agent),
      tendered for exchange shall be cancelled and surrendered by the Warrant
      Agency to the Warrant Agent and the Warrant Agent shall certify all
      Warrant Certificates necessary to carry out such
  exchanges.

Section 2.12      
Transfer and Ownership of Warrants.

	(1) 	
      The Warrants may only be transferred on the register kept
      by the Warrant Agent at the Warrant Agency by the holder or its legal
      representatives or its attorney duly appointed by an instrument in writing
      in form and execution satisfactory to the Warrant Agent only upon (a) in
      the case of a Warrant Certificate, surrendering to the Warrant Agent at
      the Warrant Agency the Warrant Certificates representing the Warrants to
      be transferred together with a duly executed transfer form as set forth in
      Schedule A, (b) in the case of Book Entry Only Warrants, in accordance
      with procedures prescribed by the Depository under the book entry
      registration system, and (c) upon compliance
with:

- 14 -

	 	(i) 	
      the conditions herein;

	 	 	 
	 	(ii) 	
      such reasonable requirements as the Warrant Agent may
      prescribe; and

	 	 	 
	 	(iii) 	
      all applicable securities legislation and requirements of
      regulatory authorities;

		
      and such transfer shall be duly noted in such register by
      the Warrant Agent. Upon compliance with such requirements, the Warrant
      Agent shall issue to the transferee of a Certificated Warrant, a Warrant
      Certificate. Any Warrant Certificate shall continue to bear the legends
      prescribed in Section 2.8.

	 	 
	(2) 	
      The Warrant Agent understands and acknowledges that the
      Warrants and the Common Shares issuable upon the exercise of the Warrants
      have not been and will not be registered under any state securities laws
      of the United States; provided, however, that such understanding and
      acknowledgement shall not detract from or in any way lessen or diminish
      the obligations of the Warrantholders, and the transferors and transferees
      of Warrants, to comply with all Applicable Legislation including
      applicable state securities laws of the United States with respect to the
      sale, transfer, disposition, purchase or acquisition of the Warrants or
      the Common Shares issuable upon exercise of a Warrant.

	 	 
	(3) 	
      Subject to the provisions of this Indenture and
      Applicable Legislation, the Warrantholder shall be entitled to the rights
      and privileges attaching to the Warrants, and the issue of Common Shares
      by the Corporation upon the exercise of Warrants in accordance with the
      terms and conditions herein contained shall discharge all responsibilities
      of the Corporation and the Warrant Agent with respect to such Warrants and
      neither the Corporation nor the Warrant Agent shall be bound to inquire
      into the title of any such holder.

Section 2.13      
Cancellation of Surrendered Warrants.

             All
Warrant Certificates surrendered pursuant to Section 2.11, Section 2.12, Section
3.1, Section 3.2(1) or Section 3.3 shall be cancelled by the Warrant Agent and
upon such circumstances all such Uncertificated Warrants shall be deemed
cancelled and so noted on the register by the Warrant Agent. Upon request by the
Corporation, the Warrant Agent shall furnish to the Corporation a cancellation
certificate identifying the Warrant Certificates so cancelled, the number of
Warrants evidenced thereby, and the details of any Warrant Certificates issued
in substitution or exchange for such Warrant Certificates cancelled. 

ARTICLE 3 

  EXERCISE OF WARRANTS

Section 3.1        
Right of Exercise.

             Subject
to the provisions hereof, only Warrantholders that are not U.S. Warrantholders
may exercise the right conferred on such holder to subscribe for and

- 15 - 

purchase one (1) Common Share for each Warrant after the Issue
Date and prior to the Expiry Time and in accordance with the conditions herein.

Section
3.2          Warrant
Exercise. 

	(1) 	
      Subject to Section 3.1, Registered Warrantholders of
      Warrant Certificates who wish to exercise the Warrants held by them in
      order to acquire Common Shares must complete the exercise form (the
      “Exercise Notice”) attached to the Warrant Certificate(s) which
      form is attached hereto as Schedule “B”, which may be amended by the
      Corporation with the consent of the Warrant Agent, if such amendment does
      not, in the reasonable opinion of the Corporation and the Warrant Agent,
      which may be based on the advice of Counsel, materially and adversely
      affect the rights, entitlements and interests of the Warrantholders, and
      deliver such certificate(s), the executed Exercise Notice and a certified
      cheque, bank draft or money order payable to or to the order of the
      Corporation in an amount equal to the product obtained by multiplying the
      number of Common Shares subscribed for pursuant to such Warrants by the
      Exercise Price to the Warrant Agent at the Warrant Agency. The Warrants
      represented by a Warrant Certificate shall be deemed to be surrendered
      upon personal delivery of such certificate, Exercise Notice and Exercise
      Price or, if such documents are sent by mail or other means of
      transmission, upon actual receipt thereof by the Warrant Agent at the
      office referred to above.

	 	 
	(2) 	
      The Warrants and the Common Shares issuable upon exercise
      thereof have not been registered under the securities laws of any state or
      territory of the United States, and the Warrants may not be exercised by
      any U.S. Warrantholder. No exercise of any Warrants shall be effective,
      and no certificate representing Common Shares shall be issued or
      registered pursuant to the exercise of Warrants, unless the Warrantholder
      certifies that: (i) it is not a U.S. Warrantholder; (ii) at the time of
      exercise of the Warrants it is not exercising the Warrants for the account
      or benefit of a person in the United States or a U.S. Person; (iii) it did
      not execute or deliver the exercise form for the Warrants in the United
      States; and (iv) delivery of the Common Shares to be issued upon exercise
      of the Warrants is not to an address in the United States. No certificates
      representing Common Shares will be registered to or for the account or
      benefit of a person in the United States or a U.S. Person or delivered to
      an address in the United States unless the holder of Warrants complies
      with the requirements set forth in this Section 3.2(2).

	 	 
	(3) 	
      A beneficial holder of Uncertificated Warrants evidenced
      by a security entitlement in respect of Warrants in the book entry
      registration system who desires to exercise his or her Warrants must do so
      by becoming a Registered Warrantholder and following the provisions set
      out in Section 3.2(1) above.

	 	 
	(4) 	
      Any exercise form or Exercise Notice referred to in this
      Section 3.2 shall be signed by the Registered Warrantholder, or its
      executors or administrators or other legal representatives or an attorney
      of the Registered Warrantholder, duly appointed by an instrument in
      writing satisfactory to the Warrant Agent but such exercise form need not
      be executed by the Depository.

- 16 -

	(5) 	
      Any exercise referred to in this Section 3.2 shall
      require that the entire Exercise Price for Common Shares subscribed for
      must be paid at the time of subscription and such Exercise Price and
      original Exercise Notice executed by the Registered Warrantholder must be
      received by the Warrant Agent prior to the Expiry Time.

	 	 
	(6) 	
      Notwithstanding the foregoing in this Section 3.2,
      Warrants may only be exercised pursuant to this Section 3.2 by or on
      behalf of a Registered Warrantholder who makes the certifications set
      forth on the Exercise Notice set out in Schedule B.

	 	 
	(7) 	
      If the form of Exercise Notice set forth in the Warrant
      Certificate shall have been amended, the Corporation shall cause the
      amended Exercise Notice to be forwarded to all Registered
      Warrantholders.

	 	 
	(8) 	
      Exercise Notices must be delivered to the Warrant Agent
      at any time during the Warrant Agent’s actual business hours on or prior
      to any Business Day prior to the Expiry Time. Any Exercise Notice received
      by the Warrant Agent after business hours on any Business Day other than
      the Expiry Date will be deemed to have been received by the Warrant Agent
      on the next following Business Day.

Section 3.3        
Transfer Fees and Taxes.

             If
any of the Common Shares subscribed for are to be issued to a person or persons
other than the Registered Warrantholder, the Registered Warrantholder shall
execute the form of transfer and will comply with such reasonable requirements
as the Warrant Agent may stipulate and will pay to the Corporation or the
Warrant Agent on behalf of the Corporation, all applicable transfer or similar
taxes and the Corporation will not be required to issue or deliver certificates
evidencing Common Shares unless or until such Warrantholder shall have paid to
the Corporation or the Warrant Agent on behalf of the Corporation, the amount of
such tax or shall have established to the satisfaction of the Corporation and
the Warrant Agent that such tax has been paid or that no tax is due. 

Section 3.4        
Warrant Agency.

             To
facilitate the exchange, transfer or exercise of Warrants and compliance with
such other terms and conditions hereof as may be required, the Corporation has
appointed the Warrant Agency, as the agency at which Warrants may be surrendered
for exchange or transfer or at which Warrants may be exercised and the Warrant
Agent has accepted such appointment. The Corporation may from time to time
designate alternate or additional places as the Warrant Agency (subject to the
Warrant Agent’s prior approval) and will give notice to the Warrant Agent of any
proposed change of the Warrant Agency. Branch registers shall also be kept at
such other place or places, if any, as the Corporation, with the approval of the
Warrant Agent, may designate. The Warrant Agent will from time to time when
requested to do so by the Corporation or any Registered Warrantholder, upon
payment of the Warrant Agent’s reasonable charges, furnish a list of the names
and addresses of Registered Warrantholders showing the number of Warrants held
by each such Registered Warrantholder. 

- 17 - 

Section
3.5          Effect
of Exercise of Warrant Certificates.

	(1) 	
      Upon the exercise of Warrants pursuant to and in
      compliance with Section 3.2 and subject to Section 3.3, the Common Shares
      to be issued pursuant to the Warrants exercised shall be deemed to have
      been issued and the person or persons to whom such Common Shares are to be
      issued shall be deemed to have become the holder or holders of record of
      such Common Shares on the Exercise Date unless the transfer registers of
      the Corporation shall be closed on such date, in which case the Common
      Shares subscribed for shall be deemed to have been issued and such person
      or persons deemed to have become the holder or holders of record of such
      Common Shares, on the date on which such transfer registers are reopened
      but such Common Shares shall be issued at the Exercise Price in effect on
      the Exercise Date.

	 	 
	(2) 	
      As soon as practicable, and in any event no later than
      within the fifth Business Day after the Exercise Date with respect to a
      Warrant, the Corporation shall cause to be delivered or mailed to the
      person or persons in whose name or names the Warrant is registered or, if
      so specified in writing by the holder, cause to be delivered to such
      person or persons at the Warrant Agency where the Warrant Certificate was
      surrendered, a certificate or certificates for the appropriate number of
      Common Shares subscribed for.

Section 3.6        
Partial Exercise of Warrants; Fractions.

	(1) 	
      The holder of any Warrants may exercise his right to
      acquire a number of whole Common Shares less than the aggregate number of
      Warrants which the holder is entitled to acquire. In the event of any
      exercise of a number of Warrants less than the aggregate number which the
      holder is entitled to exercise, the holder of Warrants upon such exercise
      shall, in addition, be entitled to receive, without charge therefor, a new
      Warrant Certificate(s), bearing the same legend, if applicable, or other
      appropriate evidence of Warrants, in respect of the balance of the
      Warrants held by such holder and which were not then exercised.

	 	 
	(2) 	
      Notwithstanding anything herein contained including any
      adjustment provided for in Section 4.1, the Corporation shall not be
      required, upon the exercise of any Warrants, to issue fractions of Common
      Shares. Warrants may only be exercised in a sufficient number to acquire
      whole numbers of Common Shares. If the number of Common Shares to which a
      Warrantholder would otherwise be entitled upon exercise of a Warrant is
      not a whole number, then the number of Common Shares to be issued shall be
      rounded up to the next whole number and the holder of such Warrant shall
      not be entitled to any compensation in respect of any fractional Common
      Share.

