Private Placement Agreement dated November 29, 2014 with Stichting VB Vagobel

on the Effective Date:

43,000,000 common shares in the capital of the Corporation (the “Initial Shares”) at a purchase price of $0.15 per Initial Share for an aggregate purchase price of $6,450,000 (the “Initial Share Purchase Price”), and

For no additional consideration, two non-transferable common share purchase warrants. The first of these non-transferable common share purchase warrants (the “Initial Warrant”) will provide that the Purchaser shall purchase, on the fifth Business Day (the “Warrant Exercise Date”) following the date (the “Shareholder Approval Date”) upon which the Shareholder Resolution is approved by the Shareholders of the Corporation, an additional 23,717,633 common shares in the capital of the Corporation (the “Initial Warrant Shares”) at an exercise price of $0.20 per Initial Warrant Share for aggregate proceeds of $4,743,527 (the “Initial Warrant Exercise Price”). The second of these non- transferable common share purchase warrants (the “Second Warrant”) will provide that the Purchaser shall purchase, on the Warrant Exercise Date, an additional 5,771,130 common shares in the capital of the Corporation (the “Second Warrant Shares”) at an exercise price of $0.15 per Second Warrant Share for aggregate proceeds of $865,669 (the “Second Warrant Exercise Price”);

on the Warrant Exercise Date (which may also be referred to as the “First Debenture Date”):

one non-transferable convertible debenture (the “First Debenture”) in the amount of $25,000,000 (the “First Debenture Principal Amount”) and

one non-transferable common share purchase warrant (the “Interest Warrant”) pursuant to which the Purchaser shall purchase, on each “Interest Payment Date” (as hereinafter defined) such number of common shares in the capital of the Corporation (each an “Interest Warrant Share”) as is equal to the amount of interest payable in “Interest Shares” (as contemplated by the terms of each of the First Debenture and the Second Debenture) payable on that Interest Payment Date, at an exercise price of $0.70 per Interest Warrant Share; and

on the four-month anniversary (the “Second Debenture Date”) of the Shareholder Approval Date, one non-transferable convertible debenture (the “Second Debenture”) in the principal amount of $25,000,000 (the “Second Debenture Principal Amount”)

use commercially reasonable efforts to defend all lawsuits or other legal, regulatory or other proceedings to which it is a Party challenging or affecting this Agreement or the consummation of the transactions contemplated hereby;

use commercially reasonable efforts to have lifted or rescinded any injunction or restraining order relating to the Corporation or other order which may adversely affect the ability of the Parties to consummate the transactions contemplated hereby; and

comply, in all material respects, promptly with all requirements which applicable Canadian and U.S. Laws may impose on the Corporation with respect to the transactions contemplated hereby.

by mutual consent of the Parties;

by the Purchaser if any of the conditions in Schedule E have not been satisfied at or prior to March 31, 2015 (or such later date as the Parties may have agreed in writing prior to March 31, 2015) and the Purchaser has not waived such condition at or prior to such date, or if any of said conditions are no longer satisfied on the Closing Date;

by the Corporation if any of the conditions in Schedule F have not been satisfied at or prior to March 31, 2015 (or such later date as the Parties may have agreed in writing prior to March 31, 2015) and the Corporation has not waived such condition at or prior to such date, or if any of said conditions are no longer satisfied on the Closing Date;

by the Purchaser, should there occur any Material Adverse Change; or

by either Party if there has been a material breach of any provision of this Agreement by the other Party and such breach has not been waived by the non-breaching Party or cured by the breaching Party prior to the date of notice.

any breach or inaccuracy of any representation or warranty given by the Corporation contained in this Agreement or the certificate to be delivered pursuant to Paragraph (1) of Schedule E; and

any failure of the Corporation to perform or fulfil any of its covenants or obligations under this Agreement.

any breach or inaccuracy of any representation or warranty given by the Purchaser contained in this Agreement, or the certificate to be delivered pursuant Paragraph (1) of Schedule F;

any inaccuracy of any information supplied to the Corporation by the Purchaser for inclusion in the Circular or in any submission to the Exchange or any regulatory authority; and

any failure of the Purchaser to perform or fulfil any of its covenants or obligations under this Agreement.

“1933 Act” means the United States Securities Act of 1933, as amended, and all rules, regulations, orders, notices and policy statements thereunder, as amended from time to time, and any successor legislation.

“Affiliate” or “affiliate” has the meaning attributed to it in Rule 405 promulgated by the Securities and Exchange Commission pursuant to the 1933 Act and means, unless otherwise specified, a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.

“Business Day” means any day, other than a Saturday or Sunday, or a day on which banking institutions in Baar, Switzerland or Amersfoort, the Netherlands are authorized or required by law or other government action to close;

"Common Shares" means the class of common shares which the Corporation is authorized to issue as at the close of business on the Effective Date; provided that in the event of any adjustment pursuant to the provisions of Section 4.3(a) hereof, "Common Shares" shall thereafter mean the shares or other securities or property resulting from such adjustment;

“Company” means MNP Petroleum Corporation until a successor corporation will have become such as a result of consolidation, amalgamation or merger of the Company with or into any other corporation or corporations, or as a result of the conveyance or transfer of all or substantially all of the properties and estates of the Company as an entirety to any other corporation, and, thereafter, “Company” will mean such successor corporation;

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

"Effective Date" means the date the Warrants are issued;

"Exercise Date" means the date that is five Business Days following the date of the Shareholder Meeting;

“Exercise Time” means 10:00 a.m. (in Baar, Switzerland) on the Exercise Date;

“Exchange” means the TSX Venture Exchange operated by TMX Group Limited;

“Exercise Price” means $0.20 per Warrant Share, subject to adjustment as provided in Section 4.3(a) hereof;

“First Debenture” has the meaning attributed to it in the Private Placement Agreement;

“herein”, “hereby” and similar expressions refer to these Terms and Conditions as the same may be amended or modified from time to time;

“Holder” means Stichting VB Vagobel;

“Interest Warrant” has the meaning attributed to it in the Private Placement Agreement;

“person” and “Person” means a natural person, corporation, limited liability corporation, unlimited liability corporation, joint stock corporation, partnership, limited partnership, limited liability partnership, trust, trustee, any unincorporated organization, joint venture or any other entity;

“Private Placement Agreement” means the Private Placement Agreement dated November 29, 2014, between the Company and the Holder pursuant to which, among other things, the Company agreed to issue the Warrants and other securities;

“Second Debenture” has the meaning attributed to it in the Private Placement Agreement;

“Second Warrant” has the meaning attributed to it in the Private Placement Agreement;

“Section” followed by a number refers to the specified Section of these Terms and Conditions;

“Shareholder Meeting” means the special meeting of the Shareholders, including any adjournment or postponement thereof, to be called and held to consider the Shareholder Resolution.

“Shareholder Resolution” means the ordinary resolution to be considered by the Shareholders at the Shareholder Meeting to approve the issuance, effectiveness, and the terms and conditions of the Interest Warrant, the First Debenture and the Second Debenture, the exercise of these Warrants, the Second Warrant and the Interest Warrant and the conversion of the First Debenture and the Second Debenture, such resolution to be in form and substance satisfactory to the Corporation and the Purchaser, acting reasonably.

“Shareholders” means the holders of Common Shares (excluding the Holder);

“Shares” means the common shares in the capital of the Company as constituted at the date hereof and any Shares resulting from any subdivision or consolidation of the Shares;

“Time of Expiry” means 5:00 pm (in Baar, Switzerland) on the Exercise Date, if the Shareholders do not approve the Shareholder Resolution at the Shareholder Meeting;

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

“Transfer” includes:

any direct or indirect sale, exchange, assignment, gift, bequest, disposition, mortgage, charge, pledge, encumbrance, grant of a security interest or other arrangement by which possession, legal title or beneficial ownership passes from one person to another, or to the same person in a different capacity; or

any disposition by way of option, right or privilege capable of becoming an agreement or option,

whether or not voluntarily and whether or not for value, and any agreement to effect any of the foregoing, and the words “Transferred”, “Transferring” and similar words have corresponding meanings;

“Warrant Certificate” means the Warrant Certificate attached to these Terms and Conditions;

“Warrant” means one of the warrants issued hereunder and “Warrants” means all of the warrants issued hereunder, each one of which provides that the Holder will purchase one Common Share for an exercise price of $0.20 at the Exercise Time, subject to adjustment in accordance with Section 4.3(a) hereof; and

“Warrant Shares” means the Shares issuable upon exercise of the Warrants.

In case any Warrant Certificate becomes mutilated, lost, destroyed or stolen, the Company, at its discretion, may issue and deliver a new Warrant Certificate of like date and tenor as the one mutilated, lost, destroyed or stolen, in exchange for, in place of, and upon cancellation of, such mutilated Warrant Certificate, or in lieu of, and in substitution for, such lost, destroyed or stolen Warrant Certificate, and the replacement Warrant Certificate will be entitled to the benefit hereof and rank equally in accordance with its terms with all other warrants issued or to be issued by the Company.

