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<SEC-DOCUMENT>0001130319-07-000087.txt : 20070215
<SEC-HEADER>0001130319-07-000087.hdr.sgml : 20070215
<ACCEPTANCE-DATETIME>20070215095009
ACCESSION NUMBER:		0001130319-07-000087
CONFORMED SUBMISSION TYPE:	F-10/A
PUBLIC DOCUMENT COUNT:		10
FILED AS OF DATE:		20070215
DATE AS OF CHANGE:		20070215

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ONCOLYTICS BIOTECH INC
		CENTRAL INDEX KEY:			0001129928
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		F-10/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-140460
		FILM NUMBER:		07625630

	BUSINESS ADDRESS:	
		STREET 1:		1167 KENSINGTON CRES NW SUITE 210
		STREET 2:		CALGARY ALBERTA CANADA T2N 1X7
		CITY:			ALBERTA CANADA
		STATE:			A0
		ZIP:			00000
		BUSINESS PHONE:		4036707380

	MAIL ADDRESS:	
		STREET 1:		210 - 1167 KENSINGTON CRES NW
		CITY:			CALGARY
		STATE:			A0
		ZIP:			T2N 1X7
</SEC-HEADER>
<DOCUMENT>
<TYPE>F-10/A
<SEQUENCE>1
<FILENAME>o34728formfv10za.htm
<DESCRIPTION>FORM F-10/A DATED FEBRUARY 13,2007
<TEXT>
<HTML>
<HEAD>
<TITLE>formfv10za</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-bottom: 3pt">As
filed with the Securities and Exchange Commission on February&nbsp;14, 2007<BR>
..
</DIV>


<DIV align="right" style="font-size: 10pt; margin-bottom: 3pt"><B>Registration No.&nbsp;333- 140460</B>
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<DIV align="center" style="font-size: 14pt; margin-top: 9pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 9pt"><B><FONT style="font-size:14pt">Amendment No.&nbsp;2</FONT><BR>
<FONT style="font-size:14pt">to</FONT><BR>
Form&nbsp;F-10</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT UNDER<BR>
THE SECURITIES ACT OF 1933</B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 9pt"><B>ONCOLYTICS BIOTECH INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><I>(Exact name of Registrant as specified in its charter)</I></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Alberta</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>2834</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Not Applicable</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>(Province or other jurisdiction</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>(Primary Standard Industrial Classification</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>(I.R.S. Employer</I></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>of incorporation or organization)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>Code Number)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>Identification Number)</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 9pt"><B>Suite #210, 1167 Kensington Crescent N.W.<BR>
Calgary, Alberta<BR>
Canada T2N 1X7<BR>
(403)&nbsp;670-7377</B><BR>
<I>(Address and Telephone Number of Registrant&#146;s Principal Executive Offices)</I>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt"><B>DL Services, Inc.<BR>
1420 Fifth Avenue, Suite&nbsp;3400<BR>
Seattle, Washington 98101<BR>
(206)&nbsp;903-8800</B><BR>
<I>(Name, Address (including Zip Code) and Telephone Number (including Area Code) of Agent for Service in the United States)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt"><B>Copies to:</B></DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Douglas A. Ball<BR>
Oncolytics Biotech Inc.<BR>
210-1167 Kensington Cr. N.W.<BR>
Calgary, Alberta<BR>
Canada T2N 1X7<BR>
Telephone: (403)&nbsp;670-7377
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Randal Jones<BR>
Jason K. Brenkert<BR>
370, 17<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Street, Suite&nbsp;4700<BR>
Denver, Colorado 80202<BR>
Telephone: (303)&nbsp;629-3400
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Brent W. Kraus<BR>
Bennett Jones LLP<BR>
4500, 855 2<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP> Street SW<BR>
Calgary, Alberta<BR>
Canada T2P 4K7<BR>
Telephone: (403)&nbsp;298-3071
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Kevin Keogh<BR>
White &#038; Case LLP<BR>
1155 Avenue of the Americas<BR>
New York, New York 10036<BR>
Telephone: (212)&nbsp;819-8270
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Iain Mant<BR>
Fasken Martineau DuMoulin LLP<BR>
2100-1075 West Georgia Street<BR>
Vancouver, British Columbia<BR>
Canada V6E 3G2<BR>
Telephone: (604)&nbsp;631-4734</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Approximate date of commencement of proposed sale of the securities to the public:</B><BR>
As soon as practicable after this Registration Statement becomes effective.</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Province of Alberta, Canada</B><BR>
<I>(Principal jurisdiction regulating this offering)</I></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">It is proposed that this filing shall become effective (check appropriate box):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">A.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#254;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Upon filing with the Commission, pursuant to Rule&nbsp;467(a)
(if in connection with an offering being made
contemporaneously in the United States and Canada).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">B.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">At some future date (check the appropriate box below):</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">1.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">pursuant to Rule&nbsp;467(b) on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (date)&nbsp;at <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (time) (designate
a time not sooner than 7 calendar days after filing).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">pursuant to Rule&nbsp;467(b) on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (date)&nbsp;at <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (time) (designate
a time 7 calendar days or sooner after filing) because
the securities regulatory authority in the review
jurisdiction has issued a receipt or notification of
clearance on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (date).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">pursuant to Rule&nbsp;467(b) as soon as practicable after
notification of the Commission by the Registrant or the
Canadian securities regulatory authority of the review
jurisdiction that a receipt or notification of clearance
has been issued with respect hereto.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">after the filing of the next amendment to this Form (if
preliminary material is being filed).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If any of the securities being registered on this Form are to be offered on a delayed or continuous
basis pursuant to the home jurisdiction&#146;s shelf prospectus offering procedures, check the following
box. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Explanatory Note: The Registrant hereby amends its Registration Statement on </B><B>Form F-10</B><B>, previously
filed with the Commission on February&nbsp;5, 2007, as amended on February&nbsp;6, 2007, to include the final
short form prospectus filed with the Alberta Securities Commission on the date hereof, relating the
offering of the Registrant&#146;s units in Canada and the United States.</B>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>


</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">








<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>PART I</B>
</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>INFORMATION REQUIRED TO BE DELIVERED TO<BR>
OFFEREES OR PURCHASERS</B>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 6pt">No securities regulatory
    authority has expressed an opinion about these securities and it
    is an offence to claim otherwise. A registration statement
    relating to these securities has been filed with the U.S.
    Securities and Exchange Commission. These securities may not be
    sold nor may offers to buy be accepted prior to the time the
    registration statement becomes effective. This prospectus shall
    not constitute an offer to sell or the solicitation of an offer
    to buy nor shall there be any sale of these securities in any
    U.S. state in which such offer, solicitation or sale would be
    unlawful prior to registration or qualification under the
    securities laws of any such U.S. state.</FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 6pt">Information has been
    incorporated by reference in this short form prospectus from
    documents filed with securities commissions or similar
    authorities in Canada. Copies of the documents incorporated
    herein by reference may be obtained on request without charge
    from the Corporate Secretary of Oncolytics Biotech Inc. at
    Suite&#160;210, 1167 Kensington Crescent N.W., Calgary, Alberta
    T2N&#160;1X7, telephone
    <FONT style="white-space: nowrap">(403)&#160;670-7377.</FONT>
    In addition, copies of documents incorporated by reference may
    be obtained from the securities commissions or similar
    authorities in Canada through the SEDAR website at
    www.sedar.com. See &#147;Documents Incorporated by
    Reference&#148;.</FONT></I>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">Short
    Form&#160;Prospectus</FONT></B>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <I><FONT style="font-size: 9pt; font-family: 'Times New Roman', Times">New
    Issue</FONT></I></TD>
    <TD nowrap align="right">    <FONT style="font-size: 9pt; font-family: 'Times New Roman', Times">February&#160;14,
    2007
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="o34728o3472800.gif" alt="(ONCOLYTICS LOGO)" ><FONT style="font-size: 9pt">
    </FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">$12,000,000</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">4,000,000&#160;Units</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">We are offering
    4,000,000&#160;units at a price of $3.00&#160;per unit. Each
    unit consists of one of our common shares and one-half of one
    common share purchase warrant. One whole common share purchase
    warrant will entitle the holder to purchase one of our common
    shares upon payment of $3.50 at any time until 5:00&#160;p.m.
    (Calgary time) on the date that is 36&#160;months following the
    closing of this offering. The common shares and the warrants
    comprising the units will separate immediately upon the closing
    of this offering. See &#147;Details of the Offering&#148;. Our
    outstanding common shares are listed for trading on the Toronto
    Stock Exchange (the <B>&#147;TSX&#148;</B>) under the trading
    symbol &#147;ONC&#148; and on the NASDAQ Capital Market
    (<B>&#147;NASDAQ&#148;</B>) under the trading symbol
    &#147;ONCY&#148;. On February&#160;2, 2007, the last trading day
    prior to the announcement of this offering, the closing price of
    our common shares on the TSX was $3.25 and on NASDAQ was
    U.S.$2.74 and on February&#160;13, 2007, the closing price of
    our common shares on the TSX was $2.51 and on NASDAQ was
    U.S.$2.16. <B>The offering price of our units was determined by
    negotiation between us and the underwriter, Canaccord Capital
    Corporation. There is no market through which the common share
    purchase warrants may be sold and purchasers may not be able to
    resell the common share purchase warrants purchased under this
    short form prospectus. This may affect the pricing of the common
    share purchase warrants in the secondary market, the
    transparency and availability of trading prices, the liquidity
    of such warrants, and the extent of issuer regulation. See
    &#147;Risk Factors&#148;.</B>
    </FONT>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 8pt">An investment in the units and
    the underlying securities comprising the units should be
    considered highly speculative due to the stage and nature of our
    business and should only be made by persons who can afford a
    total loss of their investment.</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 8pt">We are permitted, under a
    multi-jurisdictional disclosure system adopted by the United
    States and Canada, to prepare this prospectus in accordance with
    Canadian disclosure requirements. You should be aware that such
    requirements are different from those of the United States. We
    have prepared our financial statements in accordance with
    Canadian generally accepted accounting principles, and they are
    subject to Canadian auditing and auditor independence standards.
    Thus, they may not be comparable to the financial statements of
    U.S. companies. Information regarding the impact upon our
    financial statements of significant differences between Canadian
    and U.S. generally accepted accounting principles is contained
    in the notes to the financial statements incorporated by
    reference in this prospectus.</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 8pt">You should be aware that the
    purchase of the units may have tax consequences both in the
    United States and Canada. This prospectus may not describe these
    tax consequences fully for investors who are resident in, or
    citizens of, the United States. You should read the tax
    discussion in this prospectus.</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 8pt">Your ability to enforce civil
    liabilities under U.S. federal securities laws may be affected
    adversely by the fact that we are incorporated under the laws of
    Canada, the majority of our officers, all of our directors and
    most of the experts named in this prospectus are residents of
    Canada, and a substantial portion of our assets and the assets
    of such persons are located outside the United States.</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 8pt">There are certain risk factors
    that should be carefully reviewed by prospective purchasers. See
    &#147;Risk Factors&#148;.</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 26%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=142 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Price: $3.00&#160;per Unit</B>
</DIV>

<CENTER style="font-size: 1pt; width: 26%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=142 -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="46%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="17%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="17%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="17%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Underwriter&#146;s<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Net Proceeds to<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Price</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Fee</B><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>the
    Corporation</B><SUP style="font-size: 85%; vertical-align: text-top">(2)(3)</SUP>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Per unit
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$3.00
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$0.24
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$2.76
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Total offering
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$12,000,000
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$960,000
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <FONT style="font-size: 8pt">$11,040,000
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="font-size: 4pt; margin-left: 0%; width: 11%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=540 length=60 -->



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Notes:</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (1)&#160;
</TD>
    <TD align="left">    The underwriter&#146;s fee represents 8% of the offering price.
</TD>
</TR>

<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>



<TR valign="top" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (2)&#160;
</TD>
    <TD align="left">    Before deducting the expenses associated with this offering,
    estimated to be $400,000. We will pay the expenses from the
    proceeds of this offering.
</TD>
</TR>

<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>



<TR valign="top" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (3)&#160;
</TD>
    <TD align="left">    The underwriter has been granted an option (the
    <B>&#147;Over-allotment Option&#148;</B>), exercisable, in whole
    or in part, not later than 30&#160;days after closing of the
    offering, to purchase up to 600,000 units at a price of
    $3.00&#160;per unit. This short form prospectus qualifies both
    the grant of the Over-allotment Option and the issuance of the
    units upon exercise of the Over-allotment Option. If the
    Over-allotment Option is fully exercised, the total offering,
    underwriter&#146;s fee and net proceeds to the Corporation will
    be $13,800,000, $1,104,000&#160;and $12,696,000, respectively.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="28%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="23%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="23%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="23%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Underwriter&#146;s Position</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Maximum Size</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Exercise Period</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Exercise Price</B>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Over-allotment Option
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <FONT style="font-size: 8pt">600,000 units
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 8pt">Exercisable not later than
    30&#160;days after closing of the offering
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <FONT style="font-size: 8pt">$3.00&#160;per unit
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">Canaccord Capital Corporation, the
    underwriter, as principal, conditionally offers these
    securities, subject to prior sale, if, as and when issued by us
    and accepted by the underwriter in accordance with the
    conditions contained in the Underwriting Agreement referred to
    under the heading &#147;Plan of Distribution&#148; and subject
    to the approval of certain legal matters on behalf of us by
    Bennett Jones LLP and Dorsey&#160;&#38; Whitney LLP, and on
    behalf of the underwriter by Fasken Martineau DuMoulin LLP and
    White&#160;&#38; Case LLP.
    </FONT>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">Subscriptions for the units will be
    received subject to rejection or allotment in whole or in part
    and the right is reserved to close the subscription books at any
    time without notice. Definitive certificates representing the
    common shares and the common share purchase warrants are
    expected to be available for delivery at the closing of this
    offering which is expected to occur on or about
    February&#160;22, 2007 or such other date as we and the
    underwriter may mutually agree, but in any event not later than
    March&#160;22, 2007. In connection with this offering, the
    underwriter may over-allot or effect transactions that stabilize
    or maintain the market price of our common shares at a level
    other than that which might otherwise prevail in the open
    market. Such transactions, if commenced, may be discontinued at
    any time. See &#147;Plan of Distribution&#148;.
    </FONT>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">In the opinion of our counsel,
    Bennett Jones LLP, and counsel to the underwriter, Fasken
    Martineau DuMoulin LLP (collectively,
    <B>&#147;Counsel&#148;</B>), our common shares offered hereby
    will, at the date hereof, be qualified investments under the
    <I>Income Tax Act</I> (Canada) (the <B>&#147;Tax Act&#148;</B>)
    and the regulations thereunder as in effect on the date hereof
    for trusts governed by registered retirement savings plans,
    registered retirement income funds, registered education savings
    plans and deferred profit sharing plans (<B>&#147;Exempt
    Plans&#148;</B>). In the opinion of Counsel, provided that we
    deal at arm&#146;s length (within the meaning of the Tax Act)
    with each person who is an annuitant, a beneficiary, an employer
    or a subscriber under, or in relation to, an Exempt Plan, as the
    case be, our common share purchase warrants offered hereby will,
    at the date hereof, be qualified investments under the Tax Act
    and the regulations thereunder as in effect on the date hereof
    for Exempt Plans.
    </FONT>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 8pt">Neither the U.S. Securities and
    Exchange Commission nor any state securities commission has
    approved or disapproved these securities or determined if this
    prospectus is truthful or complete. Any representation to the
    contrary is a criminal offence.</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 8pt">You should rely only on the
    information contained in this prospectus. We are offering to
    sell, and seeking offers to buy, our units only in jurisdictions
    where, and to persons to whom, offers and sales are lawfully
    permitted.</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">Our head office and principal place
    of business is located at 210, 1167 Kensington Crescent N.W.,
    Calgary, Alberta T2N 1X7. Our registered office is located at
    4500&#160;Bankers Hall East,
    855&#160;&#150;&#160;2nd&#160;Street S.W., Calgary, Alberta
    T2P&#160;4K7.
    </FONT>
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>