Section 3.7        
Expiration of Warrants.

             Immediately
after the Expiry Time, all rights under any Warrant in respect of which the
right of acquisition provided for herein shall not have been exercised shall
cease and terminate and each Warrant shall be void and of no further force or
effect. 

- 18 -

Section
3.8         
Accounting and Recording. 

	(1) 	
      The Warrant Agent shall promptly account to the
      Corporation with respect to Warrants exercised. Any securities or other
      instruments, from time to time received by the Warrant Agent shall be
      received in trust for, and shall be segregated and kept apart by the
      Warrant Agent, the Warrantholders and the Corporation as their interests
      may appear.

	 	 
	(2) 	
      The Warrant Agent shall record the particulars of
      Warrants exercised, which particulars shall include the names and
      addresses of the persons who become holders of Common Shares on exercise
      and the Exercise Date, in respect thereof. The Warrant Agent shall provide
      such particulars in writing to the Corporation within five Business Days
      of any request by the Corporation therefore.

Section 3.9        
Securities Restrictions.

             Notwithstanding
anything herein contained, Common Shares will be issued upon the exercise of a
Warrant only in compliance with the securities laws of any applicable
jurisdiction, including without limitation the United States, its commonwealths,
territories and possessions, the states of the United States and the District of
Columbia. 

ARTICLE 4 
ADJUSTMENT OF NUMBER OF COMMON
SHARES AND EXERCISE PRICE 

Section
4.1         
Adjustment of Number of Common Shares and Exercise Price. 

             The
subscription rights in effect under the Warrants for Common Shares issuable upon
the exercise of the Warrants shall be subject to adjustment from time to time as
follows:

	(a) 	
      if, at any time during the Adjustment Period, the
      Corporation shall:

	 	 	 
		(i) 	
      subdivide, re-divide or change its outstanding Common
      Shares into a greater number of Common Shares;

	 	 	 
		(ii) 	
      reduce, combine or consolidate its outstanding Common
      Shares into a smaller number of Common Shares;

	 	 	 
		(iii) 	
      issue Common Shares or securities exchangeable for, or
      convertible into, Common Shares to all or substantially all of the holders
      of Common Shares by way of distribution (other than a distribution of
      Common Shares upon the exercise of Warrants);

	 	 	 
		
      the Exercise Price in effect on the effective date of
      such subdivision, re-division, change, reduction, combination,
      consolidation or on the record date of such distribution, as the case may
      be, shall in the case of the events referred to in (i) or (iii) above be
      decreased in proportion to the number of outstanding Common
  Shares

- 19 -

		
      resulting from such subdivision, re-division, change or
      distribution, or shall, in the case of the events referred to in (ii)
      above, be increased in proportion to the number of outstanding Common
      Shares resulting from such reduction, combination or consolidation. Such
      adjustment shall be made successively whenever any event referred to in
      this Section 4.1(a) shall occur. Upon any adjustment of the Exercise Price
      pursuant to Section 4.1(a), the Exchange Rate shall be contemporaneously
      adjusted by multiplying the number of Common Shares theretofore obtainable
      on the exercise thereof by a fraction of which the numerator shall be the
      Exercise Price in effect immediately prior to such adjustment and the
      denominator shall be the Exercise Price resulting from such
    adjustment;

	 	 
	(b) 	
      if and whenever at any time during the Adjustment Period,
      the Corporation shall fix a record date for the issuance of rights,
      options or warrants to all or substantially all the holders of its
      outstanding Common Shares entitling them, for a period expiring not more
      than 45 days after such record date, to subscribe for or purchase Common
      Shares (or securities convertible or exchangeable into Common Shares) at a
      price per Common Share (or having a conversion or exchange price per
      Common Share) less than 95% of the Current Market Price on such record
      date (a “Rights Offering”), the Exercise Price shall be adjusted
      immediately after such record date so that it shall equal the amount
      determined by multiplying the Exercise Price in effect on such record date
      by a fraction, of which the numerator shall be the total number of Common
      Shares outstanding on such record date plus a number of Common Shares
      equal to the number arrived at by dividing 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) by such Current Market Price, and
      of which the denominator shall be the total number of Common Shares
      outstanding on such record date plus the total number of additional Common
      Shares offered for subscription or purchase or into which the convertible
      or exchangeable securities so offered are convertible or exchangeable; 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 computation; such
      adjustment shall be made successively whenever such a record date is
      fixed; to the extent that no such rights or warrants are exercised prior
      to the expiration thereof, the Exercise Price shall be readjusted to the
      Exercise Price which would then be in effect if such record date had not
      been fixed or, if any such rights or warrants are exercised, to the
      Exercise Price which would then be in effect based upon the number of
      Common Shares (or securities convertible or exchangeable into Common
      Shares) actually issued upon the exercise of such rights or warrants, as
      the case may be. Such adjustment will be made successively whenever such a
      record date is fixed, provided that if two or more such record dates or
      record dates referred to in this Section 4.1(b) are fixed within a period
      of 25 Trading Days, such adjustment will be made successively as if each
      of such record dates occurred on the earliest of such record
  dates;

	 	 
	(c) 	
      if and whenever at any time during the Adjustment Period
      the Corporation shall fix a record date for the making of a distribution
      to all or substantially all the holders of its outstanding Common Shares
      of (i) securities of any class, whether of the
  Corporation

- 20 -

		
      or any other trust (other than Common Shares), (ii)
      rights, options or warrants to subscribe for or purchase Common Shares (or
      other securities convertible into or exchangeable for Common Shares),
      other than pursuant to a Rights Offering; (iii) evidences of its
      indebtedness or (iv) any property or other assets then, in each such case,
      the Exercise Price shall be adjusted immediately after such record date so
      that it shall equal the price determined by multiplying the Exercise Price
      in effect on such record date by a fraction, of which the numerator shall
      be the total number of Common Shares outstanding on such record date
      multiplied by the Current Market Price on such record date, less the
      excess, if any, of the fair market value on such record date, as
      determined by the Corporation (whose determination shall be conclusive)
      and subject to the acceptance of the TSX Venture Exchange, of such
      securities or other assets so issued or distributed over the fair market
      value (subject to the acceptance of the TSX Venture Exchange) of any
      consideration received therefor by the Corporation from the holders of the
      Common Shares, and of which the denominator shall be the total number of
      Common Shares outstanding on such record date multiplied by such Current
      Market Price; and 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 computation; such adjustment shall be made successively whenever such
      a record date is fixed; to the extent that such distribution is not so
      made, the Exercise Price shall be readjusted to the Exercise Price which
      would then be in effect if such record date had not been fixed. Upon any
      adjustment of the Exercise Price pursuant to this Section 4.1(c), the
      Exchange Rate will be adjusted immediately after such record date so that
      it will equal the rate determined by multiplying the Exchange Rate in
      effect on such record date by a fraction, of which the numerator shall be
      the Exercise Price in effect immediately prior to such adjustment and the
      denominator shall be the Exercise Price resulting from such
    adjustment;

	 	 
	(d) 	
      if and whenever at any time during the Adjustment Period,
      there is a reclassification or redesignation of the Common Shares or a
      capital reorganization of the Corporation other than as described in
      Section 4.1(a) or a consolidation, amalgamation, arrangement or merger of
      the Corporation with or into any other body corporate, trust, partnership
      or other entity, or a sale or conveyance of the property and assets of the
      Corporation as an entirety or substantially as an entirety to any other
      body corporate, trust, partnership or other entity, any Registered
      Warrantholder who has not exercised its right of acquisition prior to the
      effective date of such reclassification, capital reorganization,
      consolidation, amalgamation, arrangement or merger, sale or conveyance,
      upon the exercise of such right thereafter, shall be entitled to receive
      upon payment of the Exercise Price and shall accept, in lieu of the number
      of Common Shares that prior to such effective date the Registered
      Warrantholder would have been entitled to receive, the number of shares or
      other securities or property of the Corporation or of the body corporate,
      trust, partnership or other entity resulting from such merger,
      amalgamation or consolidation, or to which such sale or conveyance may be
      made, as the case may be, that such Registered Warrantholder would have
      been entitled to receive on such reclassification, capital reorganization,
      consolidation, amalgamation, arrangement or merger, sale or conveyance,
      if, on the effective date thereof, as the case may be, the Registered
      Warrantholder had been the

- 21 -

		
      registered holder of the number of Common Shares to which
      prior to such effective date it was entitled to acquire upon the exercise
      of the Warrants. If determined appropriate by the Warrant Agent, relying
      on advice of Counsel, to give effect to or to evidence the provisions of
      this Section 4.1(d), the Corporation, its successor, or such purchasing
      body corporate, partnership, trust or other entity, as the case may be,
      shall, prior to or contemporaneously with any such reclassification,
      capital reorganization, consolidation, amalgamation, arrangement, merger,
      sale or conveyance, enter into an indenture which shall provide, to the
      extent possible, for the application of the provisions set forth in this
      Indenture with respect to the rights and interests thereafter of the
      Registered Warrantholders to the end that the provisions set forth in this
      Indenture shall thereafter correspondingly be made applicable, as nearly
      as may reasonably be, with respect to any shares, other securities or
      property to which a Registered Warrantholder is entitled on the exercise
      of its acquisition rights thereafter. Any indenture entered into between
      the Corporation and the Warrant Agent pursuant to the provisions of this
      Section 4.1(d) shall be a supplemental indenture entered into pursuant to
      the provisions of Article 8 hereof. Any indenture entered into between the
      Corporation, any successor to the Corporation or such purchasing body
      corporate, partnership, trust or other entity and the Warrant Agent shall
      provide for adjustments which shall be as nearly equivalent as may be
      practicable to the adjustments provided in this Section 4.1 and which
      shall apply to successive reclassifications, capital reorganizations,
      amalgamations, consolidations, mergers, sales or conveyances;

	 	 
	(e) 	
      in any case in which this Section 4.1 shall require that
      an adjustment shall become effective immediately after a record date for
      an event referred to herein, the Corporation may defer, until the
      occurrence of such event, issuing to the Registered Warrantholder of any
      Warrant exercised after such event the additional Common Shares issuable
      upon such conversion by reason of the adjustment required by such event
      before giving effect to such adjustment; provided, however, that the
      Corporation shall deliver to such Registered Warrantholder an appropriate
      instrument evidencing such Registered Warrantholder’s right to receive
      such additional Common Shares upon the occurrence of the event requiring
      such adjustment and the right to receive any distributions made on such
      additional Common Shares declared in favour of holders of record of Common
      Shares on and after the relevant date of exercise or such later date as
      such Registered Warrantholder would, but for the provisions of this
      Section 4.1(e), have become the holder of record of such additional Common
      Shares pursuant to Section 4.1;

	 	 
	(f) 	
      in any case in which Section 4.1(a)(iii), Section 4.1(b)
      or Section 4.1(c) require that an adjustment be made to the Exercise
      Price, no such adjustment shall be made if the Registered Warrantholders
      of the outstanding Warrants receive, subject to any required stock
      exchange or regulatory approval, the rights or warrants referred to in
      Section 4.1(a)(iii), Section 4.1(b) or the shares, rights, options,
      warrants, evidences of indebtedness or assets referred to in Section
      4.1(c), as the case may be, in such kind and number as they would have
      received if they had been holders of Common Shares on the applicable
      record date or effective date, as the case may be, by virtue of
    their

- 22 -

		
      outstanding Warrant having then been exercised into
      Common Shares at the Exercise Price in effect on the applicable record
      date or effective date, as the case may be;

	 	 
	(g) 	
      the adjustments provided for in this Section 4.1 are
      cumulative, and shall, in the case of adjustments to the Exercise Price be
      computed to the nearest whole cent and shall apply to successive
      subdivisions, re-divisions, reductions, combinations, consolidations,
      distributions, issues or other events resulting in any adjustment under
      the provisions of this Section 4.1, provided that, notwithstanding any
      other provision of this Section, no adjustment of the Exercise Price shall
      be required unless such adjustment would require an increase or decrease
      of at least 1% in the Exercise Price then in effect; provided, however,
      that any adjustments which by reason of this Section 4.1(g) are not
      required to be made shall be carried forward and taken into account in any
      subsequent adjustment; and

	 	 
	(h) 	
      after any adjustment pursuant to this Section 4.1, the
      term “Common Shares” where used in this Indenture shall be
      interpreted to mean securities of any class or classes which, as a result
      of such adjustment and all prior adjustments pursuant to this Section 4.1,
      the Registered Warrantholder is entitled to receive upon the exercise of
      his Warrant, and the number of Common Shares indicated by any exercise
      made pursuant to a Warrant shall be interpreted to mean the number of
      Common Shares or other property or securities a Registered Warrantholder
      is entitled to receive, as a result of such adjustment and all prior
      adjustments pursuant to this Section 4.1, upon the full exercise of a
      Warrant.

