Document:

Exhibit

Exhibit 10.42
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Fourth Amendment to Loan and Security Agreement (this “Amendment”) dated as of December 29, 2015 (the “Fourth Amendment Effective Date”), is by between SILICON VALLEY BANK, a California corporation with a loan production office located at 275 Grove Street, Suite 2-200, Newton, Massachusetts 02466 (“Bank”), and ROSETTA STONE LTD., a Virginia corporation (“Borrower”).
W I T N E S S E T H:
WHEREAS, Borrower and Bank are party to that certain Loan and Security Agreement dated as of October 28, 2014 as amended by a First Amendment to Loan and Security Agreement dated March 31, 2015, a Second Amendment to Loan and Security Agreement dated May 1, 2015 and a Third Amendment to Loan and Security Agreement dated June 26, 2015  (as amended, modified, supplemented or restated and in effect from time to time, the “Loan Agreement”); and
WHEREAS, Borrower has requested that Bank agree to modify and amend certain terms and conditions of the Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
		
	1.
	Capitalized Terms.  All capitalized terms used herein and not otherwise defined shall have the same meaning herein as in the Loan Agreement.

		
	2.
	Amendment of Exhibits D and E to the Loan Agreement.  Exhibit D and Exhibit E to the Loan Agreement are hereby deleted in their entireties and replaced by Exhibit D and Exhibit E attached to this Amendment.  

		
	3.
	Conditions Precedent to Effectiveness.  This Amendment shall not be effective until each of the following conditions precedent have been fulfilled to the satisfaction of Bank:

(a)This Amendment shall have been duly executed and delivered by the respective parties hereto.  Bank shall have received a fully executed copy hereof.
(b)All necessary consents and approvals to this Amendment shall have been obtained by Borrower.
(c)After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing.
(d)Bank shall have received the fees costs and expenses required to be paid pursuant to Section 5 of this Amendment (including the reasonable and documented fees and disbursements of legal counsel required to be paid thereunder).  

		
	4.
	Representations and Warranties.  Borrower hereby represents and warrants to Bank as follows:

(a)This Amendment is, and each other Loan Document to which it is or will be a party, when executed and delivered by Borrower, will be the legally valid and binding obligation of Borrower, enforceable against Borrower in accordance with its respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally and equitable principals (whether enforcement is sought by proceedings in equity or at law).

(b)Its representations and warranties set forth in this Amendment, the Loan Agreement, as amended by this Amendment and after giving effect hereto, and the other Loan Documents to which it is a party are (i) to the extent qualified by materiality, true and correct in all respects and (ii) to the extent not qualified by materiality, true and correct in all material respects, in each case, on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date).

(c)The execution and delivery by Borrower of this Amendment, the performance by Borrower of its obligations hereunder and the performance of Borrower under the Loan Agreement, as amended by this Amendment, (i) have been duly authorized by all necessary organizational action on the part of Borrower and (ii) will not (A) violate any provisions of the certificate of incorporation or formation or organization or by-laws or limited liability company 

agreement or limited partnership agreement of Borrower or (B) constitute a violation by Borrower of any applicable material Requirement of Law. 

Borrower acknowledges that Bank has acted in good faith and have conducted in a commercially reasonable manner their relationships with Borrower in connection with this Amendment and in connection with the other Loan Documents.  Borrower understands and acknowledges that Bank is entering into this Amendment in reliance upon, and in partial consideration for, the above representations, warranties, and acknowledgements, and agrees that such reliance is reasonable and appropriate.  
		
	5.
	Payment of Costs and Expenses Borrower shall pay to Bank an amendment fee equal to Twenty Thousand Dollars ($20,000), which fee shall be fully-earned and non-refundable as of the Fourth Amendment Effective Date.  In addition, Borrower shall pay to Bank all reasonable costs and out-of-pocket expenses of every kind in connection with the preparation, negotiation, execution and delivery of this Amendment and any documents and instruments relating hereto or thereto (which costs include, without limitation, the reasonable and documented fees and expenses of any attorneys retained by Bank).

		
	6.
	Choice of Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  Each party hereto submits to the exclusive jurisdiction of the State and Federal courts in the Southern District of the State of New York; provided, however, that nothing in the Loan Agreement as amended by this Amendment shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of such Agent. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AMENDMENT, THE OTHER LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AMENDMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  

		
	7.
	Counterpart Execution.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment.  Delivery of an executed counterpart of this Amendment by telefacsimile or by e-mail transmission of an Adobe file format document (also known as a PDF file) shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or by e-mail transmission of an Adobe file format document (also known as a PDF file) also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

		
	8.
	Effect on Loan Documents.

(a)The amendments set forth herein shall be limited precisely as written and shall not be deemed (a) to be a forbearance, waiver, or modification of any other term or condition of the Loan Agreement or of any Loan Documents or to prejudice any right or remedy which Bank may now have or may have in the future under or in connection with the Loan Documents; (b) to be a consent to any future consent or modification, forbearance, or waiver to the Loan Agreement or any other Loan Document, or to any waiver of any of the provisions thereof; or (c) to limit or impair Bank’s right to demand strict performance of all terms and covenants as of any date.  Borrower hereby ratifies and reaffirms its obligations under the Loan Agreement and the other Loan Documents to which it is a party and agrees that none of the amendments or modifications to the Loan Agreement set forth in this Amendment shall impair Borrower’s obligations under the Loan Documents or Bank’s rights under the Loan Documents.  Borrower hereby further ratifies and reaffirms the validity and enforceability of all of the Liens heretofore granted, pursuant to and in connection with the Guarantee and Collateral Agreement or any other Loan Document to Bank on behalf and for the benefit of the Secured Parties, as collateral security for the obligations under the Loan Documents, in accordance with their respective terms, and acknowledges that all of such Liens, and all collateral heretofore pledged as security for such obligations, continues to be and remain collateral for such obligations from and after the date hereof.  Borrower acknowledges and agrees that the Loan Agreement and each other Loan Document is still in full force and effect and acknowledges as of the date hereof that Borrower has no 

defenses to enforcement of the Loan Documents.  Borrower waives any and all defenses to enforcement of the Loan Agreement as amended hereby and each other Loan Documents that might otherwise be available as a result of this Amendment of the Loan Agreement.  To the extent any terms or provisions of this Amendment conflict with those of the Loan Agreement or other Loan Documents, the terms and provisions of this Amendment shall control.
(b)To the extent that any terms and conditions in any of the Loan Documents shall contradict or be in conflict with any terms or conditions of the Loan Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Loan Agreement as modified or amended hereby.
(c)This Amendment is a Loan Document.  

		
	9.
	Entire Agreement.  This Amendment constitutes the entire agreement between Borrower and Bank pertaining to the subject matter contained herein and supersedes all prior agreements, understandings, offers and negotiations, oral or written, with respect hereto and no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Amendment.  All of the terms and provisions of this Amendment are hereby incorporated by reference into the Loan Agreement, as applicable, as if such terms and provisions were set forth in full therein, as applicable.  All references in the Loan Agreement to “this Agreement”, “hereto”, “hereof”, “hereunder” or words of like import shall mean the Loan Agreement as amended hereby.  

		
	10.
	Release.  Borrower may have certain Claims against the Released Parties, as those terms are defined below, regarding or relating to the Loan Agreement or the other Loan Documents.  Bank and Borrower desire to resolve each and every one of such Claims in conjunction with the execution of this Amendment and thus Borrower makes the releases contained in this Section 10.  In consideration of Bank entering into this Amendment, Borrower  hereby fully and unconditionally releases and forever discharges Bank and its directors, officers, employees, subsidiaries, branches, affiliates, attorneys, agents, representatives, successors and assigns and all persons, firms, corporations and organizations acting on any of their behalf (collectively, the “Released Parties”), of and from any and all claims, allegations, causes of action, costs or demands and liabilities, of whatever kind or nature, from the beginning of the world to the date on which this Amendment is executed, whether known or unknown, liquidated or unliquidated, fixed or contingent, asserted or unasserted, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, anticipated or unanticipated, which Borrower has, had, claims to have had or hereafter claims to have against the Released Parties by reason of any act or omission on the part of the Released Parties, or any of them, occurring prior to the date on which this Amendment is executed, including all such loss or damage of any kind heretofore sustained or that may arise as a consequence of the dealings among the parties up to and including the date on which this Amendment is executed, including the administration or enforcement of the Loans, the Obligations, the Loan Agreement or any of the Loan Documents (collectively, all of the foregoing, the “Claims”).  Borrower represents and warrants that it has no knowledge of any claim by it against the Released Parties or of any facts or acts of omission of the Released Parties which on the date hereof would be the basis of a claim by Borrower against the Released Parties which is not released hereby.  Borrower represents and warrants that the foregoing constitutes a full and complete release of all Claims.

		
	11.
	Severability.  The provisions of this Amendment are severable, and if any clause or provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision in this Amendment in any jurisdiction.

[SIGNATURE PAGES FOLLOW]

In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.
BORROWER:
ROSETTA STONE LTD.
By:     /s/ Thomas M. Pierno    
Name:     Thomas M. Pierno    
Title:     Chief Financial Officer    

BANK:
SILICON VALLEY BANK
By:     /s/ Jack Gaziano    
Name:     Jack Gaziano    
Title:     Managing Director    

Acknowledged and Agreed: 
GUARANTORS:

ROSETTA STONE INC.

By:     /s/ Thomas M. Pierno    
Name:     Thomas M. Pierno    
Title:     Chief Financial Officer    

ROSETTA STONE HOLDINGS INC.

By:     /s/ Thomas M. Pierno    
Name:     Thomas M. Pierno    
Title:     Chief Financial Officer    

ROSETTA STONE INTERNATIONAL INC.

By:     /s/ Thomas M. Pierno    
Name:     Thomas M. Pierno    
Title:     Chief Financial Officer    

LIVEMOCHA LLC

By:    /s/ Bruce Ghrist    
Name:      Bruce Ghrist    
Title:      Manager    

LEXIA LEARNING SYSTEMS LLC

By:    /s/ Bruce Ghrist    
Name:      Bruce Ghrist    
Title:      Manager    

EXHIBIT D
COMPLIANCE CERTIFICATE

TO:    SILICON VALLEY BANK                        Date:                  
FROM:                  

The undersigned authorized officer of Rosetta Stone Ltd. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”):
(1) Each Credit party is in complete compliance for the period ending _______________ with all required covenants except as noted below; (2) there are no Events of Default; (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; (4) each Credit Party and each of its Subsidiaries, has timely filed all required tax returns and reports, and each Credit Party and each of its Subsidiaries has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by such Credit Party or Subsidiary except as otherwise permitted pursuant to the terms of Section 5.8 of the Agreement; and (5) no Liens have been levied or claims made against any Credit Party or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.  
Attached are the required documents supporting the certification.  The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes.  The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered.  Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.
	
			
	Please indicate compliance status by circling Yes/No under “Complies” column.

	 

	Reporting Covenants
	Required
	Complies

	 
	 
	 

	Quarterly financial statements with 
Compliance Certificate
	Quarterly within 45 days for the first three quarters of each fiscal year 
	Yes   No

	Annual financial statement (CPA Audited) with Compliance Certificate
	FYE within 90 days
	Yes   No

	10‐Q, 10‐K and 8-K
	Within 5 days after filing with SEC
	Yes   No

	 

	

The following Intellectual Property was registered (or a registration application submitted) after the Effective Date (if no registrations, state “None”)
___________________________________________________________________________________________
___________________________________________________________________________________________

	
				
	Financial Covenants
	Complies

	 
	 

	Achieve on a Quarterly Basis:
	 
	 
	 

	Minimum Quick Ratio
	_____:1.0
	_____:1.0
	Yes   No

	Minimum EBITDA
	_____:1.0
	_____:1.0
	Yes   No

The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.
Other Matters

	
			
	Have there been any amendments of or other changes to the capitalization table of the Credit Parties and to the Operating Documents of any Credit Party or any of its Subsidiaries since the date of the most recently delivered Compliance Certificate?  If yes, provide copies of any such amendments or changes with this Compliance Certificate to the extent not previously delivered to Bank.

The following are the exceptions with respect to the certification above:  (If no exceptions exist, state “No exceptions to note.”)
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
	
		
	ROSETTA STONE LTD.

By: 
Name: 
Title: 
	BANK USE ONLY

Received by: _____________________
authorized signer
Date: _________________________

Verified: ________________________
authorized signer
Date: _________________________

Compliance Status:Yes     No

Schedule 1 to Compliance Certificate
Financial Covenants of Borrower
In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern.
Dated:    ____________________
I.    Quick Ratio (Section 6.8(a))
Required:
	
		
	Fiscal Quarters Ending
	Quick Ratio

	December 31, 2014
	1.00 to 1.00

	March 31, 2015 and thereafter
	1.25 to 1.00

Actual:
	
			
	A.
	Aggregate value of the unrestricted cash and Cash Equivalents of Ultimate Parent and its consolidated Subsidiaries
	$

	B.
	Aggregate value of the net billed accounts receivable of Ultimate Park and its consolidated Subsidiaries
	$

	C.
	Aggregate value of the investments with maturities of fewer than 12 months 
of Ultimate Parent and its consolidated Subsidiaries
	$

	D.
	Quick Assets (the sum of lines A through C)
	$

	E.
	Aggregate value of Obligations to Bank
	$

	F.
	Aggregate value of liabilities that should, under GAAP, be classified as liabilities on Holdings’ consolidated balance sheet, including all Indebtedness, and not otherwise reflected in line E above that matures within one (1) year
	$

	G.
	Deferred Revenue
	$

	H.
	Current Liabilities (the sum of lines E and F, minus line G)
	$

	I.
	Quick Ratio (line D divided by line H)
	 

Is line H equal to or greater than ___:1:00?
  No, not in compliance                          Yes, in compliance
II.    ADJUSTED EBITDA (Section 6.8(b))
Required:
	
		
	Fiscal Quarters Ending
	Adjusted EBITDA

	 
	 

	March 31, 2015
	$4,000,000

	June 30, 2015
	$1,000,000

	September 30, 2015
	$7,000,000

	December 31, 2015 
	$1

	March 31, 2016
	$5,000,000

	June 30, 2016
	$3,000,000

	September 30, 2016
	$7,000,000

	December 31, 2016 and thereafter 
	$10,000,000

Actual (for the trailing four quarters):
1.  Fiscal quarter most recently ended: 
	
			
	A.
	Net Income 
	$

	B.
	To the extent included in the determination of Net Income
	 

	 
	1.Interest Expense
	$

	 
	2.Income tax benefit and expense
	$

	 
	3.Depreciation expense
	$

	 
	4.Amortization expense
	$

	 
	5.Stock-based compensation expense
	$

	 
	6. Other non-operating expense (less other income) (as such amount is shown on the “Other income and (expense)”" line item below the operating income line in the Ultimate Parent's relevant income statement, determined in accordance with GAAP)
	$

	 
	7.Goodwill impairment
	$

	 
	8.Change in Deferred Revenue 
	$

	 
	9.Impairments other than Goodwill
	$

	 
	10.Change in deferred commissions
	$

	 
	11.Items related to the litigation with Google Inc.
	$

	 
	12.Restructuring and related wind down costs, consulting and other related costs associated with development and implementation of Borrower’s revised business strategy, severance costs and transaction and other costs associated with mergers and acquisitions
	$

	 
	13.Adjustments related to recording the non-cash tax valuation allowance for deferred tax assets.
	$

	 
	14.Interest income
	$

	 
	15. FX
	$

	 
	16.Total Line B: The sum of lines 1 through 9 minus lines 10 through 14 and plus or minus line 15
	$

	C.
	ADJUSTED EBITDA (line A plus line B)
	$

2.  1st fiscal quarter preceding the fiscal quarter most recently ended: 
	
			
	A.
	Net Income 
	$

	B.
	To the extent included in the determination of Net Income
	 

	 
	1.Interest Expense
	$

	 
	2.Income tax benefit and expense
	$

	 
	3.Depreciation expense
	$

	 
	4.Amortization expense
	$

	 
	5.Stock-based compensation expense
	$

	 
	6. Other non-operating expense (less other income) (as such amount is shown on the “Other income and (expense)”" line item below the operating income line in the Ultimate Parent's relevant income statement, determined in accordance with GAAP)
	$

	 
	7.Goodwill impairment
	$

	 
	8.Change in Deferred Revenue 
	$

	 
	9.Impairments other than Goodwill
	$

	 
	10.Change in deferred commissions
	$

	 
	11.Items related to the litigation with Google Inc.
	$

	 
	12.Restructuring and related wind down costs, consulting and other related costs associated with development and implementation of Borrower’s revised business strategy, severance costs and transaction and other costs associated with mergers and acquisitions
	$

	 
	13.Adjustments related to recording the non-cash tax valuation allowance for deferred tax assets.
	$

	 
	14.Interest income
	$

	 
	15. FX
	$

	 
	16.Total Line B: The sum of lines 1 through 9 minus lines 10 through 14 and plus or minus line 15
	$

	C.
	ADJUSTED EBITDA (line A plus line B)
	$

3.  2nd fiscal quarter prior preceding the fiscal quarter most recently ended: 
	
			
	A.
	Net Income 
	$

	B.
	To the extent included in the determination of Net Income
	 

	 
	1.Interest Expense
	$

	 
	2.Income tax benefit and expense
	$

	 
	3.Depreciation expense
	$

	 
	4.Amortization expense
	$

	 
	5.Stock-based compensation expense
	$

	 
	6. Other non-operating expense (less other income) (as such amount is shown on the “Other income and (expense)”" line item below the operating income line in the Ultimate Parent's relevant income statement, determined in accordance with GAAP)
	$

	 
	7.Goodwill impairment
	$

	 
	8.Change in Deferred Revenue 
	$

	 
	9.Impairments other than Goodwill
	$

	 
	10.Change in deferred commissions
	$

	 
	11.Items related to the litigation with Google Inc.
	$

	 
	12.Restructuring and related wind down costs, consulting and other related costs associated with development and implementation of Borrower’s revised business strategy, severance costs and transaction and other costs associated with mergers and acquisitions
	$