<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="89%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="right" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Page</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'><FONT style="font-size: 10pt">DEFINITIONS AND
    OTHER MATTERS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'><FONT style="font-size: 10pt">SPECIAL NOTICE
    REGARDING FORWARD-LOOKING STATEMENTS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'><FONT style="font-size: 10pt">ELIGIBILITY FOR
    INVESTMENT</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">3
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'><FONT style="font-size: 10pt">DOCUMENTS
    INCORPORATED BY&#160;REFERENCE</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">3
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'><FONT style="font-size: 10pt">WHERE YOU CAN FIND
    ADDITIONAL INFORMATION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">4
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'><FONT style="font-size: 10pt">ENFORCEABILITY OF
    CIVIL LIABILITIES</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">5
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'><FONT style="font-size: 10pt">DOCUMENTS FILED AS
    PART&#160;OF THE REGISTRATION STATEMENT</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">5
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'><FONT style="font-size: 10pt">RISK
    FACTORS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">5
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'><FONT style="font-size: 10pt">ONCOLYTICS BIOTECH
    INC.&#160;</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">11
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'><FONT style="font-size: 10pt">OUR
    BUSINESS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">11
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'><FONT style="font-size: 10pt">RECENT
    DEVELOPMENTS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">12
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'><FONT style="font-size: 10pt">USE OF
    PROCEEDS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">17
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'><FONT style="font-size: 10pt">CAPITALIZATION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">18
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'><FONT style="font-size: 10pt">DETAILS OF THE
    OFFERING</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">18
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'><FONT style="font-size: 10pt">PLAN OF
    DISTRIBUTION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">19
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'><FONT style="font-size: 10pt">CANADIAN FEDERAL
    INCOME TAX CONSIDERATIONS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">21
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'><FONT style="font-size: 10pt">U.S. FEDERAL INCOME
    TAX CONSIDERATIONS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">23
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'><FONT style="font-size: 10pt">LEGAL
    MATTERS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'><FONT style="font-size: 10pt">LEGAL
    PROCEEDINGS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'><FONT style="font-size: 10pt">AUDITORS, TRANSFER
    AGENT AND REGISTRAR</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'><FONT style="font-size: 10pt">STATUTORY RIGHTS OF
    WITHDRAWAL AND RESCISSION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#122'><FONT style="font-size: 10pt">AUDITORS&#146;
    CONSENT</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">33
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#123'><FONT style="font-size: 10pt">CERTIFICATE OF THE
    CORPORATION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">C-1
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#124'><FONT style="font-size: 10pt">CERTIFICATE OF THE
    UNDERWRITER</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">C-2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="o34728exv3w1.htm">Underwriting Agreement Dated February 6, 2007</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="o34728exv5w1.htm">Consent of Ernst & Young LLP dated February 13, 2007</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="o34728exv5w2.htm">Consent of Bennett Jones LLP dated February 13, 2007</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="o34728exv5w3.htm">Consent of Fasken Martineau DuMoulin LLP dated February 13, 2007</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="o34728exv7w1.htm">Warrant Indenture Dated February 12, 2007</A></FONT></TD></TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>
<A name='101'>
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DEFINITIONS
    AND OTHER MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In this prospectus, unless otherwise indicated, references to
    &#147;we&#148;, &#147;us&#148;, &#147;our&#148;,
    &#147;Oncolytics&#148; or the &#147;Corporation&#148; are to
    Oncolytics Biotech Inc. All references to &#147;dollars&#148;,
    &#147;Cdn.$&#148; or &#147;$&#148; are to Canadian dollars and
    all references to &#147;U.S.$&#148; are to United States
    dollars. Unless otherwise indicated, all financial information
    included and incorporated by reference in this prospectus is
    determined using Canadian generally accepted accounting
    principles.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus is part of a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-10</FONT>
    relating to the units that we filed with the
    U.S.&#160;Securities and Exchange Commission (the
    <B>&#147;SEC&#148;</B>). This prospectus does not contain all of
    the information contained in the registration statement, certain
    parts of which are omitted in accordance with the rules and
    regulations of the SEC. You should refer to the registration
    statement and the exhibits to the registration statement for
    further information with respect to us and the units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We prepare our financial statements in accordance with Canadian
    generally accepted accounting principles (<B>&#147;Canadian
    GAAP&#148;</B>), which differ from U.S. generally accepted
    accounting principles (<B>&#147;U.S. GAAP&#148;</B>). Therefore,
    our financial statements incorporated by reference in this
    prospectus and in the documents incorporated by reference in
    this prospectus may not be comparable to financial statements
    prepared in accordance with U.S. GAAP. You should refer to
    Note&#160;20 of our financial statements for the year ended
    December&#160;31, 2005 for a discussion of the principal
    differences between our financial results determined under
    Canadian GAAP and under U.S. GAAP. For our financial statements
    as at September&#160;30, 2006, you should refer to our
    reconciliation of our financial statements as at
    September&#160;30, 2006 and for the three and nine months ended
    September&#160;30, 2006 to U.S. GAAP furnished to the SEC on the
    Company&#146;s Current Report on
    <FONT style="white-space: nowrap">Form&#160;6-K</FONT>
    dated February&#160;5, 2007 and incorporated into this document
    by reference. See &#147;Documents Incorporated by
    Reference&#148;.
</DIV>
<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SPECIAL
    NOTICE REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Some of the statements that we make contain forward-looking
    statements reflecting our current beliefs, plans, estimates and
    expectations. Readers are cautioned that these forward-looking
    statements involve risks and uncertainties, including, without
    limitation, clinical trial study delays, product development
    delays, our ability to attract and retain business partners,
    future levels of government funding, competition from other
    biotechnology companies and our ability to obtain the capital
    required for research, product development, operations and
    marketing. These factors should be carefully considered and
    readers should not place undue reliance on our forward-looking
    statements. Actual events may differ materially from our current
    expectations due to risks and uncertainties.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our statements of &#147;belief&#148;, &#147;estimates&#148;,
    &#147;expectations&#148; and other similar statements are based
    primarily upon our results derived to date from our research and
    development program with animals and early stage human results
    and upon which we believe we have a reasonable scientific basis
    to expect the particular results to occur. It is not possible to
    predict, based upon studies in animals or early stage human
    results, whether a new therapeutic will be proved to be safe and
    effective in humans. There can be no assurance that the
    particular result expected by us will occur. Except as required
    by applicable securities laws, we undertake no obligation to
    update publicly any forward-looking statements for any reason
    after the date of this prospectus or to conform these statements
    to actual results or to changes in our expectations.
</DIV>
<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ELIGIBILITY
    FOR INVESTMENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common shares and common share purchase warrants, as of the
    date hereof, are eligible investments, where applicable, subject
    to compliance with the prudent investment standards and general
    investment provisions and restrictions of the statutes referred
    to below (and, where applicable, regulations or guidelines
    thereunder) and, in certain cases, subject to the satisfaction
    of additional requirements relating to investment or lending
    policies and procedures and, in certain cases, the filing of
    such investment policies and procedures, under the following
    statutes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Insurance Companies Act</I> (Canada)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Pension Benefits Standards Act, 1985</I> (Canada)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Cooperative Credit Associations Act</I> (Canada)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Trust and Loan Companies Act</I> (Canada)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Financial Institutions Act</I> (British Columbia)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Pension Benefits Standards Act</I> (British Columbia)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Alberta Heritage Savings Trust&#160;Fund&#160;Act</I>
    (Alberta)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Employment Pension Plans Act</I> (Alberta)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Insurance Act</I> (Alberta)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Loan and Trust&#160;Corporations Act</I> (Alberta)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The Insurance Act</I> (Manitoba)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The Pension Benefits Act</I> (Manitoba)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The Trustee Act</I> (Manitoba)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Loan and Trust&#160;Corporations Act</I> (Ontario)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Pension Benefits Act</I> (Ontario)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Trustee Act</I> (Ontario)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, in the opinion of Counsel, our common shares
    offered hereby will, at the date hereof, be qualified
    investments under the Tax Act and the regulations thereunder as
    in effect on the date hereof for trusts governed by Exempt
    Plans. In the opinion of Counsel, provided that we deal at
    arm&#146;s length (within the meaning of the Tax Act) with each
    person who is an annuitant, a beneficiary, an employer or a
    subscriber under, or in relation to, an Exempt Plan, as the case
    may be, our common share purchase warrants offered hereby will,
    at the date hereof, be qualified investments under the Tax Act
    and the regulations thereunder as in effect on the date hereof
    for Exempt Plans.
</DIV>
<A name='104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DOCUMENTS
    INCORPORATED BY REFERENCE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Information has been incorporated by reference in this short
    form prospectus from documents filed with securities commissions
    or similar authorities in Canada</B>. Copies of the documents
    incorporated herein by reference may be obtained on request
    without charge from our Corporate Secretary at Suite&#160;210,
    1167 Kensington Crescent N.W., Calgary, Alberta T2N 1X7,
    telephone
    <FONT style="white-space: nowrap">(403)&#160;670-7377.</FONT>
    In addition, copies of documents incorporated by reference may
    be obtained from the securities commissions or similar
    authorities in Canada through the SEDAR website at www.sedar.com.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have filed the following documents with the securities
    commissions or similar regulatory authorities in the provinces
    of Canada and such documents are specifically incorporated by
    reference in this prospectus:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our Renewal Annual Information Form dated March&#160;2, 2006,
    for the year ended December&#160;31, 2005 (the
    <B>&#147;AIF&#148;</B>);
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our Management Proxy Circular dated March&#160;24, 2006 relating
    to the annual and special meeting of shareholders held on
    April&#160;26, 2006;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our audited financial statements, together with the accompanying
    notes to the financial statements, for the fiscal years ended
    December&#160;31, 2005 and 2004 and the auditors&#146; report
    thereon addressed to our shareholders;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our management&#146;s discussion and analysis of financial
    condition and results of operations dated March&#160;2, 2006,
    for the year ended December&#160;31, 2005;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our unaudited interim financial statements as at
    September&#160;30, 2006 and for the three and nine months ended
    September&#160;30, 2006, together with the notes thereto;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our management&#146;s discussion and analysis of financial
    condition and results of operations dated November&#160;2, 2006,
    for the three and nine months ended September&#160;30, 2006;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the reconciliation of our financial statements as at
    September&#160;30, 2006 and for the three and nine months ended
    September&#160;30, 2006 to U.S.&#160;GAAP, filed on
    February&#160;5, 2007 under the heading
    &#147;Other&#148;;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our material change report dated February&#160;12, 2007 with
    respect to this&#160;offering.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any documents of the type required by National Instrument
    44-101&#160;&#151; <I>Short Form&#160;Prospectus
    Distributions</I> of the Canadian Securities Administrators to
    be incorporated by reference in a short form prospectus,
    including any annual information form, comparative annual
    financial statements and the auditors&#146; report thereon,
    comparative interim financial statements, management&#146;s
    discussion and analysis of financial condition and results of
    operations, material change report (except a confidential
    material change report), business acquisition report and
    information circular, if filed by us with the securities
    commissions or similar authorities in the provinces of Canada
    after the date of this prospectus and before the termination of
    the distribution, shall be deemed to be incorporated by
    reference in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we incorporate by reference our reconciliation of
    our financial statements as at September&#160;30, 2006 and for
    the three and nine months ended September&#160;30, 2006 to U.S.
    GAAP furnished to the SEC on our Current Report on
    <FONT style="white-space: nowrap">Form&#160;6-K</FONT>
    dated February&#160;5, 2007. Any report filed by us with the SEC
    pursuant to section 13(a), 13(c), 14 or 15(d) of the United
    States Securities Exchange Act of 1934 after the date of this
    prospectus until the termination of this distribution shall be
    deemed to be incorporated by reference into the registration
    statement of which this prospectus forms a part, if and to the
    extent expressly provided in such report.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Any statement contained in this prospectus or in a document
    incorporated or deemed to be incorporated by reference herein
    will be deemed to be modified or superseded for purposes of this
    prospectus to the extent that a statement contained in this
    prospectus or in any other subsequently filed document which
    also is, or is deemed to be, incorporated by reference into this
    prospectus modifies or supersedes that statement. The modifying
    or superseding statement need not state that it has modified or
    superseded a prior statement or include any other information
    set forth in the document that it modifies or supersedes. The
    making of a modifying or superseding statement shall not be
    deemed an admission for any purposes that the modified or
    superseded statement when made, constituted a misrepresentation,
    an untrue statement of a material fact or an omission to state a
    material fact that is required to be stated or that is necessary
    to make a statement not misleading in light of the circumstances
    in which it was made. Any statement so modified or superseded
    shall not be deemed, except as so modified or superseded, to
    constitute part of this prospectus.</B>
</DIV>
<A name='105'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND ADDITIONAL INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have filed with the SEC a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-10</FONT>
    relating to the units. This prospectus, which constitutes a part
    of the registration statement, does not contain all of the
    information contained in the registration statement, certain
    items of which are contained in the exhibits to the registration
    statement as permitted by the rules and regulations of the SEC.
    Statements included or incorporated by reference in this
    prospectus about the contents of any contract, agreement or
    other documents referred to are not necessarily complete, and in
    each instance, you should refer to the exhibits for a more
    complete description of the matter involved. Each such statement
    is qualified in its entirety by such reference.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We file annual and quarterly financial information and material
    change reports and other material with the SEC and with the
    securities commissions or similar regulatory authorities in
    Canada. Under a multi-jurisdictional disclosure system adopted
    by the United States, documents and other information that we
    file with the SEC may be prepared in accordance with the
    disclosure requirements of Canada, which are different from
    those of the United States. You may read and copy any document
    that we have filed with the SEC at the SEC&#146;s public
    reference rooms in Washington, D.C. and Chicago, Illinois. You
    may also obtain copies of those documents from the public
    reference room of the SEC at 100&#160;F&#160;Street, N.E.,
    Washington, D.C. 20549 by paying a fee. You should call the SEC
    at
    <FONT style="white-space: nowrap">1-800-SEC-0330</FONT>
    or access its website at www.sec.gov for further information
    about the public reference rooms. You may read and download some
    of the documents we have filed with the SEC&#146;s Electronic
    Data Gathering and Retrieval system at www.sec.gov. You may read
    and download any public document that we have filed with the
    securities commissions or similar regulatory authorities in
    Canada at www.sedar.com.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->
<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ENFORCEABILITY
    OF CIVIL LIABILITIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a corporation existing under the <I>Business Corporations
    Act</I> (Alberta). All of our directors, the majority of our
    officers, and some of the experts named in this prospectus, are
    residents of Canada or otherwise reside outside the United
    States, and all, or a substantial portion of their assets and a
    substantial portion of our assets, are located outside the
    United States. We have appointed an agent for service of process
    in the United States, but it may be difficult for holders of
    units who reside in the United States to effect service within
    the United States upon those directors, officers and experts who
    are not residents of the United States. It may also be difficult
    for holders of units who reside in the United States to realize
    in the United States upon judgments of courts of the United
    States predicated upon our civil liability and the civil
    liability of our directors, officers and experts under the
    United States federal securities laws. We have been advised by
    our Canadian counsel, Bennett Jones LLP, that a judgment of a
    United States court predicated solely upon civil liability under
    United States federal securities laws would probably be
    enforceable in Canada if the United States court in which the
    judgment was obtained has a basis for jurisdiction in the matter
    that would be recognized by a Canadian court for the same
    purposes. We have also been advised by Bennett Jones LLP,
    however, that there is substantial doubt whether an action could
    be brought in Canada in the first instance on the basis of
    liability predicated solely upon United States federal
    securities laws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We filed with the SEC, concurrently with our registration
    statement on
    <FONT style="white-space: nowrap">Form&#160;F-10,</FONT>
    an appointment of agent for service of process on
    <FONT style="white-space: nowrap">Form&#160;F-X.</FONT>
    Under the
    <FONT style="white-space: nowrap">Form&#160;F-X,</FONT>
    we appointed DL Services, Inc. at 1420, Fifth Avenue,
    Suite&#160;3400, Seattle, Washington 98101 as our agent for
    service of process in the United States in connection with any
    investigation or administrative proceeding conducted by the SEC,
    and any civil suit or action brought against or involving us in
    a United States court arising out of, related to, or concerning
    the offering of the units under this prospectus.
</DIV>
<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DOCUMENTS
    FILED AS PART&#160;OF THE REGISTRATION STATEMENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following documents have been or will be filed with the SEC
    as part of the registration statement of which this prospectus
    forms a part: (i)&#160;the documents referred to under the
    heading &#147;Documents Incorporated by Reference&#148;;
    (ii)&#160;the Underwriting Agreement (as defined below);
    (iii)&#160;the Warrant Indenture (as defined below);
    (iv)&#160;consent of Ernst&#160;&#38; Young LLP;
    (v)&#160;consent of Bennett Jones LLP; (vi)&#160;consent of
    Fasken Martineau DuMoulin LLP; and (vii)&#160;powers of attorney
    from our directors and officers.
</DIV>
<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>A prospective purchaser of our units should carefully
    consider the list of risk factors set forth below as well as the
    other information contained in and incorporated by reference in
    this prospectus before purchasing our units.</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">All of
    our potential products, including
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
    are in the research and development stage and will require
    further development and testing before they can be marketed
    commercially.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prospects for companies in the biotechnology industry generally
    may be regarded as uncertain given the nature of the industry
    and, accordingly, investments in biotechnology companies should
    be regarded as speculative. We are currently in the research and
    development stage on one product,
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
    for human application, the riskiest stage for a company in the
    biotechnology industry. It is not possible to predict, based
    upon studies in animals and early stage human clinical trials
    whether
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    will prove to be safe and effective in humans.
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    will require additional research and development, including
    extensive additional clinical testing, before we will be able to
    obtain the approvals of the relevant regulatory authorities in
    applicable countries to market
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    commercially. There can be no assurance that the research and
    development programs we conducted will result in
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    or any other products becoming commercially viable products, and
    in the event that any product or products result from the
    research and development program, it is unlikely they will be
    commercially available for a number of years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To achieve profitable operations we, alone or with others, must
    successfully develop, introduce and market our products. To
    obtain regulatory approvals for products being developed for
    human use, and to achieve commercial success, human clinical
    trials must demonstrate that the product is safe for human use
    and that the product shows efficacy. Unsatisfactory results
    obtained from a particular study relating to a program may cause
    us to abandon our commitment to that program or the product
    being tested. No assurances can be provided that any current or
    future animal or human test, if undertaken, will yield
    favourable results. If we are unable to establish that
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    is a safe, effective treatment for cancer, we may be required to
    abandon further development of the product and develop a new
    business strategy.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">There are
    inherent risks in pharmaceutical research and
    development.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pharmaceutical research and development is highly speculative
    and involves a high and significant degree of risk. The
    marketability of any product we develop will be affected by
    numerous factors beyond our control, including but not limited
    to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the discovery of unexpected toxicities or lack of sufficient
    efficacy of products which make them unattractive or unsuitable
    for human use;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    preliminary results as seen in animal and/or limited human
    testing may not be substantiated in larger, controlled clinical
    trials;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    manufacturing costs or other production factors may make
    manufacturing of products ineffective, impractical and
    non-competitive;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    proprietary rights of third parties or competing products or
    technologies may preclude commercialization;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    requisite regulatory approvals for the commercial distribution
    of products may not be obtained; and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other factors may become apparent during the course of research,
    up-scaling or manufacturing which may result in the
    discontinuation of research and other critical projects.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our products under development have never been manufactured on a
    commercial scale, and there can be no assurance that such
    products can be manufactured at a cost or in a quantity to
    render such products commercially viable. Production and
    utilization of our products may require the development of new
    manufacturing technologies and expertise. The impact on our
    business in the event that new manufacturing technologies and
    expertise are required to be developed is uncertain. There can
    be no assurance that we will successfully meet any of these
    technological challenges, or others that may arise in the course
    of development.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Pharmaceutical
    products are subject to intense regulatory approval
    processes.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The regulatory process for pharmaceuticals, which includes
    preclinical studies and clinical trials of each compound to
    establish its safety and efficacy, takes many years and requires
    the expenditure of substantial resources. Moreover, if
    regulatory approval of a drug is granted, such approval may
    entail limitations on the indicated uses for which it may be
    marketed. Failure to comply with applicable regulatory
    requirements can, among other things, result in suspension of
    regulatory approvals, product recalls, seizure of products,
    operating restrictions and criminal prosecution. Further,
    government policy may change, and additional government
    regulations may be established that could prevent or delay
    regulatory approvals for our products. In addition, a marketed
    drug and its manufacturer are subject to continual review. Later
    discovery of previously unknown problems with the product or
    manufacturer may result in restrictions on such product or
    manufacturer, including withdrawal of the product from the
    market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The U.S. Food and Drug Administration (the
    <B>&#147;FDA&#148;</B>) in the United States and similar
    regulatory authorities in other countries may deny approval of a
    new drug application if required regulatory criteria are not
    satisfied, or may require additional testing. Product approvals
    may be withdrawn if compliance with regulatory standards is not
    maintained or if problems occur after the product reaches the
    market. The FDA and similar regulatory authorities in other
    countries may require further testing and surveillance programs
    to monitor the pharmaceutical product that has been
    commercialized. Non-compliance with applicable requirements can
    result in fines and other judicially imposed sanctions,
    including product withdrawals, product seizures, injunction
    actions and criminal prosecutions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to our own pharmaceuticals, we may supply active
    pharmaceutical ingredients and advanced pharmaceutical
    intermediates for use in our customers&#146; drug products. The
    final drug products in which the pharmaceutical ingredients and
    advanced pharmaceutical intermediates are used, however, are
    subject to regulation for safety and efficacy by the FDA and
    other jurisdictions, as the case may be. Such products must be
    approved by such agencies before they can be commercially
    marketed. The process of obtaining regulatory clearance for
    marketing is uncertain, costly and time consuming. We cannot
    predict how long the necessary regulatory approvals will take or
    whether our customers will ever obtain such approval for their
    products. To the extent that our customers do not obtain the
    necessary regulatory approvals for marketing new products, our
    product sales could be adversely affected.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The FDA and other governmental regulators have increased
    requirements for drug purity and have increased environmental
    burdens upon the pharmaceutical industry. Because pharmaceutical
    drug manufacturing is a highly
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    regulated industry, requiring significant documentation and
    validation of manufacturing processes and quality control
    assurance prior to approval of the facility to manufacture a
    specific drug, there can be considerable transition time between
    the initiation of a contract to manufacture a product and the
    actual initiation of manufacture of that product. Any lag time
    in the initiation of a contract to manufacture product and the
    actual initiation of manufacture could cause us to lose profits
    or incur liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The pharmaceutical regulatory regime in Europe and other
    countries is, by and large, generally similar to that of the
    United States. We could face similar risks in these other
    jurisdictions, as the risks described above.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    operations and products may be subject to other government
    manufacturing and testing regulations.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Securing regulatory approval for the marketing of therapeutics
    by the FDA in the United States and similar regulatory agencies
    in other countries is a long and expensive process, which can
    delay or prevent product development and marketing. Approval to
    market products may be for limited applications or may not be
    received at all.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The products we anticipate manufacturing will have to comply
    with the FDA&#146;s current Good Manufacturing Practices
    (<B>&#147;cGMP&#148;</B>) and other FDA, and local government
    guidelines and regulations, including other international
    regulatory requirements and guidelines. Additionally, certain of
    our customers may require the manufacturing facilities
    contracted by us to adhere to additional manufacturing
    standards, even if not required by the FDA. Compliance with cGMP
    regulations requires manufacturers to expend time, money and
    effort in production, and to maintain precise records and
    quality control to ensure that the product meets applicable
    specifications and other requirements. The FDA and other
    regulatory bodies periodically inspect drug-manufacturing
    facilities to ensure compliance with applicable cGMP
    requirements. If the manufacturing facilities contracted by us
    fail to comply with the cGMP requirements, the facilities may
    become subject to possible FDA or other regulatory action and
    manufacturing at the facility could consequently be suspended.
    We may not be able to contract suitable alternative or back-up
    manufacturing facilities on terms acceptable to us or at all.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The FDA or other regulatory agencies may also require the
    submission of any lot of a particular product for inspection. If
    the lot product fails to meet the FDA requirements, then the FDA
    could take any of the following actions: (i)&#160;restrict the
    release of the product; (ii)&#160;suspend manufacturing of the
    specific lot of the product; (iii)&#160;order a recall of the
    lot of the product; or (iv)&#160;order a seizure of the lot of
    the product.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are subject to regulation by governments in many
    jurisdictions and, if we do not comply with healthcare, drug,
    manufacturing and environmental regulations, among others, our
    existing and future operations may be curtailed, and we could be
    subject to liability.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the regulatory approval process, we may be
    subject to regulations under local, provincial, state, federal
    and foreign law, including requirements regarding occupational
    health, safety, laboratory practices, environmental protection
    and hazardous substance control, and may be subject to other
    present and future local, provincial, state, federal and foreign
    regulations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    biotechnology industry is extremely competitive and we must
    successfully compete with larger companies with substantially
    greater resources.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Technological competition in the pharmaceutical industry is
    intense and we expect competition to increase. Other companies
    are conducting research on therapeutics involving the Ras
    pathway as well as other novel treatments or therapeutics for
    the treatment of cancer which may compete with our product. Many
    of these competitors are more established, benefit from greater
    name recognition and have substantially greater financial,
    technical and marketing resources than us. In addition, many of
    these competitors have significantly greater experience in
    undertaking research, preclinical studies and human clinical
    trials of new pharmaceutical products, obtaining regulatory
    approvals and manufacturing and marketing such products. In
    addition, there are several other companies and products with
    which we may compete from time to time, and which may have
    significantly better and larger resources than us. Accordingly,
    our competitors may succeed in manufacturing and/or
    commercializing products more rapidly or effectively, which
    could have a material adverse effect on our business, financial
    condition or results of operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We anticipate that we will face increased competition in the
    future as new products enter the market and advanced
    technologies become available. There can be no assurance that
    existing products or new products developed by our competitors
    will not be more effective, or be more effectively manufactured,
    marketed and sold, than any that may be
</DIV>