Section
4.2         
Entitlement to Common Shares on Exercise of Warrant. 

             All
Common Shares or shares of any class or other securities, which a Registered
Warrantholder is at the time in question entitled to receive on the exercise of
its Warrant, whether or not as a result of adjustments made pursuant to this
Article 4, shall, for the purposes of the interpretation of this Indenture, be
deemed to be Common Shares which such Registered Warrantholder is entitled to
acquire pursuant to such Warrant. 

Section
4.3          No
Adjustment for Certain Transactions. 

             Notwithstanding
anything in this Article 4, no adjustment shall be made in the acquisition
rights attached to the Warrants if the issue of Common Shares is being made
pursuant to this Indenture or in connection with (a) any share incentive plan or
restricted share plan or share purchase plan in force from time to time for
directors, officers, employees, consultants or other service providers of the
Corporation; or (b) the satisfaction of existing instruments issued at the date
hereof. 

Section 4.4        
Determination by Auditors.

             In
the event of any dispute arising with respect to the adjustments provided for in
this Article 4 such dispute shall be conclusively determined by an independent
firm of chartered accountants other than the Auditors, who shall have access to
all necessary records of the Corporation, and such determination shall be
binding upon the Corporation, the Warrant Agent, all Warrantholders and all
other persons interested therein. 

- 23 - 

Section
4.5         
Proceedings Prior to any Action Requiring Adjustment. 

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

Section
4.6         
Certificate of Adjustment. 

             The
Corporation shall from time to time immediately after the occurrence of any
event which requires an adjustment or readjustment as provided in Section 4.1,
deliver a certificate of the Corporation to the Warrant Agent specifying the
nature of the event requiring the same and the amount of the adjustment or
readjustment necessitated thereby and setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based, which
certificate shall be supported by a certificate of the Corporation’s Auditors
verifying such calculation. The Warrant Agent shall rely, and shall be protected
in so doing, upon the certificate of the Corporation or of the Corporation’s
Auditor and any other document filed by the Corporation pursuant to this Article
4 for all purposes.

Section
4.7          Notice
of Special Matters. 

             The
Corporation covenants with the Warrant Agent that, so long as any Warrant
remains outstanding, it will give notice to the Warrant Agent and to the
Registered Warrantholders of its intention to fix a record date that is prior to
the Expiry Date for any matter for which an adjustment may be required pursuant
to Section 4.1 Such notice shall specify the particulars of such event and the
record date for such event, provided that the Corporation shall only be required
to specify in the notice such particulars of the event as shall have been fixed
and determined on the date on which the notice is given. The notice shall be
given in each case not less than 14 days prior to such applicable record date.
If notice has been given and the adjustment is not then determinable, the
Corporation shall promptly, after the adjustment is determinable, file with the
Warrant Agent a computation of the adjustment and give notice to the Registered
Warrantholders of such adjustment computation.

Section
4.8          No
Action after Notice. 

             The
Corporation covenants with the Warrant Agent that it will not close its transfer
books or take any other corporate action which might deprive the Registered
Warrantholder of the opportunity to exercise its right of acquisition pursuant
thereto during the period of 14 days after the giving of the certificate or
notices set forth in Section 4.6 and Section 4.7. 

- 24 -

Section 4.9        
Other Action.

             If
the Corporation, after the date hereof, shall take any action affecting the
Common Shares other than action described in Section 4.1, which in the
reasonable opinion of the directors of the Corporation would materially affect
the rights of Registered Warrantholders, the number of Common Shares which may
be acquired upon exercise of the Warrants shall be adjusted in such manner and
at such time, by action of the directors, acting reasonably, in their sole
discretion as they may determine to be equitable in the circumstances, provided
that no such adjustment will be made unless prior approval of any stock exchange
on which the Common Shares are listed for trading has been obtained. 

Section 4.10      
Protection of Warrant Agent.

             The
  Warrant Agent shall not:

	(a) 	
      at any time be under any duty or responsibility to any
      Registered Warrantholder to determine whether any facts exist which may
      require any adjustment contemplated by Section 4.1, or with respect to the
      nature or extent of any such adjustment when made, or with respect to the
      method employed in making the same;

	 	 
	(b) 	
      be accountable with respect to the validity or value (or
      the kind or amount) of any Common Shares or of any other securities or
      property which may at any time be issued or delivered upon the exercise of
      the rights attaching to any Warrant;

	 	 
	(c) 	
      be responsible for any failure of the Corporation to
      issue, transfer or deliver Common Shares or certificates for the same upon
      the surrender of any Warrants for the purpose of the exercise of such
      rights or to comply with any of the covenants contained in this Article;
      and

	 	 
	(d) 	
      incur any liability or be in any way responsible for the
      consequences of any breach on the part of the Corporation of any of the
      representations, warranties or covenants herein contained or of any acts
      of the directors, officers, employees, agents or servants of the
      Corporation.

Section 4.11      
Other Adjustments.

             If
the Corporation after the date hereof shall take any action affecting the Common
Shares, other than an action described in this Article 4 which, in the opinion
of the directors, would have a material adverse affect on the rights of
Registered Warrantholders, the Exercise Price and/or the Exchange Rate, there
shall be an adjustment in such manner, if any, and at such time, by action of
the directors, acting reasonably and in good faith, as they may reasonably
determine to be equitable to the Registered Warrantholders in such
circumstances, provided that no such adjustment will be made unless prior
approval of any stock exchange on which the Common Shares are listed for trading
has been obtained.

- 25 -

Section 4.12      
Participation by Warrantholder.

             No
adjustments shall be made pursuant to this Article 4 if the Registered
Warrantholders are entitled to participate in any event described in this
Article 4 on the same terms, mutatis mutandis, as if the Registered
Warrantholders had exercised their Warrants prior to, or on the effective date
or record date of, such event. 

ARTICLE 5 

  RIGHTS OF THE CORPORATION AND COVENANTS

Section 5.1        
Optional Purchases by the Corporation.

             Subject
to compliance with applicable securities legislation and approval of applicable
regulatory authorities, if any, the Corporation may from time to time purchase
by private contract or otherwise any of the Warrants. Any such purchase shall be
made at the lowest price or prices at which, in the opinion of the directors,
such Warrants are then obtainable, plus reasonable costs of purchase, and may be
made in such manner, from such persons and on such other terms as the
Corporation, in its sole discretion, may determine. In the case of Certificated
Warrants, Warrant Certificates representing the Warrants purchased pursuant to
this Section 5.1 shall forthwith be delivered to and cancelled by the Warrant
Agent. In the case of Uncertificated Warrants, the Warrants purchased pursuant
to this Section 5.1 shall be reflected accordingly in accordance with procedures
prescribed by the Depository under the book entry registration system. No
Warrants shall be issued in replacement thereof. 

Section 5.2        
General Covenants.

             The
Corporation covenants with the Warrant Agent for the benefit of the Warrant
Agent and the Warrantholders that so long as any Warrants remain outstanding:

	(a) 	
      it will reserve and keep available a sufficient number of
      Common Shares for the purpose of enabling it to satisfy its obligations to
      issue Common Shares upon the exercise of the Warrants;

	 	 
	(b) 	
      it will cause the Common Shares from time to time
      acquired pursuant to the exercise of the Warrants to be duly issued and
      delivered in accordance with the Warrants and the terms hereof;

	 	 
	(c) 	
      all Common Shares which shall be issued upon exercise of
      the right to acquire provided for herein shall be fully paid and
      non-assessable;

	 	 
	(d) 	
      it will use best efforts to maintain its corporate
      existence and carry on its business in the ordinary course;

	 	 
	(e) 	
      it will use reasonable commercial efforts to ensure that
      all Common Shares outstanding or issuable from time to time (including
      without limitation the Common Shares issuable on the exercise of the
      Warrants) continue to be or are listed and

- 26 -

		
      posted for trading on the TSX Venture Exchange (or such
      other Canadian stock exchange acceptable to the Corporation), provided
      that this clause shall not be construed as limiting or restricting the
      Corporation to agree to a consolidation, amalgamation, arrangement,
      takeover bid or merger even if the consideration being offered are not
      securities that are so listed and posted for trading;

	 	 
	(f) 	
      it will make all requisite filings under applicable
      Canadian securities legislation including those necessary to remain a
      reporting issuer not in default in each of the provinces and other
      Canadian jurisdictions where it is or becomes a reporting issuer;
    and

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

Section
5.3          Warrant
Agent’s Remuneration and Expenses. 

             The
Corporation covenants that it will pay to the Warrant Agent from time to time
reasonable remuneration for its services hereunder and will pay or reimburse the
Warrant Agent upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Warrant Agent in the administration or
execution of the duties hereby created (including the reasonable compensation
and the disbursements of its Counsel and all other advisers and assistants not
regularly in its employ) both before any default hereunder and thereafter until
all duties of the Warrant Agent hereunder shall be finally and fully performed.
Any amount owing hereunder and remaining unpaid after 30 days from the invoice
date will bear interest at the then current rate charged by the Warrant Agent
against unpaid invoices and shall be payable upon demand. This Section shall
survive the resignation or removal of the Warrant Agent and/or the termination
of this Indenture. 

Section
5.4         
Performance of Covenants by Warrant Agent. 

             If
the Corporation shall fail to perform any of its covenants contained in this
Indenture, the Warrant Agent may notify the Registered Warrantholders of such
failure on the part of the Corporation or may itself perform any of the
covenants capable of being performed by it but, subject to Section 9.2, shall be
under no obligation to perform said covenants or to notify the Registered
Warrantholders of such performance by it. All sums expended or advanced by the
Warrant Agent in so doing shall be repayable as provided in Section 5.3. No such
performance, expenditure or advance by the Warrant Agent shall relieve the
Corporation of any default hereunder or of its continuing obligations under the
covenants herein contained. 

Section 5.5        
Enforceability of Warrants.

             The
Corporation covenants and agrees that it is duly authorized to create and issue
the Warrants to be issued hereunder and that the Warrants, when issued and
Authenticated as herein provided, will be valid and enforceable against the
Corporation in accordance with the provisions hereof and the terms hereof and
that, subject to the provisions of this Indenture, the Corporation will cause
the Common Shares from time to time acquired upon exercise of

- 27 -

Warrants issued under this Indenture to be duly issued and
delivered in accordance with the terms of this Indenture. 