The applicant for the issue of a new Warrant Certificate pursuant hereto will bear the cost of the issue thereof and, in case of loss, destruction or theft, will furnish to the Company such evidence of ownership and of loss, destruction or theft of the Warrant Certificate so lost, destroyed or stolen as will be satisfactory to the Company in its discretion. Such applicant may also be required to furnish indemnity in amount and form satisfactory to the Company in its discretion, and will pay the reasonable charges of the Company in connection therewith.

a completed and executed subscription form, in the form attached as Appendix B hereto (the “Subscription Form”);

surrendering the Warrant Certificate, together with the executed Subscription Form, to the Company at the address set forth in Section 3.2; and

paying the Exercise Price, in immediately available U.S. funds, by wire transfer to the Company or its lawyers pursuant to wiring instructions that will be provided to the Holder not less than five (5) Business Days prior to the Exercise Date.

Following approval of the Shareholder Resolution at the Shareholder Meeting, at the Exercise Time and upon receipt by the Company of the duly executed Subscription Form and the Exercise Price, the Warrant Shares so subscribed for will be deemed to have been allotted and issued as fully paid and non-assessable Common Shares and the Holder will be deemed to have become the holder (or holders) of record of such Warrant Shares on such date.

As promptly as practicable after the Exercise Time and, in any event, within ten (10) Business Days after the Exercise Date, the Company shall forthwith cause to be delivered to the Holder a certificate for the Warrant Shares.

The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of these Warrants. If any fraction of a Warrant Share would, except for the provisions of this Section 4.3, be issuable upon exercise of these Warrants, the number of Warrant Shares to be issued will be rounded up to the nearest whole share.

If at any time or from time to time while the Warrants are still outstanding, the Company shall effect a subdivision or consolidation of the issued and outstanding Shares, the Exercise Price in effect immediately before the subdivision shall be proportionately decreased, and, conversely, the Exercise Price in effect immediately before a consolidation shall be proportionately increased. Any adjustment under this Section 4.4(a) shall become effective at the close of business on the date the subdivision or consolidation becomes effective.

If at any time while the Warrants are outstanding, (i) the Company effects any merger or combination of the Company with or into another entity, (ii) the Company effects any sale of all or substantially all of its assets in one or more transactions, (iii) any tender offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Shares are permitted to tender or exchange their Shares for other securities, cash or property, or (iv) the Company effects any reclassification or recapitalization of the Shares or any compulsory share exchange pursuant to which the Shares are effectively converted into or exchanged for other securities, cash or property (other than a subdivision, consolidation or dividend provided for elsewhere in this Section 4.4) (in any such case, a “Fundamental Change”), then, upon any subsequent exercise of the Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise absent such Fundamental Change, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Change if it had been, immediately prior to such Fundamental Change, the holder of such Warrant Share (the “Alternate Consideration”). If holders of Shares are given any choice as to the securities, cash or property to be received in a Fundamental Change, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of the Warrants following such Fundamental Change. In the event of a Fundamental Change, the Company or the successor or purchasing entity, as the case may be, shall execute with the Holder a written agreement providing that:

the Warrants shall thereafter entitle the Holder to purchase the Alternate Consideration; and

in the case of any such successor or purchasing entity, upon such consolidation, merger, statutory exchange, combination, sale or conveyance, such successor or purchasing entity shall be jointly and severally liable with the Company for the performance of all of the Company’s obligations under the Warrants and the Private Placement Agreement.

If, in the case of any Fundamental Change, the Alternate Consideration includes shares, other securities, other property or assets of an entity other than the Company or any such successor or purchasing entity, as the case may be, then such written agreement shall also be executed by such other entity and shall contain such additional provisions to protect the interests of the Holder as the board of directors of the Company shall reasonably consider necessary by reason of the foregoing. At the Holder’s request, any successor to the Company or surviving entity in such Fundamental Change shall issue to the Holder a new Warrant Certificate consistent with the foregoing provisions and evidencing the Holder’s right to exercise the Warrants for Alternate Consideration. Any agreement pursuant to which a Fundamental Change is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 4.4 and insuring that the Warrants (or any other replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Change.

“1933 Act” means the United States Securities Act of 1933, as amended, and all rules, regulations, orders, notices and policy statements thereunder, as amended from time to time, and any successor legislation.

“Affiliate” or “affiliate” has the meaning attributed to it in Rule 405 promulgated by the Securities and Exchange Commission pursuant to the 1933 Act and means, unless otherwise specified, a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.

“Business Day” means any day, other than a Saturday or Sunday, or a day on which banking institutions in Baar, Switzerland or Amersfoort, the Netherlands are authorized or required by law or other government action to close;

"Common Shares" means the class of common shares which the Corporation is authorized to issue as at the close of business on the Effective Date; provided that in the event of any adjustment pursuant to the provisions of Section 4.3(a) hereof, "Common Shares" shall thereafter mean the shares or other securities or property resulting from such adjustment;

“Company” means MNP Petroleum Corporation until a successor corporation will have become such as a result of consolidation, amalgamation or merger of the Company with or into any other corporation or corporations, or as a result of the conveyance or transfer of all or substantially all of the properties and estates of the Company as an entirety to any other corporation, and, thereafter, “Company” will mean such successor corporation;

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

"Effective Date" means the date the Warrants are issued;

"Exercise Date" means the date that is five Business Days following the date of the Shareholder Meeting;

“Exercise Time” means 10:00 a.m. (in Baar, Switzerland) on the Exercise Date;

“Exchange” means the TSX Venture Exchange operated by TMX Group Limited;

“Exercise Price” means $0.15 per Warrant Share, subject to adjustment as provided in Section 4.3(a) hereof;

“First Debenture” has the meaning attributed to it in the Private Placement Agreement;

“herein”, “hereby” and similar expressions refer to these Terms and Conditions as the same may be amended or modified from time to time;

“Holder” means Stichting VB Vagobel;

“Interest Warrant” has the meaning attributed to it in the Private Placement Agreement;

“person” and “Person” means a natural person, corporation, limited liability corporation, unlimited liability corporation, joint stock corporation, partnership, limited partnership, limited liability partnership, trust, trustee, any unincorporated organization, joint venture or any other entity;

“Private Placement Agreement” means the Private Placement Agreement dated November 29, 2014, between the Company and the Holder pursuant to which, among other things, the Company agreed to issue the Warrants and other securities;

“Second Debenture” has the meaning attributed to it in the Private Placement Agreement;

“Second Warrant” has the meaning attributed to it in the Private Placement Agreement;

“Section” followed by a number refers to the specified Section of these Terms and Conditions;

“Shareholder Meeting” means the special meeting of the Shareholders, including any adjournment or postponement thereof, to be called and held to consider the Shareholder Resolution.

“Shareholder Resolution” means the ordinary resolution to be considered by the Shareholders at the Shareholder Meeting to approve the issuance, effectiveness, and the terms and conditions of the Interest Warrant, the First Debenture and the Second Debenture, the exercise of these Warrants, the Second Warrant and the Interest Warrant and the conversion of the First Debenture and the Second Debenture, such resolution to be in form and substance satisfactory to the Corporation and the Purchaser, acting reasonably.

“Shareholders” means the holders of Common Shares (excluding the Holder);

“Shares” means the common shares in the capital of the Company as constituted at the date hereof and any Shares resulting from any subdivision or consolidation of the Shares;

“Time of Expiry” means 5:00 pm (in Baar, Switzerland) on the Exercise Date, if the Shareholders do not approve the Shareholder Resolution at the Shareholder Meeting;

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

“Transfer” includes:

any direct or indirect sale, exchange, assignment, gift, bequest, disposition, mortgage, charge, pledge, encumbrance, grant of a security interest or other arrangement by which possession, legal title or beneficial ownership passes from one person to another, or to the same person in a different capacity; or

any disposition by way of option, right or privilege capable of becoming an agreement or option,

whether or not voluntarily and whether or not for value, and any agreement to effect any of the foregoing, and the words “Transferred”, “Transferring” and similar words have corresponding meanings;

“Warrant Certificate” means the Warrant Certificate attached to these Terms and Conditions;

“Warrant” means one of the warrants issued hereunder and “Warrants” means all of the warrants issued hereunder, each one of which provides that the Holder will purchase one Common Share for an exercise price of $0.15 at the Exercise Time, subject to adjustment in accordance with Section 4.3(a) hereof; and

“Warrant Shares” means the Shares issuable upon exercise of the Warrants.

In case any Warrant Certificate becomes mutilated, lost, destroyed or stolen, the Company, at its discretion, may issue and deliver a new Warrant Certificate of like date and tenor as the one mutilated, lost, destroyed or stolen, in exchange for, in place of, and upon cancellation of, such mutilated Warrant Certificate, or in lieu of, and in substitution for, such lost, destroyed or stolen Warrant Certificate, and the replacement Warrant Certificate will be entitled to the benefit hereof and rank equally in accordance with its terms with all other warrants issued or to be issued by the Company.