	 
	13.Adjustments related to recording the non-cash tax valuation allowance for deferred tax assets.
	$

	 
	14.Interest income
	$

	 
	15. FX
	$

	 
	16.Total Line B: The sum of lines 1 through 9 minus lines 10 through 14 and plus or minus line 15
	$

	C.
	ADJUSTED EBITDA (line A plus line B)
	$

4.  3rd fiscal quarter prior preceding the fiscal quarter most recently ended: 
	
			
	A.
	Net Income 
	$

	B.
	To the extent included in the determination of Net Income
	 

	 
	1.Interest Expense
	$

	 
	2.Income tax benefit and expense
	$

	 
	3.Depreciation expense
	$

	 
	4.Amortization expense
	$

	 
	5.Stock-based compensation expense
	$

	 
	6. Other non-operating expense (less other income) (as such amount is shown on the “Other income and (expense)”" line item below the operating income line in the Ultimate Parent's relevant income statement, determined in accordance with GAAP)
	$

	 
	7.Goodwill impairment
	$

	 
	8.Change in Deferred Revenue 
	$

	 
	9.Impairments other than Goodwill
	$

	 
	10.Change in deferred commissions
	$

	 
	11.Items related to the litigation with Google Inc.
	$

	 
	12.Restructuring and related wind down costs, consulting and other related costs associated with development and implementation of Borrower’s revised business strategy, severance costs and transaction and other costs associated with mergers and acquisitions
	$

	 
	13.Adjustments related to recording the non-cash tax valuation allowance for deferred tax assets.
	$

	 
	14.Interest income
	$

	 
	15. FX
	$

	 
	16.Total Line B: The sum of lines 1 through 9 minus lines 10 through 14 and plus or minus line 15
	$

	C.
	ADJUSTED EBITDA (line A plus line B)
	$

5.Trailing 4-quarter EBITDA (Sum of lines (1C, 2C, 3C and 4C ) $
Is line 5 equal to or greater than $____?
  No, not in compliance                          Yes, in compliance

EXHIBIT E
FINANCIAL COVENANTS

Achieve on a consolidated basis with respect to Ultimate Parent and its Subsidiaries:
(a)Quick Ratio.  A ratio of Quick Assets to Current Liabilities, in each case, measured as at the last day of the fiscal quarters specified below, of at least the following:
	
		
	Fiscal Quarters Ending
	Quick Ratio

	December 31, 2014
	1.00 to 1.00

	March 31, 2015 and thereafter
	1.25 to 1.00

(b)Adjusted EBITDA.  Adjusted EBITDA, measured as of the end of each fiscal quarter during the periods specified below for the trailing four quarters then ended, of at least the following: 
	
		
	Fiscal Quarters Ending
	Adjusted EBITDA

	 
	 

	March 31, 2015
	$4,000,000

	June 30, 2015
	$1,000,000

	September 30, 2015
	$7,000,000

	December 31, 2015 
	$1

	March 31, 2016
	$5,000,000

	June 30, 2016
	$3,000,000

	September 30, 2016
	$7,000,000

	December 31, 2016 and thereafter 
	$10,000,000Energy Fuels Inc. - Exhibit 4.1 - Filed by newsfilecorp.com

BLG Draft: March 10, 2016 

 

 

 

ENERGY FUELS INC. 

and 

CST TRUST COMPANY 

 

 

 

 

 

WARRANT INDENTURE 

 

 

 

 

Providing for the Issue of 
Common Share Purchase
Warrants 

 

 

 

Dated as of March 14, 2016 

TABLE OF CONTENTS 

	ARTICLE
      1 INTERPRETATION 	2
      
	       1.1
      	Definitions
      	2
      
	       1.2
      	Number
      and Gender 	6
      
	       1.3
      	Interpretation
      Not Affected by Headings, Etc. 	6
      
	       1.4
      	Day
      Not a Business Day 	6
      
	       1.5
      	Governing
      Law 	6
      
	       1.6
      	Attornment
      	6
      
	       1.7
      	Currency
      	7
      
	       1.8
      	Meaning
      of “Outstanding” 	7
      
	       1.9
      	Severability
      	7
      
	       1.10
      	Accounting
      Principles 	7
      
	       1.11
      	Statutory
      References 	7
      
	  	  	  
	ARTICLE
      2 ISSUE OF WARRANTS 	7
      
	       2.1
      	Issue
      of Warrants 	7
      
	       2.2
      	Form
      and Terms of Warrants 	8
      
	       2.3
      	Issue
      of Global Certificates 	9
      
	       2.4
      	Issue
      in Substitution for Lost Warrant Certificates 	12
      
	       2.5
      	Warrantholder
      Not a Shareholder 	12
      
	       2.6
      	Warrants
      to Rank Pari Passu 	12
      
	       2.7
      	Signing
      of Warrant Certificates 	12
      
	       2.8
      	Certification
      by the Warrant Agent 	13
      
	       2.9
      	Copy
      of Indenture 	13
      
	  	  	  
	ARTICLE
      3 EXCHANGE AND OWNERSHIP OF WARRANTS; NOTICES 	13
      
	       3.1
      	Exchange
      of Warrant Certificates 	13
      
	       3.2
      	Transfer
      of Warrants 	14
      
	       3.3
      	Registration
      of Warrants 	14
      
	       3.4
      	Recognition
      of Registered Holder 	15
      
	       3.5
      	Evidence
      of Ownership 	15
      
	       3.6
      	Notices
      	16
      
	  	  	  
	ARTICLE
      4 EXERCISE OF WARRANTS 	16
      
	       4.1
      	Method
      of Exercise of Warrants 	16
      
	       4.2
      	Cashless
      Exercise 	18
      
	       4.3
      	Effect
      of Exercise of Warrants 	19
      
	       4.4
      	Subscription
      for Less than Entitlement 	20
      
	       4.5
      	No
      Fractional Common Shares 	20
      
	       4.6
      	Expiration
      of Warrant Certificates 	20
      
	       4.7
      	Cancellation
      of Surrendered Warrants 	20
      
	       4.8
      	Accounting
      and Recording 	20
      
	       4.9
      	Prohibition
      on Exercise 	21
      
	  	  	  
	ARTICLE
      5 ADJUSTMENT OF SUBSCRIPTION RIGHTS AND EXERCISE PRICE 	21
      
	       5.1
      	Definitions
      	21
      

i 

	       5.2 	Adjustment of Exercise Price and Number of Common Shares
      Purchasable Upon Exercise 	21 
	       5.3 	Rules
      Regarding Calculation of Adjustment of Exercise Price and Number of Common
      Shares Purchasable Upon Exercise 	25 
	       5.4 	Postponement of Subscription 	27 
	       5.5 	Notice of
      Adjustment of Exercise Price and Number of Common Shares Purchasable Upon
      Exercise 	28 
	  	  	  
	ARTICLE 6 PURCHASES BY THE
      CORPORATION 	29 
	       6.1 	Optional Purchases by the Corporation 	29 
	  	  	  
	ARTICLE 7
      COVENANTS OF THE CORPORATION 	29 
	       7.1 	Covenants of
      the Corporation 	29 
	       7.2 	Warrant Agent’s Remuneration and Expenses 	30 
	       7.3 	Performance of
      Covenants by Warrant Agent 	30 
	  	  	  
	ARTICLE 8 ENFORCEMENT 	31 
	       8.1 	Suits by Warrantholders 	31 
	       8.2 	Immunity of
      Shareholders, Etc. 	32 
	       8.3 	Limitation of Liability 	33 
	  	  	  
	ARTICLE 9
      MEETINGS OF WARRANTHOLDERS 	33 
	       9.1 	Right to
      Convene Meetings 	33 
	       9.2 	Notice 	33 
	       9.3 	Chairman
    	33 
	       9.4 	Quorum 	34 
	       9.5 	Power to
      Adjourn 	34 
	       9.6 	Show of Hands 	34 
	       9.7 	Poll and
      Voting 	34 
	       9.8 	Regulations 	35 
	       9.9 	Corporation,
      Warrant Agent and Warrantholders May Be Represented 	36 
	       9.10 	Powers Exercisable by Extraordinary Resolution 	36 
	       9.11 	Meaning of
      Extraordinary Resolution 	37 
	       9.12 	Powers Cumulative 	38 
	       9.13 	Minutes
	38 
	       9.14 	Instruments In Writing 	38 
	       9.15 	Binding Effect
      of Resolutions 	38 
	       9.16 	Holdings by Corporation Disregarded 	38 
	  	  	  
	ARTICLE 10
      SUPPLEMENTAL INDENTURES 	39 
	       10.1 	Provision for
      Supplemental Indentures for Certain Purposes 	39 
	       10.2 	Successor
      Corporations 	40
      
	  	  	  
	ARTICLE
      11 CONCERNING THE WARRANT AGENT 	40
      
	       11.1
      	Rights
      and Duties of Warrant Agent 	40
      
	       11.2
      	Evidence,
      Experts and Advisers 	41
      
	       11.3
      	Monies
      Held by Warrant Agent 	42
      

ii 

	       11.4
      	Action
      by Warrant Agent to Protect Interest 	42
      
	       11.5
      	Warrant
      Agent Not Required to Give Security 	42
      
	       11.6
      	Protection
      of Warrant Agent 	42
      
	       11.7
      	Replacement
      of Warrant Agent; Successor by Merger 	43
      
	       11.8
      	Conflict
      of Interest 	44
      
	       11.9
      	Warrant
      Agent Not to be Appointed Receiver 	44
      
	       11.10
      	Payments
      by Warrant Agent 	44
      
	       11.11
      	Unclaimed
      Interest or Distribution - Retention of Benefits by Warrant Agent 	45
      
	       11.12
      	Deposit
      of Securities 	45
      
	       11.13
      	Act,
      Error, Omission Etc. 	45
      
	       11.14
      	Indemnification
      	45
      
	       11.15
      	Notice
      	45
      
	       11.16
      	Reliance
      by the Warrant Agent 	46
      
	       11.17
      	Anti-Money
      Laundering and Anti-Terrorist Legislation 	46
      
	       11.18
      	Privacy
      Laws 	46
      
	       11.19
      	Third
      Party Interests 	47
      
	       11.20
      	Authority
      to Carry on Business 	47
      
	  	  	  
	ARTICLE
      12 ACCEPTANCE OF TRUSTS BY WARRANT AGENT 	47
      
	       12.1
      	Acceptance
      	47
      
	  	  	  
	ARTICLE
      13 GENERAL 	47
      
	       13.1
      	Notice
      to the Corporation and the Warrant Agent 	47
      
	       13.2
      	Time
      of the Essence 	48
      
	       13.3
      	Counterparts
      and Formal Date 	48
      
	       13.4
      	Satisfaction
      and Discharge of Indenture 	48
      
	       13.5
      	Provisions
      of Indenture and Warrant Certificates for the Sole Benefit of Parties and
      Warrantholders 	49
      
	       13.6
      	Force
      Majeure 	49
      
	       13.7
      	Common
      Shares or Warrants Owned by the Corporation or its Subsidiaries -
      Certificates to be Provided 	49
      
	  	  	  
	SCHEDULE
      “A” FORM OF WARRANT CERTIFICATE 	A-1
      
	  	  	  
	SCHEDULE
      “B” SUBSCRIPTION FORM 	A-1
      
	  	  	  
	SCHEDULE
      “C” TRANSFER FORM 	B-1
      

iii 

THIS WARRANT INDENTURE made as of March 14, 2016 

BETWEEN: 

ENERGY FUELS INC., a corporation existing under the laws
  of Ontario and having its registered office in the City of Toronto, in the
Province of Ontario 

(hereinafter called the “Corporation”) 

- and - 

CST
    TRUST COMPANY, a trust company continued under the laws of Canada and
registered to carry on business in the Province of Ontario 

(hereinafter called
  the “Warrant Agent”) 

WHEREAS in connection with the public offering by the
Corporation of 5,031,250 units of the Corporation, the Corporation proposes to
issue up to 2,515,625 common share purchase warrants (“Warrants”), with
each whole Warrant entitling the registered holder thereof to purchase one
Common Share (as defined herein) (subject to adjustment as herein provided) at
the price and upon the terms and conditions herein set forth; 

AND WHEREAS for such purpose the Corporation deems it
necessary to create and issue Warrants constituted and issued in the manner
hereinafter appearing; 

AND WHEREAS for such purpose, the Corporation is duly
authorized to create and issue the Warrants constituted and issued in the manner
hereinafter provided; 

AND WHEREAS all things necessary have been done and
performed to make the Warrants (and if issued, the Warrant Certificates when
certified by the Warrant Agent and issued as provided for in this Indenture)
legal, valid and binding upon the Corporation with the benefits of and subject
to the terms of this Indenture; 

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; 

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

NOW THEREFORE THIS INDENTURE WITNESSES that for good and
valuable consideration mutually given and received, the receipt and sufficiency
of which is hereby acknowledged, it is hereby agreed and declared as follows:

ARTICLE 1 
INTERPRETATION 

1.1       
Definitions 

In this Indenture, unless there is something in the subject
matter or context inconsistent therewith, the terms defined in this Section or
elsewhere herein shall have the respective meanings specified in this Section or
elsewhere herein: 

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

	 	 
	(b) 	
      “Affiliate” has the meaning ascribed thereto in
      the Securities Act (Ontario);

	 	 
	(c) 	
      “Beneficial Owner” means, in respect of a Warrant,
      a person who owns the beneficial interest in the Warrant;

	 	 
	(d) 	
      “BEO System” means the book-based securities
      transfer system administered by CDS in accordance with its operating rules
      and procedures in force from time to time;

	 	 
	(e) 	
      “Book-Based System” means the book-entry
      registration system maintained by the Depository;

	 	 
	(f) 	
      “Business Day” means a day which is not Saturday
      or Sunday or a statutory holiday in the City of Toronto or a day on which
      the office of the Warrant Agent in the City of Toronto is
closed;

	 	 
	(g) 	
      “Capital Reorganization” has the meaning
      attributed thereto in subsection 5.2(d);

	 	 
	(h) 	
      “CDS” means CDS Clearing and Depository Services
      Inc. and its successors in interest;

	 	 
	(i) 	
      “CDS Participants” means a person recognized by
      the Depository as a participant in the securities registration and
      transfer system administered by the Depository or an institution that
      participates, directly or indirectly, in the Depository’s book-entry
      registration system with respect to the Warrants;

	 	 
	(j) 	
      “Common Shares” means the common shares in the
      capital of the Corporation as such shares exist at the close of business
      on the date hereof and, in the event that there shall occur a change in
      respect of or affecting the Common Shares referred to in Article 5
      (whether or not such change shall result in an adjustment in the Exercise
      Price), the term “Common Shares” shall include the shares, other
      securities or other property which a Warrantholder is entitled to purchase
      resulting from such change and “Common Share” means one of the
      Common Shares;

	 	 
	(k) 	
      “Common Share Reorganization” has the meaning
      attributed thereto in subsection 5.2(a);

	 	 
	(l) 	
      “Corporation” means Energy Fuels Inc., a
      corporation incorporated under the OBCA, and its lawful successors from
      time to time;

2 

	(m) 	
      “Corporation’s Auditors” means KPMG LLP, the firm
      of chartered accountants duly appointed as auditors of the Corporation or
      such other firm as may be duly appointed as auditors of the Corporation
      from time to time;

	 	 
	(n) 	
      “Court” has the meaning attributed thereto in
      subsection 11.7(a);

	 	 
	(o) 	
      “Current Market Price” of a Common Share at any
      date means the price per share equal to the volume weighted average price
      at which the Common Shares have traded: (i) on the NYSE; (ii) if the
      Common Shares are not traded on the NYSE, on the TSX or any other
      recognized exchange or market; or (iii) if the Common Shares are not
      traded on any such recognized exchange or market, on the over-the-counter
      market, during the twenty (20) consecutive Trading Days ending on the
      third Trading Day prior to such date as reported by such market or
      exchange in which the Common Shares are then trading or quoted. The volume
      weighted average price per Common Share shall be determined by dividing
      the aggregate sale price of all such shares sold on the aforementioned
      over-the- counter market, recognized exchange or market, as the case may
      be, during the aforementioned twenty (20) consecutive Trading Days by the
      total number of such shares so sold. If the Common Shares are not then
      traded in the over-the-counter market or on a recognized exchange or
      market, the Current Market Price of the Common Shares shall be the fair
      market value of the Common Shares as determined in good faith by the board
      of directors of the Corporation after consultation with a nationally or
      internationally recognized investment dealer or investment
  banker;

	 	 
	(p) 	
      “Date of Issue” for a particular Warrant means the
      date on which the Warrant is actually issued by the Corporation;

	 	 
	(q) 	
      “Depository” means CDS or its successor, or any
      other depository offering a book based securities registration and
      transfer system similar to that administered by CDS which the Corporation,
      acting reasonably, may designate;

	 	 
	(r) 	
      “director” means a director of the Corporation for
      the time being, and, unless otherwise specified herein, reference to
      action “by the directors” means action by the directors of the Corporation
      as a board, or whenever duly empowered, action by any committee of such
      board;

	 	 
	(s) 	
      “Dividends Paid in the Ordinary Course” means
      dividends paid in any financial year of the Corporation, whether in (i)
      cash, (ii) shares of the Corporation, (iii) warrants or similar rights to
      purchase any shares of the Corporation or property or other assets of the
      Corporation at a purchase or exercise price of at least 110% of the fair
      market value of the shares or property or other assets purchasable as of
      the date of distribution of such warrants or similar rights, or (iv)
      property or other assets of the Corporation, as the case may be, as
      determined by action by the directors except that, in the case of warrants
      or similar rights to purchase Common Shares or securities convertible into
      or exchangeable for Common Shares such fair market value of the warrants
      or similar rights shall be equal to the number of Common Shares which may
      be purchased thereby (or the number of Common Shares issuable upon
      conversion or exchange) as of the date of distribution of such warrants or
      similar rights, multiplied by the Current Market Price of the
  Common Shares on the date of such
distribution, provided that the value of such dividends does not in such
financial year in the aggregate exceed the greater of 

3 

	 	(a) 	
      200% of the aggregate amount of dividends paid by the
      Corporation on the Common Shares in the 12 month period ending immediately
      prior to the first day of such financial year, and

	 	 	 
	 	(b) 	
      100% of the consolidated net earnings from continuing
      operations of the Corporation, before any extraordinary items, for the
      12-month period ending immediately prior to the first day of such
      financial year (such consolidated net earnings from continuing operations
      to be computed in accordance with US GAAP or IFRS, as
  applicable);

	(t) 	
      “Exchange” means the NYSE and if the Common Shares
      are not listed on the NYSE, any other stock exchange or over-the-counter
      market on which the Common Shares are then listed or quoted for
      trading;

	 	 
	(u) 	
      “Exercise Date” with respect to any Warrant means
      the date on which the Warrant Certificate representing such Warrant is
      surrendered for exercise in accordance with the provisions of Article
      4;

	 	 
	(v) 	
      “Exercise Period” means the period commencing on
      the time of issue on the Date of Issue and ending at the Time of
      Expiry;

	 	 
	(w) 	
      “Exercise Price” means the price of US $3.20 to
      exercise a Warrant to acquire a Common Share, unless such price shall have
      been adjusted in accordance with the provisions of Article 5, in which
      case it shall mean the adjusted price in effect at such time;

	 	 
	(x) 	
      “Extraordinary Resolution” has the meaning
      attributed thereto in subsection 9.11(a);

	 	 
	(y) 	
      “Global Certificate” means a Warrant Certificate
      that is issued to and registered in the name of CDS or its
  nominee;

	 	 
	(z) 	
      “IFRS” means International Financial Reporting
      Standards.