ARTICLE 6 

  ENFORCEMENT

Section 6.1        
Suits by Registered Warrantholders.

             All
or any of the rights conferred upon any Registered Warrantholder by any of the
terms of this Indenture may be enforced by the Registered Warrantholder by
appropriate proceedings but without prejudice to the right which is hereby
conferred upon the Warrant Agent to proceed in its own name to enforce each and
all of the provisions herein contained for the benefit of the Registered
Warrantholders. 

Section 6.2        
Suits by the Corporation.

             The
Corporation shall have the right to enforce full payment of the Exercise Price
of all Common Shares issued by the Warrant Agent to a Registered Warrantholder
hereunder and shall be entitled to demand such payment from the Registered
Warrantholder or alternatively to instruct the Warrant Agent to cancel the share
certificates and amend the securities register accordingly. 

Section 6.3        
Immunity of Shareholders, etc.

             The
Warrant Agent and the Warrantholders hereby waive and release any right, cause
of action or remedy now or hereafter existing in any jurisdiction against any
incorporator or any past, present or future shareholder, trustee, employee or
agent of the Corporation or any successor Corporation on any covenant,
agreement, representation or warranty by the Corporation herein. 

Section 6.4        
Waiver of Default.

             Upon
  the happening of any default hereunder:

	(a) 	
      the Registered Warrantholders of not less than 51% of the
      Warrants then outstanding shall have power (in addition to the powers
      exercisable by Extraordinary Resolution) by requisition in writing to
      instruct the Warrant Agent to waive any default hereunder and the Warrant
      Agent shall thereupon waive the default upon such terms and conditions as
      shall be prescribed in such requisition; or

	 	 
	(b) 	
      the Warrant Agent shall have power to waive any default
      hereunder upon such terms and conditions as the Warrant Agent may deem
      advisable, on the advice of Counsel, if, in the Warrant Agent’s opinion,
      based on the advice of Counsel, the same shall have been cured or adequate
      provision made therefore;

provided that no delay or omission of the Warrant Agent or of
the Registered Warrantholders to exercise any right or power accruing upon any
default shall impair any such right or power

- 28 -

or shall be construed to be a waiver of any such default or
acquiescence therein and provided further that no act or omission either of the
Warrant Agent or of the Registered Warrantholders in the premises shall extend
to or be taken in any manner whatsoever to affect any subsequent default
hereunder of the rights resulting therefrom. 

ARTICLE 7 

  MEETINGS OF REGISTERED WARRANTHOLDERS

Section 7.1        
Right to Convene Meetings.

             The
Warrant Agent may at any time and from time to time, and shall on receipt of a
written request of the Corporation or of a Warrantholders’ Request and upon
being indemnified and funded to its reasonable satisfaction by the Corporation
or by the Registered Warrantholders signing such Warrantholders’ Request against
the costs which may be incurred by the Warrant Agent in connection with the
calling and holding of such meeting, convene a meeting of the Registered
Warrantholders. If the Warrant Agent fails to so call a meeting within seven
days after receipt of such written request of the Corporation or such
Warrantholders’ Request and the indemnity and funding given as aforesaid, the
Corporation or such Registered Warrantholders, as the case may be, may convene
such meeting. Every such meeting shall be held in the City of Vancouver or at
such other place as may be approved or determined by the Warrant Agent.
Registered Warrantholders may elect to attend such meeting by teleconference so
long as such Registered Warrantholder provides the Warrant Agent with written
notice of such Registered Warrantholders decision to attend by teleconference at
least two Business Days in advance of such meeting. Any Registered Warrantholder
attending a meeting by way of teleconference shall be deemed to be present in
person and have all of the rights of a Registered Warrantholder actually in
attendance in person. As a result, the Registered Warrantholder must ensure that
it has access to facsimile or electronic mail in order to ensure the Registered
Warrantholder can participate in the same manner as if they were attending in
person. 

Section 7.2        
Notice.

             At
least 21 days’ prior written notice of any meeting of Registered Warrantholders
shall be given to the Registered Warrantholders in the manner provided for in
Section 10.2 and a copy of such notice shall be sent by mail to the Warrant
Agent (unless the meeting has been called by the Warrant Agent) and to the
Corporation (unless the meeting has been called by the Corporation). Such notice
shall state the time when and the place where the meeting is to be held, shall
state briefly the general nature of the business to be transacted thereat and
shall contain such information as is reasonably necessary to enable the
Registered Warrantholders to make a reasoned decision on the matter, but it
shall not be necessary for any such notice to set out the terms of any
resolution to be proposed or any of the provisions of this Section 7.2. 

- 29 - 

Section
7.3         
Chairman. 

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

Section
7.4          Quorum.

             Subject
to the provisions of Section 7.11, at any meeting of the Registered
Warrantholders a quorum shall consist of Registered Warrantholder(s) present in
person (including any Registered Warrantholder attending by way of
teleconference) or by proxy and holding at least 50% of the aggregate number of
then outstanding Warrants. If a quorum of the Registered Warrantholders shall
not be present within thirty minutes from the time fixed for holding any
meeting, the meeting, if summoned by Registered Warrantholders or on a
Warrantholders’ Request, shall be dissolved; but in any other case the meeting
shall be adjourned to the same day in the next week (unless such day is not a
Business Day, in which case it shall be adjourned to the next following Business
Day) at the same time and place and no notice of the adjournment need be given.
Any business may be brought before or dealt with at an adjourned meeting which
might have been dealt with at the original meeting in accordance with the notice
calling the same. No business shall be transacted at any meeting unless a quorum
be present at the commencement of business. At the adjourned meeting the
Registered Warrantholders present in person or by proxy shall form a quorum and
may transact the business for which the meeting was originally convened,
notwithstanding that they may not be holding at least 50% of the aggregate
number of then outstanding Warrants. 

Section
7.5          Power to
Adjourn. 

             Subject
to the provisions of Section 7.4 hereof, the chairman of any meeting at which a
quorum of the Registered Warrantholders is present may, with the consent of the
meeting, adjourn any such meeting, and no notice of such adjournment need be
given except such notice, if any, as the meeting may prescribe. 

Section
7.6          Show of
Hands. 

             Every
question submitted to a meeting shall be decided in the first place by a
majority of the votes given on a show of hands except that votes on an
Extraordinary Resolution shall be given in the manner hereinafter provided. At
any such meeting, unless a poll is duly demanded as herein provided, a
declaration by the chairman that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact. 

Section
7.7          Poll and
Voting. 

	(1) 	
      On every Extraordinary Resolution, and on any other
      question submitted to a meeting and after a vote by show of hands when
      demanded by the chairman or by one or more of the Registered
      Warrantholders acting in person (including by teleconference) or
  by

- 30 -

proxy and holding in the aggregate at
least 5% of the aggregate number of Warrants then outstanding, a poll shall be
taken in such manner as the chairman shall direct. Questions other than those
required to be determined by Extraordinary Resolution shall be decided by a
majority of the votes cast on the poll.

	(2) 	
      On a show of hands, every person who is present and
      entitled to vote, whether as a Registered Warrantholder or as proxy for
      one or more absent Registered Warrantholders, or both, shall have one
      vote. On a poll, each Registered Warrantholder present in person
      (including by teleconference) or represented by a proxy duly appointed by
      instrument in writing shall be entitled to one vote in respect of each
      Warrant then held or represented by it. A proxy need not be a Registered
      Warrantholder. The chairman of any meeting shall be entitled, both on a
      show of hands and on a poll, to vote in respect of the Warrants, if any,
      held or represented by him.

Section 7.8        
Regulations.

	(1) 	
      The Warrant Agent, or the Corporation with the approval
      of the Warrant Agent, may from time to time make regulations and from time
      to time vary such regulations as it shall think fit for:

	 	 	 
		(a) 	
      the setting of the record date for a meeting for the
      purpose of determining Registered Warrantholders entitled to receive
      notice of and to vote at the meeting;

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

	 	 	 
		(c) 	
      the deposit of voting certificates and instruments
      appointing proxies at some approved place or places other than the place
      at which the meeting is to be held and enabling particulars of such
      instruments appointing proxies to be mailed or telecopied before the
      meeting to the Corporation or to the Warrant Agent at the place where the
      same is to be held and for the voting of proxies so deposited as though
      the instruments themselves were produced at the meeting;

	 	 	 
		(d) 	
      the form of the instrument of proxy;

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

	 	 	 
		(f) 	
      determining the procedures for Registered Warrantholders
      to attend meetings by teleconference.

	 	 	 
	(2) 	
      Any regulations so made shall be binding and effective
      and the votes given in accordance therewith shall be valid and shall be
      counted. Save as such regulations

- 31 -

may provide, the only persons who shall
be recognized at any meeting as a Registered Warrantholder, or be entitled to
vote or be present at the meeting in respect thereof (subject to Section 7.9),
shall be Registered Warrantholders or proxies of Registered Warrantholders. 

Section 7.9     
    Corporation and Warrant Agent May be Represented.

             The
Corporation and the Warrant Agent, by their respective directors, officers,
agents, and employees and the Counsel for the Corporation and for the Warrant
Agent may attend any meeting of the Registered Warrantholders. 

Section 7.10     
  Powers Exercisable by Extraordinary Resolution.

              In
addition to all other powers conferred upon them by any other provisions of this
Indenture or by law, the Registered Warrantholders at a meeting shall, subject
to the provisions of Section 7.11, have the power exercisable from time to time
by Extraordinary Resolution: 

	(a) 	
      to consent and agree to any modification, abrogation,
      alteration, compromise or arrangement of the rights of Registered
      Warrantholders or the Warrant Agent in its capacity as warrant agent
      hereunder (subject to the Warrant Agent’s prior consent, acting
      reasonably) or on behalf of the Registered Warrantholders against the
      Corporation whether such rights arise under this Indenture or
      otherwise;

	 	 
	(b) 	
      to amend, alter or repeal any Extraordinary Resolution
      previously passed or sanctioned by the Registered
Warrantholders;

	 	 
	(c) 	
      to direct or to authorize the Warrant Agent, subject to
      Section 9.2(2) hereof, to enforce any of the covenants on the part of the
      Corporation contained in this Indenture or to enforce any of the rights of
      the Registered Warrantholders in any manner specified in such
      Extraordinary Resolution or to refrain from enforcing any such covenant or
      right;

	 	 
	(d) 	
      to waive, and to direct the Warrant Agent to waive, any
      default on the part of the Corporation in complying with any provisions of
      this Indenture either unconditionally or upon any conditions specified in
      such Extraordinary Resolution;

	 	 
	(e) 	
      to restrain any Registered Warrantholder from taking or
      instituting any suit, action or proceeding against the Corporation for the
      enforcement of any of the covenants on the part of the Corporation in this
      Indenture or to enforce any of the rights of the Registered
      Warrantholders;

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

- 32 -

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

	 	 
	(h) 	
      with the consent of the Corporation, such consent not to
      be unreasonably withheld, to remove the Warrant Agent or its successor in
      office and to appoint a new warrant agent or warrant agents to take the
      place of the Warrant Agent so removed; and

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

Section 7.11      
Meaning of Extraordinary Resolution.