The applicant for the issue of a new Warrant Certificate pursuant hereto will bear the cost of the issue thereof and, in case of loss, destruction or theft, will furnish to the Company such evidence of ownership and of loss, destruction or theft of the Warrant Certificate so lost, destroyed or stolen as will be satisfactory to the Company in its discretion. Such applicant may also be required to furnish indemnity in amount and form satisfactory to the Company in its discretion, and will pay the reasonable charges of the Company in connection therewith.

a completed and executed subscription form, in the form attached as Appendix B hereto (the “Subscription Form”);

surrendering the Warrant Certificate, together with the executed Subscription Form, to the Company at the address set forth in Section 3.2; and

paying the Exercise Price, in immediately available U.S. funds, by wire transfer to the Company or its lawyers pursuant to wiring instructions that will be provided to the Holder not less than five (5) Business Days prior to the Exercise Date.

Following approval of the Shareholder Resolution at the Shareholder Meeting, at the Exercise Time and upon receipt by the Company of the duly executed Subscription Form and the Exercise Price, the Warrant Shares so subscribed for will be deemed to have been allotted and issued as fully paid and non-assessable Common Shares and the Holder will be deemed to have become the holder (or holders) of record of such Warrant Shares on such date.

As promptly as practicable after the Exercise Time and, in any event, within ten (10) Business Days after the Exercise Date, the Company shall forthwith cause to be delivered to the Holder a certificate for the Warrant Shares.

The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of these Warrants. If any fraction of a Warrant Share would, except for the provisions of this Section 4.3, be issuable upon exercise of these Warrants, the number of Warrant Shares to be issued will be rounded up to the nearest whole share.

If at any time or from time to time while the Warrants are still outstanding, the Company shall effect a subdivision or consolidation of the issued and outstanding Shares, the Exercise Price in effect immediately before the subdivision shall be proportionately decreased, and, conversely, the Exercise Price in effect immediately before a consolidation shall be proportionately increased. Any adjustment under this Section 4.4(a) shall become effective at the close of business on the date the subdivision or consolidation becomes effective.

If at any time while the Warrants are outstanding, (i) the Company effects any merger or combination of the Company with or into another entity, (ii) the Company effects any sale of all or substantially all of its assets in one or more transactions, (iii) any tender offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Shares are permitted to tender or exchange their Shares for other securities, cash or property, or (iv) the Company effects any reclassification or recapitalization of the Shares or any compulsory share exchange pursuant to which the Shares are effectively converted into or exchanged for other securities, cash or property (other than a subdivision, consolidation or dividend provided for elsewhere in this Section 4.4) (in any such case, a “Fundamental Change”), then, upon any subsequent exercise of the Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise absent such Fundamental Change, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Change if it had been, immediately prior to such Fundamental Change, the holder of such Warrant Share (the “Alternate Consideration”). If holders of Shares are given any choice as to the securities, cash or property to be received in a Fundamental Change, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of the Warrants following such Fundamental Change. In the event of a Fundamental Change, the Company or the successor or purchasing entity, as the case may be, shall execute with the Holder a written agreement providing that:

the Warrants shall thereafter entitle the Holder to purchase the Alternate Consideration; and

in the case of any such successor or purchasing entity, upon such consolidation, merger, statutory exchange, combination, sale or conveyance, such successor or purchasing entity shall be jointly and severally liable with the Company for the performance of all of the Company’s obligations under the Warrants and the Private Placement Agreement.

If, in the case of any Fundamental Change, the Alternate Consideration includes shares, other securities, other property or assets of an entity other than the Company or any such successor or purchasing entity, as the case may be, then such written agreement shall also be executed by such other entity and shall contain such additional provisions to protect the interests of the Holder as the board of directors of the Company shall reasonably consider necessary by reason of the foregoing. At the Holder’s request, any successor to the Company or surviving entity in such Fundamental Change shall issue to the Holder a new Warrant Certificate consistent with the foregoing provisions and evidencing the Holder’s right to exercise the Warrants for Alternate Consideration. Any agreement pursuant to which a Fundamental Change is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 4.4 and insuring that the Warrants (or any other replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Change.

“1933 Act” means the United States Securities Act of 1933, as amended, and all rules, regulations, orders, notices and policy statements thereunder, as amended from time to time, and any successor legislation.

“Affiliate” or “affiliate” has the meaning attributed to it in Rule 405 promulgated by the Securities and Exchange Commission pursuant to the 1933 Act and means, unless otherwise specified, a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.

“Business Day” means any day, other than a Saturday or Sunday, or a day on which banking institutions in Baar, Switzerland or Amersfoort, the Netherlands are authorized or required by law or other government action to close;

"Common Shares" means the class of common shares which the Corporation is authorized to issue as at the close of business on the Effective Date; provided that in the event of any adjustment pursuant to the provisions of Section 4.3(a) hereof, "Common Shares" shall thereafter mean the shares or other securities or property resulting from such adjustment;

“Company” means MNP Petroleum Corporation until a successor corporation will have become such as a result of consolidation, amalgamation or merger of the Company with or into any other corporation or corporations, or as a result of the conveyance or transfer of all or substantially all of the properties and estates of the Company as an entirety to any other corporation, and, thereafter, “Company” will mean such successor corporation;

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

"Effective Date" means the date the Warrants are issued;

“Exchange” means the TSX Venture Exchange operated by TMX Group Limited;

“Exercise Price” means $0.70 per Warrant Share, subject to adjustment as provided in Section 4.3(a) hereof;

“Expiry Date” means the Maturity Date of the Second Debenture (as that term is defined in the Second Debenture);

“First Debenture” means the Convertible Debenture issued to the Holder by the Company on the First Debenture Date, pursuant to the Private Placement Agreement;

“herein”, “hereby” and similar expressions refer to these Terms and Conditions as the same may be amended or modified from time to time;

“Holder” means Stichting VB Vagobel;

“Interest Date” has the meaning attributed in each of the First Debenture and the Second Debenture;

“Interest Payment Date” has the meaning attributed in each of the First Debenture and the Second Debenture;

“person” and “Person” means a natural person, corporation, limited liability corporation, unlimited liability corporation, joint stock corporation, partnership, limited partnership, limited liability partnership, trust, trustee, any unincorporated organization, joint venture or any other entity;

“Private Placement Agreement” means the Private Placement Agreement dated November 29, 2014, between the Company and the Holder pursuant to which, among other things, the Company agreed to issue the Interest Warrants and other securities;

“Second Debenture” means the Convertible Debenture issued to the Holder by the Company on the Second Debenture Date, pursuant to the Private Placement Agreement;

“Section” followed by a number refers to the specified Section of these Terms and Conditions;

“Shares” means the common shares in the capital of the Company as constituted at the date hereof and any Shares resulting from any subdivision or consolidation of the Shares;

“Time of Expiry” means 5:00 pm (in Baar, Switzerland) on the Expiry Date;

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

“Transfer” includes:

any direct or indirect sale, exchange, assignment, gift, bequest, disposition, mortgage, charge, pledge, encumbrance, grant of a security interest or other arrangement by which possession, legal title or beneficial ownership passes from one person to another, or to the same person in a different capacity; or

any disposition by way of option, right or privilege capable of becoming an agreement or option,

whether or not voluntarily and whether or not for value, and any agreement to effect any of the foregoing, and the words “Transferred”, “Transferring” and similar words have corresponding meanings;

“Vested Shares” has the meaning attributed in Section 4.1 hereof;

“Warrant Certificate” means the Warrant Certificate attached to these Terms and Conditions;

“Warrant” means one of the warrants issued hereunder and “Warrants” means all of the warrants issued hereunder, each one of which provides that the Holder will purchase one Common Share for an exercise price of $0.70 at the Exercise Time, subject to adjustment in accordance with Section 4.3(a) hereof; and

“Warrant Shares” means the Shares issuable upon exercise of the Warrants.

In case any Warrant Certificate becomes mutilated, lost, destroyed or stolen, the Company, at its discretion, may issue and deliver a new Warrant Certificate of like date and tenor as the one mutilated, lost, destroyed or stolen, in exchange for, in place of, and upon cancellation of, such mutilated Warrant Certificate, or in lieu of, and in substitution for, such lost, destroyed or stolen Warrant Certificate, and the replacement Warrant Certificate will be entitled to the benefit hereof and rank equally in accordance with its terms with all other warrants issued or to be issued by the Company.

The applicant for the issue of a new Warrant Certificate pursuant hereto will bear the cost of the issue thereof and, in case of loss, destruction or theft, will furnish to the Company such evidence of ownership and of loss, destruction or theft of the Warrant Certificate so lost, destroyed or stolen as will be satisfactory to the Company in its discretion. Such applicant may also be required to furnish indemnity in amount and form satisfactory to the Company in its discretion, and will pay the reasonable charges of the Company in connection therewith.

a completed and executed subscription form, in the form attached as Appendix B hereto (the “Subscription Form”) for the Vested Shares; and

payment of the Exercise Price for the Vested Shares, in immediately available U.S. funds, by wire transfer to the Company or its lawyers pursuant to wiring instructions that will be provided to the Holder not less than five (5) Business Days prior to such Interest Payment Date.