	 	 
	(aa) 	
      “NYSE” means NYSE MKT LLC.

	 	 
	(bb) 	
      “OBCA” means the Business Corporations Act
      (Ontario), as amended or replaced from time to time;

	 	 
	(cc) 	
      “Parties” means, collectively, the Corporation and
      the Warrant Agent, and “Party” means one of the Parties as the
      context under this Indenture may require;

	 	 
	(dd) 	
      “Person” means an individual, corporation,
      partnership, trust or any unincorporated
organization;

4 

	(ee) 	
      “Registered Certificate” means a Warrant
      Certificate that is registered in the name of a Warrantholder, other than
      a Global Certificate;

	 	 
	(ff) 	
      “Rights Offering” has the meaning attributed
      thereto in subsection 5.2(b);

	 	 
	(gg) 	
      “Rights Period” has the meaning attributed thereto
      in subsection 5.2(b);

	 	 
	(hh) 	
      “Shareholder” means a holder of record of one or
      more Common Shares;

	 	 
	(ii) 	
      “Special Distribution” has the meaning attributed
      thereto in subsection 5.2(c);

	 	 
	(jj) 	
      “Subscription Form” means the Subscription Form
      forming part of the Warrant Certificate to be completed by the
      Warrantholder in order to exercise the Warrants;

	 	 
	
      (kk) 
	
      “Subsidiary” has the meaning ascribed thereto in
      National Instrument 45-106 – Prospectus Exemptions;

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

	 	 
	(mm) 	
      “Time of Expiry” means 5:00 p.m. (Toronto time) on
      March 14, 2019;

	 	 
	(nn) 	
      “Transfer Form” means the Transfer Form forming
      part of the Warrant Certificate to be completed by the Warrantholder in
      order to transfer the Warrants;

	 	 
	(oo) 	
      “Trading Day” with respect to any stock exchange
      or over-the-counter market means a day in which shares may be traded
      through the facilities of such stock exchange or over- the-counter
      market;

	 	 
	(pp) 	
      “TSX” means the Toronto Stock Exchange;

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

	 	 
	(rr) 	
      “US GAAP” means generally accepted accounted
      principles in the United States;

	 	 
	(ss) 	
      “Warrant” means one purchase warrant of the
      Corporation as constituted hereunder;

	 	 
	(tt) 	
      “Warrant Agent” means CST Trust Company, or its
      successors hereunder;

	 	 
	(uu) 	
      “Warrant Certificate” means the certificate
      evidencing the Warrants in the form of the certificate set forth in
      Schedule “A” attached to this Indenture;

	 	 
	(vv) 	
      “Warrant Register” means the register maintained
      by the Warrant Agent for the Warrants;

5 

	(ww) 	
      “Warrantholders” or “holders” without
      reference to Common Shares means the Persons who are registered holders of
      Warrants;

	 	 
	(xx) 	
      “Warrantholders’ Request” means an instrument
      signed in one or more counterparts by Warrantholders holding in the
      aggregate not less than 10% of all then outstanding Warrants, requesting
      the Warrant Agent to take some action or proceeding specified therein;
      and

	 	 
	(yy) 	
      “written order of the Corporation”, “written
      request of the Corporation”, and “certificate of the
      Corporation” and any other document required to be signed by the
      Corporation mean, respectively, a written order, request and certificate
      or other document signed in the name of the Corporation by any one of the
      President, Chief Executive Officer, Chief Financial Officer, a
      Vice-President, the Treasurer or the Secretary of the Corporation, and may
      consist of one or more instruments so executed.

1.2       
Number and Gender 

Unless the context otherwise requires, words importing the
singular include the plural and vice versa and words importing gender include
all genders. 

1.3       
Interpretation Not Affected by Headings, Etc. 

The division of this Indenture into Articles, Sections and
subsections, 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 the Warrant Certificates. 

1.4       
Day Not a Business Day 

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

1.5       
Governing Law

This Indenture and the Warrant Certificates shall be governed
by and construed in accordance with the laws of the Province of Ontario and the
federal laws of Canada applicable therein and shall be treated in all respects
as Ontario contracts.

1.6       
Attornment 

The Parties hereby irrevocably and unconditionally consent to
and submit to the courts of the Province of Ontario for any actions, suits or
proceedings arising out of or relating to this Indenture or the matters
contemplated hereby (and agree to not commence any action, suit or proceeding
relating thereto except in such courts) and further agree that service of any
process, summons, notice or document by single registered mail to the addresses
of the Parties set forth in this Indenture shall be effective service of process
for any action, suit or proceeding brought against either Party in such court.
The Parties hereby irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising out of this Indenture
or the matters contemplated hereby in the courts of the Province
of Ontario and hereby further irrevocably and unconditionally waive and agree to
not plead or claim in any such court that any such action, suit or proceeding so
brought has been brought in an inconvenient forum. 

6 

1.7       
Currency 

Except as otherwise specified herein, all dollar amounts herein
are expressed in lawful money of Canada. 

1.8       
Meaning of “Outstanding” 

Every Warrant represented by a Warrant Certificate
countersigned and delivered by the Warrant Agent or issued in uncertificated
form hereunder shall be deemed to be outstanding until it shall be cancelled or
exercised pursuant to Article 4, provided that where a new Warrant Certificate
has been issued pursuant to Section 2.4 hereof to replace one which has been
mutilated, lost, destroyed or stolen, the Warrants represented by only one of
such Warrant Certificate shall be counted for the purpose of determining the
aggregate number of Warrants outstanding. 

1.9       
Severability 

In the event that any provision hereof shall be determined to
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remainder of such provision and any other provision hereof
shall not be affected or impaired thereby. 

1.10      Accounting
Principles 

Wherever in this Indenture reference is made to a calculation
to be made or an action to be taken in accordance with accounting principles and
standards, such references will be deemed to be to US GAAP or IFRS, as
applicable to the Corporation as at the date on which such calculation or action
is made or taken or required to be made or taken. 

1.11      Statutory
References 

In this Indenture, unless something in the subject matter or
context is inconsistent therewith or unless otherwise herein provided, a
reference to any statute is to that statue as now enacted or as the same may
from time to time be amended, re-enacted or replaced and includes any regulation
made thereunder. 

ARTICLE 2 
ISSUE OF WARRANTS 

2.1       
Issue of Warrants 

Up to 2,515,625 Warrants are hereby created and authorized to
be issued and where Warrants are in certificated form, any such Warrant
Certificates issued shall be executed by the Corporation, certified by or on
behalf of the Warrant Agent upon the written order of the Corporation and
delivered in accordance with this Article.

7 

2.2       
Form and Terms of Warrants 

	 	(a) 	
      Subject to subsection 2.2(b), each Warrant authorized to
      be issued hereunder shall entitle the holder thereof to purchase at its
      option, one Common Share at any time during the Exercise Period at a price
      equal to the Exercise Price in effect on the Exercise Date.

	 	 	 
	 	(b) 	
      The number of Common Shares which may be purchased
      pursuant to the Warrants and the Exercise Price shall be adjusted in the
      events and in the manner specified in Article 5.

	 	 	 
	 	(c) 	
      Subject to the provisions of this section 2.2 hereof,
      Warrants may be issued in both certificated and uncertificated
  form.

	 	 	 
	 	(d) 	
      Warrants issued in uncertificated form shall be evidenced
      by a book position on the register of Warrantholders to be maintained by
      the Warrant Agent in accordance with Section 3.3. Warrants issued by way
      of a non-certificated issue will be registered in the name of and
  deposited with CDS or its nominee in the BEO System, or, if applicable,  the Depository Trust Company (“DTC”).

	 	 	 
	 	(e) 	
      For the purpose of the administration of the Warrants to
      be issued hereunder and notwithstanding anything to the contrary contained
      in this Indenture and the Warrant Certificates, Warrants represented by a
      Global Certificate will be registered in the name of CDS, or its nominee.
      Subject to applicable law, Warrants represented by a Global Certificate
      shall, unless otherwise requested by CDS or the Corporation, be issued in
      uncertificated form. If Warrants represented by a Global Certificate are
      represented in certificated form, they shall be represented by a Warrant
      Certificate substantially in the form of the certificate attached hereto
      as Schedule “A”, and, if so represented, such certificate shall be
      delivered to CDS, or its nominee. The Global Certificate will be subject
      to the applicable procedures of the book-based system and to section 2.3
  hereof. If applicable, this  Section 2.2(e), shall also govern, as appropriate, any warrants registered in  the name of DTC, or its nominee.

	 	 	 
	 	(f) 	
      Warrant Certificates for Warrants shall be substantially
      in the form set out in Schedule “A” and shall be dated as of their Date of
      Issue and shall bear such legends and such distinguishing letters and
      numbers as set forth in this Indenture and as the Corporation shall, with
      the approval of the Warrant Agent, prescribe. Subject to subsection
      2.2(g), Warrant Certificates shall be issuable in any
  denomination.

	 	 	 
	 	(g) 	
      No Warrant Certificate evidencing any fraction of a
      Warrant shall be issued or otherwise provided for, and no Person who
      purchases or holds a fraction of a Warrant shall be entitled to any cash
      or other consideration in lieu of any interest in or claim to any fraction
      of a Warrant.

	 	 	 
	 	(h) 	
      The Warrant Certificates may be engraved, lithographed or
      printed or partly in one form and partly in another, as the Corporation
      may determine. No change in the form of the Warrant Certificate shall be
      required by reason of any adjustment made pursuant to Article
  5.

8 

2.3       
Issue of Global Certificates 

	 	(a) 	
      The Corporation may, at its sole option, specify, by a
      written order of the Corporation delivered to the Warrant Agent, that some
      or all of the Warrants are to be represented by one or more Global
      Certificates registered in the name of CDS or its nominee, and in such
      event the Corporation shall execute and the Warrant Agent shall
      countersign and deliver one or more Global Certificates that shall
      represent the aggregate number of outstanding Warrants to be represented
      by such Global Certificate(s).

	 	 	 
	 	(b) 	
      The rights of Beneficial Owners holding Warrants through
      the Book-Based System or the BEO System shall be limited to those
      established by applicable law and the agreements between CDS and the CDS
      Participants and the agreements between CDS Participants and Beneficial
      Owners. Any rights of such Beneficial Owners shall be exercised solely
      through a CDS Participant in accordance with Article 4 and the rules and
      procedures established by CDS from time to time.

	 	 	 
	 	(c) 	
      For so long as Warrants are represented by a Global
      Certificate, if any of the following events
occurs:

	 	(i) 	
      CDS notifies the Corporation that is unwilling or unable
      to continue as depository of the Warrants represented by a Global
      Certificate and the Corporation is unable to locate a qualified
      successor,

	 	 	
       

	 	(ii) 	
      the Corporation determines that CDS is no longer willing,
      able or qualified to discharge properly its responsibilities as depositary
      of the Warrants represented by a Global Certificate and the Corporation is
      unable to locate a qualified successor,

	 	 	
       

	 	(iii) 	
      CDS ceases to be a clearing agency or otherwise ceases to
      be eligible to be a depositary and the Corporation is unable to locate a
      qualified successor, or

	 	 	
       

	 	(iv) 	
      the Corporation or CDS is required by applicable laws to
      take the action contemplated in this subsection
2.3(c),

	 		
      Registered Certificates shall be issued in exchange for
      the Global Certificate, or the applicable portion thereof, in accordance
      with Section 2.8 but subject to the provisions of this Section 2.3. All
      such Warrants issued and exchanged pursuant to this subsection 2.3(c)
      shall be registered in such names and in such denominations as CDS shall
      instruct the Warrant Agent, provided that the aggregate number of such
      Warrants shall be equal to the aggregate number of Warrants represented by
      the Global Certificate so exchanged, and the Global Certificate so
      exchanged, or the applicable portion thereof, shall be cancelled by the
      Warrant Agent.

	 	 	 
	 	(d) 	
      All references herein to actions by, notices given or
      payments made to Warrantholders shall, where Warrants are held through a
      Global Certificate, refer to actions taken by, or notices given or payments made
      to, CDS upon instruction from CDS Participants in accordance with
      applicable procedures. For the purposes of any provision hereof requiring
      or permitting actions with the consent of or at the direction of
      Warrantholders evidencing a specified percentage of the aggregate Warrants
      outstanding, such direction or consent may be given by holders of Warrants
      acting through CDS and the CDS Participants owning Warrants evidencing the
      requisite percentage of the Warrants. The rights of Beneficial Owners
      shall be limited to those established by applicable laws and agreements
      between CDS and the CDS Participants and between such CDS Participants and
  Beneficial Owners.

9 

	 	(e) 	
      Each of the Warrant Agent and the Corporation may deal
      with CDS for all purposes as the authorized representative of the
      respective Warrantholders and such dealing with CDS shall constitute
      satisfaction or performance, as applicable, of their respective
      obligations hereunder. For so long as Warrants are represented by a Global
      Certificate, if any notice or other communication is required to be given
      to Warrantholders, the Warrant Agent will give such notices and
      communications to CDS or its nominee.

	 	 	 
	 	(f) 	
      Transfers of beneficial ownership in any Warrant
      represented by a Global Certificate or by way of a non-certificated issue
      will be effected only (i) with respect to the interest of a CDS
      Participant, through records maintained by CDS or its nominee for such
      Global Certificate, and (ii) with respect to the interest of any person
      other than a CDS Participant, through records maintained by CDS
      Participants. Beneficial Owners who are not CDS Participants but who
      desire to sell or otherwise transfer ownership of or any other interest in
      Warrants represented by such Global Certificate may do so through a CDS
      Participant. Fully registered Warrant Certificates issued and exchanged
      pursuant to subsection 2.3(c) hereof as a result of the withdrawal of a
      number of Warrants from a Global Certificate shall be registered in such
      names and in such denominations as CDS shall instruct the Warrant Agent,
      provided that the aggregate number of Warrants represented by such Warrant
      Certificates shall be equal to the aggregate number of Warrants so
      withdrawn from a Global Certificate. Upon withdrawal of a Global
      Certificate for one or more Warrant Certificates in definitive form, the
      number of Warrants represented by such Global Certificate shall be reduced
      by the Warrant Agent.

	 	 	 
	 	(g) 	
      Notwithstanding anything herein or in the terms of the
      Warrant Certificates to the contrary, neither the Corporation nor the
      Warrant Agent nor any agent thereof shall have any responsibility or
      liability for (i) the records maintained by CDS relating to any ownership
      interests or any other interests in the Warrants or the depository system
      maintained by CDS, or payments made on account of any ownership interest
      or any other interest of any person in any Warrant represented by any
      Global Certificate (other than the applicable depository or its nominee),
      (ii) for maintaining, supervising or reviewing any records of CDS or any
      CDS Participant relating to any such interest, or (iii) any advice or
      representation made or given by CDS or those contained herein that relate
      to the rules and regulations of CDS or any action to be taken by CDS on its own
      direction or at the direction of any CDS Participant.

10 

	 	(h) 	
      Registered Certificates issued and exchanged pursuant to
      subsection 2.3(c) shall be registered in such names and in such
      denominations as CDS shall instruct the Warrant Agent, provided that the
      aggregate number of Warrants represented by such Registered Certificates
      shall be equal to the aggregate number of Warrants represented by the
      Global Certificate(s) so exchanged. Upon exchange of a Global Certificate
      for one or more Registered Certificates in definitive form, such Global
      Certificate shall be cancelled by the Warrant Agent.

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

	 	 	 	 
	 		(i) 	
      the electronic records maintained by CDS relating to any
      ownership interests or any other interests in the Warrants or the
      Book-Based System or the BEO System, or payments made on account of any
      interest of any person in Warrants represented by an electronic position
      in the Book- Based System or the BEO System (other than in respect of CDS
      or its nominee);

	 	 	 	 
	 		(ii) 	
      maintaining, supervising or reviewing any records of CDS
      or any CDS Participant relating to any interest referred to in subsection
      2.3(i)(i); or

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

	 	(j) 	
      For so long as Warrants are represented by a Global
      Certificate, the certificates representing such Warrants shall bear the
      following legend, or such other legend as may be prescribed by CDS from
      time to time:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
  REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO ENERGY
  FUELS INC. (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION, TRANSFER, EXCHANGE OR
  PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME
  OF CDS & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
  REPRESENTATIVE 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 HOLDERS HEREOF, CDS & CO.,
HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN
AND IT IS A VIOLATION OF ITS RIGHTS FOR ANY OTHER PERSON TO HOLD, TRANSFER OR
DEAL WITH THIS CERTIFICATE. 