	(1) 	
      The expression “Extraordinary Resolution” when
      used in this Indenture means, subject as hereinafter provided in this
      Section 7.11 and in Section 7.14, a resolution proposed at a meeting of
      Registered Warrantholders duly convened for that purpose and held in
      accordance with the provisions of this Article 7 at which there are
      present in person (including by teleconference) or by proxy Registered
      Warrantholders holding at least 25% of the aggregate number of Warrants
      and passed by the affirmative votes of Registered Warrantholders holding
      not less than 662/3% of the aggregate number of Warrants at the meeting
      and voted on the poll upon such resolution.

	 	 
	(2) 	
      If, at the meeting at which an Extraordinary Resolution
      is to be considered, Registered Warrantholders holding at least 25% of the
      aggregate number of Warrants are not present in person (including by
      teleconference) or by proxy within 30 minutes after the time appointed for
      the meeting, then the meeting, if convened by Registered Warrantholders or
      on a Warrantholders’ Request, shall be dissolved; but in any other case it
      shall stand adjourned to such day, being not less than 15 or more than 60
      days later, and to such place and time as may be appointed by the
      chairman. Not less than 14 days’ prior notice shall be given of the time
      and place of such adjourned meeting in the manner provided for in Section
      10.2. Such notice shall state that at the adjourned meeting the Registered
      Warrantholders present in person (including by teleconference) or by proxy
      shall form a quorum but it shall not be necessary to set forth the
      purposes for which the meeting was originally called or any other
      particulars. At the adjourned meeting the Registered Warrantholders
      present in person (including by teleconference) or by proxy shall form a
      quorum and may transact the business for which the meeting was originally
      convened and a resolution proposed at such adjourned meeting and passed by
      the requisite vote as provided in Section 7.11(1) shall be an
      Extraordinary Resolution within the meaning of this Indenture
      notwithstanding that Registered Warrantholders holding at least 25% of the
      aggregate number of then outstanding Warrants are not present in person
      (including by teleconference) or by proxy at such adjourned
  meeting.

- 33 -

	(3) 	
      Subject to Section 7.14, votes on an Extraordinary
      Resolution shall always be given on a poll and no demand for a poll on an
      Extraordinary Resolution shall be necessary.

Section 7.12      
Powers Cumulative.

             Any
one or more of the powers or any combination of the powers in this Indenture
stated to be exercisable by the Registered Warrantholders by Extraordinary
Resolution or otherwise may be exercised from time to time and the exercise of
any one or more of such powers or any combination of powers from time to time
shall not be deemed to exhaust the right of the Registered Warrantholders to
exercise such power or powers or combination of powers then or thereafter from
time to time. 

Section 7.13      
Minutes.

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

Section 7.14      
Instruments in Writing.

             All
actions which may be taken and all powers that may be exercised by the
Registered Warrantholders at a meeting held as provided in this Article 7 may
also be taken and exercised by Registered Warrantholders holding at least 662/3%
of the aggregate number of Warrants then outstanding by an instrument in writing
signed in one or more counterparts by such Registered Warrantholders in person
or by attorney duly appointed in writing, and the expression “Extraordinary
Resolution” when used in this Indenture shall include an instrument so
signed. 

Section 7.15      
Binding Effect of Resolutions.

             Every
resolution and every Extraordinary Resolution passed in accordance with the
provisions of this Article 7 at a meeting of Registered Warrantholders shall be
binding upon all the Warrantholders, whether present at or absent from such
meeting, and every instrument in writing signed by Registered Warrantholders in
accordance with Section 7.14 shall be binding upon all the Warrantholders,
whether signatories thereto or not, and each and every Warrantholder and the
Warrant Agent (subject to the provisions for indemnity herein contained) shall
be bound to give effect accordingly to every such resolution and instrument in
writing. 

- 34 -

Section 7.16      
Holdings by Corporation Disregarded.

             In
determining whether Registered Warrantholders holding Warrants evidencing the
required number of Warrants are present at a meeting of Registered
Warrantholders for the purpose of determining a quorum or have concurred in any
consent, waiver, Extraordinary Resolution, Warrantholders’ Request or other
action under this Indenture, Warrants owned legally or beneficially by the
Corporation shall be disregarded in accordance with the provisions of Section
10.7. 

ARTICLE 8 

  SUPPLEMENTAL INDENTURES

Section 8.1        
 Provision for Supplemental Indentures for Certain Purposes.

             From
time to time, the Corporation (when authorized by action of the directors) and
the Warrant Agent may, subject to the provisions hereof and they shall, when so
directed in accordance with the provisions hereof, execute and deliver by their
proper officers, indentures or instruments supplemental hereto, which thereafter
shall form part hereof, for any one or more or all of the following purposes:

	(a) 	
      setting forth any adjustments resulting from the
      application of the provisions of Article 4;

	 	 
	(b) 	
      adding to the provisions hereof such additional covenants
      and enforcement provisions as, in the opinion of Counsel, are necessary or
      advisable in the premises, provided that the same are not in the opinion
      of the Warrant Agent, relying on the advice of Counsel, prejudicial to the
      interests of the Registered Warrantholders;

	 	 
	(c) 	
      giving effect to any Extraordinary Resolution passed as
      provided in 7.11;

	 	 
	(d) 	
      making such provisions not inconsistent with this
      Indenture as may be necessary or desirable with respect to matters or
      questions arising hereunder or for the purpose of obtaining a listing or
      quotation of the Warrants on any stock exchange, provided that such
      provisions are not, in the opinion of the Warrant Agent, relying on the
      advice of Counsel, prejudicial to the interests of the Registered
      Warrantholders;

	 	 
	(e) 	
      adding to or altering the provisions hereof in respect of
      the transfer of Warrants, making provision for the exchange of Warrants,
      and making any modification in the form of the Warrant Certificates which
      does not affect the substance thereof;

	 	 
	(f) 	
      modifying any of the provisions of this Indenture,
      including relieving the Corporation from any of the obligations,
      conditions or restrictions herein contained, provided that such
      modification or relief shall be or become operative or effective only if,
      in the opinion of the Warrant Agent, relying on the advice of Counsel,
      such modification or relief in no way prejudices any of the rights of the
      Registered Warrantholders or of the Warrant Agent, and provided further
      that the Warrant Agent may in its sole discretion decline to enter into
      any such supplemental indenture which in its
opinion

- 35 - 

may not afford adequate protection to
the Warrant Agent when the same shall become operative; and 

	(g) 	
      for any other purpose not inconsistent with the terms of
      this Indenture, including the correction or rectification of any
      ambiguities, defective or inconsistent provisions, errors, mistakes or
      omissions herein, provided that in the opinion of the Warrant Agent,
      relying on the advice of Counsel, the rights of the Warrant Agent and of
      the Registered Warrantholders are in no way prejudiced
  thereby.

Section 8.2        
Successor Entities.

             In
the case of the consolidation, amalgamation, arrangement, merger or transfer of
the undertaking or assets of the Corporation as an entirety or substantially as
an entirety to or with another entity (“successor entity”), the successor
entity resulting from such consolidation, amalgamation, arrangement, merger or
transfer (if not the Corporation) shall expressly assume, by supplemental
indenture satisfactory in form to the Warrant Agent and executed and delivered
to the Warrant Agent, the due and punctual performance and observance of each
and every covenant and condition of this Indenture to be performed and observed
by the Corporation. 

ARTICLE 9 

  CONCERNING THE WARRANT AGENT

Section 9.1        
Indenture Legislation.

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

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

Section 9.2        
Rights and Duties of Warrant Agent.

	(1) 	
      In the exercise of the rights and duties prescribed or
      conferred by the terms of this Indenture, the Warrant Agent shall exercise
      that degree of care, diligence and skill that a reasonably prudent warrant
      agent would exercise in comparable circumstances. No provision of this
      Indenture shall be construed to relieve the Warrant Agent from liability
      for its own gross negligent action, wilful misconduct, bad faith or fraud
      under this Indenture.

	 	 
	(2) 	
      The obligation of the Warrant Agent to commence or
      continue any act, action or proceeding for the purpose of enforcing any
      rights of the Warrant Agent or the Registered Warrantholders hereunder
      shall be conditional upon the Registered Warrantholders furnishing, when
      required by notice by the Warrant Agent, sufficient funds to commence or
      to continue such act, action or proceeding and an
  indemnity

- 36 -

reasonably satisfactory to the Warrant
Agent to protect and to hold harmless the Warrant Agent and its officers,
directors, employees and agents, against the costs, charges and expenses and
liabilities to be incurred thereby and any loss and damage it may suffer by
reason thereof. None of the provisions contained in this Indenture shall require
the Warrant Agent to expend or to risk its own funds or otherwise to incur
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers unless indemnified and funded as aforesaid. 

	(3) 	
      The Warrant Agent may, before commencing or at any time
      during the continuance of any such act, action or proceeding, require the
      Registered Warrantholders, at whose instance it is acting to deposit with
      the Warrant Agent the Warrants Certificates held by them, for which
      Warrant Certificates the Warrant Agent shall issue receipts.

	 	 
	(4) 	
      Every provision of this Indenture that by its terms
      relieves the Warrant Agent of liability or entitles it to rely upon any
      evidence submitted to it is subject to the provisions of Applicable
      Legislation.

Section 9.3        
Evidence, Experts and Advisers.

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

	 	 
	(2) 	
      In the exercise of its rights and duties hereunder, the
      Warrant Agent may, if it is acting in good faith, rely as to the truth of
      the statements and the accuracy of the opinions expressed in statutory
      declarations, opinions, reports, written requests, consents, or orders of
      the Corporation, certificates of the Corporation or other evidence
      furnished to the Warrant Agent pursuant to a request of the Warrant Agent,
      provided that such evidence complies with Applicable Legislation and that
      the Warrant Agent complies with Applicable Legislation and that the
      Warrant Agent examines the same and determines that such evidence complies
      with the applicable requirements of this Indenture.

	 	 
	(3) 	
      Whenever it is provided in this Indenture or under
      Applicable Legislation that the Corporation shall deposit with the Warrant
      Agent resolutions, certificates, reports, opinions, requests, orders or
      other documents, it is intended that the truth, accuracy and good faith on
      the effective date thereof and the facts and opinions stated in all such
      documents so deposited shall, in each and every such case, be conditions
      precedent to the right of the Corporation to have the Warrant Agent take
      the action to be based thereon.

	 	 
	(4) 	
      The Warrant Agent may employ or retain such Counsel,
      accountants, appraisers or other experts or advisers as it may reasonably
      require for the purpose of discharging its duties hereunder and may pay
      reasonable remuneration for all services so performed by any of them,
      without taxation of costs of any Counsel, and shall not
  be

- 37 -

responsible for any misconduct or
negligence on the part of any such Counsel, experts or advisers who have been
appointed with due care by the Warrant Agent. 

	(5) 	
      The Warrant Agent may act and rely and shall be protected
      in acting and relying in good faith on the opinion or advice of or
      information obtained from any Counsel, accountant, appraiser, engineer or
      other expert or adviser, whether retained or employed by the Corporation
      or by the Warrant Agent, in relation to any matter arising in the
      administration of the agency hereof.

	 	 
	(6) 	
      Whenever Applicable Legislation requires that evidence
      referred to in Subsection 9.3(1) be in the form of a statutory
      declaration, the Warrant Agent may accept such statutory declaration in
      lieu of a certificate of the Corporation required by any provision hereof.
      Any such statutory declaration may be made by one or more of the Chairman
      of the Board and Chief Executive Officer, President and Chief Financial
      Officer of the Corporation.