Upon receipt by the Company of the duly executed Subscription Form and the Exercise Price, the Warrant Shares so subscribed for will be deemed to have been allotted and issued as fully paid and non-assessable Common Shares and the Holder will be deemed to have become the holder (or holders) of record of such Warrant Shares on such date.

As promptly as practicable after receipt of the Subscription Form and payment of the Exercise Price and, in any event, not less than twenty calendar days thereafter, the Company shall forthwith cause to be delivered to the Holder a certificate for the Vested Shares.

The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of these Warrants. If any fraction of a Warrant Share would, except for the provisions of this Section 4.3, be issuable upon exercise of these Warrants, the number of Warrant Shares to be issued will be rounded up to the nearest whole share.

If at any time or from time to time while the Warrants are still outstanding, the Company shall effect a subdivision or consolidation of the issued and outstanding Shares, the Exercise Price in effect immediately before the subdivision shall be proportionately decreased, and, conversely, the Exercise Price in effect immediately before a consolidation shall be proportionately increased. Any adjustment under this Section 4.4(a) shall become effective at the close of business on the date the subdivision or consolidation becomes effective.

If at any time while the Warrants are outstanding, (i) the Company effects any merger or combination of the Company with or into another entity, (ii) the Company effects any sale of all or substantially all of its assets in one or more transactions, (iii) any tender offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Shares are permitted to tender or exchange their Shares for other securities, cash or property, or (iv) the Company effects any reclassification or recapitalization of the Shares or any compulsory share exchange pursuant to which the Shares are effectively converted into or exchanged for other securities, cash or property (other than a subdivision, consolidation or dividend provided for elsewhere in this Section 4.4) (in any such case, a “Fundamental Change”), then, upon any subsequent exercise of the Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise absent such Fundamental Change, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Change if it had been, immediately prior to such Fundamental Change, the holder of such Warrant Share (the “Alternate Consideration”). If holders of Shares are given any choice as to the securities, cash or property to be received in a Fundamental Change, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of the Warrants following such Fundamental Change. In the event of a Fundamental Change, the Company or the successor or purchasing entity, as the case may be, shall execute with the Holder a written agreement providing that:

the Warrants shall thereafter entitle the Holder to purchase the Alternate Consideration; and

in the case of any such successor or purchasing entity, upon such consolidation, merger, statutory exchange, combination, sale or conveyance, such successor or purchasing entity shall be jointly and severally liable with the Company for the performance of all of the Company’s obligations under the Warrants and the Private Placement Agreement.

If, in the case of any Fundamental Change, the Alternate Consideration includes shares, other securities, other property or assets of an entity other than the Company or any such successor or purchasing entity, as the case may be, then such written agreement shall also be executed by such other entity and shall contain such additional provisions to protect the interests of the Holder as the board of directors of the Company shall reasonably consider necessary by reason of the foregoing. At the Holder’s request, any successor to the Company or surviving entity in such Fundamental Change shall issue to the Holder a new Warrant Certificate consistent with the foregoing provisions and evidencing the Holder’s right to exercise the Warrants for Alternate Consideration. Any agreement pursuant to which a Fundamental Change is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 4.4 and insuring that the Warrants (or any other replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Change.

Definitions

For the purposes hereof, in addition to the terms defined elsewhere in this Debenture: (i) capitalized terms not otherwise defined herein have the meanings given to such terms in the Private Placement Agreement (as defined herein), and (ii) the following terms shall have the following meanings:

“Business Day” means any day, other than a Saturday or Sunday, or a day on which banking institutions in Baar, Switzerland or Amersfoort, the Netherlands are authorized or required by law or other government action to close;

“Cash Interest” means one third of the Interest payable on any Interest Payment Date, which shall be paid or payable in cash;

“Common Shares” means common shares in the capital of the Company and shares of any other class into which Common Shares may hereafter be reclassified or changed;

“Conversion Date” has the meaning set forth in Section 4.3 hereof;

“Conversion Price” means $0.70;

“Conversion Shares” means the Shares to be issued upon conversion, from time-to-time, of any portion of the Principal;

“Debenture” means this unsecured non-transferable convertible debenture and all of the terms and conditions pursuant to which it is issued;

“Exchange” means the TSX Venture Exchange;

“Exchange Policy 1.1” means Policy 1.1 – Interpretation of the Exchange;

“Interest Date” means each anniversary of the Issue Date during the Term, and includes the Maturity Date;

“Interest Payment Date” means the date that is 30 calendar days after each Interest Date;

“Interest Rate” means three percent (3%) per annum;

“Interest Shares” means Shares issued pursuant to exercise of the Interest Warrant in order to pay Interest;

“Interest Warrant” means the Common Share Purchase Warrant issued on <>, 2015 pursuant to which Interest Shares may be issued from time-to-time;

“Issue Date” means <>, 2015;

“Maturity Date” has the meaning attributed to it on the first page of this Convertible Debenture;

“Person” means a corporation, association, partnership, organization, business, individual, government or political subdivision thereof;

“Principal” means the amount of Principal as may be due and owing by the Company to the Holder from time to time under the Debenture;

“Private Placement Agreement” means the Private Placement Agreement dated November 29, 2014, between the Company and the Holder pursuant to which the Holder agreed to purchase the Debenture and other securities;

“Shares” means Common Shares;

“Trading Day” means a day on which the Shares are traded on the Exchange or other trading market on which the Shares are then listed or quoted, provided that, in the event that the Shares are not listed or quoted, then Trading Day shall mean a Business Day;

“U.S. Currency” means the lawful currency of the United States of America;

Unless otherwise provided, all dollar amounts referred to in the Debenture are in U.S. Currency.

Private Placement Agreement

This Debenture has been issued pursuant to the Private Placement Agreement, is subject in all respects to the terms of the Private Placement Agreement, and incorporates the terms of the Private Placement Agreement to the extent that they do not conflict with the terms of the Debenture. To the extent of any such conflict, the terms of this Debenture shall prevail and be paramount. No right, title or interest of the Holder in this Debenture may be transferred or assigned without the prior written consent of the Company, which the Company may grant or withhold in its sole and absolute discretion.

Interest

Interest on outstanding Principal shall accrue at the Interest Rate beginning on the Issue Date, shall be computed on the basis of a 360-day year and twelve 30-day months, and shall be payable annually on each Interest Payment Date. One-third of the Interest due on any Interest Payment Date shall be paid in the form of Cash Interest and two-thirds shall be paid in the form of Interest Shares pursuant to exercise of the Interest Warrant.

Interest Shares shall be issued through exercise of the Interest Warrant. The number of Interest Shares to be issued upon exercise of the Interest Warrant shall be determined by dividing the amount of Interest accrued and unpaid on each Interest Date by the Interest Warrant Exercise Price of $0.70.

Conversion

The Company shall pay all or any part of the Principal due under the Debenture at any time on or before the Maturity Date, without penalty or prepayment premium, by way of conversions pursuant to the provision of this Section 4. Conversions prior to the Maturity Date shall be at the option of the Holder, subject to the terms of this Debenture. All Principal that remains outstanding on the Maturity Date shall be automatically converted on the Maturity Date.

At any time and from time-to-time after the Issue Date and until the Maturity Date, the Holder shall be entitled to convert some or all of the outstanding Principal into Conversion Shares at the Conversion Price. In order to effect such a conversion, the Holder shall deliver to the Company an executed Conversion Notice in the form attached hereto as Appendix “A” (each a “Conversion Notice”). A Conversion Notice received by the Company after 4:00 p.m. (in Baar, Switzerland) on any Business Day, or at any time on any day that is not a Business Day, shall be deemed to have been received by the Company on the following Business Day. No Conversion Notice shall be required for the automatic conversion of Principal that is outstanding on the Maturity Date.

The Company shall effect conversions within five (5) Business Days after receipt of any Conversion Notice or the Maturity Date, as applicable. The Holder shall not be required to physically surrender the Debenture to the Company unless and until the entire Principal has been converted in the manner specified in this Section 4.3.

Any conversions hereunder shall have the effect of reducing the outstanding Principal in an amount equal to the amount of Principal being converted. The Company shall maintain records showing all Principal converted, the date of such conversions and the outstanding balance of the Principal remaining.

The Holder, by acceptance of the Debenture, acknowledges and agrees that, following each conversion of any portion of Principal, the unpaid and unconverted Principal will be decreased by the dollar amount of the product of the number of Conversion Shares issued upon conversion and the Conversion Price.

Not later than ten (10) Business Days after any Conversion Date, the Company will deliver to the Holder certificates representing the number of Conversion Shares being issued, which certificates shall bear such restrictive legends and trading restrictions as are required by applicable law, the Private Placement Agreement and by the Exchange.

If at any time or from time to time while any Principal is still outstanding, the Company shall effect a subdivision or consolidation of the issued and outstanding Shares, the Conversion Price in effect immediately before the subdivision shall be proportionately decreased, and, conversely, the Conversion Price in effect immediately before a consolidation shall be proportionately increased. Any adjustment under this Section 4.7 shall become effective at the close of business on the date the subdivision or consolidation becomes effective.