11 

2.4       
Issue in Substitution for Lost Warrant Certificates 

	 	(a) 	
      In case any Warrant Certificate shall be mutilated, lost,
      destroyed or stolen, the Corporation, subject to applicable law, shall
      issue and thereupon the Warrant Agent shall certify and deliver, a new
      certificate of like tenor as the one mutilated, lost, destroyed or stolen
      in exchange for and in place of and upon cancellation of such mutilated
      certificate, or in lieu of and in substitution for such lost, destroyed or
      stolen certificate, and the substituted certificate shall be in a form
      approved by the Warrant Agent and shall be entitled to the benefits hereof
      and shall rank equally in accordance with its terms with all other Warrant
      Certificates issued or to be issued hereunder.

	 	 	 
	 	(b) 	
      The applicant for the issue of a new certificate pursuant
      to this Section 2.4(b) shall bear the reasonable cost of the issue thereof
      and in case of loss, destruction or theft shall, as a condition precedent
      to the issue thereof, furnish to the Corporation and to the Warrant Agent
      such evidence of ownership and of the loss, destruction or theft of the
      certificate so lost, destroyed or stolen as shall be satisfactory to the
      Corporation and to the Warrant Agent in their sole discretion, acting
      reasonably, and such applicant shall also be required to furnish an
      indemnity and surety bond in amount and form satisfactory to the
      Corporation and the Warrant Agent to save each of them harmless, and shall
      pay the reasonable expenses, charges and any taxes applicable thereto to
      the Corporation and the Warrant Agent in connection
  therewith.

2.5       
Warrantholder Not a Shareholder 

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

2.6       
Warrants to Rank Pari Passu 

All Warrants shall rank pari passu, whatever may be the
respective Dates of Issue of the same. 

2.7       
Signing of Warrant Certificates 

The Warrant Certificates shall be signed by any one of the
President, Chief Executive Officer, Chief Financial Officer, a Vice-President,
Secretary, Treasurer or a director of the Corporation. The signatures of such
officer or director may be mechanically reproduced in facsimile and Warrant Certificates bearing such facsimile signatures shall be
binding upon the Corporation as if they had been manually signed by such officer
or director. Notwithstanding that any of the Persons whose manual or facsimile
signature appears on any Warrant Certificate as one of such officers or as a
director may no longer hold office at the date of certification or delivery
thereof, any Warrant Certificate signed as aforesaid shall, subject to Section
2.8, be valid and binding upon the Corporation. 

12 

2.8       
Certification by the Warrant Agent 

	 	(a) 	
      No Warrant Certificate shall be issued or, if issued,
      shall be valid or entitle the holder to the benefit hereof or thereof
      until it has been (i) in the case of a physical warrant certificate,
      certified by manual signature by or on behalf of the Warrant Agent; (ii)
      or in the case of an uncertificated Warrant Certificate, by completing all
      its customary internal procedures in connection with the making of any one
      or more entries to, changes in or deletions of any one or more entries in
      the register of Warrantholders maintained by the Warrant Agent in
      accordance with Section 3.3 hereof. and such certification by the Warrant
      Agent upon any Warrant Certificate shall be conclusive evidence as against
      the Corporation that the Warrant Certificate so certified has been duly
      issued hereunder and that the holder is entitled to the benefit
    hereof.

	 	 	 
	 	(b) 	
      The certification of the Warrant Agent on the Warrant
      Certificates issued hereunder shall not be construed as a representation
      or warranty by the Warrant Agent as to the validity of this Indenture or
      the Warrant Certificates (except the due certification thereof) and the
      Warrant Agent shall in no respect be liable or answerable for the use made
      of the Warrant Certificates or any of them or of the consideration
      therefor nor for any breach by the Corporation of its covenants herein,
      except as otherwise specified therein.

2.9       
Copy of Indenture 

The Corporation shall, on the written request of the
Warrantholder and on payment by the Warrantholder of a reasonable copying fee,
provide the Warrantholder with a copy of this Indenture. 

ARTICLE 3 
EXCHANGE AND OWNERSHIP OF WARRANTS;
NOTICES 

3.1       
Exchange of Warrant Certificates 

	 	(a) 	
      Warrant Certificates entitling Warrantholders to purchase
      any specified number of Common Shares may, upon compliance with the
      reasonable requirements of the Warrant Agent, be exchanged for another
      Warrant Certificate or Warrant Certificates of like tenor entitling the
      holder thereof to purchase an equal aggregate number of Common
    Shares.

	 	 	 
	 	(b) 	
      Warrant Certificates may be exchanged only at the office
      of the Warrant Agent in the City of Toronto, Ontario or at any other place
      that is designated by the Corporation with the approval of the Warrant Agent. Any
      Warrant Certificates tendered for exchange shall be surrendered to the
      Warrant Agent or its agents and cancelled. The Corporation shall sign all
      Warrant Certificates necessary to carry out exchanges as aforesaid and
      such Warrant Certificates shall be certified by or on behalf of the
  Warrant Agent.

13 

	 	(c) 	
      Except as otherwise herein provided, the Warrant Agent
      shall charge the holder requesting an exchange a reasonable sum for each
      new Warrant Certificate issued in exchange for the Warrant Certificate(s);
      and payment of such charges and reimbursement of the Warrant Agent or the
      Corporation for any and all taxes or governmental or other charges
      required to be paid shall be made by such holder as a condition precedent
      to such exchange.

3.2       
Transfer of Warrants 

	 	(a) 	
      Subject to any restriction under applicable law or policy
      of any applicable regulatory body, Warrants and Warrant Certificates and
      the rights thereunder are transferable by the holder thereof upon due
      completion and execution of the Transfer Form and compliance with the
      conditions prescribed hereunder.

	 	 	 
	 	(b) 	
      No transfer of a Warrant shall be valid unless made by
      the Warrantholder or its executors or administrators or other legal
      representatives or an attorney duly appointed by an instrument in writing
      in form and execution satisfactory to the Warrant Agent, upon compliance
      with such reasonable requirements as the Warrant Agent may prescribe,
      which may include the provision of a legal opinion to the Warrant Agent to
      the effect that the securities laws of the applicable jurisdiction(s) have
      been complied with in relation to the transfer of such Warrants, and
      unless such transfer shall have been duly entered on the register of
      transfers and/or noted on the Warrant Certificate. The signature of the
      registered Warrantholder must be guaranteed by a Canadian chartered bank
      or by a medallion signature guarantee from a member of a recognized
      signature medallion guarantee program. The Warrant Agent shall not be
      charged with notice of or be bound to see to the execution of any trust,
      whether expressed, implied or constructive, in respect of any Warrant and
      shall, on the written direction of the registered holder thereof, whether
      named as trustee or otherwise, as though that Person were the beneficial
      owner thereof, enter such transfer on the register of transfers.

	 	 	 
	 	(c) 	
      The Warrant Agent shall give notice to the Corporation of
      any transfer before it is made effective by the issuance of the Warrant
      Certificates. Notice is not required where beneficial holders are
      withdrawing Warrants from a Global Certificate registered in the name of
      CDS.

3.3       
Registration of Warrants 

	 	(a) 	
      The Corporation shall, at all times while any Warrants
      are outstanding, cause the Warrant Agent and its agents to maintain a
      register in which will be entered the names and latest known addresses of the Warrantholders
      and particulars of the Warrants held by them, and a register of transfers
      in which shall be entered the particulars of all transfers of Warrants,
      such registers to be kept by and at the principal transfer office of the
  Warrant Agent in the City of Toronto, Ontario.

14 

	 	(b) 	
      A Warrantholder may at any time and from time to time
      have such Warrant transferred at any place at which a register of
      transfers is kept pursuant to the provisions of this Article 3 in
      accordance with such reasonable requirements as the Warrant Agent may
      prescribe. The costs of any such transfer registration shall be borne by
      the Corporation for the ten (10) day period following the date hereof,
      thereafter the costs of transfer of any Warrants shall be borne by the
      transferee.

	 	 	 
	 	(c) 	
      The registers referred to in this Section 3.3 shall
      during normal business hours be open for inspection by the Corporation and
      by any Warrantholder. The Warrant Agent, for a reasonable fee when
      requested so to do by the Corporation, shall furnish the Corporation with
      a list of names and addresses of the Warrantholders showing the
      certificate numbers of such Warrant Certificates held by each
      Warrantholder.

3.4       
Recognition of Registered Holder 

	 	(a) 	
      The Corporation and the Warrant Agent may deem and treat
      the registered holder of any Warrant Certificate as the absolute holder
      and owner of the Warrants evidenced thereby for all purposes, and the
      Corporation and the Warrant Agent shall not be affected by any notice or
      knowledge to the contrary and, without limiting the foregoing, shall not
      be bound by notice of any trust or be required to see to the execution
      thereof. Subject to the provisions of this Indenture and applicable law,
      the registered holder of any Warrant Certificate shall be entitled to the
      rights evidenced by such Warrant Certificate free from all equities or
      rights of setoff or counterclaim between the Corporation and the original
      or any intermediate holder thereof and all Persons may act accordingly and
      the receipt by any such holder of the Common Shares obtainable 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
      issuer of such Warrants or the Warrant Agent is required to take notice by
      statute or by order of a court of competent jurisdiction.

	 	 	 
	 	(b) 	
      The Person in whose name any Warrant shall be registered
      shall for all purposes of this Indenture be and be deemed to be the owner
      thereof and shall be entitled to the rights, privileges and obligations
      contained in the Warrant Certificate and this
Indenture.

3.5       
Evidence of Ownership 

	 	(a) 	
      Upon receipt of a certificate of any bank, trust company
      or other depositary satisfactory to the Warrant Agent stating that the
      Warrants specified therein have been deposited by a named Person with such
      bank, trust company or other depositary and will remain so deposited until the expiry
      of the period specified therein, the Corporation and the Warrant Agent may
      treat the Person so named as the owner, and such certificate as sufficient
      evidence of the ownership by such Person of such Warrants during such
      period, for the purpose of any requisition, direction, consent, instrument
      or other document to be made, signed or given by the holder of the
  Warrants so deposited.

15 

	 	(b) 	
      The Corporation and the Warrant Agent may accept as
      sufficient evidence of the fact and date of the signing of any
      requisition, direction, consent, instrument or other document by any
      Person, the signature, as witness, of any officer of any trust company,
      bank or depositary satisfactory to the Warrant Agent, the certificate of
      any notary public or other officer authorized to take acknowledgements of
      deeds to be recorded at the place where such certificate is made, that the
      Person signing acknowledged to him the execution thereof, or a statutory
      declaration of a witness of such execution.

3.6       
Notices 

Unless herein otherwise expressly provided, any notice to be
given hereunder to the Warrantholders shall be deemed to be validly given if
such notice is given by personal delivery or first class mail to the attention
of the Warrantholder at the registered address of the Warrantholder recorded in
the registers maintained by the Warrant Agent, provided that in the case of
notice convening a meeting of the Warrantholders, the Warrant Agent may require
such publication of such notice, in such city or cities, as it may deem
necessary for the reasonable protection of the Warrantholders or to comply with
any applicable requirement of law or any stock exchange. Any notice so given
shall be deemed to have been given on the date of mailing. In determining under
any provision hereof the date when notice of any meeting or other event must be
given, the date of giving notice shall be included and the date of the meeting
or other event shall be excluded. For greater certainty, all costs in connection
with the giving of notices contemplated by this Section 3.6 shall be borne by
the Corporation. Accidental errors or omissions in giving notice or accidental
failure to mail notice to any holder will not invalidate any action or
proceeding founded thereon. 

ARTICLE 4 
EXERCISE OF WARRANTS 

4.1       
Method of Exercise of Warrants 

	 	(a) 	
      The holder of any Warrant Certificate may exercise the right
      thereby conferred on him to purchase Common Shares by surrendering to the
      Warrant Agent during the Exercise Period at its office in Toronto, Ontario
      or at any other place or places that may be designated by the Corporation
      with the approval of the Warrant Agent:

	 	 	 	 
	 		(i) 	
      the Warrant Certificate, with a duly completed and
      executed Subscription Form; and

16 

	 	(ii) 	
      subject to exercise of Warrants in accordance with
      Section 4.2, a certified cheque, money order or bank draft in lawful money
      of Canada payable to or to the order of CST Trust Company in an amount
      equal to the Exercise Price applicable at the time of such surrender in
      respect of each Common Share subscribed for.

	 		
      A Warrant Certificate with the duly completed and
      executed Subscription Form together, if applicable, with the payment
      aforesaid shall be deemed to be surrendered only upon personal delivery
      thereof to the Warrant Agent at its office set forth above, or, if sent by
      mail or overnight courier, upon actual receipt thereof by the Warrant
      Agent at its principal office in Toronto, Ontario.

	 	 	 
	 	(b) 	
      Any subscription referred to in this Section 4.1 shall be
      signed by the Warrantholder and shall specify:

	 	(i) 	
      the number of Common Shares which the holder desires to
      purchase (being not more than those which he is entitled to purchase
      pursuant to the Warrant Certificate(s) surrendered);

	 	 	 
	 	(ii) 	
      the Person or Persons in whose name or names the Common
      Shares are to be issued;

	 	 	 
	 	(iii) 	
      the address or addresses of such Person or
  Persons;

	 	 	 
	 	(iv) 	
      the number of Common Shares to be issued to each Person
      if more than one Person is specified, provided that the Warrantholder
      shall only be entitled to direct its entitlement to the Common Shares in a
      manner permitted by applicable securities legislation; and

	 	 	 
	 	(v) 	
      a completed transfer form if Common Shares are to be
      issued to someone other than the
Warrantholder.

	 	(c) 	
      A Beneficial Owner who desires, and is permitted under
      this Warrant Indenture, to exercise Warrants pursuant to the Book-Based
      System shall do so in accordance with the procedures established by CDS
      and the Corporation, from time to time. Such procedures shall initially be
      that a Beneficial Owner shall cause a CDS Participant to deliver to CDS
      (at its office in the City of Toronto), on behalf of such Beneficial
      Owner, notice of such Beneficial Owner’s intention to exercise Warrants
      and the Exercise Price for the Common Shares being purchased. CDS shall
      initiate the exercise of Warrants and forward in full the Exercise Price
      of the Common Shares being purchased electronically through the Book-Based
      System to the Warrant Agent, following receipt of which the Warrant Agent
      shall execute the exercise of such Warrants by issuing to CDS the Common
      Shares to which the exercising Beneficial Owner is entitled pursuant to
      such exercise of Warrants through the Book-Based System. Any expense
      associated with the preparation and delivery of the notice of intention to
      exercise Warrants and payment therefor shall be for the account of the
      Beneficial Owner exercising Warrants.

17 

	 	(d) 	
      By causing a CDS Participant to deliver the notice of
      intention to exercise Warrants to CDS pursuant to Section
4.1(c).

	 	 	 
	 	(e) 	
      By causing a CDS Participant to deliver the notice of
      intention to exercise Warrants to CDS, a Beneficial Owner shall be deemed
      to have appointed such CDS Participant to act as such Beneficial Owner’s
      exclusive settlement agent with respect to the exercise and the receipt of
      Common Shares in connection with the obligations arising from such
      exercise.

	 	 	 
	 	(f) 	
      Any notice of intention to exercise Warrants that CDS
      determines to be incomplete, not in proper form, not duly executed or
      which is not accompanied by payment in full of the Exercise Price of the
      Common Shares being purchased shall, for all purposes, be void and of no
      effect and the exercise to which it relates shall be considered for all
      purposes not to have been exercised thereby. A failure by a CDS
      Participant to exercise or to give effect to the settlement thereof in
      accordance with the Beneficial Owner’s instructions will not give rise to
      any obligations or liability on the part of the Corporation to the CDS
      Participant or the Beneficial Owner. For greater certainty, any exercise
      of Warrants pursuant to this Section 4.1, subject to Section 4.2, must be
      accompanied by payment in full of the Exercise Price for the Common Shares
      being purchased and must be received by the Warrant Agent prior to the
      Time of Expiry.

4.2       
Cashless Exercise 

	 	(a) 	
      If at the time of exercise of his or her Warrants there
      is no effective registration statement under the 1933 Act registering, or
      the prospectus contained therein is not available for, the offer and
      issuance of the Common Shares to the Warrantholder upon the exercise of
      his or her Warrants, then a Warrantholder may only exercise his or her
      Warrants, in whole or in part, at such time by means of a “cashless
      exercise” in which the Warrantholder shall be entitled to receive a number
      of whole Common Shares (rounded down to the nearest whole number) equal to
      the quotient obtained by dividing [(A-B) * (X)] by (A), where:

	 	 	
       

	 		
      (A) = the volume weighted average price at which the
      Common Shares have traded on the NYSE during the five (5) consecutive
      Trading Days ending on the Trading Day immediately prior to the date on
      which the Warrantolder elects to exercise its Warrants by means of a
      “cashless exercise,” as set forth in the applicable Subscription
    Form;

	 	 	
       

	 		
      (B) = the Exercise Price of the Warrants, as adjusted
      hereunder; and

	 	 	
       

	 		
      (X) = the number of Common Shares that would be issuable
      upon exercise of the Warrants in accordance with the terms of the Warrant
      if such exercise were by means of a cash exercise rather than a cashless
      exercise.

	 	 	
       

	 	(b) 	
      If no such registration statement is effective, or the
      prospectus is not available for, the offer and issuance of the Common
      Shares, the Corporation will advise the Warrant Agent in writing
      immediately.

18 

	 	(c) 	
      Upon receipt of a duly completed Subscription Form that
      specifies a cashless exercise, the Warrant Agent will notify the
      Corporation, which will calculate and provide to the Warrant Agent the
      number of Common Shares to be allotted to the
  Warrantholder.