	 	 
	(7) 	
      Proof of the execution of an instrument in writing,
      including a Warrantholders' Request, by any Warrantholder may be made by
      the certificate of a notary, solicitor or commissioner for oaths, or other
      officer with similar powers, that the person signing such instrument
      acknowledged to him the execution thereof, or by an affidavit of a witness
      to such execution or in any other manner which the Warrant Agent may
      consider adequate and in respect of a corporate Warrantholder, shall
      include a certificate of incumbency of such Warrantholder together with a
      certified resolution authorizing the person who signs such instrument to
      sign such instrument

Section
9.4         
Documents, Monies, etc. Held by Warrant Agent. 

             Any
monies, securities, documents of title or other instruments that may at any time
be held by the Warrant Agent may be placed in the deposit vaults of the Warrant
Agent or of any Canadian chartered bank listed in Schedule I of the Bank
Act (Canada), or deposited for safekeeping with any such bank in a
non-interest bearing account. 

Section 9.5        
 Actions by Warrant Agent to Protect Interest. 

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

Section
9.6          Warrant
Agent Not Required to Give Security. 

             The
Warrant Agent shall not be required to give any bond or security in respect of
the execution of the agency and powers of this Indenture or otherwise in respect
of the premises. 

Section 9.7        
Protection of Warrant Agent.

             By
way of supplement to the provisions of any law for the time being relating to
warrant agents it is expressly declared and agreed as follows: 

- 38 -

	 	(a) 	
      the Warrant Agent shall not be liable for or by reason of
      any statements of fact or recitals in this Indenture or in the Warrant
      Certificates (except the representation contained in Section 9.9 or in the
      certificate of the Warrant Agent on the Warrant Certificates) or be
      required to verify the same, but all such statements or recitals are and
      shall be deemed to be made by the Corporation;

	 	 	 
	 	(b) 	
      nothing herein contained shall impose any obligation on
      the Warrant Agent to see to or to require evidence of the registration or
      filing (or renewal thereof) of this Indenture or any instrument ancillary
      or supplemental hereto;

	 	 	 
	 	(c) 	
      the Warrant Agent shall not be bound to give notice to
      any person or persons of the execution hereof;

	 	 	 
	 	(d) 	
      the Warrant Agent shall not incur any liability or
      responsibility whatever or be in any way responsible for the consequence
      of any breach on the part of the Corporation of any of its covenants
      herein contained or of any acts of any directors, officers, employees,
      agents or servants of the Corporation; and

	 	 	 
	 	(e) 	
      the Corporation hereby indemnifies and agrees to hold
      harmless the Warrant Agent, its affiliates, their officers, directors,
      employees, agents, successors and assigns from and against any and all
      liabilities, losses, damages, penalties, claims, actions, suits, costs,
      expenses and disbursements, including reasonable legal fees and
      disbursements of whatever kind and nature which may at any time be imposed
      on or incurred by or asserted against the Warrant Agent, whether
      groundless or otherwise, arising from or out of any act, omission or error
      of the Warrant Agent, provided that the Corporation shall not be required
      to indemnify the Warrant Agent in the event of the gross negligence or
      wilful misconduct of the Warrant Agent, and this provision shall survive
      the resignation or removal of the Warrant Agent or the termination or
      discharge of this Indenture.

	 	 	 
	 	(f) 	
      notwithstanding the foregoing or any other provision of
      this Indenture, any liability of the Warrant Agent shall be limited, in
      the aggregate, to the amount of annual retainer fees paid by the
      Corporation to the Warrant Agent under this Indenture in the twelve (12)
      months immediately prior to the Warrant Agent receiving the first notice
      of the claim. Notwithstanding any other provision of this Indenture, and
      whether such losses or damages are foreseeable or unforeseeable, the
      Warrant Agent shall not be liable under any circumstances whatsoever for
      any (a) breach by any other party of securities law or other rule of any
      securities regulatory authority, (b) lost profits or (c) special,
      indirect, incidental, consequential, exemplary, aggravated or punitive
      losses or damages.

	 	 	 
	 	(g) 	
      in the event that any of the funds provided to the
      Warrant Agent hereunder are received by it in the form of an uncertified
      cheque or bank draft, the Warrant Agent shall be entitled to delay the
      time for release of such funds and the

- 39 -

	 		
      Common Shares to which it relates until such uncertified
      cheque has cleared the financial institution upon which the same is
      drawn.

	 	 	 
	 	(h) 	
      the forwarding of a cheque or the sending of funds by
      wire transfer by the Warrant Agent will satisfy and discharge the
      liability of any amounts due to the extent of the sum represented thereby
      unless such cheque is not honoured on presentation, provided that in the
      event of the non-receipt of such cheque by the payee, or the loss or
      destruction thereof, the Warrant Agent, upon being furnished with
      reasonable evidence of such non-receipt, loss or destruction and indemnity
      reasonably satisfactory to it, will issue to such payee a replacement
      cheque for the amount of such cheque.

Section 9.8        
 Replacement of Warrant Agent; Successor by Merger.

	(1) 	
      The Warrant Agent may resign its agency and be discharged
      from all further duties and liabilities hereunder, subject to this Section
      9.8, by giving to the Corporation not less than 60 days’ prior notice in
      writing or such shorter prior notice as the Corporation may accept as
      sufficient. The Registered Warrantholders by Extraordinary Resolution
      shall have power at any time to remove the existing Warrant Agent and to
      appoint a new Warrant Agent. In the event of the Warrant Agent resigning
      or being removed as aforesaid or being dissolved, becoming bankrupt, going
      into liquidation or otherwise becoming incapable of acting hereunder, the
      Corporation shall forthwith appoint a new Warrant Agent unless a new
      Warrant Agent has already been appointed by the Registered Warrantholders;
      failing such appointment by the Corporation, the retiring Warrant Agent or
      any Registered Warrantholder may apply to a judge of the Ontario Superior
      Court of Justice of the Province of Ontario on such notice as such judge
      may direct, for the appointment of a new Warrant Agent; but any new
      Warrant Agent so appointed by the Corporation or by the Court shall be
      subject to removal as aforesaid by the Registered Warrantholders. Any new
      Warrant Agent appointed under any provision of this Section 9.8 shall be
      an entity authorized to carry on the business of a trust company in the
      Province of Ontario and, if required by the Applicable Legislation for any
      other provinces, in such other provinces. On any such appointment the new
      warrant agent shall be vested with the same powers, rights, duties and
      responsibilities as if it had been originally named herein as Warrant
      Agent hereunder.

	(2) 	
      Upon the appointment of a successor Warrant Agent, the
      Corporation shall promptly notify the Registered Warrantholders thereof in
      the manner provided for in Section 10.2.

	 	 
	(3) 	
      Any Warrant Certificates Authenticated but not delivered
      by a predecessor Warrant Agent may be Authenticated by the successor
      Warrant Agent in the name of the predecessor or successor Warrant
      Agent.

	 	 
	(4) 	
      Any corporation in to which the Warrant Agent may be
      merged or consolidated or amalgamated, or any corporation resulting
      therefrom to which the Warrant Agent

- 40 -

shall be a party, or any corporation
succeeding to substantially the corporate trust business of the Warrant
Agent shall be the successor to the Warrant Agent hereunder without any
further act on its part or any of the parties hereto, provided that such
corporation would be eligible for appointment as successor Warrant Agent under
Section 9.8(1) . 

Section 9.9        
Conflict of Interest.

	(1) 	
      The Warrant Agent represents to the Corporation that at
      the time of execution and delivery hereof no material conflict of interest
      exists between its role as a warrant agent hereunder and its role in any
      other capacity and agrees that in the event of a material conflict of
      interest arising hereafter it will, within 90 days after ascertaining that
      it has such material conflict of interest, either eliminate the same or
      assign its agency hereunder to a successor Warrant Agent approved by the
      Corporation and meeting the requirements set forth in Section 9.8(1).
      Notwithstanding the foregoing provisions of this Section 9.9(1), if any
      such material conflict of interest exists or hereafter shall exist, the
      validity and enforceability of this Indenture and the Warrant Certificate
      shall not be affected in any manner whatsoever by reason
thereof.

	 	 
	(2) 	
      Subject to Section 9.9(1), the Warrant Agent, in its
      personal or any other capacity, may buy, lend upon and deal in securities
      of the Corporation and generally may contract and enter into financial
      transactions with the Corporation without being liable to account for any
      profit made thereby.

Section 9.10      
Acceptance of Agency

             The
Warrant Agent hereby accepts the agency in this Indenture declared and provided
for and agrees to perform the same upon the terms and conditions herein set
forth. 

Section
9.11        Warrant Agent Not
to be Appointed Receiver. 

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

Section
9.12        Warrant Agent Not
Required to Give Notice of Default. 

             The
Warrant Agent shall not be bound to give any notice or do or take any act,
action or proceeding by virtue of the powers conferred on it hereby unless and
until it shall have been required so to do under the terms hereof; nor shall the
Warrant Agent be required to take notice of any default hereunder, unless and
until notified in writing of such default, which notice shall distinctly specify
the default desired to be brought to the attention of the Warrant Agent and in
the absence of any such notice the Warrant Agent may for all purposes of this
Indenture conclusively assume that no default has been made in the observance or
performance of any of the representations, warranties, covenants, agreements or
conditions contained herein. Any such notice shall in no way limit any
discretion herein given to the Warrant Agent to determine whether or not the
Warrant Agent shall take action with respect to any default. 

- 41 -

Section
9.13        Anti-Money
Laundering. 

	(1) 	
      Each party to this Agreement other than the Warrant Agent
      hereby represents to the Warrant Agent that any account to be opened by,
      or interest to be held by the Warrant Agent in connection with this
      Agreement, for or to the credit of such party, either (i) is not intended
      to be used by or on behalf of any third party; or (ii) is intended to be
      used by or on behalf of a third party, in which case such party hereto
      agrees to complete and execute forthwith a declaration in the Warrant
      Agent’s prescribed form as to the particulars of such third
  party.

	 	 
	(2) 	
      The Warrant Agent shall retain the right not to act and
      shall not be liable for refusing to act if, due to a lack of information
      or for any other reason whatsoever, the Warrant Agent, in its sole
      judgment, determines that such act might cause it to be in non- compliance
      with any applicable anti-money laundering or anti-terrorist legislation,
      regulation or guideline. Further, should the Warrant Agent, in its sole
      judgment, determine at any time that its acting under this Indenture has
      resulted in its being in non-compliance with any applicable anti-money
      laundering or anti-terrorist legislation, regulation or guideline, then it
      shall have the right to resign on 10 days written notice to the other
      parties to this Indenture, provided (i) that the Warrant Agent’s written
      notice shall describe the circumstances of such non-compliance; (ii) that
      if such circumstances are rectified to the Warrant Agent’s satisfaction
      within such 10 day period, then such resignation shall not be
      effective.

Section 9.14      
Compliance with Privacy Code.

             The
Corporation acknowledges that the Warrant Agent may, in the course of providing
services hereunder, collect or receive financial and other personal information
about such parties and/or their representatives, as individuals, or about other
individuals related to the subject matter hereof, and use such information for
the following purposes: 

	 	(a) 	
      to provide the services required under this Indenture and
      other services that may be requested from time to time;

	 	 	 
	 	(b) 	
      to help the Warrant Agent manage its servicing
      relationships with such individuals;

	 	 	 
	 	(c) 	
      to meet the Warrant Agent’s legal and regulatory
      requirements; and

	 	 	 
	 	(d) 	
      if Social Insurance Numbers are collected by the Warrant
      Agent, to perform tax reporting and to assist in verification of an
      individual’s identity for security purposes.