If at any time while the Debenture is outstanding, (i) the Company effects any merger or combination of the Company with or into another entity, (ii) the Company effects any sale of all or substantially all of its assets in one or more transactions, (iii) any tender offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Shares are permitted to tender or exchange their Shares for other securities, cash or property, or (iv) the Company effects any reclassification or recapitalization of the Shares or any compulsory share exchange pursuant to which the Shares are effectively converted into or exchanged for other securities, cash or property (other than a subdivision, consolidation or dividend provided for elsewhere in this Section 5) (in any such case, a “Fundamental Change”), then, upon any subsequent conversion of the Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion absent such Fundamental Change, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Change if it had been, immediately prior to such Fundamental Change, the holder of one Conversion Share (the “Alternate Consideration”). If holders of Shares are given any choice as to the securities, cash or property to be received in a Fundamental Change, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of the Debenture following such Fundamental Change. In the event of a Fundamental Change, the Company or the successor or purchasing entity, as the case may be, shall execute with the Holder a written agreement providing that:

the Debenture shall thereafter entitle the Holder to purchase the Alternate Consideration; and

in the case of any such successor or purchasing entity, upon such consolidation, merger, statutory exchange, combination, sale or conveyance, such successor or purchasing entity shall be jointly and severally liable with the Company for the performance of all of the Company’s obligations under the Debenture and the Private Placement Agreement.

If, in the case of any Fundamental Change, the Alternate Consideration includes shares, other securities, other property or assets of an entity other than the Company or any such successor or purchasing entity, as the case may be, then such written agreement shall also be executed by such other entity and shall contain such additional provisions to protect the interests of the Holder as the board of directors of the Company shall reasonably consider necessary by reason of the foregoing. At the Holder’s request, any successor to the Company or surviving entity in such Fundamental Change shall issue to the Holder a new debenture consistent with the foregoing provisions and evidencing the Holder’s right to convert such new debenture into Alternate Consideration. Any agreement pursuant to which a Fundamental Change is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 4 and insuring that the Debenture (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Change.

The Company covenants that it will at all times keep available out of its authorized and unissued Shares, a number of Shares that is sufficient for the purpose of issuance upon conversion of all or any part of the Principal then outstanding and upon exercise of the Interest Warrant. The Company covenants that all Shares that shall be so issuable shall, upon issue, be duly and validly authorized and issued as fully paid and non-assessable.

No fractional Shares shall be issued upon conversion of all or any part of the Principal under the Debenture. All Shares (including fractions thereof) issuable upon conversion of all or any part of the Principal shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fraction of a Share. If, after the aforementioned aggregation, the conversion would result in the issuance of any fraction of a Share, the Company shall, in lieu of issuing any fraction of a Share, pay cash equal to the product of such fraction multiplied by the fair market value per Share on the date of the conversion (as reported by the Exchange or any other national securities exchange on which the Shares are then listed for trading, or if none, the most recently reported “over the counter” trade price or if none, as determined in good faith by the board of directors of the Company).

In each case of an adjustment or readjustment of the Conversion Price for the number of Conversion Shares issuable upon conversion of all or any part of the Principal then outstanding under the Debenture, the Company, at its own expense, shall cause its Chief Financial Officer or other officer as directed by the board of directors of the Company to compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall deliver such certificate to the Holder. The certificate shall set forth such adjustment or readjustment, showing in reasonable detail the facts upon which such adjustment or readjustment is based. No adjustment in the Conversion Price shall be required to be made unless it would result in an increase or decrease of at least one cent, but any adjustments not made because of this sentence shall be carried forward and taken into account in any subsequent adjustment otherwise required hereunder.

Events of Default

The occurrence of any of the following shall constitute an “Event of Default” under the Debenture:

the Company not complying with the payment and conversion proceedings and obligations set forth in Sections 3 and 4 of this Debenture and/or failing to pay any Principal on the due date hereunder and such failure continuing for ten (10) Business Days after written notice thereof is delivered to the Company;

the Company failing to observe or perform any other covenant or agreement contained in the Debenture or the Private Placement Agreement which failure is not cured, if possible to cure, within thirty (30) calendar days after notice of such default is sent by the Holder to the Company;

the Company (i) applying for or consenting to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) being unable, or admitting in writing its inability, to pay its debts generally as they mature or become due, (iii) making a general assignment for the benefit of its or any of its creditors or making a proposal or otherwise taking advantage of any provisions for relief under any bankruptcy legislation in any jurisdiction, (iv) being dissolved or liquidated in full or in part, (v) commencing a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consenting to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) taking any action for the purpose of effecting any of the foregoing; and

proceedings for the appointment of a receiver, manager or receiver-manager, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect being commenced and an order for relief entered or such proceeding is not dismissed or discharged within thirty (30) days of commencement.

Upon the occurrence or existence of any Event of Default and following the expiry of any applicable grace periods and at any time thereafter during the continuance of such Event of Default, the Holder may, by written notice to the Company, declare all outstanding amounts payable by the Company hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described in subsection 5.1(c) hereof, immediately and without notice, all outstanding amounts payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest, notice of dishonour or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. The Company hereby waives: (a) marshaling of assets and liabilities; (b) sale in inverse order of alienation; (c) notice of acceptance; and (d) all rights the Company may have under any applicable suretyship law. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, the Holder may exercise any other right, power or remedy permitted to it by law, either by suit in equity or by action at law, or both.

Notices

Any notice required or permitted to be given to the Company or the Holder will be in writing and may be delivered by courier, by hand or given by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy to the address of the party set forth below or such other address as such party may specify by notice in writing to the other party, and any such notice will be deemed to have been given and received by the party to whom it was addressed if by facsimile or other electronic communication, on the date sent, or, if delivered, on delivery:

Exchange or Replacement of Debenture

The Holder may, at its option, in person or by duly authorized attorney-in-fact, surrender the Debenture for exchange at the principal business office of the Company and receive in exchange therefor a new Debenture in the same Principal amount as the unpaid Principal balance of the Debenture, such new Debenture to be dated as of the date of the Debenture and to be in such Principal amount as remains unpaid and payable at the time it is issued.

Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction, or mutilation of the Debenture and (in the case of loss, theft or destruction) of an indemnity reasonably satisfactory to it, and upon surrender and cancellation of the Debenture, if mutilated, the Company will deliver a new Debenture of like tenor in lieu of the Debenture. Any Debenture delivered in accordance with the provisions of this Section 7.2 shall be dated as of the date of the Debenture.

Settling Disputes; Governing Law

If any dispute, claim, question or difference arises with respect to this Debenture or its performance, enforcement, breach, termination or validity (a “Dispute”), the Company and the Holder will use their reasonable efforts to attempt to settle the Dispute.

Except as is expressly provided in this Debenture, if the Parties do not reach a solution pursuant to Section 8.1 within a period of 15 Business Days following the first notice of the Dispute by any party to the other, then upon written notice by any party to the other, the Dispute shall be finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with said rules. The arbitration shall take place in The Hague, Netherlands, unless the parties mutually agree to have the arbitration held elsewhere, and the arbitration proceedings will be conducted in English.

All questions concerning the construction, validity, enforcement and interpretation of the Debenture shall be governed by and construed and enforced in accordance with the laws of the province of British Columbia and the federal laws of Canada applicable therein, without regard to the principles of conflicts of law thereof.

Waivers

The Company hereby waives presentment, demand for payment, notice of dishonour, notice of protest and all other notices or demands in connection with the delivery, acceptance, performance or default of the Debenture. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right, nor shall any single or partial exercise of any power or right preclude other or further exercise thereof, or the exercise thereof, or the exercise of any other power or right hereunder or otherwise; and no waiver whatsoever or modification of the terms hereof shall be valid unless set forth in writing by the Holder and then only to the extent set forth therein.

Amendments

Subject to the provisions of the Private Placement Agreement, the Debenture may not be amended without the express written consent of both the Company and the Holder.

Severability

If any provision of the Debenture is invalid, illegal or unenforceable, the balance of the Debenture shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.

Next Business Day

Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

Time of the Essence

Time will be of the essence of the Debenture.