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    <BR>
    7
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    developed or sold by us. Competitive products may render our
    products obsolete and uncompetitive prior to recovering
    research, development or commercialization expenses incurred
    with respect to any such products.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We rely
    on patents and proprietary rights to protect our
    technology.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our success will depend, in part, on our ability to obtain
    patents, maintain trade secret protection and operate without
    infringing the rights of third parties. We have patents in the
    United States, Canada and Europe and have filed applications for
    patents in the United States and under the PCT, allowing us to
    file in other jurisdictions. See &#147;Narrative Description
    &#151; Patent and Patent Application Summary&#148; in the AIF
    and &#147;Recent Developments &#151; New Patents&#148; in this
    prospectus. Our success will depend, in part, on our ability to
    obtain, enforce and maintain patent protection for our
    technology in Canada, the United States and other countries. We
    cannot be assured that patents will issue from any pending
    applications or that claims now or in the future, if any,
    allowed under issued patents will be sufficiently broad to
    protect our technology. In addition, no assurance can be given
    that any patents issued to or licensed by us will not be
    challenged, invalidated, infringed or circumvented, or that the
    rights granted thereunder will provide continuing competitive
    advantages to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The patent positions of pharmaceutical and biotechnology firms,
    including us, are generally uncertain and involve complex legal
    and factual questions. In addition, it is not known whether any
    of our current research endeavours will result in the issuance
    of patents in Canada, the United States, or elsewhere, or if any
    patents already issued will provide significant proprietary
    protection or will be circumvented or invalidated. Since patent
    applications in the United States and Canada may be maintained
    in secrecy until at least 18&#160;months after filing of the
    original priority application, and since publication of
    discoveries in the scientific or patent literature tends to lag
    behind actual discoveries by several months, we cannot be
    certain that we or any licensor were the first to create
    inventions claimed by pending patent applications or that we or
    the licensor was the first to file patent applications for such
    inventions. Loss of patent protection could lead to generic
    competition for these products, and others in the future, which
    would materially and adversely affect our financial prospects
    for these products.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Similarly, since patent applications filed before
    November&#160;29, 2000 in the United States may be maintained in
    secrecy until the patents issue or foreign counterparts, if any,
    publish, we cannot be certain that we or any licensor were the
    first creator of inventions covered by pending patent
    applications or that we or such licensor were the first to file
    patent applications for such inventions. There is no assurance
    that our patents, if issued, would be held valid or enforceable
    by a court or that a competitor&#146;s technology or product
    would be found to infringe such patents.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Accordingly, we may not be able to obtain and enforce effective
    patents to protect our proprietary rights from use by
    competitors, and the patents of other parties could require us
    to stop using or pay to use certain intellectual property, and
    as such, our competitive position and profitability could suffer
    as a result.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we may be required to obtain licenses under patents
    or other proprietary rights of third parties. No assurance can
    be given that any licenses required under such patents or
    proprietary rights will be available on terms acceptable to us.
    If we do not obtain such licenses, we could encounter delays in
    introducing one or more of our products to the market while we
    attempt to design around such patents, or could find that the
    development, manufacture or sale of products requiring such
    licenses could be foreclosed. In addition, we could incur
    substantial costs in defending ourselves in suits brought
    against us on such patents or in suits in which our attempts to
    enforce our own patents against other parties.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    products may fail or cause harm, subjecting us to product
    liability claims, which are uninsured.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The sale and use of our products entail risk of product
    liability. We currently do not have any product liability
    insurance. There can be no assurance that we will be able to
    obtain appropriate levels of product liability insurance prior
    to any sale of our pharmaceutical products. An inability to
    obtain insurance on economically feasible terms or to otherwise
    protect against potential product liability claims could inhibit
    or prevent the commercialization of products developed by us.
    The obligation to pay any product liability claim or a recall of
    a product could have a material adverse effect on our business,
    financial condition and future prospects.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We have
    limited manufacturing experience and intend to rely on third
    parties to commercially manufacture our products, if and when
    developed.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To date, we have relied upon a contract manufacturer to
    manufacture small quantities of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    The manufacturer may encounter difficulties in scaling up
    production, including production yields, quality control and
    quality
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    assurance. Only a limited number of manufacturers can supply
    therapeutic viruses and failure by the manufacturer to deliver
    the required quantities of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    on a timely basis at a commercially reasonable price may have a
    material adverse effect on us. We have completed a program for
    the development of a commercial process for manufacturing
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    and have filed a number of patent applications related to the
    process. There can be no assurance that we will successfully
    obtain sufficient patent protection related to our manufacturing
    process.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">New
    products may not be accepted by the medical community or
    consumers.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our primary activity to date has been research and development
    and we have no experience in marketing or commercializing
    products. We will likely rely on third parties to market our
    products, assuming that they receive regulatory approvals. If we
    rely on third parties to market our products, the commercial
    success of such product may be outside of our control. Moreover,
    there can be no assurance that physicians, patients or the
    medical community will accept our product even if it proves to
    be safe and effective and is approved for marketing by Health
    Canada, the FDA and other regulatory authorities. A failure to
    successfully market our product would have a material adverse
    effect on our revenue.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    technologies may become obsolete.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The pharmaceutical industry is characterized by rapidly changing
    markets, technology, emerging industry standards and frequent
    introduction of new products. The introduction of new products
    embodying new technologies, including new manufacturing
    processes, and the emergence of new industry standards may
    render our products obsolete, less competitive or less
    marketable. The process of developing our products is extremely
    complex and requires significant continuing development efforts
    and third party commitments. Our failure to develop new
    technologies and products and the obsolescence of existing
    technologies could adversely affect our business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may be unable to anticipate changes in our potential customer
    requirements that could make our existing technology obsolete.
    Our success will depend, in part, on our ability to continue to
    enhance our existing technologies, develop new technology that
    addresses the increasing sophistication and varied needs of the
    market, and respond to technological advances and emerging
    industry standards and practices on a timely and cost-effective
    basis. The development of our proprietary technology entails
    significant technical and business risks. We may not be
    successful in using our new technologies or exploiting our niche
    markets effectively or adapting our businesses to evolving
    customer or medical requirements or preferences or emerging
    industry standards.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We are
    highly dependent on third party relationships for research and
    clinical trials.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We rely upon third party relationships for assistance in the
    conduct of research efforts, pre-clinical development and
    clinical trials, and manufacturing. In addition, we expect to
    rely on third parties to seek regulatory approvals for and to
    market our product. Although we believe that our collaborative
    partners will have an economic motivation to commercialize our
    product included in any collaborative agreement, the amount and
    timing of resources diverted to these activities generally is
    expected to be controlled by the third party. Furthermore, if we
    cannot maintain these relationships, our business may suffer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We have
    no operating revenues and a history of losses.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To date, we have not generated operating revenues to offset our
    research and development costs and accordingly have not
    generated positive cash flow or made an operating profit. As of
    December&#160;31, 2005, we had an accumulated deficit of
    approximately $50.7&#160;million and as at September&#160;30,
    2006, we had an accumulated deficit of approximately
    $60.1&#160;million. We have incurred net losses of approximately
    $12.8&#160;million, $13.0&#160;million, and $8.5&#160;million
    for the years ended December&#160;31, 2005, 2004, and 2003,
    respectively. For the nine months ended September&#160;30, 2006,
    we incurred a net loss of approximately $9.4&#160;million. We
    anticipate that we will continue to incur significant losses
    during 2007 and in the foreseeable future. We will not reach
    profitability until after successful commercialization of one or
    more of our products. Even if one or more of our products are
    profitably commercialized, the initial losses incurred by us may
    never be recovered.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We may
    need additional financing in the future to fund the research and
    development of our products and to meet our ongoing capital
    requirements.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As at December&#160;31, 2005, we had cash and cash equivalents
    (including short-term investments) of $40.4&#160;million and
    working capital of approximately $39.3&#160;million. As at
    September&#160;30, 2006, we had cash and cash equivalents
    (including
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    short-term investments) of $31.5&#160;million and working
    capital of approximately $30.4&#160;million. We believe our
    existing capital resources are adequate to fund our current
    plans for research and development activities well into 2008
    without the use of the proceeds from this offering. We
    anticipate that we may need additional financing in the future
    to fund research and development and to meet our ongoing capital
    requirements. The amount of future capital requirements will
    depend on many factors, including continued scientific progress
    in our drug discovery and development programs, progress in our
    pre-clinical and clinical evaluation of drug candidates, time
    and expense associated with filing, prosecuting and enforcing
    our patent claims and costs associated with obtaining regulatory
    approvals. In order to meet such capital requirements, we will
    consider contract fees, collaborative research and development
    arrangements, and additional public or private financings
    (including the incurrence of debt and the issuance of additional
    equity securities) to fund all or a part of particular programs
    as well as potential partnering or licensing opportunities.
    There can be no assurance that additional funding will be
    available or, if available, that it will be available on
    commercially acceptable terms. If adequate funds are not
    available on terms favorable to us, we may have to reduce
    substantially or eliminate expenditures for research and
    development, testing, production and marketing of our proposed
    product, or obtain funds through arrangements with corporate
    partners that require us to relinquish rights to certain of our
    technologies or product. There can be no assurance that we will
    be able to raise additional capital if our current capital
    resources are exhausted.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The cost
    of director and officer liability insurance may increase
    substantially and may affect our ability to retain quality
    directors and officers.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We carry liability insurance on behalf of our directors and
    officers. Given a number of large director and officer liability
    insurance claims in the U.S. equity markets, director and
    officer liability insurance has become increasingly more
    expensive with increased restrictions. Consequently, there is no
    assurance that we will continue to be offered this insurance or
    be able to obtain adequate coverage. The inability to acquire
    the appropriate insurance coverage will limit our ability to
    attract and maintain directors and officers as required to
    conduct our business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We are
    dependent on our key employees and collaborators.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our ability to develop the product will depend, to a great
    extent, on our ability to attract and retain highly qualified
    scientific personnel and to develop and maintain relationships
    with leading research institutions. Competition for such
    personnel and relationships is intense. We are highly dependent
    on the principal members of our management staff as well as our
    advisors and collaborators, the loss of whose services might
    impede the achievement of development objectives. The persons
    working with us are affected by a number of influences outside
    of our control. The loss of key employees   and/or key
    collaborators may affect the speed and success of product
    development.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We presently carry key man insurance in the amounts of
    $1,500,000, $1,000,000 and $500,000 for Dr.&#160;Thompson,
    Dr.&#160;Coffey and Mr.&#160;Ball, respectively.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our share
    price may be highly volatile.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Market prices for securities of biotechnology companies
    generally are volatile. This increases the risk of securities
    litigation. Factors such as announcements (publicly made or at
    scientific conferences) of technological innovations, new
    commercial products, patents, the development of proprietary
    rights, results of clinical trials, regulatory actions,
    publications, quarterly financial results, our financial
    position, public concern over the safety of biotechnology,
    future sales of shares by us or our current shareholders and
    other factors could have a significant effect on the market
    price and volatility of the common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We incur
    some of our expenses in foreign currencies and therefore we are
    exposed to foreign currency exchange rate
    fluctuations.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We incur some of our manufacturing, clinical and consulting
    expenses in foreign currencies (to date mainly in the U.S. and
    the UK). Over the past year the Canadian dollar has appreciated
    to these currencies thereby decreasing the Canadian dollar
    equivalent. However, if this trend reverses, our Canadian dollar
    equivalent costs will increase.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Also, as we expand to other foreign jurisdictions there may be
    an increase in our foreign exchange exposure.
</DIV>

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    <BR>
    10
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We earn
    interest income on our excess cash reserves and are exposed to
    changes in interest rates.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We invest our excess cash reserves in investment vehicles that
    provide a rate of return with little risk to principal. As
    interest rates change the amount of interest income we earn will
    be directly impacted.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">We
    believe we are a passive foreign investment company, which may
    have a material affect on U.S. holders.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe we are a &#147;passive foreign investment
    company&#148; (<B>&#147;PFIC&#148;</B>), which may have a
    material affect on U.S.&#160;holders. United States income tax
    legislation contains rules governing PFICs, which can have
    significant tax effects on U.S. holders of foreign corporations.
    A U.S. holder who holds stock in a foreign corporation during
    any year in which such corporation qualifies as a PFIC is
    subject to United States federal income taxation under one of
    two alternative tax regimes at the election of each such U.S.
    holder. The U.S. federal income tax consequences to a U.S.
    holder of the acquisition, ownership, and disposition of common
    shares will depend on whether such U.S. holder makes an election
    to treat the Corporation as a &#147;qualified electing
    fund&#148; or &#147;QEF&#148; under Section&#160;1295 of the
    Code (a <B>&#147;QEF Election&#148;</B>) or a
    <FONT style="white-space: nowrap">mark-to-market</FONT>
    election under Section&#160;1296 of the Code (a
    <B><FONT style="white-space: nowrap">&#147;Mark-to-Market</FONT>
    Election&#148;</B>). You should consult your tax advisor as to
    the consequences of acquiring, owning or disposing of our common
    shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">There is
    no market for the common share purchase warrants offered under
    this prospectus.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There is no market through which the common share purchase
    warrants may be sold and purchasers may not be able to resell
    the common share purchase warrants purchased under this short
    form prospectus. This may affect the pricing of the common share
    purchase warrants in the secondary market, the transparency and
    availability of trading prices, the liquidity of such warrants,
    and the extent of issuer regulation.
</DIV>
<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ONCOLYTICS
    BIOTECH INC.</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Oncolytics Biotech Inc. was incorporated pursuant to the
    provisions of the <I>Business Corporations Act</I> (Alberta) on
    April&#160;2, 1998 as 779738 Alberta Ltd. On April&#160;8, 1998,
    we amended our articles and changed our name to Oncolytics
    Biotech Inc. On July&#160;29, 1999, we amended our articles by
    removing the private company restrictions and subdividing our
    issued and outstanding 2,222,222 common shares to create
    6,750,000 common shares. On February&#160;9, 2007, we further
    amended our articles to permit for our shareholder meetings to
    be held at any place in Alberta or at any other location as
    determined by our directors. Our head office and principal place
    of business is located at 210, 1167&#160;Kensington
    Crescent&#160;N.W., Calgary, Alberta T2N 1X7. Our registered
    office is located at 4500&#160;Bankers Hall East,
    855&#160;&#150;&#160;2nd Street S.W., Calgary, Alberta
    T2P&#160;4K7.
</DIV>
<A name='110'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OUR
    BUSINESS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We focus on the discovery and development of oncolytic viruses
    for the treatment of cancers that have not been successfully
    treated with conventional therapeutics. Recent scientific
    advances in oncology, virology, and molecular biology have
    created opportunities for new approaches to the treatment of
    cancer. The product we are presently developing may represent a
    novel treatment for Ras mediated cancers which can be used as an
    alternative to existing cytotoxic or cytostatic therapies, as an
    adjuvant therapy to conventional chemotherapy, radiation
    therapy, or surgical resections. It could also potentially be
    used to treat certain cellular proliferative disorders for which
    no current therapy exists.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our technologies are based primarily on discoveries in the
    Department of Microbiology and Infectious Diseases at the
    University of Calgary in the 1990&#146;s. Oncolytics was formed
    in 1998 to explore the natural oncolytic capability of the
    reovirus, a virus that preferentially replicates in cells with
    an activated Ras pathway.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The lead product being developed by us may represent a novel
    treatment for certain tumour types and some cellular
    proliferative disorders. Our lead product is a virus that is
    able to replicate specifically in, and hence kill, certain
    tumour cells both in tissue culture as well as in a number of
    animal models without damaging normal cells.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our potential product for human use,
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
    is developed from the reovirus. This virus has been demonstrated
    to replicate specifically in tumour cells bearing an activated
    Ras pathway. Activating mutations of Ras occur in approximately
    thirty per cent of all human tumours directly, but considering
    its central role in signal transduction, activation of the Ras
    pathway may play a role in approximately two-thirds of all
    tumours.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The functionality of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    is based upon the finding that tumours bearing an activated Ras
    pathway are deficient in their ability to activate the
    anti-viral response mediated by the host cellular protein,
    Protein Kinase R (<B>&#147;PKR&#148;</B>). Since PKR is
    responsible for preventing reovirus replication, tumour cells
    lacking the activity of PKR are susceptible to reovirus
    infections. As normal cells do not possess Ras activations,
    these cells are able to thwart reovirus infections by the
    activity of PKR. In a tumour cell with an activated Ras pathway,
    reovirus is able to freely replicate and hence kill the host
    tumour cell. The result of this replication is progeny viruses
    that are then free to infect surrounding cancer cells. This
    cycle of infection, replication and cell death is believed to be
    repeated until there are no longer any tumour cells carrying an
    activated Ras pathway available.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following schematic illustrates the molecular basis of how
    the reovirus kills cancer cells.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="o34728o3472801.gif" alt="(DIAGRAM)" >
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For both non-cancer cells, and cancer cells with an activated
    Ras pathway, virus binding, entry, and production of viral genes
    all proceed normally. In the case of normal cells however, the
    viral genes cause the activation of the anti-viral response that
    is mediated by the host cell&#146;s PKR, thus blocking the
    replication of the reovirus. In cells with an activated Ras
    pathway, the activation of PKR is prevented or reversed by an
    element of the Ras signal transduction pathway, thereby allowing
    the replication of the reovirus in these cancer cells. The end
    result of this replication is the death of the cancer cell. The
    action of the Ras pathway in allowing reovirus replication to
    ensue can be mimicked in non-cancerous cells by treating these
    cells with the chemical
    <FONT style="white-space: nowrap">2-aminopurine</FONT>
    <FONT style="white-space: nowrap">(2-AP)</FONT> which
    prevents the activation of PKR.
</DIV>
<A name='111'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RECENT
    DEVELOPMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    Development</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We continue to develop our lead product
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    as a possible cancer therapy. Our goal each year is to advance
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    through the various steps and stages of development required for
    potential pharmaceutical products. In order to achieve this
    goal, we actively manage the development of our clinical trial
    program, our pre-clinical and collaborative programs, our
    manufacturing process,
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    supply, and our intellectual property.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Clinical
    Trial Program</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are directing a broad clinical trial program with the
    objective of developing
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    as a human cancer therapeutic. The clinical program includes
    human trials using
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    alone and in combination with radiation and chemotherapy, and
    delivered via local administration and/or intravenous
    administration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on indications of activity in our clinical trial program
    to date, Oncolytics&#146; Phase II clinical trial program may
    include combination
    chemotherapy/REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    trials including colorectal, prostate, pancreatic and non-small
    cell lung
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    cancer, and combination radiation/
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    trials in a number of tumour types. In addition, the U.S.
    National Cancer Institute (<B>&#147;NCI&#148;</B>) has solicited
    proposals to conduct two trials using
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    as a monotherapy for melanoma and ovarian cancers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Clinical
    Trial Chart</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following chart shows the states of clinical trials that
    have been completed or that are in progress.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="26%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="22%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="22%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="22%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <B>Trial Program and Cancer<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Delivery Method</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Indication</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Location</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Status</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Intravenous administration in
    combination with gemcitabine
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">pancreatic, lung, ovarian
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Approval to commence
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Intravenous administration in
    combination with docetaxel
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">bladder, prostate, lung, upper
    gastro-intestinal
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Approval to commence
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Intravenous administration in
    combination with paclitaxel and carboplatin
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">melanoma, lung, ovarian
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Approval to commence
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Local therapy in combination with
    radiation
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase II various metastatic
    tumours, including head &#38; neck
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Ongoing
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Local therapy in combination with
    radiation
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I various metastatic tumours
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase Ia complete<BR>
    Phase Ib ongoing
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Infusion monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I/II recurrent malignant
    gliomas
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United States
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Ongoing
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Intravenous administration
    monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I various metastatic tumours
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United Kingdom
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Complete
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Intravenous administration
    monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I various metastatic tumours
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">United States
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Complete
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Local monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I recurrent malignant gliomas
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Canada
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Complete
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Local monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">T2 prostate cancer
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Canada
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Complete
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Local monotherapy
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 10pt">Phase I trial for various
    subcutaneous tumours
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Canada
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 10pt">Complete
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Combination Gemcitabine and
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In January 2007, we received approval from the U.K. Medicines
    and Healthcare products Regulatory Agency (the
    <B>&#147;MHRA&#148;</B>) to begin a clinical trial using
    intravenous administration of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with gemcitabine
    (Gemzar<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>)
    in patients with advanced cancers including pancreatic, lung and
    ovarian. The trial has two components. The first is an
    open-label, dose-escalating, non-randomized study of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    given intravenously with gemcitabine every three weeks. A
    standard dosage of gemcitabine will be delivered with escalating
    dosages of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    A maximum of three cohorts will be enrolled in the
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    dose escalation portion. The second component of the trial will
    immediately follow and will include the enrolment of a further
    12 patients at the maximum dosage of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with a standard dosage of gemcitabine. Eligible
    patients include those who have been diagnosed with advanced or
    metastatic solid tumours including pancreatic, lung and ovarian
    cancers that are refractory (have not
</DIV>