             The
Corporation acknowledges and agrees that the Warrant Agent may receive, collect,
use and disclose personal information provided to it or acquired by it in the
course of its acting as agent hereunder for the purposes described above and,
generally, in the manner and on the terms described in its Privacy Code, which
the Warrant Agent shall make available on its website or upon request, including
revisions thereto. Further, the Corporation agrees that it shall not provide or
cause to be provided to the Warrant Agent any personal

- 42 - 

information relating to an individual who is not a party to
this Indenture unless the Corporation has assured itself that such individual
understands and has consented to the aforementioned uses and disclosures. 

ARTICLE 10

  GENERAL 

Section
10.1        Notice to the
Corporation and the Warrant Agent.

	(1) 	
      Unless herein otherwise expressly provided, any notice to
      be given hereunder to the Corporation or the Warrant Agent shall be deemed
      to be validly given if delivered, sent by registered letter, postage
      prepaid or telecopied:

	 	 	 
		(a) 	
      If to the Corporation:

	 	 	 
			
      Manas Petroleum Corporation 
Bahnhofstrasse 9,
      Postfach 155
CH-6341 Baar 
Switzerland

	 	 	 
			
      Attention: President

	 	 	 
			
      Telecopy: 011 41 44 718 10 30

	 	 	 
		(b) 	
      If to the Warrant Agent:

	 	 	 
			
      Equity Financial Trust Company 
200 University Avenue,
      Suite 400 
Toronto, Ontario M5H 4H1

	 	 	 
			
      Attention: Manager, Corporate Trust Services

	 	 	 
			
      Telecopy: (416) 361-0470

	 	 	 
		
      and any such notice delivered in accordance with the
      foregoing shall be deemed to have been received and given on the date of
      delivery or, if mailed, on the fifth Business Day following the date of
      mailing such notice or, if telecopied, on the next Business Day following
      the date of transmission.

	 	 	 
	(2) 	
      The Corporation or the Warrant Agent, as the case may be,
      may from time to time notify the other in the manner provided in Section
      10.1(1) of a change of address which, from the effective date of such
      notice and until changed by like notice, shall be the address of the
      Corporation or the Warrant Agent, as the case may be, for all purposes of
      this Indenture.

	 	 	 
	(3) 	
      If, by reason of a strike, lockout or other work
      stoppage, actual or threatened, involving postal employees, any notice to
      be given to the Warrant Agent or to the

- 43 -

Corporation hereunder could reasonably
be considered unlikely to reach its destination, such notice shall be valid and
effective only if it is delivered to the named officer of the party to which it
is addressed, as provided in Section 10.1(1), or given by telecopy or other
means of prepaid, transmitted and recorded communication. 

Section 10.2      
Notice to Registered Warrantholders.

	(1) 	
      Unless otherwise provided herein, notice to the
      Registered Warrantholders under the provisions of this Indenture shall be
      valid and effective if delivered or sent by ordinary post addressed to
      such holders at their post office addresses appearing on the register
      hereinbefore mentioned and shall be deemed to have been effectively
      received and given on the date of delivery or, if mailed, on the third
      Business Day following the date of mailing such notice. In the event that
      Warrants are held in the name of the Depository, a copy of such notice
      shall also be sent by electronic communication to the Depository and shall
      be deemed received and given on the day it is so sent.

	 	 
	(2) 	
      If, by reason of a strike, lockout or other work
      stoppage, actual or threatened, involving postal employees, any notice to
      be given to the Registered Warrantholders hereunder could reasonably be
      considered unlikely to reach its destination, such notice shall be valid
      and effective only if it is delivered to such Registered Warrantholders to
      the address for such Registered Warrantholders contained in the register
      maintained by the Warrant Agent or such notice may be given, at the
      Corporation’s expense, by means of publication in the Globe and Mail,
      National Edition, or any other English language daily newspaper or
      newspapers of general circulation in Canada, in each two successive weeks,
      and any so notice published shall be deemed to have been received and
      given on the latest date the publication takes
place.

Section 10.3      
Ownership of Warrants.

             The
Corporation and the Warrant Agent may deem and treat the Registered
Warrantholders as the absolute owner thereof for all purposes, and the
Corporation and the Warrant Agent shall not be affected by any notice or
knowledge to the contrary except where the Corporation or the Warrant Agent is
required to take notice by statute or by order of a court of competent
jurisdiction. The receipt of any such Registered Warrantholder of the Common
Shares which may be acquired pursuant thereto shall be a good discharge to the
Corporation and the Warrant Agent for the same and neither the Corporation nor
the Warrant Agent shall be bound to inquire into the title of any such holder
except where the Corporation or the Warrant Agent is required to take notice by
statute or by order of a court of competent jurisdiction. 

Section 10.4      
Counterparts.

             This
Indenture may be executed in several counterparts and may be delivered by
facsimile or electronic transmission, each of which when so executed shall be
deemed to be an original and such counterparts together shall constitute one and
the same instrument and

- 44 - 

notwithstanding their date of execution they shall be deemed to
be dated as of the date hereof. 

Section
10.5        Satisfaction and
Discharge of Indenture. 

             Upon
the earlier of: 

	 	(a) 	
      the date by which there shall have been delivered to the
      Warrant Agent for exercise or cancellation all Warrants theretofore
      Authenticated hereunder, in the case of Certificated Warrants (or such
      other instructions, in a form satisfactory to the Warrant Agent), in the
      case of Uncertificated Warrants, or by way of standard processing through
      the book entry only system in the case of a CDS Global Warrant;
  or

	 	 	 
	 	(b) 	
      the Expiry Time;

and if all certificates or other entry on the register
representing Common Shares required to be issued in compliance with the
provisions hereof have been issued and delivered hereunder or to the Warrant
Agent in accordance with such provisions, this Indenture shall cease to be of
further effect. Notwithstanding the foregoing, the indemnities provided to the
Warrant Agent by the Corporation hereunder shall remain in full force and effect
and survive the termination of this Indenture. 

	
      Section 10.6 
	
      Provisions of Indenture and Warrants for the Sole
      Benefit of Parties and Registered Warrantholders.
  

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

	
      Section 10.7 
	
      Common Shares or Warrants Owned by the Corporation or
      its Subsidiaries - Certificate to be Provided.
  

             For
the purpose of disregarding any Warrants owned legally or beneficially by the
Corporation in Section 7.16, the Corporation shall provide to the Warrant Agent,
from time to time, a certificate of the Corporation setting forth as at the date
of such certificate: 

	 	(a) 	
      the names (other than the name of the Corporation) of the
      Registered Warrantholders which, to the knowledge of the Corporation, are
      owned by or held for the account of the Corporation; and

	 	 	 
	 	(b) 	
      the number of Warrants owned legally or beneficially by
      the Corporation;

        
    and the Warrant Agent, in making the computations in
Section 7.16, shall be entitled to rely on such certificate without any
additional evidence. 

- 45 -

Section
10.8       Severability

             If,
in any jurisdiction, any provision of this Indenture or its application to any
party or circumstance is restricted, prohibited or unenforceable, such provision
will, as to such jurisdiction, be ineffective only to the extent of such
restriction, prohibition or unenforceability without invalidating the remaining
provisions of this Indenture and without affecting the validity or
enforceability of such provision in any other jurisdiction or without affecting
its application to other parties or circumstances. 

Section
10.9       Force Majeure

             No
party shall be liable to the other, or held in breach of this Indenture, if
prevented, hindered, or delayed in the performance or observance of any
provision contained herein by reason of act of God, riots, terrorism, acts of
war, epidemics, governmental action or judicial order, earthquakes, or any other
similar causes (including, but not limited to, mechanical, electronic or
communication interruptions, disruptions or failures). Performance times under
this Indenture shall be extended for a period of time equivalent to the time
lost because of any delay that is excusable under this Section.

Section
10.10     Assignment, Successors and
Assigns

        
    Neither of the parties hereto may assign its rights or
interest under this Indenture, except as provided in Section 9.8 in the case of
the Warrant Agent, or as provided in Section 8.2 in the case of the Corporation.
Subject thereto, this Indenture shall enure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted
assigns.

Section
10.11      Rights of Rescission and
Withdrawal for Holders

      
      Should a holder of Warrants exercise any
legal, statutory, contractual or other right of withdrawal or rescission that
may be available to it, and the holder’s funds which were paid on exercise have
already been released to the Corporation by the Warrant Agent, the Warrant Agent
shall not be responsible for ensuring the exercise is cancelled and a refund is
paid back to the holder. In such cases, the holder shall seek a refund directly
from the Corporation and subsequently, the Corporation, upon surrender to the
Corporation or the Warrant Agent of any underlying shares that may have been
issued, or such other procedure as agreed to by the parties hereto, shall
instruct the Warrant Agent in writing, to cancel the exercise transaction and
any such underlying shares on the register, which may have already been issued
upon the Warrant exercise. In the event that any payment is received from the
Corporation by virtue of the holder being a shareholder for such Warrants that
were subsequently rescinded, such payment must be returned to the Corporation by
such holder. The Warrant Agent shall not be under any duty or obligation to take
any steps to ensure or enforce that the funds are returned pursuant to this
section, nor shall the Warrant Agent be in any other way responsible in the
event that any payment is not delivered or received pursuant to this section.

- 46 -

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

MANAS PETROLEUM
CORPORATION

	 	By: 	/s/ Peter-Mark Vogel 
	 	  	Name: Peter-Mark Vogel 
	 	  	Title: Chief Executive Officer
  
	 	  	 
	 	By: 	/s/ Ari Muljana 
	 	  	Name: Ari Muljana 
	 	  	Title: Chief Financial Officer
  

EQUITY FINANCIAL TRUST
COMPANY

	 	By: 	/s/ Shelley Martin 
	 	  	Name: Shelley Martin 
	 	  	Authorized Signatory 
	 	  	  
	 	By: 	/s/ Carol Mikos 
	 	  	Name: Carol Mikos 
	 	  	Authorized Signatory
  

A-1

SCHEDULE “A” 

FORM OF WARRANT

THE WARRANTS EVIDENCED HEREBY ARE EXERCISABLE AT OR BEFORE 4:30
P.M. (LOCAL TIME) ON MAY 6, 2014 AFTER WHICH TIME THE WARRANTS EVIDENCED HEREBY
SHALL BE DEEMED TO BE VOID AND OF NO FURTHER FORCE OR EFFECT.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO MANAS
PETROLEUM CORPORATION (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED
IN THE NAME OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY
INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A
VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS
CERTIFICATE. 

THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER ANY STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR
THE BENEFIT OF THE CORPORATION THAT THESE SECURITIES MAY BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT
CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN
CANADA. 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES. THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR
BY OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON OR ANY OTHER PERSON WITHIN THE
UNITED STATES. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S
UNDER THE U.S. SECURITIES ACT. 

A-2 

WARRANT 

To acquire Common Shares of 

MANAS PETROLEUM CORPORATION 

(incorporated pursuant to the laws of the State of Nevada) 

	Warrant 	Certificate for
      __________________________________________
	Certificate No. 	Warrants, each entitling the holder to acquire
      one (1) Common Share 
	  	  
	  	CUSIP 56176Q 110 
	  	  
	  	ISIN CA US56176Q1105 

THIS IS TO CERTIFY THAT, for value received, 

______________________________________________________________________________
(the
“Warrantholder”) is the registered holder of the number of common share
purchase warrants (the “Warrants”) of Manas Petroleum Corporation
(the “Corporation”) specified above, and is entitled, on exercise of
these Warrants upon and subject to the terms and conditions set forth herein and
in the Warrant Indenture hereinafter referred to, to purchase at any time before
4:30 p.m. (Toronto time) (the “Expiry Time”) on May 6, 2014 (the
“Expiry Date”) one fully paid and non-assessable common share without par
value in the capital of the Corporation as constituted on the date hereof (a
“Common Share”) for each Warrant. 