Definitions

For the purposes hereof, in addition to the terms defined elsewhere in this Debenture: (i) capitalized terms not otherwise defined herein have the meanings given to such terms in the Private Placement Agreement (as defined herein), and (ii) the following terms shall have the following meanings:

“Business Day” means any day, other than a Saturday or Sunday, or a day on which banking institutions in Baar, Switzerland or Amersfoort, the Netherlands are authorized or required by law or other government action to close;

“Cash Interest” means one third of the Interest payable on any Interest Payment Date, which shall be paid or payable in cash;

“Common Shares” means common shares in the capital of the Company and shares of any other class into which Common Shares may hereafter be reclassified or changed;

“Conversion Date” has the meaning set forth in Section 4.3 hereof;

“Conversion Price” means $0.70;

“Conversion Shares” means the Shares to be issued upon conversion, from time-to-time, of any portion of the Principal;

“Debenture” means this unsecured non-transferable convertible debenture and all of the terms and conditions pursuant to which it is issued;

“Exchange” means the TSX Venture Exchange;

“Exchange Policy 1.1” means Policy 1.1 – Interpretation of the Exchange;

“Interest Date” means each anniversary of the Issue Date during the Term, and includes the Maturity Date;

“Interest Payment Date” means the date that is 30 calendar days after each Interest Date;

“Interest Rate” means three percent (3%) per annum;

“Interest Shares” means Shares issued pursuant to exercise of the Interest Warrant in order to pay Interest;

“Interest Warrant” means the Common Share Purchase Warrant issued on the fifth Business Day following the Shareholder Approval Date pursuant to which Interest Shares may be issued from time-to-time;

“Issue Date” means <>, 2015; [INSERT THE DATE THAT IS FOUR MONTHS AFTER THE SHAREHOLDER APPROVAL DATE]

“Maturity Date” has the meaning attributed to it on the first page of this Convertible Debenture;

“Person” means a corporation, association, partnership, organization, business, individual, government or political subdivision thereof;

“Principal” means the amount of Principal as may be due and owing by the Company to the Holder from time to time under the Debenture;

“Private Placement Agreement” means the Private Placement Agreement dated November 29, 2014, between the Company and the Holder pursuant to which the Holder agreed to purchase the Debenture and other securities;

“Shares” means Common Shares;

“Trading Day” means a day on which the Shares are traded on the Exchange or other trading market on which the Shares are then listed or quoted, provided that, in the event that the Shares are not listed or quoted, then Trading Day shall mean a Business Day;

“U.S. Currency” means the lawful currency of the United States of America;

Unless otherwise provided, all dollar amounts referred to in the Debenture are in U.S. Currency.

Private Placement Agreement

This Debenture has been issued pursuant to the Private Placement Agreement, is subject in all respects to the terms of the Private Placement Agreement, and incorporates the terms of the Private Placement Agreement to the extent that they do not conflict with the terms of the Debenture. To the extent of any such conflict, the terms of this Debenture shall prevail and be paramount. No right, title or interest of the Holder in this Debenture may be transferred or assigned without the prior written consent of the Company, which the Company may grant or withhold in its sole and absolute discretion.

Interest

Interest on outstanding Principal shall accrue at the Interest Rate beginning on the Issue Date, shall be computed on the basis of a 360-day year and twelve 30-day months, and shall be payable annually on each Interest Payment Date. One-third of the Interest due on any Interest Payment Date shall be paid in the form of Cash Interest and two-thirds shall be paid in the form of Interest Shares pursuant to exercise of the Interest Warrant.

Interest Shares shall be issued through exercise of the Interest Warrant. The number of Interest Shares to be issued upon exercise of the Interest Warrant shall be determined by dividing the amount of Interest accrued and unpaid on each Interest Date by the Interest Warrant Exercise Price of $0.70.

Conversion

The Company shall pay all or any part of the Principal due under the Debenture at any time on or before the Maturity Date, without penalty or prepayment premium, by way of conversions pursuant to the provision of this Section 4. Conversions prior to the Maturity Date shall be at the option of the Holder, subject to the terms of this Debenture. All Principal that remains outstanding on the Maturity Date shall be automatically converted on the Maturity Date.

At any time and from time-to-time after the Issue Date and until the Maturity Date, the Holder shall be entitled to convert some or all of the outstanding Principal into Conversion Shares at the Conversion Price. In order to effect such a conversion, the Holder shall deliver to the Company an executed Conversion Notice in the form attached hereto as Appendix “A” (each a “Conversion Notice”). A Conversion Notice received by the Company after 4:00 p.m. (in Baar, Switzerland) on any Business Day, or at any time on any day that is not a Business Day, shall be deemed to have been received by the Company on the following Business Day. No Conversion Notice shall be required for the automatic conversion of Principal that is outstanding on the Maturity Date.

The Company shall effect conversions within five (5) Business Days after receipt of any Conversion Notice or the Maturity Date, as applicable. The Holder shall not be required to physically surrender the Debenture to the Company unless and until the entire Principal has been converted in the manner specified in this Section 4.3.

Any conversions hereunder shall have the effect of reducing the outstanding Principal in an amount equal to the amount of Principal being converted. The Company shall maintain records showing all Principal converted, the date of such conversions and the outstanding balance of the Principal remaining.

The Holder, by acceptance of the Debenture, acknowledges and agrees that, following each conversion of any portion of Principal, the unpaid and unconverted Principal will be decreased by the dollar amount of the product of the number of Conversion Shares issued upon conversion and the Conversion Price.

Not later than ten (10) Business Days after any Conversion Date, the Company will deliver to the Holder certificates representing the number of Conversion Shares being issued, which certificates shall bear such restrictive legends and trading restrictions as are required by applicable law, the Private Placement Agreement and by the Exchange.

If at any time or from time to time while any Principal is still outstanding, the Company shall effect a subdivision or consolidation of the issued and outstanding Shares, the Conversion Price in effect immediately before the subdivision shall be proportionately decreased, and, conversely, the Conversion Price in effect immediately before a consolidation shall be proportionately increased. Any adjustment under this Section 4.7 shall become effective at the close of business on the date the subdivision or consolidation becomes effective.

If at any time while the Debenture is outstanding, (i) the Company effects any merger or combination of the Company with or into another entity, (ii) the Company effects any sale of all or substantially all of its assets in one or more transactions, (iii) any tender offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Shares are permitted to tender or exchange their Shares for other securities, cash or property, or (iv) the Company effects any reclassification or recapitalization of the Shares or any compulsory share exchange pursuant to which the Shares are effectively converted into or exchanged for other securities, cash or property (other than a subdivision, consolidation or dividend provided for elsewhere in this Section 5) (in any such case, a “Fundamental Change”), then, upon any subsequent conversion of the Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion absent such Fundamental Change, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Change if it had been, immediately prior to such Fundamental Change, the holder of one Conversion Share (the “Alternate Consideration”). If holders of Shares are given any choice as to the securities, cash or property to be received in a Fundamental Change, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of the Debenture following such Fundamental Change. In the event of a Fundamental Change, the Company or the successor or purchasing entity, as the case may be, shall execute with the Holder a written agreement providing that:

the Debenture shall thereafter entitle the Holder to purchase the Alternate Consideration; and

in the case of any such successor or purchasing entity, upon such consolidation, merger, statutory exchange, combination, sale or conveyance, such successor or purchasing entity shall be jointly and severally liable with the Company for the performance of all of the Company’s obligations under the Debenture and the Private Placement Agreement.

If, in the case of any Fundamental Change, the Alternate Consideration includes shares, other securities, other property or assets of an entity other than the Company or any such successor or purchasing entity, as the case may be, then such written agreement shall also be executed by such other entity and shall contain such additional provisions to protect the interests of the Holder as the board of directors of the Company shall reasonably consider necessary by reason of the foregoing. At the Holder’s request, any successor to the Company or surviving entity in such Fundamental Change shall issue to the Holder a new debenture consistent with the foregoing provisions and evidencing the Holder’s right to convert such new debenture into Alternate Consideration. Any agreement pursuant to which a Fundamental Change is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 4 and insuring that the Debenture (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Change.

The Company covenants that it will at all times keep available out of its authorized and unissued Shares, a number of Shares that is sufficient for the purpose of issuance upon conversion of all or any part of the Principal then outstanding and upon exercise of the Interest Warrant. The Company covenants that all Shares that shall be so issuable shall, upon issue, be duly and validly authorized and issued as fully paid and non-assessable.

No fractional Shares shall be issued upon conversion of all or any part of the Principal under the Debenture. All Shares (including fractions thereof) issuable upon conversion of all or any part of the Principal shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fraction of a Share. If, after the aforementioned aggregation, the conversion would result in the issuance of any fraction of a Share, the Company shall, in lieu of issuing any fraction of a Share, pay cash equal to the product of such fraction multiplied by the fair market value per Share on the date of the conversion (as reported by the Exchange or any other national securities exchange on which the Shares are then listed for trading, or if none, the most recently reported “over the counter” trade price or if none, as determined in good faith by the board of directors of the Company).

In each case of an adjustment or readjustment of the Conversion Price for the number of Conversion Shares issuable upon conversion of all or any part of the Principal then outstanding under the Debenture, the Company, at its own expense, shall cause its Chief Financial Officer or other officer as directed by the board of directors of the Company to compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall deliver such certificate to the Holder. The certificate shall set forth such adjustment or readjustment, showing in reasonable detail the facts upon which such adjustment or readjustment is based. No adjustment in the Conversion Price shall be required to be made unless it would result in an increase or decrease of at least one cent, but any adjustments not made because of this sentence shall be carried forward and taken into account in any subsequent adjustment otherwise required hereunder.