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    <BR>
    13
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    responded) to standard therapy or for which no curative standard
    therapy exists. The primary objective of the trial is to
    determine the MTD, DLT, recommended dose and dosing schedule and
    safety profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    when administered in combination with gemcitabine. Secondary
    objectives include the evaluation of immune response to the drug
    combination, the body&#146;s response to the drug combination
    compared to chemotherapy alone and any evidence of anti-tumour
    activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Combination Docetaxel and
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In January 2007, we received approval from the MHRA for our
    Clinical Trial Application to begin a clinical trial using
    intravenous administration of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with docetaxel
    (Taxotere<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>)
    in patients with advanced cancers including bladder, prostate,
    lung and upper gastro-intestinal. The trial has two components.
    The first is an open-label, dose-escalating, non-randomized
    study of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    given intravenously with docetaxel every three weeks. A standard
    dosage of docetaxel will be delivered with escalating dosages of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    A maximum of three cohorts will be enrolled in the
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    dose escalation portion. The second component of the trial will
    immediately follow and will include the enrolment of a further
    12 patients at the maximum dosage of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with a standard dosage of docetaxel. Eligible
    patients include those who have been diagnosed with advanced or
    metastatic solid tumours such as bladder, lung, prostate or
    upper gastro-intestinal cancers that are refractory (have not
    responded) to standard therapy or for which no curative standard
    therapy exists. The primary objective of the trial is to
    determine the Maximum Tolerated Dose (<B>&#147;MTD&#148;</B>),
    Dose-Limiting Toxicity (<B>&#147;DLT&#148;</B>), recommended
    dose and dosing schedule and safety profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    when administered in combination with docetaxel. Secondary
    objectives include the evaluation of immune response to the drug
    combination, the body&#146;s response to the drug combination
    compared to chemotherapy alone and any evidence of anti-tumour
    activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Combination Paclitaxel and Carboplatin with
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In December 2006, the MHRA approved a clinical trial using
    intravenous administration of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with paclitaxel and carboplatin in patients with
    advanced cancers including melanoma, lung and ovarian. The trial
    has two components. The first is an open-label, dose-escalating,
    non-randomized study of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    given intravenously with paclitaxel and carboplatin every three
    weeks. Standard dosages of paclitaxel and carboplatin will be
    delivered with escalating dosages of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    A maximum of three cohorts will be enrolled in the
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    dose escalation portion. The second component of the trial will
    immediately follow and will include the enrolment of a further
    12 patients at the maximum dosage of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with standard dosages of paclitaxel and
    carboplatin. Eligible patients include those who have been
    diagnosed with advanced or metastatic solid tumours including
    melanoma, lung and ovarian that are refractory (have not
    responded) to standard therapy or for which no curative standard
    therapy exists. The primary objective of the trial is to
    determine the MTD, DLT, recommended dose and dosing schedule and
    safety profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    when administered in combination with paclitaxel and
    carboplatin. Secondary objectives include the evaluation of
    immune response to the drug combination, the body&#146;s
    response to the drug combination compared to chemotherapy alone
    and any evidence of anti-tumour activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Phase II Combination
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>/radiation
    Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In December 2006, we commenced enrolment in our Phase II U.K.
    clinical trial to evaluate the anti-tumour effects of
    intratumoural administration of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with low-dose radiation in patients with advanced
    cancers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The trial is an open-label, single-arm, multi-centre Phase II
    study of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    delivered via intratumoural injection to patients during
    treatment with low-dose radiotherapy. Up to 40 evaluable
    patients, including approximately 20 patients with head and neck
    and esophageal cancers, and approximately 20 patients with other
    advanced cancers, will be treated with two intratumoural doses
    of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    at
    1x10<SUP style="font-size: 85%; vertical-align: text-top">10</SUP>
    TCID<SUB style="font-size: 85%; vertical-align: text-bottom">50</SUB>
    with a constant localized radiation dose of 20&#160;Gy in five
    consecutive daily fractions. Eligible patients include those who
    have been diagnosed with advanced or metastatic cancers
    including head, neck and esophageal tumours that are refractory
    (have not responded) to standard therapy or for which no
    curative standard therapy exists.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary objective of the trial is to assess the anti-tumour
    activity of the combination of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    and low dose radiotherapy in treated and untreated lesions.
    Secondary objectives include the evaluation of viral
    replication, immune response to the virus and to determine the
    safety and tolerability of intratumoural administration of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in patients with advanced cancers who are receiving radiation
    treatment.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
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<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Phase Ia/Ib Combination
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>/Radiation
    Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the third quarter of 2006, we commenced patient enrolment
    in our Phase Ib U.K. clinical trial investigating
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    in combination with radiation therapy as a treatment for
    patients with advanced cancers. The Phase Ib trial will treat
    patients with a range of two to six intratumoural doses of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    at
    1x10<SUP style="font-size: 85%; vertical-align: text-top">10</SUP>
    TCID<SUB style="font-size: 85%; vertical-align: text-bottom">50</SUB>
    with a constant radiation dose of 36 Gy in 12 fractions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary objective of our Phase Ib trial is to determine the
    maximum tolerated dose, dose limiting toxicity, and safety
    profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    when administered intratumourally to patients receiving
    radiation treatment. A secondary objective is to examine any
    evidence of anti-tumour activity. Eligible patients include
    those who have been diagnosed with advanced or metastatic solid
    tumours that are refractory (have not responded) to standard
    therapy or for which no curative standard therapy exists. An
    additional group of patients is planned to be treated at the
    maximum dose regimen reached in the Ib trial.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Patient enrolment in our Ia combination
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>/radiation
    trial was completed in June 2006. The Phase Ia trial tested two
    intratumoural treatments of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    at dosages of
    1x10<SUP style="font-size: 85%; vertical-align: text-top">8</SUP>,
    1x10<SUP style="font-size: 85%; vertical-align: text-top">9</SUP>,
    or
    1x10<SUP style="font-size: 85%; vertical-align: text-top">10</SUP>
    TCID<SUB style="font-size: 85%; vertical-align: text-bottom">50</SUB>
    with a constant localized radiation dose of 20 Gy given in five
    fractions. A maximum tolerated dose was not reached and the
    combination treatment appears to have been well tolerated by the
    patients.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interim results of the Phase Ia trial were presented at the
    American Association for Cancer Research Annual Meeting in
    Washington, D.C. in April 2006. Preliminary analysis has
    demonstrated evidence of both local and systemic response.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Phase I/II Recurrent Malignant Glioma Clinical
    Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the third quarter of 2006, we began patient enrolment in
    our clinical trial to investigate the use of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    for patients with recurrent malignant gliomas. This clinical
    trial is an open-label dose escalation Phase&#160;I/II trial in
    which a single dose of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    is administered by infusion to patients with recurrent malignant
    gliomas that are refractory to standard therapy. The
    administration involves the stereotactically-guided placement of
    a needle into the tumour, through which
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    will be administered or infused into the tumour mass and
    surrounding tissue using a pump.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The primary objective of the study is to determine the maximum
    tolerated dose, dose limiting toxicity and safety profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    Secondary objectives include the evaluation of viral
    replication, immune response to the virus and any evidence of
    anti-tumour activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.K.
    Phase I Systemic Administration Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Further results of our U.K. Phase I Systemic Administration
    Clinical Trial were presented at the
    18<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
    EORTC-NCI-AACR Symposium on Molecular Targets and Cancer
    Therapeutics in November 2006 in Prague, Czech Republic. A
    poster entitled &#147;A Phase I Study of Wild-Type Reovirus,
    Which Selectively Replicates in Cells Expressing Activated Ras,
    Administered Intravenously to Patients with Advanced
    Cancer&#148; was presented by Dr.&#160;Timothy Yap of The Royal
    Marsden Foundation Trust and the Institute of Cancer Research.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Results indicated that
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    can be delivered systemically to various tumour types and cause
    virus-mediated tumour responses. A total of 33 patients were
    treated in the trial to a maximum daily dose of
    1x10<SUP style="font-size: 85%; vertical-align: text-top">11</SUP>
    TCID<SUB style="font-size: 85%; vertical-align: text-bottom">50</SUB>.
    Of 32&#160;patients assessed, anti-tumour activity was noted in
    seven patients. Two patients with colorectal cancer had tumour
    stabilization (one for three months, the other classified as
    stable disease for six months) and had CEA tumour marker
    reduction of 27% and 60% respectively. One patient with
    metastatic prostate cancer had stable disease for four months,
    had a 50% decrease in PSA, and had extensive product-induced
    necrosis with associated intratumoural viral replication in
    metastatic lesions in the lymph nodes. One patient with
    metastatic bladder cancer had stable disease for four months and
    had a minor tumour response in a metastatic lesion in a lymph
    node. A patient with pancreatic cancer and a patient with NSCL
    cancer had stable disease for four months. A patient with
    endometrial cancer had stable disease for five months.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Phase I Systemic Administration Clinical Trial</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the third quarter of 2006, we completed patient enrolment
    in our Phase I U.S. clinical trial investigating the systemic
    delivery of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    to treat patients with advanced cancers. A total of 18 patients
    were treated in the Phase I
</DIV>