		
      For the avoidance of doubt, a Warrantholder may only
      exercise his or her warrants by means of “cashless exercise” if there is
      no effective registration statement under the 1933 Act registering, or the
      prospectus contained therein is not available for, the offer and issuance
      of the Common Shares to the Warrantholder upon the exercise of his or her
      Warrants. If there is an effective registration statement under the 1933
      Act registering, or the prospectus contained therein is available for, the
      offer and issuance of the Common Shares to the Warrantholder upon the
      exercise of his or her Warrants, such Warrantholder may only exercise his
      or her Warrants in accordance with Section 4.1.

	 	 
	4.3 	
      Effect of Exercise of
Warrants

	 	(a) 	
      Upon surrender and payment by the holder of any Warrant
      Certificate in accordance with Section 4.1 or Section 4.2, as applicable,
      the Common Shares so subscribed for 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 share registers maintained
      by the transfer agent of the Corporation shall be closed on such date, in
      which case the Common Shares so subscribed for shall be deemed to have
      been issued, and such Person or Persons shall be deemed to have become the
      holder or holders of record of such Common Shares on the date on which
      such registers were reopened and such Common Shares shall be issued at the
      Exercise Price in effect on the Exercise Date. To the extent the opening
      of the registers remains within the control of the Warrant Agent, the
      Corporation and the Warrant Agent shall cause such registers to be open on
      Business Days.

	 	 	 
	 	(b) 	
      Within three (3) Business Days during which the transfer
      registers of the Corporation shall have been open after the due exercise
      of a Warrant Certificate for Common Shares as aforesaid, the Warrant Agent
      shall notify the Corporation of the exercise of any Warrant. Furthermore,
      the Corporation or its counsel shall notify the Warrant Agent of any
      trading restrictions on the Common Shares acquired upon such exercise
      pursuant to applicable securities legislation or policy of any applicable
      regulatory body and the requirement to endorse any Common Share
      certificate to such effect. Unless and until advised in writing by the
      Corporation or its counsel that a specific legend and trading restrictions
      apply to the Common Shares, the Warrant Agent shall be entitled to assume
      that no specific legend is required and that there are no trading
      restrictions on the Common Shares pursuant to applicable Canadian
      securities laws.

	 	 	 
	 	(c) 	
      Within five (5) Business Days during which the transfer
      registers of the Corporation shall have been open after the due exercise
      of a Warrant Certificate for Common Shares as aforesaid, the Corporation
      shall cause the Warrant Agent to mail to the Person or Persons in whose
      name or names the Common Shares so subscribed for have been issued, as
specified in the subscription endorsed on the Warrant Certificate, at his/her or
their respective addresses specified in such subscription or, if so specified in
such subscription, cause to be delivered to such Person or Persons at the office
of the Warrant Agent where such Warrant Certificate was surrendered, a
certificate or certificates for the appropriate number of Common Shares
subscribed for. 

19 

4.4       
Subscription for Less than Entitlement 

The holder of any Warrant Certificate may subscribe for and
purchase a number of Common Shares less than the number which the holder is
entitled to purchase pursuant to the surrendered Warrant Certificate. In the
event of a purchase of a number of Common Shares less than the number which may
be purchased pursuant to a Warrant Certificate, the holder thereof shall be
entitled to receive, without charge except as aforesaid, a new Warrant
Certificate in respect of the balance of the Common Shares which such holder was
entitled to purchase pursuant to the surrendered Warrant Certificate and which
was not then purchased. 

4.5       
No Fractional Common Shares 

The Corporation shall not be required, upon exercise of any
Warrants, to issue fractional Common Shares or to distribute certificates which
evidence fractional Common Shares in satisfaction of its obligations hereunder.
If any fractional interest in a Common Share would, except for the provisions of
this Section 4.5, be deliverable upon the exercise of a Warrant, the number of
Common Shares issued shall be rounded down to the next smaller whole number of
Common Shares. 

4.6       
Expiration of Warrant Certificates 

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

4.7       
Cancellation of Surrendered Warrants 

All Warrant Certificates surrendered to the Warrant Agent
pursuant to Sections 2.4, 3.1, 3.2, 4.1 or 6.1 shall be cancelled by the Warrant
Agent and, if required by the Corporation, the Warrant Agent shall, upon receipt
of a written request from the Corporation, cause to be furnished to the
Corporation a certificate identifying the Warrant Certificates so cancelled and
the number of Common Shares which could have been purchased pursuant to each
cancelled Warrant Certificate. 

4.8       
Accounting and Recording 

	 	(a) 	
      Within five (5) Business Days, the Warrant Agent shall
      promptly account to the Corporation with respect to Warrants exercised and
      forward to the Corporation all monies received on the purchase of Common
      Shares through the exercise of Warrants. All such monies, and 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 in
  trust for, the Corporation.

20 

	 	(b) 	
      Within five (5) Business Days, the Warrant Agent shall
      record the particulars of the Warrant Certificates exercised which shall
      include the name or names and addresses of the Persons who become holders
      of Common Shares on exercise, the Exercise Date and the Exercise Price
      thereof.

4.9       
Prohibition on Exercise

Other than by cashless exercise pursuant to Section 4.2, the
Warrants may not be exercised unless the Common Shares underlying the Warrants
are registered pursuant to an effective registration statement under the 1933
Act and any applicable state securities laws.

ARTICLE 5 
ADJUSTMENT OF SUBSCRIPTION RIGHTS AND
EXERCISE PRICE 

5.1      
Definitions 

In this Article 5, the terms “record date” and “effective date”
mean the particular time on the relevant date. 

5.2       
Adjustment of Exercise Price and Number of Common Shares Purchasable Upon
Exercise 

The Exercise Price (and the number of Common Shares purchasable
upon exercise in the case of subsections 5.2(a), (b) and (c) below) shall be
subject to adjustment from time to time in the events and in the manner provided
as follows: 

	 	(a) 	
      Common Share Reorganization. If during the
      Exercise Period the Corporation shall:

	 	 	 	 
	 		(i) 	
      issue Common Shares or securities exchangeable for or
      convertible into Common Shares to all or substantially all of the holders
      of the Common Shares by way of stock dividend or other distribution (other
      than as Dividends Paid in the Ordinary Course);

	 	 	 	 
	 		(ii) 	
      subdivide, redivide or change its outstanding Common
      Shares into a greater number of Common Shares; or

	 	 	 	 
	 		(iii) 	
      consolidate, reduce or combine its outstanding Common
      Shares into a lesser number of Common Shares,

21 

	 		
      (any of such events in subsections
5.2(a)(i), (ii) and (iii) being called a “Common Share Reorganization”),
then the Exercise Price shall be adjusted as of the effective date or record
date of such stock dividend or other distribution, as the case may be, by
multiplying the Exercise Price in effect immediately prior to such effective
date or record date by a fraction, the numerator of which shall be the number of Common Shares outstanding on such effective
      date or record date before giving effect to such Common Share
      Reorganization and the denominator of which shall be the number of Common
      Shares outstanding as of the effective date or record date after giving
      effect to such Common Share Reorganization (including, in the case where
      securities exchangeable for or convertible into Common Shares are
      distributed, the number of Common Shares that would have been outstanding
      had such securities been exchanged for or converted into Common Shares on
      such record date or effective date). If during the Exercise Period a
      Common Share Reorganization shall occur which results in an adjustment in
      the Exercise Price pursuant to the provisions of this subsection 5.2(a),
      the number of Common Shares purchasable pursuant to each Warrant shall be
      adjusted contemporaneously with the adjustment of the Exercise Price by
      multiplying the number of Common Shares theretofore purchasable on the
      exercise thereof by a fraction, the numerator of which shall be the
      Exercise Price in effect immediately prior to such adjustment and the
      denominator of which shall be the Exercise Price resulting from such
  adjustment.

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

	 	(i) 	
      the numerator of which shall be the aggregate
  of:

	 	 	 	 
	 		A. 	
      number of Common Shares outstanding as of the record date
      for the Rights Offering; and

	 	 	 	 
	 		B. 	
      a number determined by dividing: (i) either: (a) the
      product of the number of Common Shares issued or subscribed for during the
      Rights Period upon the exercise of the rights, warrants or options under
      the Rights Offering and the price at which such Common Shares are offered;
      or (b) the product of the exchange or conversion price per share of such
      securities offered and the number of Common Shares for or into which the
      securities so offered pursuant to the Rights Offering have been exchanged
      or converted during the rights period, as the case may be by; (ii) the
      Current Market Price of the Common Shares as of the record date for the
      Rights Offering; and

22 

	 	(ii) 	
      the denominator of which shall be the number of Common
      Shares outstanding after giving effect to the Rights Offering and
      including the number of Common Shares actually issued or subscribed for
      during the Rights Period upon exercise of the rights, warrants or options
      under the Rights Offering or upon the exercise of the exchange or
      conversion rights contained in such exchangeable or convertible securities
      under the Rights Offering.

	 		
      If during the Exercise Period a Rights Offering shall
      occur which results in an adjustment in the Exercise Price pursuant to the
      provisions of this subsection 5.2(b), the number of Common Shares
      purchasable pursuant to each Warrant shall be adjusted contemporaneously
      with the adjustment of the Exercise Price by multiplying the number of
      Common Shares theretofore purchasable on the exercise thereof by a
      fraction, the numerator of which shall be the Exercise Price in effect
      immediately prior to such adjustment and the denominator of which shall be
      the Exercise Price resulting from such adjustment.

	 	 	 	 
	 		
      For the purposes of any computation made in accordance
      with this subsection 5.2(b), Common Shares owned legally or beneficially
      by the Corporation or a Subsidiary or any other Affiliate of the
      Corporation, as determined in accordance with the provisions of Section
      13.7, shall be disregarded.

	 	 	 	 
	 	(c) 	
      Special Distribution. If during the Exercise
      Period the Corporation shall issue or distribute to all or substantially
      all of the holders of the Common Shares:

	 	 	 	 
	 		(i) 	
      securities of the Corporation including rights, options
      or warrants to acquire shares of any class or securities exchangeable for
      or convertible into any such shares or property or assets;

	 	 	 	 
	 		(ii) 	
      evidences of the Corporation’s indebtedness; or

	 	 	 	 
	 		(iii) 	
      any property or other assets,

and if such issuance or distribution
does not constitute Dividends Paid in the Ordinary Course, a Common Share
Reorganization or a Rights Offering (any of such non-excluded events being
herein called a “Special Distribution”), the Exercise Price shall,
subject to the prior written approval of any stock exchange or over-the-counter
market on which the Common Shares are then listed or quoted for trading, be
adjusted effective immediately after the record date at which the holders of
affected Common Shares are determined for purposes of the Special Distribution
to a price determined by multiplying the Exercise Price in effect on such record
date by a fraction: 

	 	(i) 	
      the numerator of which shall be:

23 

	 	A. 	
      the product of the number of Common Shares outstanding on
      such record date and the Current Market Price of the Common Shares on such
      record date; less

	 	 	 
	 	B. 	
      the excess, if any, of: (A) the fair market value on such
      record date, as determined by action by the directors, whose determination
      shall be conclusive, which action shall be subject to the prior written
      approval of any stock exchange or over-the-counter market on which the
      Common Shares are then listed or quoted for trading, to the holders of the
      Common Shares of such securities or property or other assets so issued or
      distributed in the Special Distribution over; (B) the fair market value of
      any consideration received therefor by the Corporation from the holders of
      the Common Shares, as determined by action by the directors, which
      determination shall be conclusive; and

	 	(ii) 	
      the denominator of which shall be the product of the
      number of Common Shares outstanding on such record date and the Current
      Market Price of the Common Shares on such record
date.

	 		
      If during the Exercise Period a Special Distribution
      shall occur which results in an adjustment in the Exercise Price pursuant
      to the provisions of this subsection 5.2(c), the number of Common Shares
      purchasable pursuant to each Warrant shall be adjusted contemporaneously
      with the adjustment of the Exercise Price by multiplying the number of
      Common Shares theretofore purchasable on the exercise thereof by a
      fraction, the numerator of which shall be the Exercise Price in effect
      immediately prior to such adjustment and the denominator of which shall be
      the Exercise Price resulting from such adjustment.

	 	 	 
	 		
      For the purposes of any computation made in accordance
      with this subsection 5.2(c), Common Shares owned legally or beneficially
      by the Corporation or any Subsidiary or any other Affiliate of the
      Corporation, as determined in accordance with the provisions of Section
      13.7, shall be disregarded.

	 	 	 
	 	(d) 	
      Capital Reorganization. If during the Exercise
      Period there shall be a reclassification or redesignation of Common Shares
      at any time outstanding or a change of the Common Shares into other shares
      or into other securities (other than a Common Share Reorganization), or a
      consolidation, amalgamation, take-over bid, compulsory acquisition, plan
      of arrangement or merger of the Corporation with or into any other
      corporation or other entity (other than a consolidation, amalgamation,
      arrangement, take-over bid, compulsory acquisition, plan of arrangement or
      merger which does not result in any reclassification of the outstanding
      Common Shares or a change of the Common Shares into other shares), a
      change, exchange or conversion of the Common Shares into or for other
      shares or securities or property, or a transfer, sale or conveyance of the
      undertaking or assets of the Corporation as an entirety or substantially
      as an entirety to another corporation or
other entity in which the holders of Common Shares are entitled to receive
shares, other securities or other property (any of such events being herein
called a “Capital Reorganization”), any Warrantholder who exercises his
or her right to purchase Common Shares pursuant to Warrant(s) then held after
the effective date of such Capital Reorganization shall be entitled to receive,
and shall accept for the same aggregate consideration in lieu of the number of
Common Shares to which such holder was theretofore entitled upon such exercise
the aggregate number of shares, other securities or other property which such
holder would have been entitled to receive as a result of such Capital
Reorganization if, on the effective date thereof, the Warrantholder had been the
registered holder of the number of Common Shares to which such holder was
theretofore entitled upon exercise of the Warrant subject to adjustment
thereafter in accordance with provisions the same, as nearly as may be possible,
as those contained in Sections 5.2 and 5.3 hereof. If determined appropriate by
the Corporation, acting reasonably, and subject to the prior written approval of
any stock exchange or over-the-counter market on which the Common Shares are
then listed or quoted for trading, appropriate adjustments to the exercise price
and/or the number of Common Shares issuable on exercise shall be made as a
result of any such Capital Reorganization in the application of the provisions
set forth in this Article 5 with respect to the rights and interests thereafter
of Warrantholders to the end that the provisions set forth in this Article 5
shall thereafter correspondingly be made applicable as nearly as may reasonably
be in relation to any shares, other securities or other property thereafter
deliverable upon the exercise of any Warrant. Any such adjustments shall be made
by and set forth in terms and conditions supplemental hereto approved by action
by the directors and by the Warrant Agent, acting reasonably, and shall for all
purposes be conclusively deemed to be appropriate adjustments. 

24 

	5.3 	
      Rules Regarding Calculation of Adjustment of Exercise
      Price and Number of Common Shares Purchasable Upon
  Exercise

For the purposes of Section 5.2: 

	 	(a) 	
      The adjustments provided for in Section 5.2 are
      cumulative, and shall, in the case of adjustments to the Exercise Price be
      computed to the nearest one-tenth of one cent and shall be made
      successively whenever an event referred to therein shall occur, subject to
      the following subsections of this Section 5.3.

	 	 	 
	 	(b) 	
      No adjustment in the Exercise Price or in the number of
      Common Shares purchasable upon the exercise of Warrants shall be required
      unless such adjustment would result in a change of at least 1% in the
      prevailing Exercise Price and no adjustment shall be made in the number of
      Common Shares purchasable upon exercise of a Warrant unless it would
      result in a change of at least one one-hundredth of a Common Share;
      provided, however, that any adjustments which, except for the provisions
      of this subsection 5.3(b) would otherwise have been required to be made,
      shall be carried forward and taken into account in any subsequent
      adjustment.

25 

	 	(c) 	
      No adjustment in the Exercise Price or in the number of
      Common Shares purchasable upon exercise of Warrants shall be made in
      respect of any event described in Section 5.2, other than the events
      referred to in subsections 5.2(a)(i), 5.2(a)(ii) and 5.2(a)(iii), if
      Warrantholders are entitled to participate in such event on the same
      terms, mutatis mutandis, as if Warrantholders had exercised their
      Warrants prior to or on the effective date or record date of such event.
      The terms of the participation of the Warrantholders in such event shall
      be subject to the prior written approval of any stock exchange or
      over-the-counter market on which the Common Shares are then listed or
      quoted for trading.

	 	 	 	 
	 	(d) 	
      No adjustment in the Exercise Price shall be made
      pursuant to Section 5.2 in respect of the issue from time to
  time:

	 	 	 	 
	 		(i) 	
      of Common Shares purchased on exercise of the
      Warrants;

	 	 	 	 
	 		(ii) 	
      of Dividends Paid in the Ordinary Course of Common Shares
      to holders of Common Shares who exercise an option or election to receive
      substantially equivalent dividends in Common Shares in lieu of receiving a
      cash dividend pursuant to a dividend reinvestment plan or similar plan
      adopted by the Corporation in accordance with the requirements of the
      Exchange and applicable securities laws; or

	 	 	 	 
	 		(iii) 	
      of Common Shares pursuant to any stock options, stock
      option plan, stock purchase plan, restricted share units or restricted
      share unit plans other benefit plans in force at the date hereof for
      directors, officers, employees, advisers or consultants of the
      Corporation, as such option or plan is amended or superseded from time to
      time in accordance with the requirements of the Exchange and applicable
      securities laws, and such other benefit plans as may be adopted by the
      Corporation in accordance with the requirements of the Exchange and
      applicable securities laws,

	 		
      and any such issue shall be deemed not to be a Common
      Share Reorganization or Capital Reorganization.