Events of Default

The occurrence of any of the following shall constitute an “Event of Default” under the Debenture:

the Company not complying with the payment and conversion proceedings and obligations set forth in Sections 3 and 4 of this Debenture and/or failing to pay any Principal on the due date hereunder and such failure continuing for ten (10) Business Days after written notice thereof is delivered to the Company;

the Company failing to observe or perform any other covenant or agreement contained in the Debenture or the Private Placement Agreement which failure is not cured, if possible to cure, within thirty (30) calendar days after notice of such default is sent by the Holder to the Company;

the Company (i) applying for or consenting to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) being unable, or admitting in writing its inability, to pay its debts generally as they mature or become due, (iii) making a general assignment for the benefit of its or any of its creditors or making a proposal or otherwise taking advantage of any provisions for relief under any bankruptcy legislation in any jurisdiction, (iv) being dissolved or liquidated in full or in part, (v) commencing a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consenting to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) taking any action for the purpose of effecting any of the foregoing; and

proceedings for the appointment of a receiver, manager or receiver-manager, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect being commenced and an order for relief entered or such proceeding is not dismissed or discharged within thirty (30) days of commencement.

Upon the occurrence or existence of any Event of Default and following the expiry of any applicable grace periods and at any time thereafter during the continuance of such Event of Default, the Holder may, by written notice to the Company, declare all outstanding amounts payable by the Company hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described in subsection 5.1(c) hereof, immediately and without notice, all outstanding amounts payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest, notice of dishonour or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. The Company hereby waives: (a) marshaling of assets and liabilities; (b) sale in inverse order of alienation; (c) notice of acceptance; and (d) all rights the Company may have under any applicable suretyship law. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, the Holder may exercise any other right, power or remedy permitted to it by law, either by suit in equity or by action at law, or both.

Notices

Any notice required or permitted to be given to the Company or the Holder will be in writing and may be delivered by courier, by hand or given by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy to the address of the party set forth below or such other address as such party may specify by notice in writing to the other party, and any such notice will be deemed to have been given and received by the party to whom it was addressed if by facsimile or other electronic communication, on the date sent, or, if delivered, on delivery:

Exchange or Replacement of Debenture

The Holder may, at its option, in person or by duly authorized attorney-in-fact, surrender the Debenture for exchange at the principal business office of the Company and receive in exchange therefor a new Debenture in the same Principal amount as the unpaid Principal balance of the Debenture, such new Debenture to be dated as of the date of the Debenture and to be in such Principal amount as remains unpaid and payable at the time it is issued.

Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction, or mutilation of the Debenture and (in the case of loss, theft or destruction) of an indemnity reasonably satisfactory to it, and upon surrender and cancellation of the Debenture, if mutilated, the Company will deliver a new Debenture of like tenor in lieu of the Debenture. Any Debenture delivered in accordance with the provisions of this Section 7.2 shall be dated as of the date of the Debenture.

Settling Disputes; Governing Law

If any dispute, claim, question or difference arises with respect to this Debenture or its performance, enforcement, breach, termination or validity (a “Dispute”), the Company and the Holder will use their reasonable efforts to attempt to settle the Dispute.

Except as is expressly provided in this Debenture, if the Parties do not reach a solution pursuant to Section 8.1 within a period of 15 Business Days following the first notice of the Dispute by any party to the other, then upon written notice by any party to the other, the Dispute shall be finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with said rules. The arbitration shall take place in The Hague, Netherlands, unless the parties mutually agree to have the arbitration held elsewhere, and the arbitration proceedings will be conducted in English.

All questions concerning the construction, validity, enforcement and interpretation of the Debenture shall be governed by and construed and enforced in accordance with the laws of the province of British Columbia and the federal laws of Canada applicable therein, without regard to the principles of conflicts of law thereof.

Waivers

The Company hereby waives presentment, demand for payment, notice of dishonour, notice of protest and all other notices or demands in connection with the delivery, acceptance, performance or default of the Debenture. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right, nor shall any single or partial exercise of any power or right preclude other or further exercise thereof, or the exercise thereof, or the exercise of any other power or right hereunder or otherwise; and no waiver whatsoever or modification of the terms hereof shall be valid unless set forth in writing by the Holder and then only to the extent set forth therein.

Amendments

Subject to the provisions of the Private Placement Agreement, the Debenture may not be amended without the express written consent of both the Company and the Holder.

Severability

If any provision of the Debenture is invalid, illegal or unenforceable, the balance of the Debenture shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.

Next Business Day

Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

Time of the Essence

Time will be of the essence of the Debenture.

The Corporation is duly and validly incorporated, existing and in good standing under the Laws of the State of Nevada and has the corporate power to own and operate its property, carry on its business and enter into and perform its obligations under this Agreement.

The execution, delivery and performance by the Corporation of this Agreement have been duly authorized by all necessary corporate action on the part of the Corporation.

The execution, delivery and performance by the Corporation of this Agreement:

do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) constitute or result in a violation or breach of, or conflict with, or allow any Person to exercise any rights under, any of the terms or provisions of its constating documents or by-laws;

do not and will not (or would not with the giving of notice, the lapse of time or the happening or any other event or condition) constitute or result in a breach or violation of, or conflict with or allow any Person to exercise any rights under, any of the terms or provisions of any Contract, lease or instrument to which the Corporation is a party or pursuant to which any of its assets or property may be affected;

do not and will not result in a breach of, or cause the termination or revocation of, any Authorization held by the Corporation or necessary to the operation of the Business; and

do not and will not result in the violation of any Law, except where such violation would not reasonably be expected to result in a Material Adverse Effect on the Corporation.

This Agreement has been duly executed and delivered by the Corporation and constitutes the legal, valid and binding agreement of the Corporation enforceable against it in accordance with its terms, subject to any limitation under applicable laws relating to (i) bankruptcy, winding-up, insolvency, arrangement, fraudulent preference and conveyance, assignment and preference and other laws of general application affecting the enforcement of creditors' rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

Except for (i) the approval of the Shareholders of the Shareholder Resolution at the Shareholder Meeting; (ii) the approval of the Exchange, (iii) the filing of exempt distribution reports; and (iv) the approvals, if any, required by any Governmental Entity in the Netherlands, no filing with, notice to, or Authorization of, any Governmental Entity is required on the part of the Corporation as a condition to the lawful completion of the transactions contemplated by this Agreement.

There is no requirement to obtain any consent, approval or waiver of a party under any Contract that the Corporation is a party to, to the completion of the transactions contemplated by this Agreement.

The authorized capital of the Corporation consists of 600,000,000 Common Shares, each with a par value of $0.001. As at the date hereof (i) there are 172,592,292 Common Shares issued and outstanding, all of which are fully paid and non-assessable, (ii) 12,400,000 Corporation Options outstanding; and (iii) at the Effective Date, except for Corporation Option Shares issued after the date hereof and prior to the completion of any of the transactions contemplated in this Agreement, 172,592,292 Common Shares shall have been duly issued and shall be outstanding as fully paid and non-assessable.

Except for the Purchaser’s rights under this Agreement and pursuant to Corporation Options, no Person has any written or oral agreement, option or warrant or any right or privilege (whether by Law, pre-emptive or contractual) capable of becoming such for the purchase or acquisition from the Corporation of any Common Shares or any securities convertible into Common Shares.

The Securities, when issued in accordance with the provisions of this Agreement, shall be duly authorized.

The Corporate Records are, in all material respects, complete and accurate and all corporate proceedings and actions reflected in the Corporate Records have been conducted or taken in compliance with all applicable Laws and with the articles and by-laws of the Corporation. Without limiting the generality of the foregoing (i) the minute books contain complete and accurate minutes of all meetings of the directors and shareholders held since incorporation; (ii) the minute books contain all resolutions passed by the directors and shareholders (and committees, if any) and all such resolutions were properly passed; and (iii) the registers of directors and officers are complete and accurate and all former and present directors and officers were properly elected or appointed, as the case may be

The Corporation has complied with Applicable Securities Laws in connection with the offer, sale and issuance of the Securities.

The Corporation is currently in compliance with all Applicable Securities Laws and the rules and requirements of the Exchange, including without limitation the requirements to publicly disclose any material fact or material change as required pursuant thereto, except where failing to be in compliance would not reasonably be expected to result in a Material Adverse Effect on the Corporation.

The Corporation and its subsidiaries own all of the properties and assets that they purport to own, as reflected in the Public Record, including all the properties and assets reflected as being owned by the Corporation and its subsidiaries in their respective financial Books and Records, in each case free and clear of all Liens.

No Person has any written or oral agreement, option, understanding or commitment, or any right or privilege capable of becoming such for the purchase or other acquisition from the Corporation of any of the Assets or any interest therein.

There is no claim, grievance, action, proceeding or investigation pending or, to the knowledge of the Corporation, threatened against or relating to the Corporation or any of its subsidiaries or affecting any of their properties or assets before any Governmental Entity that, if adversely determined, would reasonably be expected to result in a Material Adverse Change. To the knowledge of the Corporation, neither the Corporation, nor any of its subsidiaries is subject to any outstanding order, writ, injunction or decree that has had or is reasonably likely to result in a Material Adverse Change.