The right to purchase Common Shares may only be exercised by
the holder within the time set forth above by: 

	(a) 	
      duly completing and executing the exercise form (the
      “Exercise Form”) attached hereto; and

	 	 
	(b) 	
      surrendering this warrant certificate (the “Warrant
      Certificate”), with the Exercise Form to the Warrant Agent at the
      principal office of the Warrant Agent, in the city of Toronto, or such
      other place as may be designated by the Warrant Agent in accordance with
      the Warrant Indenture, together with a certified cheque, bank draft or
      money order in the lawful money of Canada payable to or to the order of
      the Corporation in an amount equal to the purchase price of the Common
      Shares so subscribed for.

The surrender of this Warrant Certificate, the duly completed
Exercise Form and payment as provided above will be deemed to have been effected
only on personal delivery thereof to, or if 

A-3

sent by mail or other means of transmission on actual receipt
thereof by, the Warrant Agent at its principal office as set out above.

Subject to adjustment thereof in the events and in the manner
set forth in the Warrant Indenture hereinafter referred to, the exercise price
payable for each Common Share upon the exercise of Warrants shall be
U.S.$0.70 per Common Share. 

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

This Warrant Certificate evidences Warrants of the Corporation
issued or issuable under the provisions of a warrant indenture (which indenture
together with all other instruments supplemental or ancillary thereto is herein
referred to as the “Warrant Indenture”) dated as of May 6, 2011
between the Corporation and Equity Financial Trust Company as warrant
agent, to which Warrant Indenture reference is hereby made for particulars of
the rights of the holders of Warrants, the Corporation and the Warrant Agent in
respect thereof and the terms and conditions on which the Warrants are issued
and held, all to the same effect as if the provisions of the Warrant Indenture
were herein set forth, to all of which the holder, by acceptance hereof,
assents. The Corporation will furnish to the holder, on request and without
charge, a copy of the Warrant Indenture.

On presentation at the principal office of the Warrant Agent as
set out above, subject to the provisions of the Warrant Indenture and on
compliance with the reasonable requirements of the Warrant Agent, one or more
Warrant Certificates may be exchanged for one or more Warrant Certificates equal
to the number of Warrants represented by the Warrant Certificate(s) so
exchanged. 

No exercise of any Warrants shall be effective and the
Corporation shall not recognize any attempted exercise of a warrant and no
certificate representing Common Shares shall be issued or registered pursuant to
the attempted exercise of Warrants, unless the Warantholder certifies that: (i)
it is not a U.S. Warrantholder; (ii) at the time of exercise of the Warrants it
is not exercising the Warrants for the account or benefit of a U.S. Person or
any other person in the United States; (iii) it did not execute or deliver the
exercise form for the Warrants in the United States; and (iv) delivery of the
Common Shares to be issued upon exercise of the Warrants is not an address in
the United States. 

Notwithstanding anything herein contained, Common Shares will
be issued upon the exercise of a Warrant only in compliance with the securities
laws of any applicable jurisdiction, including without limitation the United
States, its commonwealths, territories and possessions, the states of the United
States and the District of Columbia. 

A-4

The Warrants represented by this Warrant Certificate and the
Common Shares deliverable upon exercise thereof have not been and will not be
registered under the securities laws of any state of the United States. This
Warrant may not be exercised in the United States or by, or for the account or
benefit of, a person in the United States or a U.S. person. 

The Warrant Indenture contains provisions for the adjustment of
the price payable for each Common Share upon the exercise of Warrants and the
number of Common Shares issuable upon the exercise of Warrants in the events and
in the manner set forth therein. 

The Warrant Indenture also contains provisions making binding
on all holders of Warrants outstanding thereunder resolutions passed at meetings
of holders of Warrants held in accordance with the provisions of the Warrant
Indenture and instruments in writing signed by Warrantholders of Warrants
holding a specific majority of the then outstanding Warrants.

Nothing contained in this Warrant Certificate, the Warrant
Indenture or elsewhere shall be construed as conferring upon the holder hereof
any right or interest whatsoever as a holder of Common Shares or any other right
or interest except as herein and in the Warrant Indenture expressly provided. In
the event of any discrepancy between anything contained in this Warrant
Certificate and the terms and conditions of the Warrant Indenture, the terms and
conditions of the Warrant Indenture shall govern. 

Warrants may only be transferred in compliance with the
conditions of the Warrant Indenture on the register to be kept by the Warrant
Agent in Toronto, or such other registrar as the Corporation, with the approval
of the Warrant Agent, may appoint at such other place or places, if any, as may
be designated, upon surrender of this Warrant Certificate to the Warrant Agent
or other registrar accompanied by a written instrument of transfer in form and
execution satisfactory to the Warrant Agent or other registrar and upon
compliance with the conditions prescribed in the Warrant Indenture and with such
reasonable requirements as the Warrant Agent or other registrar may prescribe
and upon the transfer being duly noted thereon by the Warrant Agent or other
registrar. Time is of the essence hereof. 

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

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

A-5 

IN WITNESS WHEREOF the Corporation has caused this
Warrant Certificate to be duly executed as of May 6, 2011. 

	  	MANAS PETROLEUM CORPORATION 
	 	 
	  	By:           
      ____________________________________
	  	           
             Authorized Signatory 
	 	 
	  	By:           
      ____________________________________
	Countersigned and Registered by: 	           
             Authorized Signatory 
	 	 
	EQUITY FINANCIAL TRUST COMPANY 	  
	 	 
	By:           
      ____________________________________	  
	               
         Authorized Signatory 	  
	 	 
	Date:        
      ____________________________________	  

A-6

FORM OF TRANSFER

Manas Petroleum Corporation 

Equity Financial Trust Company

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

______________________________________________________________________________

______________________________________________________________________________
(print
name and address) the Warrants represented by this Warrants Certificate and
hereby irrevocable constitutes and appoints ____________________ as its attorney
with full power of substitution to transfer the said securities on the
appropriate register of the Warrant Agent. 

DATED this ____ day of _________________, 20____. 

	SPACE FOR GUARANTEES OF SIGNATURES
      (BELOW) 	) 	
	 	) 	 
    
	 	) 	Signature of Transferor 
	 	) 	  
	 	) 	 
    
	Guarantor’s Signature/Stamp 	) 	Name of Transferor 
	 	) 	  

CERTAIN REQUIREMENTS RELATING TO TRANSFERS – READ
CAREFULLY

The signature(s) of the transferor(s) must correspond with the
name(s) as written upon the face of this certificate(s), in every particular,
without alteration or enlargement, or any change whatsoever. The signature(s) on
this form must be guaranteed in accordance with the transfer agent’s then
current guidelines and requirements at the time of transfer. Notarized or
witnessed signatures are not acceptable as guaranteed signatures. As at the time
of closing, you may choose one of the following methods (although subject to
change in accordance with industry practice and standards): 

	Canada and the USA: A Medallion Signature Guarantee obtained from a
  member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP,
  NYSE MSP). Many commercial banks, savings banks, credit unions, and all broker
  dealers participate in a Medallion Signature Guarantee Program. The Guarantor
  must affix a stamp bearing the actual words “Medallion Guaranteed”,
  with the correct prefix covering the face value of the certificate. 

A-7

	
  Canada: A Signature Guarantee obtained from the Guarantor must affix
  a stamp bearing the actual words “Signature Guaranteed”. Signature
  Guarantees are not accepted from Treasury Branches, Credit Unions or Caisse
  Populaires unless they are members of a Medallion Signature Guarantee Program.
  For corporate holders, corporate signing resolutions, including certificate of
  incumbency, are also required to accompany the transfer, unless there is a
  “Signature & Authority to Sign Guarantee” Stamp affixed to the
  transfer (as opposed to a “Signature Guarantee” Stamp) obtained from an
  authorized officer of a major Canadian Schedule 1 chartered bank. 

  
	
  Outside North America: For holders located outside North America,
  present the certificates(s) and/or document(s) that require a guarantee to a
  local financial institution that has a corresponding Canadian or American
  affiliate which is a member of an acceptable Medallion Signature Guarantee
  Program. The corresponding affiliate will arrange for the signature to be
  over-guaranteed. 

B-1 

SCHEDULE “B” 

EXERCISE FORM 

	TO: 	MANAS PETROLEUM
      CORPORATION 
	 	 
	AND TO: 	EQUITY FINANCIAL TRUST
      COMPANY 

               The
undersigned holder of the Warrants evidenced by this Warrant Certificate hereby
exercises the right to acquire ____________ (A) Common Shares of Manas Petroleum
Corporation. 

               Exercise
Price Payable:
__________________________________________________
                                                           
((A) multiplied by U.S.$0.70, subject to adjustment) 

              
The undersigned hereby exercises the right of such holder to be issued, and
hereby subscribes for, Common Shares that are issuable pursuant to the exercise
of such Warrants on the terms specified in such Warrant Certificate and in the
Warrant Indenture. 

               The
undersigned hereby acknowledges that the undersigned is aware that the Common
Shares received on exercise may be subject to restrictions on resale under
applicable securities legislation. 

               Any
capitalized term in this Warrant Certificate that is not otherwise defined
herein, shall have the meaning ascribed thereto in the Warrant Indenture.

               The
undersigned represents, warrants and certifies that the undersigned holder at
the time of exercise of the Warrants: (i) it is not a U.S. Warrantholder; (ii)
at the time of exercise of the Warrants it is not exercising the Warrants for
the account or benefit of a person in the United States or a U.S. Person; (iii)
it did not execute or deliver the exercise form for the Warrants in the United
States; and (iv) delivery of the Common Shares to be issued upon exercise of the
Warrants is not to an address in the United States. 

    
          It is understood that the
Corporation and Equity Financial Trust Company may require evidence to verify
the foregoing representations. Certificates will not be registered or delivered
to an address in the United States. 

               “United
States” and “U.S. Person” are as defined in Rule 902 of Regulation S
under the U.S. Securities Act. 

B-2

              
The undersigned hereby irrevocably directs that the said Common Shares be
issued, registered and delivered as follows: 

	Name(s) in Full and 
Social Insurance
      
Number(s) 
(if applicable) 	 	Address(es) 

	 	Number of 
Common Shares
      

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

              
Please print full name in which certificates representing the Common Shares are
to be issued. If any Common Shares are to be issued to a person or persons other
than the registered holder, the registered holder must pay to the Warrant Agent
all exigible transfer taxes or other government charges, if any, and the Form of
Transfer must be duly executed. 

              
Once completed and executed, this Exercise Form must be mailed or delivered to
Equity Financial Trust Company, Attn: Corporate Actions Department. 

	 DATED this ____day of _____, 20__. 		  
	  		  
			 
		)	 
		)	 
	Witness 	)	(Signature of Warrantholder, to be the same as
    
	  	)	appears on the face of this Warrant
      Certificate) 
		)	 
		)	 
	  	)	Name of Registered Warrantholder

     [ 
]      Please check if the certificates representing
the Common Shares are to be delivered at the office where this Warrant
Certificate is surrendered, failing which such certificates will be mailed to
the address set out above. Certificates will be delivered or mailed as soon as
practicable after the surrender of this Warrant Certificate to the Warrant
Agent.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}]]