	 	 	 
	 	(e) 	
      If a dispute shall at any time arise with respect to
      adjustments provided for in Section 5.2, such dispute shall be
      conclusively determined by the Corporation’s Auditors, or if they are
      unable or unwilling to act, by such other firm of independent chartered
      accountants as may be selected by action by the directors and any such
      determination shall be binding upon the Corporation, the Warrant Agent and
      the Warrantholders. Notwithstanding the foregoing, such determination
      shall be subject to the prior written approval of any stock exchange or
      over-the-counter market on which the Common Shares are then listed or
      quoted for trading. Such auditors or accountants shall be provided access
      to all necessary records of the Corporation. In the event that any such
      determination is made, the Corporation shall deliver a certificate to the
      Warrant Agent and a notice to the Warrantholders in the manner
      contemplated in Section 3.6 describing such
  determination.

26 

	 	(f) 	
      In case the Corporation after the date hereof shall take
      any action affecting the Common Shares, other than action described in
      Section 5.2, which in the opinion of the directors would materially affect
      the rights of Warrantholders, the Exercise Price and the number of Common
      Shares purchasable upon exercise shall be adjusted in such manner, if any,
      and at such time, by action by the directors, in their sole discretion,
      acting reasonably and in good faith, as they may determine to be equitable
      in the circumstances, but subject in all cases to the prior consent of the
      Exchange and any other necessary regulatory approval. Failure of the
      taking of action by the directors so as to provide for an adjustment on or
      prior to the effective date of any action by the Corporation affecting the
      Common Shares shall be conclusive evidence that the board of directors of
      the Corporation has determined that it is equitable to make no adjustment
      in the circumstances.

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

	 	 	 
	 	(h) 	
      In the absence of a resolution of the directors fixing a
      record date for a Special Distribution or Rights Offering, the Corporation
      shall be deemed to have fixed as the record date therefor the date on
      which the Special Distribution or Rights Offering is effected.

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

5.4       
Postponement of Subscription 

In any case in which this Article 5 shall require that an
adjustment shall be effective immediately after a record date for an event
referred to herein, the Corporation may defer, until the occurrence of such an
event: 

	 	(a) 	
      issuing to the holder of any Warrant exercised after such
      record date and before the occurrence of such event, the additional Common
      Shares issuable upon such exercise by reason of the adjustment required by
      such event; and

27 

	 	(b) 	
      delivering to such holder any distributions declared with
      respect to such additional Common Shares after such Exercise Date and
      before such event,

		
      provided, however, that the Corporation shall deliver or
      cause to be delivered to such holder, an appropriate instrument evidencing
      such holder’s right, upon the occurrence of the event requiring the
      adjustment, to an adjustment in the Exercise Price or the number of Common
      Shares purchasable on the exercise of any Warrant and to such
      distributions declared with respect to any additional Common Shares
      issuable on the exercise of any Warrant.

	 	 	 
	5.5 	
      Notice of Adjustment of Exercise Price and Number of
      Common Shares Purchasable Upon Exercise

	 	 	 
		(a) 	
      At least fourteen (14) Business Days prior to the
      effective date or record date, as the case may be, of any event which
      requires or might require adjustment in any of the subscription rights
      pursuant to any of the Warrants, including the Exercise Price and the
      number of Common Shares which are purchasable upon the exercise thereof,
      or such longer period of notice as the Corporation shall be required to
      provide holders of Common Shares in respect of any such event, the
      Corporation shall give notice, in the form of a certificate of adjustment,
      to the Warrant Agent and the Warrantholders of the particulars of such
      event and, if determinable, the required adjustment and the computation of
      such adjustment. Notice to the Warrantholders shall be given in the manner
      specified in Section 3.6.

	 	 	 
			
      The Warrant Agent may, for all purposes, act and rely
      upon the certificate of the Corporation submitted to it pursuant to this
      subsection 5.5(a) and on the accuracy of such certificate, calculations
      and formulas contained therein. Except as provided in Section 11.1, the
      Warrant Agent shall not at any time be under any duty or responsibility to
      any Warrantholder to determine whether any facts exist which may require
      adjustment contemplated by this Article 5, 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) 	
      The Corporation will not close its transfer books or take
      any other corporate action which might deprive the Warrantholder of the
      opportunity of exercising its right of acquisition pursuant thereto during
      the period of fourteen (14) Business Days after the giving of any notice
      required by subsection 5.5(a).

	 	 	 
		(c) 	
      In case any adjustment for which a notice in subsection
      5.5(a) has been given is not then determinable, the Corporation shall
      promptly after such adjustment is determinable give notice to the Warrant
      Agent and the Warrantholders of the adjustment and the computation of such
      adjustment.

	 	 	 
		(d) 	
      The Warrant Agent shall not be accountable with respect
      to the validity or value (or the kind or amount) of any Common Shares or
      of any other shares or securities or property which may at any time be
      issued or delivered upon the exercise or deemed exercise of any
      Warrant.

28 

	 	(e) 	
      The Warrant Agent shall not be responsible for any
      failure of the Corporation to make any cash payment or to issue, transfer
      or deliver Common Shares or Common Share certificates upon the surrender
      of any Warrant for the purpose of exercise or deemed exercise of such
      Warrants, or to comply with any of the covenants contained in this Article
      5.

ARTICLE 6 
PURCHASES BY THE CORPORATION

6.1       
Optional Purchases by the Corporation 

Subject to applicable law, the Corporation may from time to
time purchase by invitation for tender, in the open market, by private agreement
on any stock exchange or otherwise any or all of the Warrants then outstanding.
Any such purchase shall be made at the lowest price or prices at which, in the
opinion of the board of 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.
The Warrant Certificates representing the Warrants purchased pursuant to this
Section 6.1 shall forthwith be delivered to and cancelled by the Warrant
Agent.

ARTICLE 7 
COVENANTS OF THE CORPORATION

7.1       
Covenants of the Corporation 

The Corporation covenants to and with the Warrant Agent that so
long as any Warrants remain outstanding and may be exercised: 

	 	(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 and the certificates
      representing the Common Shares subscribed and paid for pursuant to the
      exercise of the Warrants to be duly issued and delivered in accordance
      with the Warrant Certificates and the terms hereof;

	 	 	 
	 	(c) 	
      all Common Shares which shall be issued upon exercise of
      the right to purchase provided for herein and in the Warrant Certificates,
      upon payment of the Exercise Price herein provided for and in the Warrant
      Certificates and upon compliance with the other applicable terms and
      conditions hereof and thereof, shall be fully paid and
    non-assessable;

	 	 	 
	 	(d) 	
      it will give to the Warrantholders, in the manner
      provided in Section 3.6 hereof, and to the Warrant Agent in the manner
      provided in Section 13.1 hereof, notice of a record date, or effective
      date, as the case may be, for any event referred to in Article 5 hereof
      which may give rise to an adjustment in the Exercise Price or in the
      number of Common Shares purchasable upon the exercise of Warrants and,
      in each case, such notice shall specify the particulars of
      such event and the record date, or the effective date, for such event,
      provided that the Corporation shall only be required to specify in such
      notice such particulars of such event as shall have been fixed and
      determined on the date on which such notice is given, and such notice
      shall be given concurrently with notice of such event to holders of Common
  Shares;

29 

	 	(e) 	
      it will maintain its corporate existence, provided that
      this subsection 7.1(e) shall not restrict the Corporation from completing
      a Capital Reorganization in accordance with subsection 5.2(d);

	 	 	 
	 	(f) 	
      it will not take any other action which might deprive the
      Warrantholders of the opportunity of exercising their right of purchase
      pursuant to the Warrants held by such Persons during the period of notice
      required by subsection 5.5(a);

	 	 	 
	 	(g) 	
      it will give written notice of the issue of Common Shares
      pursuant to the exercise of Warrants, if required and in such detail as
      may be required, to each securities regulatory authority in each relevant
      jurisdiction pursuant to applicable law;

	 	 	 
	 	(h) 	
      it will promptly notify the Warrant Agent and the
      Warrantholders in writing of any material default under the terms of this
      Warrant Indenture which remains unrectified for more than fifteen (15)
      days following its occurrence; and

	 	 	 
	 	(i) 	
      it will perform all of its covenants and carry out all of
      the acts or things to be done by it as provided in this
  Indenture.

7.2       
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 within thirty (30) days of the Warrant
Agent’s request for all reasonable expenses, disbursements and advances incurred
or made by the Warrant Agent in the administration or execution of the trusts
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, except any such expense,
disbursement or advance as may arise out of or result from the negligence,
wilful misconduct or fraud of the Warrant Agent or of Persons for whom the
Warrant Agent is responsible. The Warrant Agent shall not have any recourse
against any monies, securities or other property held by it for the benefit of
the Warrantholders pursuant to this Indenture for the payment of its fee. 

7.3       
Performance of Covenants by Warrant Agent 

If the Corporation shall fail to perform any of its covenants
contained in this Warrant Indenture, the Warrant Agent may notify the
Warrantholders in the manner provided in Section 3.6 of such failure on the part
of the Corporation or, subject to Section 11.1, may itself perform any of the
covenants capable of being performed by it, but shall be under no obligation to
perform such covenants or to notify the 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 7.2. 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. 

30 

ARTICLE 8 
ENFORCEMENT 

	8.1 	
      Suits by Warrantholders

	 	 	 	 
		(a) 	
      Warrantholders May Not Sue. Except to the extent
      that the rights of an individual Warrantholder or group of Warrantholders
      would be prejudiced thereby, no Warrantholder has the right to institute
      any action or proceeding or to exercise any other remedy authorized
      hereunder for the purpose of enforcing any right on behalf of the
      Warrantholders as a whole or for the execution of any trust or power
      hereunder or for the appointment of a liquidator or receiver or receiver
      and manager or for a receiving order under the Bankruptcy and
      Insolvency Act (Canada) or to have the Corporation wound up or to file
      or prove a claim in any liquidation or bankruptcy proceedings, unless the
      Warrant Agent has received a Warrantholders’ Request directing it to take
      the requested action and has been provided with sufficient funds or other
      security and/or such indemnity satisfactory to the Warrant Agent, acting
      reasonably, in respect of the costs, expenses and liabilities that may be
      incurred by it in so proceeding and the Warrant Agent has failed to act
      within a reasonable time thereafter. If the Warrant Agent has so failed to
      act, but not otherwise, any Warrantholder acting on behalf of all
      Warrantholders will be entitled to take any of the proceedings that the
      Warrant Agent might have taken hereunder. No Warrantholder has any right
      in any manner whatsoever to effect, disturb or prejudice the rights hereby
      created by its action or to enforce any right hereunder or under any
      Warrant, except subject to the conditions and in the manner herein
      provided. Any money received as a result of a proceeding taken by any
      Warrantholder on behalf of the Warrantholders hereunder must be forthwith
      paid to the Warrant Agent.

	 	 	 	 
		(b) 	
      Warrant Agent not Required to Possess Warrants.
      All rights of action under this Indenture may be enforced by the Warrant
      Agent without the possession of any of the Warrants or the production
      thereof on any trial or other proceedings relative thereto.

	 	 	 	 
		(c) 	
      Warrant Agent May Institute All
  Proceedings.

	 	 	 	 
			(i) 	
      The Warrant Agent shall be entitled and empowered, either
      in its own name or as Warrant Agent of an express trust, or as
      attorney-in-fact for the Warrantholders, or in any one or more of such
      capacities, to file such proof of debt, amendment of proof of debt, claim,
      petition or other document as may be necessary or advisable in order to
      have the claim of the Warrant Agent and the Warrantholders allowed in any
      insolvency, bankruptcy, liquidation or other judicial proceedings relative
      to the Corporation or its creditors or relative to or affecting its
      property. The Warrant Agent is hereby irrevocably appointed (and the
      successive respective Warrantholders by taking and holding the same shall
      be conclusively deemed to have so appointed the Warrant Agent) the true
      and lawful attorney-in-fact of the respective Warrantholders with
      authority to make and file in the respective names of the Warrantholders
      or on behalf of the Warrantholders as a class, subject to deduction from
      any such claims of the amounts of any claims filed by any of the
      Warrantholders themselves if and to the extent permitted hereunder, any
      proof of debt, amendment of proof of debt, claim, petition or other
      document in any such proceedings and to receive payment of any sums
      becoming distributable on account thereof, and to execute any such other
      papers and documents and to do and perform any and all such acts and
      things for and on behalf of the Warrantholders, as may be necessary or
      advisable in the opinion of the Warrant Agent, in order to have the
      respective claims of the Warrant Agent and of the Warrantholders against
      the Corporation or its property allowed in any such proceeding, and to
      receive payment of or on account of such claims, provided, however, that
      nothing contained in this Indenture shall be deemed to give the Warrant
      Agent, unless so authorized by Extraordinary Resolution, any right to
      accept or consent to any plan of reorganization or otherwise by action of
      any character in such proceeding to waive or change in any way any right
  of any Warrantholder.

31 

	 	(ii) 	
      The Warrant Agent shall also have the power, but not the
      obligation, at any time and from time to time to institute and to maintain
      such suits and proceedings as it may be advised shall be necessary or
      advisable to preserve and protect its interests and the interests of the
      Warrantholders.

	 	 	 
	 	(iii) 	
      Any such suit or proceeding instituted by the Warrant
      Agent may be brought in the name of the Warrant Agent as Warrant Agent of
      an express trust, and any recovery of judgment shall be for the rateable
      benefit of the Warrantholders subject to the provisions of this Indenture.
      In any proceeding brought by the Warrant Agent (and also any proceeding in
      which a declaratory judgment of a court may be sought as to the
      interpretation or construction of any provision of this Indenture, to
      which the Warrant Agent shall be a party), the Warrant Agent shall,
      relying on advice of counsel at its discretion, be held to represent all
      the Warrantholders, and it shall not be necessary to make any
      Warrantholders parties to any such proceeding.

8.2       
Immunity of Shareholders, Etc. 

Subject to any rights or remedies available to the
Warrantholders under applicable securities legislation, the Warrant Agent and,
by their acceptance of the Warrant Certificates and as part of the consideration
for the issue of the Warrants, the Warrantholders hereby waive and release any
right, cause of action or remedy now or hereafter existing in any jurisdiction
against any incorporator or any past, present or future Shareholder, director,
officer, employee or agent of the Corporation or of any successor corporation
for the issue of the Common Shares pursuant to any Warrant or on any covenant, agreement, representation or
warranty by the Corporation herein or in the Warrant Certificates contained.

32 

8.3       
Limitation of Liability 

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

ARTICLE 9 
MEETINGS OF WARRANTHOLDERS 

9.1       
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 receiving sufficient funds, determined reasonably, and being
indemnified to its reasonable satisfaction by the Corporation or by the
Warrantholders signing such Warrantholders’ Request against the cost which may
be incurred in connection with the calling and holding of such meeting, convene
a meeting of the Warrantholders. In the event the Warrant Agent fails to call a
meeting within ten (10) days after receipt of such proper written request of the
Corporation or Warrantholders’ Request, funds and indemnity given as aforesaid,
the Corporation or such Warrantholders, as the case may be, may convene such
meeting. Every such meeting shall be held in the City of Toronto or such other
place as may be approved or determined by the Warrant Agent and approved by the
Corporation, acting reasonably. 

9.2       
Notice 

At least twenty-one (21) days prior notice of any meeting of
Warrantholders shall be given to the Warrantholders in the manner provided for
in Section 3.6 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
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 nor any of the provisions of this Article 9. A notice of meeting may be
signed by an appropriate officer of the Warrant Agent or by the Corporation or
by the Warrantholder or Warrantholders convening the meeting. 

9.3       
Chairman 

An individual (who need not be a Warrantholder) nominated in
writing by the Warrant Agent shall be chairman of the meeting and if no
individual is so nominated, or if the individual so nominated is not present
within 15 minutes from the time fixed for the holding of the meeting, or if such Person is unable or unwilling to act as chairman, the
Warrantholders present in person or by proxy shall choose some individual
present to be chairman. 

33 

9.4       
Quorum 

Subject to the provisions of Section 9.11, at any meeting of
the Warrantholders a quorum shall consist of Warrantholders, present in person
or by proxy, representing at least 25% of the then outstanding Warrants,
provided that at least two Persons entitled to vote thereat are personally
present. If a quorum of the Warrantholders shall not be present within 30
minutes from the time fixed for holding any meeting, the meeting, if summoned by
the 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, subject to
Section 9.11, 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 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 represent
at least 25% of the then outstanding Warrants. 

9.5       
Power to Adjourn 

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

9.6       
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. 

9.7       
Poll and Voting 

	 	(a) 	
      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 Warrantholders acting in
      Person or by proxy, 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 votes cast on
      the poll.

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

34 

9.8       
Regulations 

	 	(a) 	
      Subject to the provisions of this Indenture, the Warrant
      Agent or the Corporation with the approval of the Warrant Agent, may from
      time to time make and from time to time vary such regulations as it shall
      think fit:

	 	 	 	 
	 		(i) 	
      for the issue of voting certificates by any bank, trust
      company or other depositary approved by the Warrant Agent certifying that
      specified Warrants have been deposited with it by a named holder and will
      remain on deposit until after the meeting of Warrantholders, which voting
      certificates shall entitle the holders named therein to be present and
      vote at any such meeting and at any adjournment thereof or to appoint a
      proxy or proxies to represent them and vote for them at any such meeting
      and at any adjournment thereof in the same manner and with the same effect
      as though the holders so named in such voting certificates were the actual
      holders of the Warrant specified therein;

	 	 	 	 
	 		(ii) 	
      for Warrantholders to appoint a proxy or proxies to
      represent them and vote for them at any such meeting and at any
      adjournment thereof and the manner in which same shall be executed, and
      for the production of the authority of any Persons signing on behalf of
      the grantor of such proxy;

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

	 	 	 	 
	 		(iv) 	
      for the deposit of voting certificates and instruments
      appointing proxies at some approved place or places other than the place
      at which the meeting of Warrantholders is to be held and enabling
      particulars of such instruments appointing proxies to be mailed, delivered
      or sent by facsimile transmission 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;

	 	 	 	 
	 		(v) 	
      for the form of the voting certificates and instrument of
      proxy; and

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

	 	(b) 	
      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 may provide, or as may be
expressly provided for herein, the only Persons who shall be recognized at any
meeting as a Warrantholder, or be entitled to vote or be present at the meeting
in respect thereof (subject to Section 9.9) shall be Warrantholders or Persons
holding voting certificates or instruments of proxy of Warrantholders. 