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    <BR>
    15
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    trial with
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    at escalating dosages of
    1x10<SUP style="font-size: 85%; vertical-align: text-top">8</SUP>,
    3x10<SUP style="font-size: 85%; vertical-align: text-top">8</SUP>,
    1x10<SUP style="font-size: 85%; vertical-align: text-top">9</SUP>,
    3x10<SUP style="font-size: 85%; vertical-align: text-top">9</SUP>,
    1x10<SUP style="font-size: 85%; vertical-align: text-top">10</SUP>
    or
    3x10<SUP style="font-size: 85%; vertical-align: text-top">10</SUP>
    TCID<SUB style="font-size: 85%; vertical-align: text-bottom">50</SUB>.
    A maximum tolerated dose was not reached and the treatment
    appears to have been well tolerated by the patients.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The clinical trial is an open-label, dose-escalation Phase I
    study in which a single dose of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    is administered intravenously to patients diagnosed with
    selected advanced or metastatic solid tumours that are
    refractory (have not responded) to standard therapy or for which
    no curative standard therapy exists. The primary objective of
    the study is to determine the maximum tolerated dose, dose
    limiting toxicity and safety profile of
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
    Secondary objectives include the evaluation of viral
    replication, immune response to the virus and any evidence of
    anti-tumour activity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Pre-Clinical
    Trial and Collaborative Program</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We perform pre-clinical studies and engage in collaborations to
    help support our clinical trial programs and expand our
    intellectual property base. We continue with studies examining
    the interaction between the immune system and the reovirus, the
    use of the reovirus as a co-therapy with chemotherapeutics and
    radiation, the use of new RAS active viruses as potential
    therapeutics, and to consider other uses for the reovirus as a
    therapeutic.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In January 2007, Dr.&#160;Sheila Fraser of St.&#160;James&#146;s
    University Hospital in Leeds, U.K. presented an abstract
    entitled &#147;Reovirus as a Potentially Immunogenic as well as
    Cytotoxic Therapy for Metastatic Colorectal Cancer&#148; at the
    Society of Academic&#160;&#38; Research Surgery Conference in
    Cambridge, U.K. The investigators tested reovirus <I>in
    vitro</I> against recently resected colorectal cancer liver
    metastases. The results showed that a significant proportion of
    tumour cell cultures showed susceptibility to death following
    reovirus infection, and also demonstrated effective replication
    of reovirus within these cells. In addition, dendritic cells
    that prime the immune system to fight cancer cells were
    activated by exposure to the reovirus. The investigators
    concluded that the data supports the development of reovirus as
    a novel therapy for colorectal cancer, with the potential to
    direct the immune system to target cancer cells.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In November 2006, Dr.&#160;Shizuko Sei of SAIC-Frederick Inc.,
    prime contractor the National Cancer Institute at Frederick
    (<B>&#147;NCI-F&#148;</B>) presented a poster at the
    18<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
    EORTC-NCI-AACR symposium on Molecular Targets and Cancer
    Therapeutics in Prague, Czech Republic. The poster was entitled
    &#147;Synergistic Antitumor Activity of Oncolytic Reovirus and
    Chemotherapeutic Agents against Non-small Cell Lung Cancer
    (NSCLC)&#148;. The research focused on work conducted by the NCI
    with reovirus in combination with a number of common
    chemotherapeutic agents. In general, the combination of reovirus
    with cisplatin, gemcitabine, mitomycin or vinblastine was
    synergistic against NSCLC cell lines sensitive to anti-cancer
    drugs. The combination of reovirus and paclitaxel was uniformly
    synergistic in all six cell lines examined, including in those
    with high-level resistance to paclitaxel or reovirus. The data
    suggest that the combination of reovirus and paclitaxel may help
    in promoting cell-death signaling, resulting in a more efficient
    and synergistic anti-cancer effect against these cell lines than
    using each agent on its own.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;9, 2006 a poster, prepared by one of our
    collaborators, entitled &#147;Reovirus Activates Dendritic Cells
    and Promotes Innate Anti-Tumour Immunity&#148; was presented at
    the 1st Joint Meeting of European National Societies of
    Immunology. The poster highlighted the researchers&#146; use of
    isolated human cells to examine whether the use of the reovirus
    as a direct tumour killing agent might also activate the innate
    immune system to play a role in the killing of tumour cells. The
    innate immune system is the broad, short-term and non-specific
    first-line immune response to an infection. The research showed
    that the reovirus can infect and activate immature human
    dendritic cells. The reovirus-activated dendritic cells
    triggered anti-tumour cytotoxicity when co-cultured with two
    other types of immune cells, natural killer cells and autologous
    T-cells. The researchers concluded that the reovirus may support
    early innate anti-tumour immunity as well as inducing direct
    tumour cell death.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Other
    Clinical Trial Activity</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We continue to develop our Phase II clinical trial program which
    includes the assessment of different cancer indications and
    potential drug combinations, the interviewing and selection of
    investigators and clinical trial sites, and the contracting of
    Contract Research Organizations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Manufacturing
    and Process Development</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have completed the production runs that should provide us
    with sufficient product to complete our U.K. Phase II
    combination
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>/radiation
    clinical trial and our existing Phase I clinical trials. At the
    same time, our process
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    development activity helped improve virus yields from our
    manufacturing process. We completed the transfer of these
    improvements to our cGMP manufacturer at the beginning of the
    third quarter of 2006 and began production runs under this
    improved process. These production runs are expected to provide
    sufficient
    REOLYSIN<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    to expand our Phase II clinical trial program. Our process
    development activity has now shifted focus to the examination of
    the potential scale up of our manufacturing process.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">New
    Patents</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth certain patent issuances in
    select jurisdictions since the filing of our AIF:
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="33%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="16%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="20%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="10%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Ownership</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Inventors</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Status of Patent</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Patent Number U.S. 6,994,858
    Reovirus Clearance of Ras-Mediated Neoplastic Cells from Mixed
    Cellular Compositions
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Don Morris<BR>
    Dr. Bradley G. Thompson<BR>
    Dr. Matthew C. Coffey
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">May 3, 2001<BR>
    February 7, 2006
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Patent Number U.S. 7,014,847
    Methods for Preventing Reovirus Recognition for the Treatment of
    Cellular Proliferative Disorders
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Bradley G. Thompson<BR>
    Dr. Matthew C. Coffey
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">March 28, 2003<BR>
    March 21, 2006
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Patent Number U.S. 7,049,127 Method
    of Producing Infectious Reovirus
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Bradley G. Thompson<BR>
    Dr. Matthew C. Coffey
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">December 11, 2003<BR>
    May 23, 2006
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Patent Number U.S. 7,052,832
    Methods for the Treatment of Cellular Proliferative Disorders
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Matthew C. Coffey
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">November 6, 2001<BR>
    May 30, 2006
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Patent Number U.S. 7,163,678
    Reovirus for the Treatment of Ral-Mediated Cellular
    Proliferative Disorders
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Patrick W.K. Lee<BR>
    Dr. Kara L. Norman
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">November 6, 2003<BR>
    January 16, 2007
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">Canadian Patent Number 2,415,750
    Methods for Preventing Reovirus Recognition for the Treatment of
    Cellular Proliferative Disorders
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Bradley G. Thompson<BR>
    Dr. Matthew C. Coffey
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">July 20, 2001<BR>
    March 28, 2006
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <FONT style="font-size: 8pt">European Patent Number: 1,498,129
    Use of Adenoviruses Mutated in the VA Genes for Cancer Treatment
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Oncolytics Biotech Inc.
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">Dr. Ramon Alemany<BR>
    Dr. Manel M. Cascallo
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <FONT style="font-size: 8pt">Filing date:<BR>
    Issued:
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <FONT style="font-size: 8pt">March 25, 2003<BR>
    November 16, 2005
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">New
    Directors and Officer</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ed Levy and Ger J. van Amersfoort were appointed to our board of
    directors on May&#160;17, 2006 and June&#160;15, 2006,
    respectively. On January&#160;23, 2007, Mary Ann Dillahunty was
    appointed as our Vice President, Intellectual Property.
</DIV>
<A name='112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming that the Over-allotment Option is not exercised, the
    estimated net proceeds to be received by us from the sale of the
    units will be $10,640,000&#160;after deducting the
    underwriter&#146;s fee of $960,000&#160;and the estimated
    expenses of the offering of $400,000. If the Over-allotment
    Option is exercised in full, the estimated net proceeds to be
    received by us from the sale of the units will be
    $12,296,000&#160;after deducting the underwriter&#146;s fee of
    $1,104,000&#160;and the estimated expenses of the offering of
    $400,000. The net proceeds for this offering will be used by us
    for our clinical trial program, our manufacturing activities in
    support of the program and general corporate purposes.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->
<A name='113'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAPITALIZATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;30, 2006, we had 36,386,748 common shares
    issued and outstanding. Since September&#160;30, 2006, we have
    issued 134,000 common shares pursuant to the exercise of stock
    options. As at February&#160;14, 2007, we have 36,520,748 common
    shares issued and outstanding. If all of our warrants and
    options outstanding as of February&#160;14, 2007 were exercised,
    we would have 42,830,698 common shares issued and outstanding.
    Following this offering, we will have 40,520,748&#160;common
    shares issued and outstanding (48,830,698&#160;common shares on
    a fully-diluted basis). Following this offering and assuming the
    Over-allotment Option is exercised in full, we will have
    41,120,748&#160;common shares issued and outstanding
    (49,730,698&#160;common shares on a fully-diluted basis).
</DIV>
<A name='114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DETAILS
    OF THE OFFERING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This offering consists of 4,000,000&#160;units at a price of
    $3.00&#160;per unit. Each unit consists of one common share and
    one-half of one common share purchase warrant. Each whole common
    share purchase warrant will entitle the holder to purchase one
    of our common shares upon payment of $3.50&#160;at any time
    until 5:00&#160;p.m. (Calgary time) on the date that is
    36&#160;months following the closing of this offering. The
    common shares and the common share purchase warrants comprising
    the units will separate immediately on the closing of the
    offering.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are authorized to issue an unlimited number of common shares.
    Each common share entitles the holder to one vote per share held
    at meetings of shareholders, to receive such dividends as
    declared by us and to receive our remaining property and assets
    upon dissolution or winding up. Our common shares are not
    subject to any future call or assessment and there are no
    pre-emptive, conversion or redemption rights attached to such
    shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common share purchase warrants are governed by an indenture
    (the <B>&#147;Warrant Indenture&#148;</B>) entered into between
    us and Computershare Trust&#160;Company of Canada on
    February&#160;12, 2007, as agent for the holders of the common
    share purchase warrants. The following is a summary of the
    material attributes and characteristics of the common share
    purchase warrants. This summary does not, however, include a
    description of all of the terms of the common share purchase
    warrants, and reference should be made to the Warrant Indenture
    for a complete description of the terms of the common share
    purchase warrants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each whole warrant will entitle the holder to purchase one of
    our common shares at a price of $3.50, subject to adjustment as
    summarized below. All rights under any common share purchase
    warrants that for any reason have not been exercised by
    5:00&#160;p.m. (Calgary time) on the date that is 36&#160;months
    following the closing of this offering will terminate and the
    certificate representing such common share purchase warrant will
    be void.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>There is no market through which the common share purchase
    warrants may be sold and purchasers may not be able to resell
    the common share purchase warrants purchased under this
    prospectus. This may affect the pricing of the common share
    purchase warrants in the secondary market, the transparency and
    availability of trading prices, the liquidity of such common
    share purchase warrants, and the extent of issuer regulation.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Common share purchase warrants will be evidenced by fully
    registered certificates. A register of holders will be
    maintained at the principal office of Computershare
    Trust&#160;Company of Canada in Calgary, Alberta. One or more
    certificates may be exchanged for one or more certificates of
    different denominations evidencing in the aggregate the same
    number of common share purchase warrants as the certificate or
    certificates being exchanged.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Warrant Indenture provides that the share ratio and exercise
    price of the common share purchase warrants will be subject to
    adjustment in the event of a subdivision or consolidation of our
    common shares. The Warrant Indenture also provides that if there
    is (a)&#160;any reclassification or change of our common shares
    into other shares, (b)&#160;any consolidation, amalgamation,
    arrangement or other business combination of Oncolytics
    resulting in any reclassification or change of our common shares
    into other shares, or (c)&#160;any sale, lease, exchange or
    transfer of our assets as an entity or substantially as an
    entirety to another entity, then each holder of a common share
    purchase warrant which is thereafter exercised shall receive, in
    lieu of common shares, the kind and number or amount of other
    securities or property which such holder would have been
    entitled to receive as a result of such event if such holder had
    exercised the common share purchase warrants prior to the event.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also covenant in the Warrant Indenture that, during the
    period in which the common share purchase warrants are
    exercisable, we will give public notice of our intention to fix
    a record date for the issuance of rights, options or warrants
    (other than the common share purchase warrants comprising part
    of the units) to all or substantially all of the holders of our
    outstanding common shares at least 14&#160;days prior to the
    record date of such event.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that the holder of a common share purchase warrant
    would otherwise be entitled to purchase a fraction of a common
    share, Oncolytics, in lieu of issuing a fractional common share,
    shall pay to the holder thereof within five business days of
    exercise an amount in Canadian dollars equal to the difference
    between the &#147;Current Market Price&#148; of the common
    shares on the exercise date multiplied by the fractional
    interest, provided that Oncolytics shall make only one payment
    for each beneficial holder exercising such common share purchase
    warrants and shall not be required to make any payment that is
    less than $10.00. Holders of common share purchase warrants do
    not have any voting or pre-emptive rights or any other rights as
    shareholders of Oncolytics.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is a closing condition of this offering that we file and
    clear a short form base shelf prospectus with the Alberta
    Securities Commission and concurrently, pursuant to the
    multi-jurisdictional disclosure system, file and bring effective
    a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-10</FONT>
    with the SEC. Further, it is a closing condition of the closing
    of this offering that we file with the Alberta Securities
    Commission a prospectus supplement and with the SEC a
    post-effective amendment to the registration statement
    registering the offering of our common shares issuable from time
    to time on the exercise of the common share purchase warrants.
    We have agreed to use reasonable efforts to maintain the base
    shelf prospectus and the registration statement, or another
    registration statement under the United States Securities Act of
    1933, as amended (the <B>&#147;Securities Act&#148;</B>),
    relating to the common shares underlying the common share
    purchase warrants, effective until the earlier of the expiration
    date of the common share purchase warrants and the date on which
    no common share purchase warrants remain outstanding. No U.S.
    Person or person holding common share purchase warrants for the
    benefit of or for the account of a U.S. Person will be permitted
    to exercise common share purchase warrants during any period of
    time prior to the expiration date of the common share purchase
    warrants during which no registration statement under the
    Securities Act is effective. If no registration statement under
    the Securities Act is effective, we will notify the holders of
    the common share purchase warrants in the United States, in
    accordance with the Warrant Indenture.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Holders of common share purchase warrants resident in the United
    States who acquire common shares pursuant to the exercise of
    common share purchase warrants in accordance with their terms
    and under a base shelf prospectus and any applicable prospectus
    supplement may have a right of action against the Corporation
    for any misrepresentation in the base shelf prospectus or any
    applicable prospectus supplement. However, the existence and
    enforceability of such a right of action is not without doubt.
    By contrast, holders of common share purchase warrants resident
    in Canada who may acquire common shares pursuant to the exercise
    of common share purchase warrants in accordance with their terms
    and who will be deemed to acquire such common shares under
    applicable Canadian prospectus exemptions, will not have any
    such right of action.
</DIV>
<A name='115'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PLAN OF
    DISTRIBUTION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under an underwriting agreement dated February&#160;6, 2007 (the
    <B>&#147;Underwriting Agreement&#148;</B>) between us and the
    underwriter, we have agreed to sell and the underwriter has
    agreed to purchase on February&#160;22, 2007 or on such other
    date as we and the underwriter may mutually agree, but in any
    event not later than March&#160;22, 2007 (subject to the
    termination rights described below), all but not less than all
    of the 4,000,000 units offered hereby at a price of
    $3.00&#160;per unit for total consideration of
    $12,000,000&#160;payable in cash to us against delivery of
    certificates representing the common shares and common share
    purchase warrants comprising the units. The obligations of the
    underwriter under the Underwriting Agreement may be terminated
    at its discretion upon the occurrence of certain stated events.
    The underwriter is, however, obligated to take up and pay for
    all of the units if any of the units are purchased under the
    Underwriting Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The offering price was determined by negotiation between us and
    the underwriter. We have agreed to pay to the underwriter a fee
    equal to 8% of the gross proceeds of the offering, equal to
    $0.24&#160;per unit in consideration of services rendered by it
    in connection with this offering. We have also agreed to
    reimburse the underwriter for the fees of its Canadian legal
    counsel and United States legal counsel in amounts not to exceed
    Cdn.$100,000 and U.S.$100,000, respectively. All fees payable to
    the underwriter will be paid on account of services rendered in
    connection with the offering and will be paid from the proceeds
    from the offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have granted the underwriter the Over-allotment Option,
    exercisable, in whole or in part, for a period of up to
    30&#160;days after closing of the offering, to purchase up to an
    additional 600,000 units, each unit consisting of one of our
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    common shares and one-half of one common share purchase warrant,
    at the offering price, to cover over-allotments, if any, and for
    market stabilization purposes. The grant of the Over-allotment
    Option and the issuance of the units upon exercise of the
    Over-allotment Option are qualified for distribution under this
    prospectus. If the Over-allotment Option is exercised in full,
    the total offering, the underwriter&#146;s fee and the net
    proceeds to the Corporation (before payment of the expenses of
    the offering) will be $13,800,000, $1,104,000&#160;and
    $12,696,000, respectively.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This offering is being made concurrently in Canada and the
    United States pursuant to the multi-jurisdictional disclosure
    system implemented by the securities regulatory authorities in
    Canada and the United States. The units will be offered in
    Canada and the United States through the underwriter either
    directly or through its U.S. or Canadian broker-dealer affiliate
    or agent registered in each jurisdiction, as applicable. Subject
    to applicable law, the underwriter may offer the units outside
    of Canada and the United States.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have agreed to indemnify the underwriter and its directors,
    officers, employees and agents against certain liabilities,
    including liabilities under the Securities Act and Canadian
    provincial securities legislation, in connection with the
    offering or to contribute to payments that the underwriter may
    be required to make in respect thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have agreed not to issue or announce the issuance of any
    equity securities or any securities convertible into,
    exchangeable for or exercisable to acquire equity securities
    without the prior consent of the underwriter until a date which
    is 90&#160;days after the closing date of this offering, other
    than pursuant to: (i)&#160;presently outstanding rights, or
    agreements, including options, warrants and other convertible
    securities and any rights which have been granted, issued or
    will be issued under the offering, subject to any necessary
    regulatory approval; (ii)&#160;presently outstanding options
    granted to officers, directors, employees or consultants of the
    Corporation or any subsidiary thereof pursuant to the
    Oncolytics&#146; stock option plan (the <B>&#147;Option
    Plan&#148;</B>); (iii)&#160;the Option Plan; or
    (iv)&#160;arm&#146;s length corporate alliances, partnerships,
    mergers or acquisitions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to a rule of the Ontario Securities Commission, the
    underwriter may not, throughout the period of distribution under
    this prospectus, bid for or purchase our common shares. The
    foregoing restriction is subject to exceptions, on the condition
    that the bid or purchase is not engaged in for the purpose of
    creating actual or apparent active trading in, or raising the
    price of, our common shares. These exceptions include a bid or
    purchase permitted under the Universal Market Integrity Rules
    for Canadian Marketplaces of Market Regulation&#160;Services
    Inc. relating to market stabilization and passive market-making
    activities and a bid or purchase made for and on behalf of a
    customer where the order was not solicited during the period of
    distribution. Under the first-mentioned exception, in connection
    with the offering, the underwriter may over-allot or effect
    transactions which stabilize or maintain the market price for
    the common shares at levels other than those which might
    otherwise prevail in the open market. Those transactions, if
    commenced, may be discontinued at any time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common shares are listed on the TSX under the trading symbol
    &#147;ONC&#148; and on the NASDAQ under the trading symbol
    &#147;ONCY&#148;. On February&#160;2, 2007, the last trading day
    prior to the announcement of this offering, the closing price of
    our common shares on the TSX was $3.25 and on NASDAQ was
    U.S.$2.74 and on February&#160;13, 2007, the closing price of
    our common shares on the TSX was $2.51 and on NASDAQ was
    U.S.$2.16. The TSX has conditionally approved the listing of the
    (i)&#160;common shares comprising part of the units;
    (ii)&#160;common shares issuable upon exercise of the common
    share purchase warrants comprising part of the units; and
    (iii)&#160;the common shares to be issued on the exercise of the
    Over-allotment Option. Listing is subject to the Corporation
    fulfilling all of the applicable listing requirements of the TSX
    on or before May&#160;4, 2007. We have also provided the NASDAQ
    with the necessary notification for the additional listing of
    the aforementioned securities. Pursuant to its procedures, the
    NASDAQ has verbally confirmed that it will not be objecting to
    the additional listing of such securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">United
    States Securities Law Compliance</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is a closing condition of the closing of this offering that
    we file and clear a short form base shelf prospectus with the
    Alberta Securities Commission and concurrently, pursuant to the
    multi-jurisdictional disclosure system, file and bring effective
    a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-10</FONT>
    with the SEC. Further, it is a closing condition of the closing
    of this offering that we file with the Alberta Securities
    Commission a prospectus supplement and with the SEC a
    post-effective amendment to the registration statement
    registering the offering of our common shares issuable from time
    to time on the exercise of the Warrants. No U.S. Person or
    person holding Warrants on behalf or for the account of a U.S.
    Person may exercise the Warrants during any period of time when
    a registration statement covering such common shares is not
    effective. See &#147;Details of the Offering&#160;&#151;
    Warrants&#148;.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->
<A name='116'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CANADIAN
    FEDERAL INCOME TAX CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the opinion of Counsel, the following is a general summary of
    the principal Canadian federal income tax considerations
    generally applicable to an investment in units pursuant to this
    offering. This summary is based upon the current provisions of
    the Tax Act, the regulations thereunder (the
    <B>&#147;Regulations&#148;</B>), all specific proposals to amend
    the Tax Act and the Regulations publicly announced by the
    Government of Canada prior to the date hereof (the
    <B>&#147;Proposed Amendments&#148;</B>) and Counsels&#146;
    understanding of the prevailing administrative views of the
    Canada Revenue Agency (the <B>&#147;CRA&#148;</B>). This summary
    is not exhaustive of all possible Canadian federal income tax
    considerations and except for the Proposed Amendments does not
    otherwise take into account any changes in law, whether by
    legislative, governmental or judicial action, nor does it take
    into account or consider any provincial, territorial or foreign
    income tax considerations. There can be no assurance that the
    Proposed Amendments will be enacted in their current form or at
    all.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary is applicable only to investors who acquire such
    units pursuant to this offering and who for the purposes of the
    Tax Act and at all relevant times will hold the common shares
    and common share purchase warrants acquired under this offering
    as capital property, deal at arm&#146;s length, and are not
    affiliated with us and do not use or hold, and are not deemed to
    use or hold, their common shares and common share purchase
    warrants in, or in the course of, carrying on a business in
    Canada. Common shares and common share purchase warrants will
    generally constitute capital property to an investor provided
    that the investor does not hold such securities in the course of
    carrying on a business and has not acquired such securities in a
    transaction or transactions considered to be an adventure or
    concern in the nature of trade. This summary does not apply to
    investors who are &#147;financial institutions&#148; or
    &#147;specified financial institutions&#148; for the purposes of
    the Tax Act. Such investors should consult their own tax
    advisors for advice.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary is of a general nature only and is not intended to
    be, nor should it be construed to be, legal or tax advice to any
    particular investor. Accordingly, all prospective investors are
    urged to consult their own tax advisors with respect to their
    particular circumstances.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Residents
    of Canada</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This portion of the summary is applicable to an investor who,
    for the purposes of the Tax Act and at all relevant times, is
    resident or is deemed to be resident in Canada. Certain
    investors who are resident in Canada for the purposes of the Tax
    Act whose common shares might not otherwise qualify as capital
    property may be entitled to make an irrevocable election in
    accordance with subsection 39(4) of the Tax Act to have such
    common shares treated as capital property.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Allocation
    of Purchase Price</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the purposes of the Tax Act, the purchase price of each unit
    offered hereby must be allocated, on a reasonable basis, between
    the common share and the one-half of a common share purchase
    warrant acquired on the acquisition of the unit in order to
    determine the respective cost of the common share and the
    fractional common share purchase warrant to the investor.
    Oncolytics believes that it is reasonable to allocate a nominal
    value of the purchase price of each unit to the fractional
    common share purchase warrant. For this purpose, we will
    allocate $2.47 of the purchase price for each unit to the common
    share and $0.53 of the purchase price for each unit to the
    one-half of one warrant. Purchasers will be required to
    allocate, on a reasonable basis, the purchase price of a unit
    between the common share and the one-half of a common share
    purchase warrant. However, such allocation is not binding upon
    the CRA.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The portion of the purchase price of each unit allocated to the
    common share and to the one-half common share purchase warrant,
    respectively, will become an investor&#146;s acquisition cost of
    the common share and the one-half common share purchase warrant
    for income tax purposes. These amounts must generally be
    averaged with the adjusted cost base of all other common shares
    and common share purchase warrants, respectively, held by the
    investor as capital property to determine the adjusted cost base
    of all such common shares and common share purchase warrants to
    the investor.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Exercise
    of Common Share Purchase Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An investor will not realize a gain or a loss upon the exercise
    of a common share purchase warrant. For the purposes of the Tax
    Act, when a common share purchase warrant is exercised, the
    investor&#146;s adjusted cost base of the common share acquired
    thereby will (subject to averaging) be the aggregate of the
    investor&#146;s adjusted cost base of the common share purchase
    warrant and the exercise price paid on the exercise of the
    common share purchase warrant.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Expiry of
    Common Share Purchase Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The expiry of an unexercised common share purchase warrant will
    generally result in a capital loss to the investor equal to the
    adjusted cost base of the common share purchase warrant
    immediately prior to the expiry. The tax treatment of capital
    losses is described in greater detail below under
    &#147;Treatment of Capital Gains and Capital Losses&#148;.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Common Shares or Common Share Purchase Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, a disposition, or a deemed disposition, of a common
    share, other than to us, or a common share purchase warrant,
    other than on the exercise thereof, will give rise to a capital
    gain (or a capital loss) in the taxation year of the disposition
    equal to the amount by which the proceeds of disposition of the
    common share or common share purchase warrant, as the case may
    be, net of any reasonable costs of disposition, exceed (or are
    less than) the adjusted cost base of the common share or common
    share purchase warrant, as the case may be, to the holder
    thereof. The tax treatment of capital gains and capital losses
    are described in greater detail below under &#147;Treatment of
    Capital Gains and Capital Losses&#148;.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Treatment
    of Capital Gains and Capital Losses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the year of disposition an investor will be required to
    include one-half of the amount of any capital gain (a
    &#147;taxable capital gain&#148;) in income, and will be
    required to deduct one-half of the amount of any capital loss
    (an &#147;allowable capital loss&#148;) against taxable capital
    gains realized by the investor. Allowable capital losses not
    deducted in the taxation year in which they are realized may be
    carried back and deducted in any of the three preceding taxation
    years or carried forward and deducted in any subsequent taxation
    year against taxable capital gains realized in such years, to
    the extent and under the circumstances specified in the Tax Act.
    A capital gain realized by an investor who is an individual
    (including certain trusts) may give rise to alternative minimum
    tax. A &#147;Canadian-controlled private corporation&#148; (as
    defined in the Tax Act) may be liable to an additional
    6<FONT style="vertical-align: top; font-size: 70&#37;">2</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    refundable tax under the Tax Act on certain investment income,
    including taxable capital gains.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amount of any capital loss realized on the disposition or
    deemed disposition of a common share by an investor that is a
    corporation may be reduced by the amount of dividends received
    or deemed to have been received by it on the common share to the
    extent and in the circumstances prescribed by the Tax Act.
    Similar rules may apply where an investor that is a corporation
    is a member of a partnership or is beneficiary of a trust that
    owns common shares and where common shares are owned by a
    partnership or trust of which a partnership or trust is a
    partner or beneficiary. Investors to whom these rules may be
    relevant should consult their own tax advisors.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dividends</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dividends (including deemed dividends) received on common shares
    will be included in computing the investor&#146;s income. On
    June&#160;29, 2006, the Government of Canada released draft
    legislation which would provide for an enhanced dividend tax
    credit for eligible dividends (as discussed in such draft
    legislation) paid by us on common shares acquired by individuals
    pursuant to this offering. In the case of an individual
    investor, such dividends will generally be subject to the
    gross-up and dividend tax credit rules normally applicable to
    dividends received from taxable Canadian corporations. In the
    case of a corporation, such dividends will generally be
    deductible in computing the corporation&#146;s taxable income.
    An investor that is a &#147;private corporation&#148;, as
    defined in the Tax Act, or any other corporation resident in
    Canada and controlled by or for the benefit of an individual
    (other than a trust) or a related group of individuals (other
    than trusts) will generally be liable to pay a refundable tax at
    the rate of
    33<FONT style="vertical-align: top; font-size: 70&#37;">1</FONT>/<FONT style="font-size: 70&#37;">3</FONT>%
    under Part&#160;IV of the Tax Act on dividends received (or
    deemed to be received) on common shares to the extent such
    dividends are deductible in computing its taxable income.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Non-Residents
    of Canada</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This portion of the summary is applicable to an investor who,
    for the purposes of the Tax Act and at all relevant times, is
    not, and has never been, resident in Canada and is not, and has
    never been, deemed to be resident in Canada, does not use or
    hold, and is not deemed to use or hold, common shares in, or in
    the course of, carrying on business in Canada, and is not an
    insurer who carries on an insurance business in Canada and
    elsewhere (a <B>&#147;Non-Resident Holder&#148;</B>).
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    22
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Allocation
    of the Purchase Price</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Non-Resident Holder will be required to allocate the purchase
    price of each unit between the common share and the one-half of
    a common share purchase warrant in the same manner described
    above under <I>&#147;Residents of Canada &#151; Allocation of
    Purchase Price&#148;</I>.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Common Shares and Common Share Purchase Warrants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Non-Resident Holder will be subject to tax under the Tax Act
    in respect of a disposition of common shares only to the extent
    such common shares constitute &#147;taxable Canadian
    property&#148; for purposes of the Tax Act and the Non-Resident
    Holder is not afforded relief from such tax under an applicable
    income tax treaty.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common shares will normally not be taxable Canadian property
    at a particular time provided that: (i)&#160;the common shares
    are listed on a prescribed stock exchange at the particular time
    (which includes the TSX); (ii)&#160;the Non-Resident Holder,
    persons with whom the Non-Resident Holder does not deal at
    arm&#146;s length (within the meaning of the Tax Act), or the
    Non-Resident Holder together with such persons, did not own 25%
    or more of the issued shares of any class or series of
    Oncolytics at any time during the
    <FONT style="white-space: nowrap">60-month</FONT>
    period preceding the particular time; and (iii)&#160;such common
    shares are not otherwise deemed under the Tax Act to be taxable
    Canadian property at the particular time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Non-Resident Holder will not be subject to tax under the Tax
    Act on the exercise of common share purchase warrants. A
    disposition of common share purchase warrants (other than on the
    exercise thereof) will be subject to tax under the Tax Act only
    to the extent that such common share purchase warrants
    constitute &#147;taxable Canadian property&#148; for purposes of
    the Tax Act and the Non-Resident Holder is not afforded relief
    under an applicable income tax treaty.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common share purchase warrants will normally not be taxable
    Canadian property at a particular time provided that:
    (i)&#160;the common shares are listed on a prescribed stock
    exchange at the particular time (which includes the TSX<B>)</B>;
    (ii)&#160;the common share purchase warrants held by the
    Non-Resident Holder, together with any other options or rights
    held by the Non-Resident Holder to acquire our shares , were not
    exerciseable into 25% or more of the issued shares of any class
    or series of Oncolytics at any time during the
    <FONT style="white-space: nowrap">60-month</FONT>
    period preceding the particular time; and (iii)&#160;the
    Non-Resident Holder, persons with whom the Non-Resident Holder
    does not deal at arm&#146;s length (within the meaning of the
    Tax Act), or the Non-Resident Holder together with such persons,
    did not own 25% or more of the issued shares of any class or
    series of Oncolytics at any time during the
    <FONT style="white-space: nowrap">60-month</FONT>
    period preceding the particular time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Non-Resident Holder who is subject to tax under the Tax Act on
    a disposition of common shares or common share purchase warrants
    will generally be required to compute such gains in the same
    manner described above under <I>&#147;Residents of
    Canada&#160;&#151; Disposition of Common Shares or Common Share
    Purchase Warrants&#148;</I>.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dividends</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dividends paid or credited, or which are deemed to be paid or
    credited, on the common shares will be subject to a Canadian
    non-resident withholding tax of 25%, subject to reduction of
    such rate under an applicable income tax treaty. For example,
    Non-Resident Holders who are residents of the United States for
    the purposes of the <I>Canada-United States Tax Convention,
    1980</I> will generally have such rate of withholding reduced to
    15% (or 5% if such Non-Resident Holder owns at least 10% of the
    voting stock of Oncolytics).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Non-Resident Holders should consult their tax advisors with
    respect to the tax implications of acquiring shares pursuant to
    this offering in their jurisdiction of residence and the
    application of any bilateral income tax treaty between Canada
    and their jurisdiction of residence.</B>
</DIV>
<A name='117'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">U.S.
    FEDERAL INCOME TAX CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of certain material anticipated U.S.
    federal income tax consequences to a U.S. Holder (as defined
    below) arising from and relating to the acquisition of units
    purchased pursuant to this U.S. Preliminary Placement
    Memorandum, the exercise, disposition, and lapse of warrants
    acquired through such units, and the acquisition, ownership, and
    disposition of common shares acquired through such units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary is for general information purposes only and does
    not purport to be a complete analysis or listing of all
    potential U.S. federal income tax consequences that may apply to
    a U.S. Holder as a result of the acquisition of units
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    23
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    purchased pursuant to this U.S. Preliminary Placement
    Memorandum, the exercise, disposition, and lapse of warrants, or
    the acquisition, ownership, and disposition of common shares. In
    addition, this summary does not take into account the individual
    facts and circumstances of any particular U.S. Holder that may
    affect the U.S. federal income tax consequences to such U.S.
    Holder. Accordingly, this summary is not intended to be, and
    should not be construed as, legal or U.S. federal income tax
    advice with respect to any U.S. Holder. Each U.S. Holder should
    consult its own financial advisor, legal counsel, or accountant
    regarding the U.S. federal income, U.S. state and local, and
    foreign tax consequences of the acquisition of units purchased
    pursuant to this U.S. Preliminary Placement Memorandum, the
    exercise, disposition, and lapse of warrants, and the
    acquisition, ownership, and disposition of common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No legal opinion from U.S. legal counsel or ruling from the
    Internal Revenue Service (the <B>&#147;IRS&#148;</B>) has been
    requested, or will be obtained, regarding the U.S. federal
    income tax consequences of the acquisition of units purchased
    pursuant to this U.S. Preliminary Placement Memorandum, the
    exercise, disposition, and lapse of warrants, or the
    acquisition, ownership, and disposition of common shares. This
    summary is not binding on the IRS, and the IRS is not precluded
    from taking a position that is different from, and contrary to,
    the positions taken in this summary. In addition, because the
    authorities on which this summary is based are subject to
    various interpretations, the IRS and the U.S. courts could
    disagree with one or more of the positions taken in this summary.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Notice Pursuant To IRS Circular 230:</B>&#160;&#160;Anything
    contained in this summary concerning any U.S. federal tax issue
    is not intended or written to be used, and it cannot be used by
    a U.S. Holder, for the purpose of avoiding federal tax penalties
    under the Internal Revenue Code. This summary was written to
    support the promotion or marketing of the transactions or
    matters addressed by this U.S. Preliminary Placement Memorandum.
    Each U.S. Holder should seek U.S. federal tax advice, based on
    such U.S. Holder&#146;s particular circumstances, from an
    independent tax advisor.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Scope of
    this Summary</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Authorities</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary is based on the Internal Revenue Code of 1986, as
    amended (the <B>&#147;Code&#148;</B>), Treasury Regulations
    (whether final, temporary, or proposed), published rulings of
    the IRS, published administrative positions of the IRS, the
    Convention Between Canada and the United States of America with
    Respect to Taxes on Income and on Capital, signed
    September&#160;26, 1980, as amended (the <B>&#147;Canada-U.S.
    Tax Convention&#148;</B>), and U.S. court decisions that are
    applicable and, in each case, as in effect and available, as of
    the date of this U.S. Preliminary Placement Memorandum. Any of
    the authorities on which this summary is based could be changed
    in a material and adverse manner at any time, and any such
    change could be applied on a retroactive basis. This summary
    does not discuss the potential effects, whether adverse or
    beneficial, of any proposed legislation that, if enacted, could
    be applied on a retroactive basis.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of this summary, a &#147;U.S. Holder&#148; is a
    beneficial owner of units, warrants, or common shares acquired
    through such units, as the case may be, that, for U.S. federal
    income tax purposes, is (a)&#160;an individual who is a citizen
    or resident of the U.S., (b)&#160;a corporation, or any other
    entity classified as a corporation for U.S. federal income tax
    purposes, that is created or organized in or under the laws of
    the U.S., any state in the U.S., or the District of Columbia,
    (c)&#160;an estate if the income of such estate is subject to
    U.S. federal income tax regardless of the source of such income,
    or (d)&#160;a trust if (i)&#160;such trust has validly elected
    to be treated as a U.S. person for U.S. federal income tax
    purposes or (ii)&#160;a U.S. court is able to exercise primary
    supervision over the administration of such trust and one or
    more U.S. persons have the authority to control all substantial
    decisions of such trust.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Non-U.S.
    Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of this summary, a &#147;non-U.S. Holder&#148; is a
    beneficial owner of units, warrants, or common shares other than
    a U.S. Holder. This summary does not address the U.S. federal
    income tax consequences to non-U.S. Holders of the acquisition
    of units purchased pursuant to this U.S. Preliminary Placement
    Memorandum, the exercise, disposition, and lapse of warrants, or
    the acquisition, ownership, and disposition of common shares.
    Accordingly, a non-U.S. Holder should consult its own financial
    advisor, legal counsel, or accountant regarding the U.S. federal
    income, U.S. state and local, and foreign tax consequences
    (including the potential application of and operation of any
    income tax treaties) of the acquisition of units purchased
    pursuant to this U.S. Preliminary Placement Memorandum, the
    exercise, disposition, and lapse of warrants, and the
    acquisition, ownership, and disposition of common shares.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    24
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Holders Subject to Special U.S. Federal Income Tax
    Rules&#160;Not Addressed</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary does not address the U.S. federal income tax
    consequences applicable to U.S. Holders that are subject to
    special provisions under the Code, including the following U.S.
    Holders: (a)&#160;U.S. Holders that are tax-exempt
    organizations, qualified retirement plans, individual retirement
    accounts, or other tax-deferred accounts; (b)&#160;U.S. Holders
    that are financial institutions, insurance companies, real
    estate investment trusts, or regulated investment companies;
    (c)&#160;U.S. Holders that are dealers in securities or
    currencies or U.S. Holders that are traders in securities that
    elect to apply a
    <FONT style="white-space: nowrap">mark-to-market</FONT>
    accounting method; (d)&#160;U.S. Holders that have a
    &#147;functional currency&#148; other than the U.S. dollar;
    (e)&#160;U.S.&#160;Holders that are liable for the alternative
    minimum tax under the Code; (f)&#160;U.S. Holders that own
    units, warrants, or common shares as part of a straddle, hedging
    transaction, conversion transaction, constructive sale, or other
    arrangement involving more than one position; (g)&#160;U.S.
    Holders that acquired units, warrants, or common shares in
    connection with the exercise of employee stock options or
    otherwise as compensation for services; (h)&#160;U.S. Holders
    that hold units, warrants, or common shares other than as a
    capital asset within the meaning of Section&#160;1221 of the
    Code; or (i)&#160;U.S. Holders that own (directly, indirectly,
    or constructively) 10% or more of the total combined voting
    power of the outstanding shares of the Corporation.
    U.S.&#160;Holders that are subject to special provisions under
    the Code, including U.S.&#160;Holders described immediately
    above, should consult their own financial advisor, legal counsel
    or accountant regarding the U.S. federal income tax consequences
    of the acquisition of units purchased pursuant to this U.S.
    Preliminary Placement Memorandum, the exercise, disposition, and
    lapse of warrants, and the acquisition, ownership, and
    disposition of common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If an entity that is classified as a partnership for U.S.
    federal income tax purposes holds units, warrants, or common
    shares, the U.S. federal income tax consequences to such
    partnership and the partners of such partnership generally will
    depend on the activities of the partnership and the status of
    such partners. Partners of entities that are classified as
    partnerships for U.S. federal income tax purposes should consult
    their own financial advisor, legal counsel or accountant
    regarding the U.S. federal income tax consequences of the
    acquisition of units purchased pursuant to this U.S. Preliminary
    Placement Memorandum, the exercise, disposition, and lapse of
    warrants, and the acquisition, ownership, and disposition of
    common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax
    Consequences Other than U.S. Federal Income Tax Consequences Not
    Addressed</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary does not address the U.S. state and local, U.S.
    federal estate and gift, or foreign tax consequences to
    U.S.&#160;Holders of the acquisition of units purchased pursuant
    to this U.S. Preliminary Placement Memorandum, the exercise,
    disposition, and lapse of warrants, or the acquisition,
    ownership, and disposition of common shares. Each
    U.S.&#160;Holder should consult its own financial advisor, legal
    counsel, or accountant regarding the U.S.&#160;state and
    local,&#160;U.S.&#160;federal estate and gift, and foreign tax
    consequences of the acquisition of units purchased pursuant to
    this U.S.&#160;Preliminary Placement Memorandum, the exercise,
    disposition, and lapse of warrants, and the acquisition,
    ownership, and disposition of common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Federal Income Tax Consequences of the Acquisition of
    Units</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For U.S. federal income tax purposes, the acquisition of a unit
    by a U.S. Holder will be treated as the acquisition of an
    &#147;investment unit&#148; consisting of two components: one
    common share and one-half of one warrant. The purchase price for
    each unit will be allocated between these two components in
    proportion to their relative fair market values on the date that
    the unit is purchased by the U.S. Holder. This allocation of the
    purchase price for each unit will establish a U.S. Holder&#146;s
    initial tax basis in the common share and the one-half of one
    warrant that comprise each unit for U.S. federal income tax
    purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For this purpose, the Corporation will allocate U.S.$2.09 of the
    purchase price for each unit to the common share and U.S.$0.45
    of the purchase price for each unit to the one-half of one
    warrant. The IRS will not be bound by the Corporation&#146;s
    allocation of the purchase price for each unit between the
    common share and the one-half of one warrant, and accordingly,
    the IRS may allocate the purchase price for each unit between
    the common share and the one-half of one warrant in a manner
    that is different than the allocation set forth above. Each U.S.
    Holder should consult its own financial advisor, legal counsel,
    or accountant regarding the allocation of the purchase price for
    each unit between the common share and the one-half of one
    warrant.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Federal Income Tax Consequences of the Exercise and Disposition
    of Warrants</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Exercise
    of Warrants</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder should not recognize gain or loss on the exercise
    of a warrant and related receipt of a common share (except if
    cash is received in lieu of the issuance of a fractional common
    share). A U.S. Holder&#146;s initial tax basis in the common
    share received on the exercise of a warrant should be equal to
    the sum of (a)&#160;such U.S. Holder&#146;s tax basis in such
    warrant plus (b)&#160;the exercise price paid by such U.S.
    Holder on the exercise of such warrant. A U.S. Holder&#146;s
    holding period for the common share received on the exercise of
    a warrant should begin on the date that such warrant is
    exercised by such U.S. Holder.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Warrants</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder will recognize gain or loss on the sale or other
    taxable disposition of a warrant in an amount equal to the
    difference, if any, between (a)&#160;the amount of cash plus the
    fair market value of any property received and (b)&#160;such
    U.S.&#160;Holder&#146;s tax basis in the warrant sold or
    otherwise disposed of. Subject to the &#147;passive foreign
    investment company&#148; rules discussed below, any such gain or
    loss generally will be a capital gain or loss (provided that the
    common share to be issued on the exercise of such warrant would
    have been a capital asset within the meaning of
    Section&#160;1221 of the Code if acquired by the U.S. Holder),
    which will be long-term capital gain or loss if the warrant is
    held for more than one year.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Expiration
    of Warrants Without Exercise</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the lapse or expiration of a warrant, a U.S.&#160;Holder
    will recognize a loss in an amount equal to such
    U.S.&#160;Holder&#146;s tax basis in the warrant. Any such loss
    generally will be a capital loss (provided that the common share
    to be issued on the exercise of such warrant would have been a
    capital asset if acquired by the U.S. Holder). Any such capital
    loss will be short-term capital loss or long-term capital loss,
    depending on whether the warrants are held for more than one
    year. Deductions for capital losses are subject to complex
    limitations under the Code.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Certain
    Adjustments to the Warrants</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Section&#160;305 of the Code, an adjustment to the number
    of common shares that will be issued on the exercise of the
    warrants, or an adjustment to the exercise price of the
    warrants, may be treated as a constructive distribution to a
    U.S.&#160;Holder of the warrants if, and to the extent that,
    such adjustment has the effect of increasing such
    U.S.&#160;Holder&#146;s proportionate interest in the
    &#147;earnings and profits&#148; or assets of the Corporation,
    depending on the circumstances of such adjustment (for example,
    if such adjustment is to compensate for a distribution of cash
    or other property to shareholders of the Corporation). (See more
    detailed discussion of the rules applicable to distributions
    made by the Corporation at &#147;Distributions on Common
    Shares&#148; below).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Federal Income Tax Consequences of the Acquisition, Ownership,
    and Disposition of Common Shares</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    on Common Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">General
    Taxation of Distributions</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the &#147;passive foreign investment company&#148;
    rules discussed below, a U.S. Holder that receives a
    distribution, including a constructive distribution, with
    respect to the common shares will be required to include the
    amount of such distribution in gross income as a dividend
    (without reduction for any Canadian income tax withheld from
    such distribution) to the extent of the current or accumulated
    &#147;earnings and profits&#148; of the Corporation. To the
    extent that a distribution exceeds the current and accumulated
    &#147;earnings and profits&#148; of the Corporation, such
    distribution will be treated (a)&#160;first, as a tax-free
    return of capital to the extent of a U.S. Holder&#146;s tax
    basis in the common shares and, (b)&#160;thereafter, as gain
    from the sale or exchange of such common shares. (See more
    detailed discussion at &#147;Disposition of Common Shares&#148;
    below). Dividends paid on the common shares generally will not
    be eligible for the &#147;dividends received deduction.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Reduced
    Tax Rates for Certain Dividends</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For taxable years beginning before January&#160;1, 2011, a
    dividend paid by the Corporation generally will be taxed at the
    preferential tax rates applicable to long-term capital gains if
    (a)&#160;the Corporation is a &#147;qualified foreign
    corporation&#148; (as defined below), (b)&#160;the U.S. Holder
    receiving such dividend is an individual, estate, or trust, and
    (c)&#160;such dividend is paid
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    on common shares that have been held by such U.S. Holder for at
    least 61&#160;days during the
    <FONT style="white-space: nowrap">121-day</FONT>
    period beginning 60&#160;days before the &#147;ex-dividend
    date.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Corporation generally will be a &#147;qualified foreign
    corporation&#148; under Section&#160;1(h)(11) of the Code (a
    <B>&#147;QFC&#148;</B>) if (a)&#160;the Corporation is eligible
    for the benefits of the Canada-U.S. Tax Convention, or
    (b)&#160;the common shares are readily tradable on an
    established securities market in the U.S. However, even if the
    Corporation satisfies one or more of such requirements, the
    Corporation will not be treated as a QFC if the Corporation is a
    &#147;passive foreign investment company&#148; (as defined
    below) for the taxable year during which the Corporation pays a
    dividend or for the preceding taxable year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As discussed below, the Corporation anticipates that it may
    qualify as a &#147;passive foreign investment company&#148; for
    the taxable year ending December&#160;31, 2007 and subsequent
    taxable years, depending on the assets and income of the
    Corporation over the course of the taxable year ending
    December&#160;31, 2007. (See more detailed discussion at
    &#147;Additional Rules that May Apply to U.S.
    Holders&#160;&#151; Passive Foreign Investment Corporation&#148;
    below). Accordingly, there can be no assurances that the
    Corporation will be a QFC for the current or any future taxable
    year or that the Corporation will be able to certify that it is
    a QFC in accordance with the certification procedures issued by
    the Treasury and the IRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Corporation is not a QFC, a dividend paid by the
    Corporation to a U.S. Holder, including a U.S. Holder that is an
    individual, estate, or trust, generally will be taxed at
    ordinary income tax rates (and not at the preferential tax rates
    applicable to long-term capital gains). The dividend rules are
    complex, and each U.S. Holder should consult its own financial
    advisor, legal counsel, or accountant regarding the dividend
    rules.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Distributions
    Paid in Foreign Currency</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amount of a distribution paid to a U.S. Holder in foreign
    currency generally will be equal to the U.S. dollar value of
    such distribution based on the exchange rate applicable on the
    date of receipt. A U.S. Holder that does not convert foreign
    currency received as a distribution into U.S. dollars on the
    date of receipt generally will have a tax basis in such foreign
    currency equal to the U.S. dollar value of such foreign currency
    on the date of receipt. Such a U.S. Holder generally will
    recognize ordinary income or loss on the subsequent sale or
    other taxable disposition of such foreign currency (including an
    exchange for U.S. dollars).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Common Shares</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder will recognize gain or loss on the sale or other
    taxable disposition of common shares in an amount equal to the
    difference, if any, between (a)&#160;the amount of cash plus the
    fair market value of any property received and (b)&#160;such
    U.S. Holder&#146;s tax basis in the common shares sold or
    otherwise disposed of. Subject to the &#147;passive foreign
    investment company&#148; rules discussed below, any such gain or
    loss generally will be capital gain or loss, which will be
    long-term capital gain or loss if the common shares are held for
    more than one year. Gain or loss recognized by a
    U.S.&#160;Holder on the sale or other taxable disposition of
    common shares generally will be treated as &#147;U.S.
    source&#148; for purposes of applying the U.S. foreign tax
    credit rules. (See more detailed discussion at &#147;Foreign Tax
    Credit&#148; below).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Preferential tax rates apply to long-term capital gains of a
    U.S. Holder that is an individual, estate, or trust. There are
    currently no preferential tax rates for long-term capital gains
    of a U.S. Holder that is a corporation. Deductions for capital
    losses are subject to significant limitations under the Code.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Foreign
    Tax Credit</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that pays (whether directly or through
    withholding) Canadian income tax with respect to dividends
    received on the common shares generally will be entitled, at the
    election of such U.S. Holder, to receive either a deduction or a
    credit for such Canadian income tax paid. Generally, a credit
    will reduce a U.S. Holder&#146;s U.S. federal income tax
    liability on a
    <FONT style="white-space: nowrap">dollar-for-dollar</FONT>
    basis, whereas a deduction will reduce a U.S. Holder&#146;s
    income subject to U.S. federal income tax. This election is made
    on a
    <FONT style="white-space: nowrap">year-by-year</FONT>
    basis and applies to all foreign taxes paid (whether directly or
    through withholding) by a U.S. Holder during a taxable year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Complex limitations apply to the foreign tax credit, including
    the general limitation that the credit cannot exceed the
    proportionate share of a U.S. Holder&#146;s U.S. federal income
    tax liability that such U.S. Holder&#146;s &#147;foreign
    source&#148; taxable income bears to such U.S. Holder&#146;s
    worldwide taxable income. In applying this limitation, a U.S.
    Holder&#146;s various items of income and deduction must be
    classified, under complex rules, as either &#147;foreign
    source&#148; or &#147;U.S. source.&#148; In addition, this
    limitation is calculated separately with respect to specific
    categories of income. Dividends received on the common
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    shares generally will constitute &#147;foreign source&#148;
    income and generally will be categorized as &#147;passive
    income.&#148; The foreign tax credit rules are complex, and each
    U.S. Holder should consult its own financial advisor, legal
    counsel, or accountant regarding the foreign tax credit rules.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Information
    Reporting; Backup Withholding Tax</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Payments made within the U.S., or by a U.S. payor or U.S.
    middleman, of dividends on, or proceeds arising from the sale or
    other taxable disposition of, common shares generally will be
    subject to information reporting and backup withholding tax, at
    the rate of 28%, if a U.S. Holder (a)&#160;fails to furnish such
    U.S. Holder&#146;s correct U.S. taxpayer identification number
    (generally on
    <FONT style="white-space: nowrap">Form&#160;W-9),</FONT>
    (b)&#160;furnishes an incorrect U.S. taxpayer identification
    number, (c)&#160;is notified by the IRS that such U.S. Holder
    has previously failed to properly report items subject to backup
    withholding tax, or (d)&#160;fails to certify, under penalty of
    perjury, that such U.S. Holder has furnished its correct
    U.S.&#160;taxpayer identification number and that the IRS has
    not notified such U.S.&#160;Holder that it is subject to backup
    withholding tax. However, U.S.&#160;Holders that are
    corporations generally are excluded from these information
    reporting and backup withholding tax rules. Any amounts withheld
    under the U.S. backup withholding tax rules will be allowed as a
    credit against a U.S.&#160;Holder&#146;s U.S.&#160;federal
    income tax liability, if any, or will be refunded, if such U.S.
    Holder furnishes required information to the IRS. Each U.S.
    Holder should consult its own financial advisor, legal counsel,
    or accountant regarding the information reporting and backup
    withholding tax rules.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Information
    Filing Required by Certain U.S. Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder may be required to file Form&#160;926 with the IRS
    if (a)&#160;immediately after acquiring the units pursuant to
    this U.S. Preliminary Placement Memorandum, such U.S. Holder
    owns, directly or indirectly, at least 10% of the total voting
    power or the total value of the outstanding shares of the
    Corporation or (b)&#160;the purchase price of the units, when
    aggregated with all other transfers of cash by such U.S. Holder
    (or any person related to such U.S. Holder) to the Corporation
    within the preceding 12&#160;month period, exceeds U.S.$100,000.
    A U.S. Holder that fails to properly and timely file
    Form&#160;926 with the IRS generally will be subject to a
    penalty equal to 10% of the purchase price for the units
    (subject to a maximum penalty of U.S.$100,000, unless the
    failure to file is due to intentional disregard). Each U.S.
    Holder should consult its own financial advisor, legal counsel,
    or accountant regarding the information reporting requirements
    that may apply with respect to the acquisition of the units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Additional
    Rules that May Apply to U.S. Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Corporation is a &#147;passive foreign investment
    company&#148; (as defined below), the preceding sections of this
    summary may not describe the U.S. federal income tax
    consequences to U.S. Holders of the acquisition, ownership, and
    disposition of common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Passive
    Foreign Investment Corporation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Corporation generally will be a &#147;passive foreign
    investment company&#148; under Section&#160;1297 of the Code (a
    <B>&#147;PFIC&#148;</B>) if, for a taxable year, (a)&#160;75% or
    more of the gross income of the Corporation for such taxable
    year is passive income or (b)&#160;on average, 50% or more of
    the assets held by the Corporation either produce passive income
    or are held for the production of passive income, based on the
    fair market value of such assets (or on the adjusted tax basis
    of such assets, if the Corporation is not publicly traded and
    either is a &#147;controlled foreign corporation&#148; or makes
    an election). &#147;Passive income&#148; includes, for example,
    dividends, interest, certain rents and royalties, certain gains
    from the sale of stock and securities, and certain gains from
    commodities transactions. Active business gains arising from the
    sale of commodities generally are excluded from passive income
    if substantially all of a foreign corporation&#146;s commodities
    are (a)&#160;stock in trade of such foreign corporation or other
    property of a kind which would properly be included in inventory
    of such foreign corporation, or property held by such foreign
    corporation primarily for sale to customers in the ordinary
    course of business, (b)&#160;property used in the trade or
    business of such foreign corporation that would be subject to
    the allowance for depreciation under Section&#160;167 of the
    Code, or (c)&#160;supplies of a type regularly used or consumed
    by such foreign corporation in the ordinary course of its trade
    or business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of the PFIC income test and asset test described
    above, if the Corporation owns, directly or indirectly, 25% or
    more of the total value of the outstanding shares of another
    corporation, the Corporation will be treated as if it
    (a)&#160;held a proportionate share of the assets of such other
    corporation and (b)&#160;received directly a proportionate share
    of the
</DIV>