Each of the Corporation and its subsidiaries has good title (whether in fee simple or equivalent or by means of a lease or other arrangement (collectively, the “Corporation Mineral Rights”)), free and clear of any title defect, royalty or encumbrance, to its mineral projects. To the best of the knowledge of the Corporation, there are no conflicting mineral claims that could constitute a material defect in the Corporation’s or its subsidiaries’ title to any of the Corporation Mineral Rights. To the best of the knowledge of the Corporation, there are no pending or threatened, suits, claims, actions, proceedings or investigations of any nature affecting the Corporation Mineral Rights. Except as may have been disclosed in the Public Record, neither the Corporation, any subsidiary nor any other party has received notice from any Governmental Entity or any other Person of any proposal or intention to withdraw, revoke, amend or terminate any of the Corporation Mineral Rights or has any reason to believe that any such withdrawal, revocation, amendment or termination is pending or threatened or will occur in the future and all material obligations in respect of the Corporation Mineral Rights have been complied with at all times, and no action, claim, demand, dispute or liability in respect of the same is outstanding or, to the knowledge of the Corporation, threatened.

To the best of the knowledge of the Corporation, except as could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect on the Corporation (i) each of the Corporation and its subsidiaries is not in violation of any applicable Law relating to pollution or occupational health and safety, the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including laws relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”); (ii) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, information requests, claims, Liens, notices of non-compliance or violation, investigation or proceedings relating to any Environmental Laws against the Corporation and its subsidiaries; and (iii) each of the Corporation and its subsidiaries is not the subject of any international, foreign, federal, provincial, municipal or private action, suit, litigation, grievance, arbitration proceeding, governmental proceeding, investigation or claim involving a demand for damages or other potential liability with respect to violations of Environmental Laws.

The Corporation’s audited consolidated financial statements for the year ending December 31, 2013 and its interim consolidated financial statements for the period ending June 30, 2014, both as filed in the Electronic Data Gathering, Analysis and Retrieval system (EDGAR), present a true and fair view of the consolidated assets, liabilities, shareholders’ equity, results of operations and cash-flows of the Corporation as of December 31, 2013 and as of June 30, 2014, respectively, under U.S. generally accepted accounting principles.

Since June 30, 2014, no Material Adverse Change has occurred, and no material loss contingency has arisen for which a loss reserve should be established or increased under U.S. generally accepted accounting principles.

The Purchaser is a corporation incorporated and existing under the laws of The Netherlands and has the corporate power and authority to enter into and perform its obligations under this Agreement.

The execution and delivery of, and performance by the Purchaser of, this Agreement has been duly authorized by all necessary corporate action on the part of the Purchaser.

The execution and delivery of, and performance by the Purchaser of, this Agreement do not and will not result in the violation of any Law.

This Agreement has been duly executed and delivered by the Purchaser and constitutes the legal, valid and binding agreement of the Purchaser, enforceable against it in accordance with its terms, subject only to any limitation under applicable laws relating to (i) bankruptcy, winding-up insolvency, arrangement, fraudulent preference and conveyance, assignment and preference and other similar laws of general application affecting creditors' rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

The Purchaser acknowledges that:

the Securities are being offered on a “private placement” basis and are listed and quoted for trading on the facilities of the Exchange.

none of the Securities have been or will be registered under the 1933 Act or under any securities or “blue sky” laws of any state of the United States or any Province of Canada and, unless so registered, may not be offered or sold in the United States or Canada or, directly or indirectly, to U.S. Persons, as that term is defined in Regulation S, except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration or prospectus requirements of the 1933 Act and applicable Canadian securities Laws and in each case only in accordance with applicable state, provincial and foreign securities laws;

the Corporation has not undertaken to, and will have no obligation to, register any of the Securities under the 1933 Act or any other securities legislation;

the decision to execute this Agreement and acquire the Securities agreed to be purchased hereunder has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Corporation and such decision is based entirely upon a review of any public information which has been filed by the Corporation in the Public Record;

the Purchaser understands and agrees that the Corporation and others will rely upon the truth and accuracy of the acknowledgements, representations, warranties, covenants and agreements contained in this Agreement and agrees that if any of such acknowledgements, representations and agreements are no longer accurate or have been breached at any time between the Effective Date and the Second Debenture Date, the Purchaser shall promptly notify the Corporation;

there are risks associated with the purchase of the Securities, some of which are more fully described in the Corporation’s periodic disclosure forming part of the Public Record;

the Purchaser and the Purchaser’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from the Corporation in connection with the distribution of the Securities hereunder, and to obtain additional information, to the extent possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information about the Corporation;

the books and records of the Corporation were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Purchaser during reasonable business hours at its principal place of business, and all documents, records and books in connection with the distribution of the Securities hereunder have been made available for inspection by the Purchaser and the Purchaser’s advisor(s);

all of the information which the Purchaser has provided to the Corporation is correct and complete as of the Effective Date and if there should be any change in such information prior to the Second Debenture Date, the Purchaser will immediately provide the Corporation with such information;

the Corporation is entitled to rely on the representations and warranties of the Purchaser contained in this Agreement and the Purchaser will hold harmless the Corporation from any loss or damage it may suffer as a result of the Purchaser’s failure to correctly complete this Agreement;

the Purchaser has been advised to consult the Purchaser’s own legal, tax and other advisors with respect to the merits and risks of an investment in the Securities and with respect to applicable resale restrictions, and it is solely responsible (and the Corporation is not in any way responsible) for compliance with:

any applicable laws of the jurisdiction in which the Purchaser is resident in connection with the distribution to the Purchaser hereunder, and

applicable resale restrictions;

The certificates representing the Initial Shares and any Common Shares issued pursuant to the exercise of either of the Initial Warrant, the Second Warrant or the Interest Warrant or the conversion of, prior to the expiration of the applicable hold period with respect to, the First Debenture or the Second Debenture or ownership statements issued under a direct registration system or other electronic book-entry system, will bear legends in accordance with Applicable Securities Laws substantially in the form of the following:

U.S. Legend:

The Purchaser is at arm’s-length, within the meaning of the policies of the Exchange, with the Corporation.

The Purchaser acknowledges that the Corporation is required to file a report of exempt distribution with all applicable Securities Regulatory Authorities containing personal information about the Purchaser.

Performance of Covenants. The Corporation shall have fulfilled or complied with all covenants contained in this Agreement to be fulfilled or complied with by it at or prior to the Effective Date, the Warrant Exercise Date, the First Debenture Date and the Second Debenture Date, as applicable, and the Corporation shall have executed and delivered a certificate of a senior officer to that effect.

Exchange Approval. The Purchaser shall have been provided with evidence satisfactory to it, acting reasonably, that the Exchange shall have approved the issuance to the Purchaser of each of the Securities, as applicable.

Securities Laws. The issuance of the Securities is exempt from the prospectus and registration requirements of Applicable Securities Laws.

Approvals. The Corporation shall have obtained all orders, permits, approvals, waivers, consents, licenses or similar authorizations of Securities Regulatory Authorities necessary to complete the sale of the Initial Shares, the Initial Warrant and the Second Warrant on the Effective Date, the exercise of the Initial Warrant and the Second Warrant on the Warrant Exercise Date, the sale of the First Debenture on the First Debenture Date and the sale of the Second Debenture on the Second Debenture Date, as applicable.

Deliveries. The Corporation shall have delivered or cause to be delivered to the Purchaser at Closing the following in form and substance satisfactory to the Purchaser:

As applicable, copies of all resolutions of the Shareholders approving the entering into and completion of the transactions contemplated by this Agreement;

A certificate of status, compliance, good standing or like certificate with respect to the Corporation issued by the appropriate Governmental Entity;

No Legal Action. No legal or regulatory acts or proceedings shall be pending or threatened by any Person which would enjoin, restrict or prohibit the issuance, sale or purchase of any of the Securities as contemplated hereby.

Performance of Covenants. The Purchaser shall have fulfilled or complied with all covenants contained in this Agreement to be fulfilled or complied with by it at or prior to Effective Date, the Warrant Exercise Date, the First Debenture Date and the Second Debenture Date, as applicable, and the Purchaser shall have executed and delivered a certificate of a senior officer to that effect.

Securities Laws. The issuance of the Securities is exempt from the prospectus and registration requirements of Applicable Securities Laws.

Approvals. The Corporation shall have obtained all orders, permits, approvals, waivers, consents, licenses or similar authorizations of Securities Regulatory Authorities necessary to complete the sale of the Initial Shares, the Initial Warrant and the Second Warrant on the Effective Date, the exercise of the Initial Warrant and the Second Warrant on the Warrant Exercise Date, the sale of the First Debenture on the First Debenture Date and the sale of the Second Debenture on the Second Debenture Date, as applicable.

No Legal Action. No legal or regulatory acts or proceedings shall be pending or threatened by any Person which would enjoin, restrict or prohibit the issuance, sale or purchase of any of the Securities as contemplated hereby.