35 

9.9       
Corporation, Warrant Agent and Warrantholders May Be Represented 

The Corporation and the Warrant Agent, by their respective
directors, officers and employees, and counsel for any of the Corporation, the
Warrant Agent and any Warrantholder may attend any meeting of the
Warrantholders, but shall have no vote as such, except in their capacity as
Warrantholders, proxy or holder of voting certificate(s). 

9.10      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 Warrantholders at a meeting
shall, subject to Section 9.11 have the power, exercisable from time to time by
Extraordinary Resolution, subject to any required regulatory approval: 

	 	(a) 	
      to agree, on behalf of and binding on all Warrantholders,
      to any modification, abrogation, alteration, compromise or arrangement of
      the rights of Warrantholders or (with the consent of the Warrant Agent,
      such consent not to be unreasonably withheld) the Warrant Agent in its
      capacity as Warrant Agent hereunder or on behalf of the Warrantholders
      against the Corporation, whether such rights arise under this Indenture,
      the Warrant Certificate or otherwise;

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

	 	 	 
	 	(c) 	
      to direct or to authorize the Warrant Agent, subject to
      its prior indemnification pursuant to subsection 11.1(b), to enforce
      against the Corporation any of the covenants of the Corporation contained
      in this Indenture or the Warrant Certificates or to enforce any of the
      rights of the 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 or the Warrant Certificates either unconditionally or upon
      any conditions specified in such Extraordinary Resolution;

	 	 	 
	 	(e) 	
      to restrain any 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 contained in this
      Indenture or the Warrant Certificates or to enforce any of the rights of
      the Warrantholders;

36 

	 	(f) 	
      to direct any 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 Warrantholder in connection
  therewith;

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

	 	 	 
	 	(h) 	
      except as otherwise permitted hereunder (including as
      permitted under Section 10.1), amend this Indenture or the Warrant
      Certificates; and

	 	 	 
	 	(i) 	
      to remove the Warrant Agent and to appoint a successor
      warrant agent in the manner specified in Section 11.7
  hereof.

	9.11 	
      Meaning of Extraordinary Resolution

	 	 	 
		(a) 	
      The expression “Extraordinary Resolution” when used in
      this Indenture means, subject as hereinafter provided in this Section 9.11
      and in Section 9.14, a resolution either; (1) proposed at a meeting of
      Warrantholders duly convened for that purpose and held in accordance with
      the provisions of this Article 9 at which quorum is present, passed by the
      affirmative votes of Warrantholders entitled to purchase not less than
      662/3% of the aggregate number of Warrants represented at the meeting and
      voted on the poll upon such resolution; or (2) adopted by an instrument in
      writing signed by the holders of Warrants representing not less than
      662/3% of the aggregate number of all the then outstanding
  Warrants.

	 	 	 
		(b) 	
      If, at any meeting called for the purpose of passing an
      Extraordinary Resolution, quorum is not established within 30 minutes
      after the time appointed for the meeting, then the meeting, if convened by
      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
      fifteen (15) or more than sixty (60) days later, and to such place and
      time as may be determined by the chairman. Not less than ten (10) days’
      prior notice shall be given of the time and place of such adjourned
      meeting in the manner provided for in Section 3.6. Such notice shall state
      that at the adjourned meeting the Warrantholders present in Person or by
      proxy shall form a quorum but it shall not be necessary to set forth the
      purposes for which the meeting was originally called or any other
      particulars. At the adjourned meeting the Warrantholders present in Person
      or by proxy shall form a quorum 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
      subsection 9.11(a) shall be an Extraordinary Resolution within the meaning
      of this Indenture notwithstanding that Warrantholders holding at least 25%
      of the then outstanding Warrants are not present in Person or by proxy at
      such adjourned meeting.

37 

	 	(c) 	
      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.

9.12      Powers
Cumulative 

Any one or more of the powers or any combination of the powers
in this Indenture stated to be exercisable by the 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 Warrantholders to
exercise such power or powers or combination of powers then or thereafter from
time to time. 

9.13      Minutes

Minutes of all resolutions and proceedings at every meeting of
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 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
or proceedings taken thereat shall be deemed to have been duly passed and taken.

9.14      Instruments
In Writing 

All actions which may be taken and all powers that may be
exercised by the Warrantholders at a meeting held as provided in this Article 9
may also be taken and exercised by Warrantholders representing at least 662/3%
of the aggregate number of the then outstanding Warrants by an instrument in
writing signed in one or more counterparts by such 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.

9.15      Binding
Effect of Resolutions 

Every resolution and every Extraordinary Resolution passed in
accordance with the provisions of this Article 9 at a meeting of Warrantholders
shall be binding upon all the Warrantholders, whether present at or absent from
such meeting, and every instrument in writing signed by Warrantholders in
accordance with Section 9.14 shall be binding upon all the Warrantholders,
whether signatories thereto or not, and each and every Warrantholder and the
Warrant Agent (subject to receiving prior indemnification pursuant to subsection
11.1(b)) shall be bound to give effect accordingly to every such resolution and
instrument in writing. In the case of an instrument in writing the Warrant Agent
shall give notice in the manner contemplated in Section 3.6 and Section 13.1 of
the effect of the instrument in writing to all Warrantholders and the
Corporation as soon as is reasonably practicable. 

9.16      Holdings by
Corporation Disregarded 

In determining whether Warrantholders holding the requisite
number of Warrants are present at a meeting of 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 or any Subsidiary of the Corporation, as
determined in accordance with the provisions of Section 13.7, shall be
disregarded. 

38 

ARTICLE 10 
SUPPLEMENTAL INDENTURES 

10.1      Provision
for Supplemental Indentures for Certain Purposes 

From time to time the Corporation (when authorized by action by
the directors) and the Warrant Agent may, without the consent of the
Warrantholders and subject to the provisions hereof, and they shall, when so
directed in accordance with the provisions hereof and regulatory approval,
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) 	
      providing for the issue of additional Warrants hereunder
      and any consequential amendments hereto as may be required by the Warrant
      Agent;

	 	 	 
	 	(b) 	
      setting forth any adjustments resulting from the
      application of the provisions of Article 5 or any modification affecting
      the rights of Warrantholders hereunder on exercise of the Warrants,
      provided that any such adjustments or modifications shall be subject to
      the prior written approval of the Exchange;

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

	 	 	 
	 	(d) 	
      evidencing the succession, or successive successions, of
      other corporations to the Corporation and the covenants of and obligations
      assumed by any such successor in accordance with the provisions of this
      Indenture;

	 	 	 
	 	(e) 	
      giving effect to any Extraordinary Resolution passed as
      provided in Article 9;

	 	 	 
	 	(f) 	
      making such provisions not inconsistent with this
      Indenture as may be necessary or desirable with respect to matters or
      questions arising hereunder, provided that such provisions are not, in the
      opinion of the Warrant Agent, relying on the advice of counsel,
      prejudicial to the rights or interests of any of the
  Warrantholders;

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

	 	 	 
	 	(h) 	
      modifying any of the provisions of this Indenture,
      including by providing for the creation and the authority to issue
      additional Warrants, or 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 or interests of any of the
      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 may not afford adequate
      protection to the Warrant Agent when the same shall become operative;
  and

39 

	 	(i) 	
      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 or interests of the Warrant
      Agent and any of the Warrantholders are in no way prejudiced
    thereby.

10.2     
Successor Corporations 

Until the Time of Expiry or the exercise of all of the
outstanding Warrants in accordance with their terms, the Corporation shall not,
directly or indirectly, sell, transfer or otherwise dispose of all or
substantially all of its property and assets as an entirety to any other
corporation and shall not amalgamate (except with a wholly-owned subsidiary) or
merge with or into any other corporation (any such other corporation being
herein referred to as a “Successor Corporation”) unless the Successor
Corporation executes, before or contemporaneously with the consummation of any
such transaction, an indenture supplemental hereto together with such other
instruments as are satisfactory to the Warrant Agent and in the opinion of its
counsel are necessary or advisable to evidence the assumption by the Successor
Corporation of the due and punctual observance and performance of all the
covenants and obligations of the Corporation under this Indenture. 

ARTICLE 11 
CONCERNING THE WARRANT AGENT

	11.1 	
      Rights and Duties of Warrant Agent

	 	 	 
		(a) 	
      In the exercise of the rights and duties prescribed or
      conferred by the terms of this Indenture, the Warrant Agent shall act
      honestly and in good faith with a view to the best interests of the
      Warrantholders and shall exercise that degree of care, diligence and skill
      that a reasonably prudent trustee would exercise in comparable
      circumstances. No provision of this Indenture shall be construed to
      relieve the Warrant Agent from, or require any Person to indemnify the
      Warrant Agent against, liability for its own negligence, wilful misconduct
      or bad faith. The duties and obligations of the Warrant Agent shall be
      determined solely by the provisions hereof and, accordingly, the Warrant
      Agent shall only be responsible for the performance of such duties and
      obligations as it has undertaken herein. The Warrant Agent shall retain
      the right not to act and shall not be held liable for refusing to act in
      circumstances that require the delivery to or receipt by the Warrant Agent
      of documentation unless it has received clear and reasonable documentation
      which complies with the terms of this Indenture. Such documentation must
      not require the exercise of any discretion or
independent judgement other than as contemplated by this Indenture.
      The Warrant Agent shall incur no liability with respect to the delivery or
      non-delivery of any certificate or certificates whether delivered by hand,
      mail or any other means, provided that it has complied with the terms of
      this Indenture in respect of the discharging of its obligations in respect
  of the delivery of such certificates.

40 

	 	(b) 	
      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 Warrantholders hereunder shall be
      conditional upon the Warrantholders furnishing, when required by notice in
      writing by the Warrant Agent, sufficient funds to commence or to continue
      such act, action or proceeding and an indemnity reasonably satisfactory to
      the Warrant Agent to protect and to hold harmless the Warrant Agent
      against the costs, charges and expenses and liabilities to be incurred
      thereby and any loss and damage it may suffer by reason thereof.

	 	 	 
	 	(c) 	
      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.

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

	 	 	 
	 	(e) 	
      Every provision of this Indenture that by its terms
      relieves the Warrant Agent of liability or entitles the Warrant Agent to
      rely upon any evidence submitted to it is subject to the provisions of
      this Section 11.1 and of Section 11.2.

	11.2 	
      Evidence, Experts and Advisers

	 	 	 
		(a) 	
      In addition to the reports, certificates, opinions and
      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 the Warrant Agent may reasonably require by
      written notice to the Corporation.

	 	 	 
		(b) 	
      The Warrant Agent shall be protected in acting in
      reasonable reliance upon any written notice, request, waiver, consent,
      certificate, receipt, statutory declaration or other paper or document
      furnished to it, not only as to its due execution and the validity and
      effectiveness of its provisions, but also as to the truth of and
      acceptability of any information therein contained which it in good faith
      believes to be genuine and what it purports to be.

	 	 	 
		(c) 	
      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 public, 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.

41 

	 	(d) 	
      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 determining and discharging its duties
      hereunder and shall not be responsible for any misconduct or negligence on
      the part of such experts or advisors who have been appointed and
      supervised with due care by the Warrant Agent. The fees of such counsel
      and other experts shall be part of the Warrant Agent’s fees hereunder. The
      Warrant Agent shall be fully protected in acting or not acting, in good
      faith, in accordance with any opinion or instruction of such counsel. Any
      remuneration so paid by the Warrant Agent shall be repaid to the Warrant
      Agent in accordance with Section 7.2.

	11.3 	
      Monies Held by Warrant Agent

	 	 
		
      The Warrant Agent may retain any cash balance held in
      connection with this Indenture and may, but need not, hold the same in its
      deposit department or the deposit department of one of its Affiliates; but
      the Warrant Agent and its Affiliates shall not be liable to account for
      any profit to the Corporation or any other person or entity other than at
      a rate, if any, established from time to time by the Warrant Agent or its
      Affiliates.

	 	 
	11.4 	
      Action 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
Warrantholders. 

11.5     
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 trusts and powers of this Indenture
or otherwise in respect of the premises. 

11.6     
Protection of Warrant Agent 

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

	 	(a) 	
      the Warrant Agent shall not be liable for or by reason of
      any statement of fact or recitals in this Indenture or in the Warrant
      Certificates (except the representations contained in Section 11.8 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;

42 

	 	(d) 	
      the Warrant Agent shall not be accountable with respect
      to the validity or value (or the kind or amount) of any Common Shares or
      of any shares or other securities or property which may at any time be
      issued or delivered upon the exercise of the rights attaching to any
      Warrant;

	 	 	 
	 	(e) 	
      the Warrant Agent shall not be responsible for any
      failure of the Corporation to issue, transfer or deliver Common Shares or
      certificates representing Common Shares upon the surrender of any Warrants
      for the purpose of the exercise of such rights or to comply with any of
      the covenants of the Corporation contained in Article 7; and

	 	 	 
	 	(f) 	
      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 the covenants
      herein contained or of any acts of any directors, officers, employees,
      agents or servants of the Corporation.

	11.7 	
      Replacement of Warrant Agent; Successor by
      Merger

	 	 	 
		(a) 	
      The Warrant Agent may resign its trust and be discharged
      from all further duties and liabilities hereunder, subject to this
      subsection 11.7(a), by giving to the Corporation not less than thirty (30)
      days prior notice in writing or such shorter prior notice as the
      Corporation may accept as sufficient. The 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
      Warrantholders; failing such appointment by the Corporation, the retiring
      warrant agent or any Warrantholder may apply to a judge of the Ontario
      Court of Justice (the “Court”), at the Corporation’s expense, on
      such notice as such justice 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
      Warrantholders. Any new warrant agent appointed under any provision of
      this Section 11.7 shall be a company authorized to carry on the business
      of a trust company in the Province of Ontario. 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 without any further assurance, conveyance, act or deed; but there
      shall be immediately executed, at the expense of the Corporation, all such
      conveyances or other instruments as may, in the opinion of counsel, be
      necessary or advisable for the purpose of assuring the same to the new
      warrant agent, provided that, any resignation or removal of the warrant
      agent and appointment of a successor warrant agent shall not become
      effective until the successor warrant agent shall have executed an
      appropriate instrument accepting such appointment and, at the request of
      the Corporation, the predecessor warrant agent shall execute and deliver
      to the successor warrant agent an appropriate instrument transferring to such successor
      warrant agent all rights and powers of the Warrant Agent
  hereunder.

43 

	 	(b) 	
      Upon the appointment of a successor warrant agent, the
      Corporation shall promptly notify the Warrantholders thereof in the manner
      provided for in Section 3.6.

	 	 	 
	 	(c) 	
      Any corporation into or with which the Warrant Agent may
      be merged or consolidated or amalgamated, or any corporation resulting
      thereof, or any corporation succeeding to or acquiring the warrant agency
      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 a successor Warrant Agent under subsection
11.7(a).

	11.8 	
      Conflict of Interest

	 	 	 
		(a) 	
      The Warrant Agent represents to the Corporation that at
      the time of execution and delivery hereof no material conflict of interest
      exists in 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 ninety (90) days after ascertaining that
      it has such material conflict of interest, either eliminate the same or
      resign its trusts hereunder to a successor warrant agent approved by the
      Corporation and meeting the requirements set forth in subsection 11.7(a).
      Notwithstanding the foregoing provisions of this subsection 11.8(a), if
      any such material conflict of interest exists or hereinafter shall exist,
      the validity and enforceability of this Indenture and the Warrant
      Certificates shall not be affected in any manner whatsoever by reason
      thereof.

	 	 	 
		(b) 	
      Subject to subsection 11.8(a), 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 or any Subsidiary without being liable
      to account for any profit made thereby, subject to compliance with
      applicable securities legislation.

11.9     
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. 

11.10    Payments by Warrant
Agent 

The forwarding of a cheque by the Warrant Agent will satisfy
and discharge the liability for any amounts due to the extent of the sum or sums
represented thereby (plus the amount of any tax deducted or withheld as required
by law) 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. 

44 

11.11    Unclaimed Interest or
Distribution - Retention of Benefits by Warrant Agent 

In the event that the Warrant Agent shall hold any amount of
interest or other distributable amount which is unclaimed or which cannot be
paid for any reason, the Warrant Agent shall be under no obligation to invest or
reinvest the same but shall only be obligated to hold the same on behalf of the
Person or Persons entitled thereto in a current or other non-interest bearing
account pending payment to the Person or Persons entitled thereto. The Warrant
Agent shall, as and when required by law, and may at any time prior to such
required time, pay all or part of such interest or other distributable amount so
held to a public trustee (or other appropriate governmental official or agency)
whose receipt shall be good discharge and release of the Warrant Agent. 

11.12    Deposit of Securities

The Warrant Agent shall not be responsible or liable in any
manner whatsoever for the sufficiency, correctness, genuineness or validity of
any security deposited with it. 

11.13    Act, Error, Omission
Etc. 

The Warrant Agent shall not be liable for any error in
judgement or for any act done or step taken or omitted by it in good faith, for
any mistake, in fact or law, or for anything which it may do or refrain from
doing in connection herewith except arising out of its own gross negligence or
wilful misconduct. 

11.14    Indemnification

The Corporation hereby agrees to indemnify and hold harmless
the Warrant Agent and its respective officers, directors, employees, agents,
representatives, successors and assigns from and against any and all reasonable
costs, expenses and disbursements, damages, liabilities, claims and actions
(including reasonable legal fees and disbursements) which it might incur or to
which it might have become subject and any action, suit, or other similar legal
proceeding which might be instituted against the Warrant Agent arising from or
out of any act, omission or error of the Warrant Agent provided that such act,
omission or error was made in good faith and the conduct of the Warrant Agent’s
duties hereunder was in accordance with the standards set forth in Section 11.1
and did not constitute negligence, wilful misconduct or fraud on the part of the
Warrant Agent. This provision shall survive the resignation or removal of the
Warrant Agent or the termination of this Indenture. 