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    <BR>
    28
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    income of such other corporation. In addition, for purposes of
    the PFIC income test and asset test described above,
    &#147;passive income&#148; does not include any interest,
    dividends, rents, or royalties that are received or accrued by
    the Corporation from a &#147;related person&#148; (as defined in
    Section&#160;954(d)(3) of the Code), to the extent such items
    are properly allocable to the income of such related person that
    is not passive income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, if the Corporation is a PFIC and owns shares of
    another foreign corporation that also is a PFIC, under certain
    indirect ownership rules, a disposition of the shares of such
    other foreign corporation or a distribution received from such
    other foreign corporation generally will be treated as an
    indirect disposition by a U.S. Holder or an indirect
    distribution received by a U.S. Holder, subject to the rules of
    Section&#160;1291 of the Code discussed below. To the extent
    that gain recognized on the actual disposition by a U.S. Holder
    of the common shares or income recognized by a U.S. Holder on an
    actual distribution received on the common shares was previously
    subject to U.S. federal income tax under these indirect
    ownership rules, such amount generally should not be subject to
    U.S. federal income tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Corporation anticipates that it may qualify as a PFIC for
    the taxable year ending December&#160;31, 2007 and for
    subsequent taxable years. Whether the Corporation will, in fact,
    qualify as a PFIC for the taxable year ending December&#160;31,
    2007 will depend on the assets and income of the Corporation
    over the course of the taxable year ending December&#160;31,
    2007 and, as a result, cannot be predicted with certainty as of
    the date of this U.S. Preliminary Private Placement Memorandum.
    Each U.S. Holder should consult its own financial advisor, legal
    counsel, or accountant regarding whether the Corporation will
    qualify as a PFIC for the taxable year ending December&#160;31,
    2007 and in subsequent taxable years.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Default
    PFIC Rules&#160;Under Section&#160;1291 of the
    Code</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Corporation is a PFIC, the U.S. federal income tax
    consequences to a U.S. Holder of the acquisition, ownership, and
    disposition of common shares will depend on whether such U.S.
    Holder makes an election to treat the Corporation as a
    &#147;qualified electing fund&#148; or &#147;QEF&#148; under
    Section&#160;1295 of the Code (a <B>&#147;QEF
    Election&#148;</B>) or a
    <FONT style="white-space: nowrap">mark-to-market</FONT>
    election under Section&#160;1296 of the Code (a
    <B><FONT style="white-space: nowrap">&#147;Mark-to-Market</FONT>
    Election&#148;</B>). A U.S. Holder that does not make either a
    QEF Election or a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election will be referred to in this summary as a
    &#147;Non-Electing U.S.&#160;Holder.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Non-Electing U.S. Holder will be subject to the rules of
    Section&#160;1291 of the Code with respect to (a)&#160;any gain
    recognized on the sale or other taxable disposition of common
    shares and (b)&#160;any excess distribution paid on the common
    shares. A distribution generally will be an &#147;excess
    distribution&#148; to the extent that such distribution
    (together with all other distributions received in the current
    taxable year) exceeds 125% of the average distributions received
    during the three preceding taxable years (or during a U.S.
    Holder&#146;s holding period for the common shares, if shorter).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Section&#160;1291 of the Code, any gain recognized on the
    sale or other taxable disposition of common shares, and any
    excess distribution paid on the common shares, must be ratably
    allocated to each day in a Non-Electing U.S. Holder&#146;s
    holding period for the common shares. The amount of any such
    gain or excess distribution allocated to prior years of such
    Non-Electing U.S. Holder&#146;s holding period for the common
    shares (other than years prior to the first taxable year of the
    Corporation beginning after December&#160;31, 1986 for which the
    Corporation was not a PFIC) will be subject to U.S. federal
    income tax at the highest tax applicable to ordinary income in
    each such prior year. A Non-Electing U.S. Holder will be
    required to pay interest on the resulting tax liability for each
    such prior year, calculated as if such tax liability had been
    due in each such prior year. Such a Non-Electing U.S. Holder
    that is not a corporation must treat any such interest paid as
    &#147;personal interest,&#148; which is not deductible. The
    amount of any such gain or excess distribution allocated to the
    current year of such Non-Electing U.S. Holder&#146;s holding
    period for the common shares will be treated as ordinary income
    in the current year, and no interest charge will be incurred
    with respect to the resulting tax liability for the current year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Corporation is a PFIC for any taxable year during which a
    Non-Electing U.S. Holder holds common shares, the Corporation
    will continue to be treated as a PFIC with respect to such
    Non-Electing U.S. Holder, regardless of whether the Corporation
    ceases to be a PFIC in one or more subsequent years. A
    Non-Electing U.S. Holder may terminate this deemed PFIC status
    by electing to recognize gain (which will be taxed under the
    rules of Section&#160;1291 of the Code discussed above) as if
    such common shares were sold on the last day of the last taxable
    year for which the Corporation was a PFIC.
</DIV>

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    <BR>
    29
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">QEF
    Election</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that makes a QEF Election generally will not be
    subject to the rules of Section&#160;1291 of the Code discussed
    above. However, a U.S. Holder that makes a QEF Election will be
    subject to U.S. federal income tax on such U.S. Holder&#146;s
    pro rata share of (a)&#160;the net capital gain of the
    Corporation, which will be taxed as long-term capital gain to
    such U.S. Holder, and (b)&#160;the ordinary earnings of the
    Corporation, which will be taxed as ordinary income to such U.S.
    Holder. Generally, &#147;net capital gain&#148; is the excess of
    (a)&#160;net long-term capital gain over (b)&#160;net short-term
    capital loss, and &#147;ordinary earnings&#148; are the excess
    of (a)&#160;&#147;earnings and profits&#148; over (b)&#160;net
    capital gain. A U.S. Holder that makes a QEF Election will be
    subject to U.S. federal income tax on such amounts for each
    taxable year in which the Corporation is a PFIC, regardless of
    whether such amounts are actually distributed to such U.S.
    Holder by the Corporation. However, a U.S. Holder that makes a
    QEF Election may, subject to certain limitations, elect to defer
    payment of current U.S. federal income tax on such amounts,
    subject to an interest charge. If such U.S. Holder is not a
    corporation, any such interest paid will be treated as
    &#147;personal interest,&#148; which is not deductible.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that makes a QEF Election generally (a)&#160;may
    receive a tax-free distribution from the Corporation to the
    extent that such distribution represents &#147;earnings and
    profits&#148; of the Corporation that were previously included
    in income by the U.S. Holder because of such QEF Election and
    (b)&#160;will adjust such U.S. Holder&#146;s tax basis in the
    common shares to reflect the amount included in income or
    allowed as a tax-free distribution because of such QEF Election.
    In addition, a U.S. Holder that makes a QEF Election generally
    will recognize capital gain or loss on the sale or other taxable
    disposition of common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The procedure for making a QEF Election, and the U.S. federal
    income tax consequences of making a QEF Election, will depend on
    whether such QEF Election is timely. A QEF Election will be
    treated as &#147;timely&#148; if such QEF Election is made for
    the first year in the U.S. Holder&#146;s holding period for the
    common shares in which the Corporation was a PFIC. A&#160;U.S.
    Holder may make a timely QEF Election by filing the appropriate
    QEF Election documents at the time such U.S.&#160;Holder files a
    U.S. federal income tax return for such first year. However, if
    the Corporation was a PFIC in a prior year, then in addition to
    filing the QEF Election documents, a U.S. Holder must elect to
    recognize (a)&#160;gain (which will be taxed under the rules of
    Section&#160;1291 of the Code discussed above) as if the common
    shares were sold on the qualification date or (b)&#160;if the
    Corporation was also a CFC, such U.S. Holder&#146;s pro rata
    share of the post-1986 &#147;earnings and profits&#148; of the
    Corporation as of the qualification date. The
    &#147;qualification date&#148; is the first day of the first
    taxable year in which the Corporation was a QEF with respect to
    such U.S. Holder. The election to recognize such gain or
    &#147;earnings and profits&#148; can only be made if such U.S.
    Holder&#146;s holding period for the common shares includes the
    qualification date. By electing to recognize such gain or
    &#147;earnings and profits,&#148; such U.S. Holder will be
    deemed to have made a timely QEF Election. In addition, under
    very limited circumstances, a U.S. Holder may make a retroactive
    QEF Election if such U.S. Holder failed to file the QEF Election
    documents in a timely manner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A QEF Election will apply to the taxable year for which such QEF
    Election is made and to all subsequent taxable years, unless
    such QEF Election is invalidated or terminated or the IRS
    consents to revocation of such QEF Election. If a U.S. Holder
    makes a QEF Election and, in a subsequent taxable year, the
    Corporation ceases to be a PFIC, the QEF&#160;Election will
    remain in effect (although it will not be applicable) during
    those taxable years in which the Corporation is not a PFIC.
    Accordingly, if the Corporation becomes a PFIC in another
    subsequent taxable year, the QEF Election will be effective and
    the U.S. Holder will be subject to the QEF rules described above
    during any such subsequent taxable year in which the Corporation
    qualifies as a PFIC. In addition, the QEF Election will remain
    in effect (although it will not be applicable) with respect to a
    U.S. Holder even after such U.S. Holder disposes of all of such
    U.S. Holder&#146;s direct and indirect interest in the common
    shares. Accordingly, if such U.S. Holder reacquires an interest
    in the Corporation, such U.S. Holder will be subject to the QEF
    rules described above for each taxable year in which the
    Corporation is a PFIC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each U.S. Holder should consult its own financial advisor, legal
    counsel, or accountant regarding the availability of, and
    procedure for making, a QEF Election. The Corporation will make
    available to U.S. Holders, upon their request, timely and
    accurate information as to its status as a PFIC and will use
    commercially reasonable efforts to provide to a purchaser
    acquiring common shares pursuant to this Private Placement
    Memorandum that is a U.S. Holder all information that a U.S.
    Holder making a QEF Election is required to obtain for U.S.
    federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under applicable Treasury Regulations, a person that holds an
    option, warrant, or other right to acquire shares of a PFIC may
    not make a QEF Election that will apply to either (a)&#160;the
    option, warrant, or other right or (b)&#160;the shares of the
    PFIC subject to the option, warrant, or other right. In
    addition, under Treasury Regulations, if a person holds an
    option,
</DIV>