11.15    Notice 

The Warrant Agent shall not be required to take notice or be
deemed to have constructive or actual knowledge of any matter hereunder,
including failure by the Corporation to perform any of its covenants in this
Indenture or any other breach of the Corporation hereunder, unless the Warrant
Agent shall have received from the Corporation or a Warrantholder, a written
notice stating the matter in respect of which the Warrant Agent should
have actual knowledge and identifying in such notice that it is given in respect
of this Indenture. 

45 

11.16    Reliance by the
Warrant Agent 

The Warrant Agent may act on the opinion or advice obtained
from counsel to the Warrant Agent and shall, provided it acts in good faith in
reliance thereon, not be responsible for any loss occasioned by doing so nor
shall it incur any liability or responsibility for determining in good faith not
to act upon such opinion or advice. The Warrant Agent may rely, and shall be
protected in relying, upon any statement, request, direction or other paper or
document believed by it to be genuine and to have been signed, sent or presented
by or on behalf of the proper party or parties. The Warrant Agent may assume for
the purposes of this Indenture that any address on the register of the
Warrantholders is the holder’s actual address and is also determinative as to
residency and that the address of any transferee to whom any Common Shares are
to be registered, as shown on the transfer document is the transferee’s actual
address and is also determinative as to residency of the transferee. 

11.17    Anti-Money Laundering
and Anti-Terrorist Legislation 

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, acting
reasonably, determines that such act might cause it to be in non-compliance with
any applicable anti-money laundering or anti-terrorist legislation, regulation
or guideline. Further, should the Warrant Agent, in its sole judgment, determine
at any time that its acting under this Warrant 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 ten (10) days’ written notice to the Corporation, provided
that: (i) the Warrant Agent’s written notice shall describe the circumstances of
such non-compliance; and (ii) if such circumstances are rectified to the Warrant
Agent’s satisfaction within such ten (10) day period, then such resignation
shall not be effective. 

11.18    Privacy Laws 

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

46 

11.19    Third Party Interests

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

11.20    Authority to Carry on
Business 

The Warrant Agent represents to the Corporation that it is
authorized to carry on the business of a trust company in the Province of
Ontario. 

ARTICLE 12 
ACCEPTANCE OF TRUSTS BY WARRANT AGENT

12.1      Acceptance

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

ARTICLE 13 
GENERAL 

	13.1 	
      Notice to the Corporation and the Warrant
    Agent

	 	 	 
		(a) 	
      Unless herein otherwise expressly provided, any notice to
      be given hereunder to the Corporation and to the Warrant Agent shall be in
      writing and may be given by mail, or by facsimile (with original copy to
      follow by mail) or by personal delivery and shall be addressed as
      follows:

if to the Warrant Agent: 

CST Trust Company 
Client Services

320 Bay Street 
3rd Floor
Toronto, Ontario M5H 4A6

Facsimile: 1 (877) 715-0494 

if to the Corporation: 

47 

Energy Fuels Inc. 
80 Richmond St.
West, 18th Floor 
Toronto, Ontario M5H 2A4 
Attention: Chief
Financial Officer 
Facsimile: (416) 214-2810 

	 		
      and shall be deemed to have been received, if delivered
      or sent by courier, on the date of delivery or, if mailed, on the fifth
      (5th) Business Day following the date of the postmark on such
      notice. Any delivery made or sent by facsimile on a day other than a
      Business Day, or after 5:00 p.m. (Toronto time) on a Business Day, shall
      be deemed to be received on the next following Business Day.

	 	 	 
	 	(b) 	
      The Corporation or the Warrant Agent, as the case may be,
      may from time to time give notice in the manner provided in subsection
      13.1(a) 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. A copy of any notice of change of address of the
      Corporation given pursuant to this subsection 13.1(b) shall be sent to the
      principal transfer office of the Warrant Agent in the City of Toronto,
      Ontario and shall be available for inspection by Warrantholders during
      normal business hours.

	 	 	 
	 	(c) 	
      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 Corporation hereunder could
      reasonably be considered unlikely to reach its destination, such notice
      shall be valid and effective only if it is delivered to an officer of the
      Party to which it is addressed or if it is delivered to such Party at the
      appropriate address provided in subsection 13.1(a) by telecopy or other
      means of prepaid, transmitted, recorded communication and any such notice
      delivered in accordance with the foregoing shall be deemed to have been
      received on the date of delivery to such officer or if delivered by
      telecopy or other means of prepaid, transmitted, recorded communication,
      on the first (1st) Business Day following the date of the
      sending of such notice by the Person giving such
notice.

13.2      Time
of the Essence 

Time is of the essence in this Indenture. 

13.3      Counterparts
and Formal Date 

This Indenture may be executed in several counterparts, 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 notwithstanding their
date of execution shall be deemed to be dated as of the date hereof. 

13.4     
Satisfaction and Discharge of Indenture 

Upon the earlier of: (a) the date by which all the Warrant
Certificates thereto certified hereunder have been delivered to the Warrant
Agent for exercise or destruction; or (b) the expiration of the Exercise Period, this Indenture, except to the extent that
Common Shares and certificates therefore have not been issued and delivered
hereunder or the Warrant Agent or the Corporation has not performed any of their
obligations hereunder, shall cease to be of further effect and the Warrant
Agent, on demand of and at the cost and expense of the Corporation and upon
delivery to the Warrant Agent of a certificate of the Corporation stating that
all conditions precedent to the satisfaction and discharge of this Indenture
have been complied with and upon payment to the Warrant Agent of the fees and
other remuneration payable to the Warrant Agent, shall execute proper
instruments acknowledging satisfaction of and discharging of this Indenture.

48 

13.5      Provisions
of Indenture and Warrant Certificates for the Sole Benefit of Parties and
Warrantholders 

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

13.6      Force
Majeure 

Neither of the Parties hereto 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 13.6. 

13.7      Common
Shares or Warrants Owned by the Corporation or its Subsidiaries - Certificates
to be Provided 

For the purpose of disregarding any Warrants owned legally or
beneficially by the Corporation or any Subsidiary or any other Affiliate of the
Corporation, 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 holders of Common Shares which, to the knowledge of the
      Corporation, are owned by or held for the account of the Corporation or
      any Subsidiary of the Corporation; and

	 	 	 
	 	(b) 	
      the number of Warrants owned legally and beneficially by
      the Corporation or any Subsidiary of the
Corporation,

and the Warrant Agent in making any
determinations in such regard shall be entitled to rely on such certificate.

[Intentionally Left Blank]

49 

IN WITNESS WHEREOF the Parties hereto have executed this
Indenture as of the date first written above. 

ENERGY FUELS INC. 

 

Per:        /s/
Stephen P. Antony                   

CST TRUST COMPANY 

 

Per:        /s/
Christopher De Lima                 
                
Authorized Signatory 

 

Per:       /s/ Radha Mulchan-Singh             

                
Authorized Signatory 

S-1 

SCHEDULE “A” 
FORM OF WARRANT CERTIFICATE

ENERGY FUELS INC. 

	  	CUSIP: 292671161 
	  	ISIN: CA2926711615 
	  	  
	NO. ___________________________	__________________  WARRANTS
  

COMMON SHARE PURCHASE WARRANTS 

THIS IS TO CERTIFY THAT for value received
_____________________________________, the registered holder hereof is entitled
for each whole Warrant represented hereby to purchase one fully paid and
non-assessable common share (“Common Share”) in the capital of Energy
Fuels Inc. (the “Corporation”) at a price per share of U.S. $3.20,
subject to adjustment as hereinafter referred to. 

Such right to purchase may be exercised by the registered
holder hereof at any time on the date of issue hereof up to and including 5:00
p.m. (Toronto time) on March 14, 2019 (the “Time of Expiry”) by
surrender of this Warrant Certificate to CST Trust Company (the “Warrant
Agent”) at the transfer office of the Warrant Agent in Toronto, Ontario,
together with the subscription form attached hereto duly executed and completed
for the number of Common Shares which the holder hereof is exercising its right
to purchase and the purchase price of such Common Shares as herein provided.

This Warrant Certificate and such payment shall be deemed not
to have been surrendered and made except upon personal delivery thereof or, if
sent by post or other means of transmission, upon actual receipt thereof by the
Warrant Agent at the office specified above. 

The purchase price of Common Shares subscribed for hereunder
shall be paid by certified cheque, money order or bank draft in lawful money of
Canada payable to the order of the Corporation at par in the city where this
Warrant Certificate is delivered. 

Certificates for the Common Shares subscribed for will be
mailed to the persons specified in the subscription form at their respective
addresses specified therein or, if so specified in such subscription form,
delivered to such persons at the office where the applicable Warrant Certificate
was surrendered, when the transfer registers of the Corporation have been open
for five (5) Business Days after the due surrender of such Warrant Certificate
and payment as aforesaid. In the event of a purchase of a number of Common
Shares fewer than the number which can be purchased pursuant to this Warrant
Certificate, the holder shall be entitled to receive without charge a new
Warrant Certificate in respect of the balance of such Warrants. 

This Warrant Certificate and other Warrant Certificates are
issued under and pursuant to a certain warrant indenture (herein referred to as
the “Indenture”) dated March 14, 2016 between the Corporation and the
Warrant Agent, to which Indenture and any instruments supplemental thereto
reference is hereby made for a description of the terms and conditions upon
which such Warrant Certificates are issued and are to be held all to the
same effect as if the provisions of the Indenture and all instruments
supplemental thereto were herein set forth, to all of which provisions the
holder of this Warrant Certificate by acceptance hereof assents. In the event of
any inconsistency between the terms set forth in this Warrant Certificate and
the terms of the Warrant Indenture, the terms of the Warrant Indenture shall
govern. The Corporation will furnish to the holder of this Warrant Certificate,
upon request and without charge, a copy of the Indenture. 

A-1 

Subject to the Corporation’s right to purchase the Warrants
under the Indenture and to any restriction under applicable law or policy of any
applicable regulatory body, the Warrants and Warrants Certificates and the
rights thereunder shall only be transferable by the registered holder hereof in
compliance with the conditions prescribed in the Indenture and the due
completion, execution and delivery of a Transfer Form (as attached hereto) in
accordance with the terms of the Indenture. 

The holding of this Warrant Certificate shall not constitute
the holder hereof a holder of Common Shares nor entitle the holder to any right
or interest in respect thereof. 

The Warrants evidenced hereby shall not be exercised by any
person during any time that no registration statement under the 1933 Act
registering the offer and sale of the Common Shares issuable upon the exercise
of the Warrants evidenced hereby is effective, provided that, during such
time and prior to the Time of Expiry, any person holding such Warrants shall
have the right to provide notice to the Corporation of their intent to exercise,
at which time the Corporation shall permit such holder to exercise on a cashless
basis such Warrant. 

The Indenture provides for adjustment in the number of Common
Shares to be delivered upon the exercise of the right of purchase hereby granted
and to the Exercise Price in certain events therein set forth. 

The Indenture contains provisions making binding upon all
holders of Warrants outstanding thereunder resolutions passed at meetings of
such holders held in accordance with such provisions and instruments in writing
signed by Warrantholders holding a specified percentage of Warrants outstanding.

The holder of this Warrant Certificate may at any time up to
and including the Time of Expiry upon the surrender hereof to the Warrant Agent
at its transfer office in Toronto, Ontario and payment of any charges provided
for in the Indenture, exchange this Warrant Certificate for other Warrant
Certificates entitling the holder to subscribe in the aggregate for the same
number of Common Shares as is expressed in this Warrant Certificate. 

This Warrant Certificate shall not be valid for any purpose
whatever unless and until it has been countersigned by the Warrant Agent for the
time being under the Indenture. 

Nothing contained herein or in the Indenture shall confer any
right upon the holder hereof or any other person to subscribe for or purchase
any Common Shares of the Corporation at any time subsequent to the Time of
Expiry. After the Time of Expiry this Warrant Certificate and all rights
thereunder shall be void and of no value. 

A-2 

Time is of the essence hereof. 

IN WITNESS WHEREOF this Warrant Certificate has been
executed on behalf of Energy Fuels Inc. as of the _____ day of
________________________, 20_____. 

	  	ENERGY FUELS INC. 
	 	 
	 	 
	  	By:
      _____________________________________________
	 	 
	 	 
	  	Countersigned: 
	 	 
	 	 
	  	CST TRUST COMPANY 
	 	 
	 	 
	Dated: ______________________________________	By:
      _____________________________________________

A-3 

SCHEDULE “B” 
SUBSCRIPTION FORM 

	TO:	CST Trust Company 
	 	320 Bay Street, 3rd
      Floor 
	 	Toronto, Ontario M5H 4A6 
	 	Attention: Corporate Restructures
    

The undersigned registered holder of the within Warrant
Certificate, subject to that certain warrant indenture (the “Indenture”)
dated as of March 14, 2016 between Energy Fuels Inc. (the “Company”) and
CST Trust Company, as Warrant Agent, subscribes for _______________ common
shares (“Common Shares”) (or such number of Common Shares or other
securities or property to which such subscription entitles the undersigned in
lieu thereof or in addition thereto under the Indenture) of the Company at the
price per share of US$3.20 (or such adjusted price which may be in effect under
the provisions of the Indenture) and in payment of the exercise price encloses a
certified cheque, money order or bank draft, in any case in lawful money of
Canada payable at par to CST Trust Company; however, if the Common Shares are
not registered under the 1933 Act at the time of exercise, the undersigned shall
subscribe for such number of Common Shares based on the cashless exercise
provision of Section 4.2 of the Indenture, and such number of Common Shares
shall be confirmed by the Warrant Agent and the Company, prior to completion of
the exercise.

The undersigned hereby delivers herewith the above-mentioned
Warrant Certificate entitling the undersigned to subscribe for the
above-mentioned number of Common Shares. 

The undersigned hereby directs that the said Common Shares be
registered as follows: 

	
Name(s) in full 	Address(es) 
(including Postal
      Code) 	Number(s) of Common 
Shares
    
	 	 	 
	 	 	 
	 	 	 

	DATED this ______________day of
      _________________________, 20___________ . 
	 
	Signature of
      Subscriber guaranteed by: 	 
    	 
    

	 	 	 
	 	 	(Signature of Subscriber) 
	 	 	 
	 	 	 
	 	 	 
	 	 	(Print Name of Subscriber*) 
	 	 	 
	 	 	 
	 	 	 
	 	 	  
	 	 	 
	 	 	 
	 	 	(Address of Subscriber in full)

A-1 

(*The name of the Subscriber must correspond with the name upon
the face of the certificate in every particular and the Corporation reserves the
right to require reasonable assurance that such signature is genuine and
effective.) 

Instructions 

	1. 	
      The registered holder may exercise its right to receive
      Common Shares by completing this form and surrendering this form and the
      Warrant Certificate representing the Warrants being exercised along with a
      certified cheque, money order or bank draft in lawful money of Canada
      payable to the order of the Corporation at par in an amount equal to the
      Exercise Price applicable at the time of such surrender (unless such
      exercise is a “cashless exercise” in accordance with Section 4.2) in
      respect of each Common Share which the Warrantholder desires to acquire
      (being not more than those which the Warrantholder is entitled to acquire
      pursuant to the Warrants represented by the Warrant Certificate so
      surrendered) to CST Trust Company, at its office at Toronto,
    Ontario.

	 	 
	2. 	
      The certificates will be mailed by registered mail to the
      address appearing in this Subscription Form.

	 	 
	3. 	
      If Common Shares are issued to a person other than the
      registered Warrantholder, the signature of the holder must be guaranteed
      by a Canadian Schedule 1 Chartered Bank or by a medallion signature
      guarantee from a member of a recognized signature medallion guarantee
      program and the Transfer Form must be completed.

	 	 
	4. 	
      If the subscription form is signed by a trustee,
      executor, administrator, curator, guardian, attorney, officer of a
      corporation or any person acting in a fiduciary or representative
      capacity, the certificate must be accompanied by evidence of authority to
      sign satisfactory to the Warrant Agent and the
  Corporation.

A-2 

SCHEDULE “C” 
TRANSFER FORM 

NOTE: TRANSFERS MAY ONLY BE MADE IN ACCORDANCE WITH
APPLICABLE LAW. 

FOR value received I/we hereby sell, assign, and
transfer unto: 

	 
	(Name of Transferee) 
	  
	 
	(Address of Transferee) 
	  
	 
	(Social Insurance Number) 
	 
	
     	
    Warrants
      of

	(Quantity & Class) 

Energy Fuels Inc. (the “Corporation”) 

	
    represented by:	
     
	
     	
     (List Certificate Number(s)) 

and the undersigned hereby irrevocably constitutes and
appoints: 

	 
	(Leave Blank) 

	the attorney to transfer the said Warrants on the books of
      the Corporation with full power of substitution in the premises. 
	
	DATED
      this                                day
      of                                                                        
      , 20      . 
	 
	Signature Guaranteed By: 

	 	 
	 	(Signature of Warrantholder) 
	 	 
	 	(Name of Warrantholder, Please Print) 
	 	 
	 	(Capacity of Authorized Representative)
  

B-1 

Instructions: 

	1. 	
      The signature on this assignment must correspond with the
      name as written upon the face of the certificate, in every particular,
      without alteration or enlargement, or change whatever.

	 	 
	2. 	
      The signature must be guaranteed by a Canadian Schedule 1
      Chartered Bank or by a member firm of an acceptable Medallion Signature
      Guarantee Program (STAMP, SMP, MSP). The stamp must bear the words
      “Signature Medallion Guaranteed”.

	 	 
	3. 	
      In the USA, signature guarantees must be done by members
      of a Medallion Signature Guarantee Program only. Signature guarantees are
      not accepted from Treasury Branches, Credit Unions or Caisses Populaires
      unless they are members of the Stamp Medallion
Program.

B-2

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