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    <BR>
    30
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    warrant, or other right to acquire shares of a PFIC, the holding
    period with respect to the shares of the PFIC acquired on the
    exercise of such option, warrant, or other right will include
    the period that the option, warrant, or other right was held.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Accordingly, a U.S. Holder of the warrants may not make a QEF
    Election that will apply to either the warrants or the common
    shares subject to the warrants. The general effect of these
    special rules is that (a)&#160;excess distributions paid on
    common shares acquired on exercise of the warrants, and gains
    recognized on the sale or other taxable disposition of common
    shares acquired on exercise of the warrants, will be spread over
    a U.S. Holder&#146;s entire holding period for such warrants and
    common shares (pursuant to the rules of Section&#160;1291 of the
    Code discussed above) and (b)&#160;if a U.S. Holder makes a QEF
    Election on the exercise of the warrants and receipt of the
    common shares, that election generally will not be a timely QEF
    Election with respect to such common shares (and the rules of
    Section&#160;1291 of the Code discussed above will continue to
    apply). It appears, however, that a U.S. Holder receiving common
    shares on the exercise of the warrants should be eligible to
    make an effective QEF Election as of the first day of the
    taxable year of such U.S. Holder beginning after the receipt of
    such common shares if such U.S. Holder also makes an election to
    recognize gain (which will be taxed under the rules of
    Section&#160;1291 of the Code discussed above) as if such common
    shares were sold on such date at fair market value. In addition,
    gain recognized on the sale or other taxable disposition (other
    than by exercise) of the warrants by a U.S. Holder will be
    subject to the rules of Section&#160;1291 of the Code discussed
    above. Each U.S. Holder should consult its own financial
    advisor, legal counsel, or accountant regarding the application
    of the PFIC rules to the warrants and the common shares.
    received on exercise of the warrants.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times"><FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder may make a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election only if the common shares are marketable stock. The
    common shares generally will be &#147;marketable stock&#148; if
    the common shares are regularly traded on a qualified exchange
    or other market. For this purpose, a &#147;qualified exchange or
    other market&#148; includes (a)&#160;a national securities
    exchange that is registered with the Securities and Exchange
    Commission, (b)&#160;the national market system established
    pursuant to section&#160;11A of the Securities and Exchange Act
    of 1934, or (c)&#160;a foreign securities exchange that is
    regulated or supervised by a governmental authority of the
    country in which the market is located, provided that
    (i)&#160;such foreign exchange has trading volume, listing,
    financial disclosure, surveillance, and other requirements
    designed to prevent fraudulent and manipulative acts and
    practices, remove impediments to and perfect the mechanism of a
    free, open, fair, and orderly market, and protect investors (and
    the laws of the country in which the foreign exchange is located
    and the rules of the foreign exchange ensure that such
    requirements are actually enforced) and (ii)&#160;the rules of
    such foreign exchange effectively promote active trading of
    listed stocks. If the common shares are traded on such a
    qualified exchange or other market, the common shares generally
    will be &#147;regularly traded&#148; for any calendar year
    during which the common shares are traded, other than in de
    minimis quantities, on at least 15&#160;days during each
    calendar quarter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election generally will not be subject to the rules of
    Section&#160;1291 of the Code discussed above. However, if a
    U.S.&#160;Holder makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election after the beginning of such U.S.&#160;Holder&#146;s
    holding period for the common shares and such U.S. Holder has
    not made a timely QEF Election, the rules of Section&#160;1291
    of the Code discussed above will apply to certain dispositions
    of, and distributions on, the common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election will include in ordinary income, for each taxable year
    in which the Corporation is a PFIC, an amount equal to the
    excess, if any, of (a)&#160;the fair market value of the common
    shares as of the close of such taxable year over (b)&#160;such
    U.S. Holder&#146;s adjusted tax basis in such common shares. A
    U.S. Holder that makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election will be allowed a deduction in an amount equal to the
    lesser of (a)&#160;the excess, if any, of (i)&#160;such U.S.
    Holder&#146;s adjusted tax basis in the common shares over
    (ii)&#160;the fair market value of such common shares as of the
    close of such taxable year or (b)&#160;the excess, if any, of
    (i)&#160;the amount included in ordinary income because of such
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election for prior taxable years over (ii)&#160;the amount
    allowed as a deduction because of such
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election for prior taxable years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S. Holder that makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election generally also will adjust such U.S. Holder&#146;s tax
    basis in the common shares to reflect the amount included in
    gross income or allowed as a deduction because of such
    Mark-to-Market Election. In addition, upon a sale or other
    taxable disposition of common shares, a U.S. Holder that makes a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election will recognize ordinary income or loss (not to exceed
    the excess, if any, of (a)&#160;the amount included in ordinary
    income because of such
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election for prior taxable years over (b)&#160;the amount
    allowed as a deduction because of such
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election for prior taxable years).
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election applies to the taxable year in which such
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election is made and to each subsequent taxable year, unless the
    common shares cease to be &#147;marketable stock&#148; or the
    IRS consents to revocation of such election. Each U.S. Holder
    should consult its own financial advisor, legal counsel, or
    accountant regarding the availability of, and procedure for
    making, a
    <FONT style="white-space: nowrap">Mark-to-Market</FONT>
    Election.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    PFIC Rules</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Section&#160;1291(f) of the Code, the IRS has issued
    proposed Treasury Regulations that, subject to certain
    exceptions, would cause a U.S. Holder that had not made a timely
    QEF Election to recognize gain (but not loss) upon certain
    transfers of common shares that would otherwise be tax-deferred
    (e.g., gifts and exchanges pursuant to corporate
    reorganizations). However, the specific U.S. federal income tax
    consequences to a U.S. Holder may vary based on the manner in
    which common shares are transferred.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain additional adverse rules will apply with respect to a
    U.S. Holder if the Corporation is a PFIC, regardless of whether
    such U.S. Holder makes a QEF Election. For example under
    Section&#160;1298(b)(6) of the Code, a U.S. Holder that uses
    common shares as security for a loan will, except as may be
    provided in Treasury Regulations, be treated as having made a
    taxable disposition of such common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The PFIC rules are complex, and each U.S. Holder should consult
    its own financial advisor, legal counsel, or accountant
    regarding the PFIC rules and how the PFIC rules may affect the
    U.S. federal income tax consequences of the acquisition,
    ownership, and disposition of common shares.
</DIV>
<A name='118'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain legal matters relating to the securities offered hereby
    will be passed upon on behalf of us by Bennett Jones LLP and
    Dorsey&#160;&#38; Whitney LLP and on behalf of the underwriter
    by Fasken Martineau DuMoulin LLP and White&#160;&#38; Case LLP.
    The partners and associates of each of Bennett Jones LLP and
    Fasken Martineau DuMoulin LLP, as a group, beneficially own,
    directly or indirectly, less than 1% of our securities.
</DIV>
<A name='119'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    PROCEEDINGS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are not involved in or aware of any present or pending legal
    proceedings against us involving us jointly or separately as a
    party.
</DIV>
<A name='120'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AUDITORS,
    TRANSFER AGENT AND REGISTRAR</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our auditors are Ernst&#160;&#38; Young LLP, Chartered
    Accountants, 1000, 440&#160;&#150;&#160;2nd Avenue S.W.,
    Calgary, Alberta T2P&#160;5E9.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transfer agent and registrar for our common shares is
    Computershare Trust&#160;Company of Canada at its principal
    offices in the cities of Calgary, Alberta and Toronto, Ontario.
</DIV>
<A name='121'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">STATUTORY
    RIGHTS OF WITHDRAWAL AND RESCISSION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Securities legislation in certain of the provinces of Canada
    provides purchasers with the right to withdraw from an agreement
    to purchase securities. This right may be exercised within two
    business days after receipt or deemed receipt of a prospectus
    and any amendment. In several of the provinces, securities
    legislation further provides a purchaser with remedies for
    rescission or, in some jurisdictions, damages if the prospectus
    and any amendment contains a misrepresentation or is not
    delivered to the purchaser, provided that the remedies for
    rescission or damages are exercised by the purchaser within the
    time limit prescribed by the securities legislation of the
    purchaser&#146;s province. The purchaser should refer to any
    applicable provisions of the securities legislation of the
    purchaser&#146;s province for the particulars of these rights or
    consult with a legal adviser.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>PART II</B>
</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>INFORMATION NOT REQUIRED TO BE DELIVERED TO<BR>
OFFEREES OR PURCHASERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the <I>Business Corporations Act </I>(Alberta), Oncolytics Biotech Inc. (the &#147;Corporation&#148;) may
indemnify a director or officer, a former director or officer, or a person who acts or acted at the
Corporation&#146;s request as a director or officer or a body corporate of which the Corporation is or
was a shareholder or creditor, and the director&#146;s or officer&#146;s heirs and legal representatives,
against all costs, charges and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by the individual in respect of any civil, criminal or administrative
action or proceeding to which the individual is involved because of that association with the
Corporation or other entity, and the Corporation may advance moneys to such an individual for the
costs, charges and expenses of such a proceeding. The Corporation may not indemnify such an
individual unless the individual acted honestly and in good faith with a view to the best interests
of the Corporation, or, as the case may be, to the best interests of the other entity for which the
individual acted as a director or officer or in a similar capacity at the Corporation&#146;s request,
and, in the case of a criminal or administrative action or proceeding that is enforced by a
monetary penalty, the individual had reasonable grounds for believing that the individual&#146;s conduct
was lawful. In addition, the individual must repay any moneys advanced by the Corporation if the
individual has not fulfilled the conditions set out in the preceding sentence. Such indemnification
or advance of moneys may be made in connection with a derivative action only with court approval.
Such an individual is entitled to indemnification from the Corporation as a matter of right if the
individual was not judged by the court or other competent authority to have committed any fault or
omitted to do anything that the individual ought to have done, and the individual fulfilled the
conditions set forth above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with and subject to the <I>Business Corporations Act </I>(Alberta), the by-laws of the
Corporation provide that the Corporation shall indemnify a director or officer, a former director
or officer, or a person who acts or acted at the Corporation&#146;s request as a director or officer, or
a body corporate of which the Corporation is or was a shareholder or creditor, and the director&#146;s
or officer&#146;s heirs and legal representatives, against all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any
civil, criminal or administrative action or proceeding to which he is made a party by reason of
being or having been a director or officer of the Corporation or other entity if he acted honestly
and in good faith with a view to the best interests of the Corporation or, as the case may be, to
the best interests of the other entity for which he acted as a director or officer at the
Corporation&#146;s request, and, in the case of a criminal or administrative action or proceeding that
is enforced by monetary penalty, he had reasonable grounds for believing that his conduct was
lawful. The Corporation shall also indemnify such person in such other circumstances as the
<I>Business Corporations Act </I>(Alberta) permits or requires.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Corporation maintains a directors&#146; &#038; officers&#146; insurance policy for the benefit of the
directors and officers of the Corporation and its subsidiaries against liability incurred by them
in their official capacities for which they become obligated to pay to the extent permitted by
applicable law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Insofar as indemnification for liabilities arising under the U.S. Securities Act of 1933, as
amended, may be permitted to directors, officers or persons controlling the Corporation pursuant to
the foregoing provisions, the Corporation has been informed that, in the opinion of the U.S.
Securities and Exchange Commission, such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II-1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>EXHIBITS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>3.1</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Underwriting Agreement dated as of February&nbsp;6, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.1</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Renewal Annual Information Form dated March&nbsp;2, 2006, for the year
ended December&nbsp;31, 2005, incorporated by reference to the
Corporation&#146;s Annual Report of Form&nbsp;40-F, filed with the
Commission on March&nbsp;3, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.2</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Audited financial statements, together with the accompanying notes
to the financial statements, for the fiscal years ended December
31, 2005 and 2004 and the auditors&#146; report thereon addressed to
the Corporation&#146;s shareholders, incorporated by reference to the
Corporation&#146;s Annual Report on Form&nbsp;40-F, filed with the
Commission on March&nbsp;3, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.3</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management Proxy Circular dated March&nbsp;24, 2006 relating to the
annual and special meeting of shareholders held on April&nbsp;26, 2006,
excluding those portions which are not prescribed by Canadian
securities law to be included in the Canadian Prospectus,
incorporated by reference to the Corporation&#146;s Current Report on
Form&nbsp;6-K, furnished to the Commission on March&nbsp;31, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.4</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management&#146;s discussion and analysis of financial condition and
results of operations dated March&nbsp;2, 2006, for the year ended
December&nbsp;31, 2005, incorporated by reference to the Corporation&#146;s
Annual Report on Form&nbsp;40-F, filed with the Commission on March&nbsp;3,
2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.5</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Unaudited interim financial statements as at September&nbsp;30, 2006
and for the three and nine months ended September&nbsp;30, 2006,
together with the notes thereto, incorporated by reference to the
Corporation&#146;s Current Report on Form&nbsp;6-K, furnished to the
Commission on November&nbsp;3, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.6</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management&#146;s discussion and analysis of financial condition and
results of operations dated November&nbsp;2, 2006, for the three and
nine months ended September&nbsp;30, 2006, incorporated by reference to
the Corporation&#146;s Current Report on Form&nbsp;6-K, furnished to the
Commission on November&nbsp;3, 2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>4.7</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reconciliation of financial statements as at September&nbsp;30, 2006
and for the three and nine months ended September&nbsp;30, 2006,
incorporated by reference to the Corporation&#146;s Current Report on
Form&nbsp;6-K, furnished to the Commission on February&nbsp;5, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>5.1</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Ernst &#038; Young LLP
dated February&nbsp;14, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>5.2</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Bennett Jones LLP dated
February&nbsp;14, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>5.3</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Fasken Martineau
DuMoulin LLP dated February&nbsp;14, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>6.1</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Powers of Attorney*</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>7.1</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant Indenture, dated as of February&nbsp;12, 2007, between the
Corporation and Computershare Trust Company of Canada, as trustee</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">*- Previously filed as part of the signature page for the Corporation&#146;s Form F-10, filed with the
Commission on February&nbsp;5, 2007.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>PART III</B>
</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>UNDERTAKING AND CONSENT TO SERVICE OF PROCESS</B>
</DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt"><B>Item&nbsp;1.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Undertaking</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Registrant undertakes to make available, in person or by telephone, representatives to respond
to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the
Commission staff, information relating to the securities registered pursuant to this Form F-10 or
to transactions in said securities.
</DIV>

<DIV align="left" style="font-size: 12pt; margin-top: 12pt"><B>Item&nbsp;2.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Consent to Service of Process</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Concurrently with the filing of this Registration Statement on Form F-10, the Registrant is
filing with the Commission a written irrevocable consent and power of attorney on Form F-X.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any change to the name and address of the agent for service of the Registrant will be communicated
promptly to the Commission by amendment to Form F-X referencing the file number of this
Registration Statement.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->III-1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Signatures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Act, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form F-10 and has
duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Calgary, Province of Alberta, Canada,
on February&nbsp;14, 2007.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>ONCOLYTICS BIOTECH INC. </B><BR><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Bradley G. Thompson
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Bradley G. Thompson&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by
or on behalf of the following persons in the capacities indicated on
February&nbsp;14, 2007:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ Bradley G. Thompson*
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Bradley G. Thompson</TD>
    <TD>&nbsp;</TD>
    <TD align="left">
President, Chief Executive Officer and Chairman
of the Board
(Principal Executive Officer)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em"><!-- Blank Space -->
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ Douglas A. Ball
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Douglas A. Ball</TD>
    <TD>&nbsp;</TD>
    <TD align="left">
Chief Financial Officer and Director
(Principal Financial and Accounting Officer)</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em"><!-- Blank Space -->
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ William A. Cochrane*
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
William A. Cochrane</TD>
    <TD>&nbsp;</TD>
    <TD align="left">
Director</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em"><!-- Blank Space -->
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ Ger J. van Amersfoort*
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Ger J. van Amersfoort</TD>
    <TD>&nbsp;</TD>
    <TD align="left">
Director</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em"><!-- Blank Space -->
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ Robert B. Schultz*
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Robert B. Schultz</TD>
    <TD>&nbsp;</TD>
    <TD align="left">
Director</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em"><!-- Blank Space -->
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ Fred A. Stewart*
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Fred A. Stewart</TD>
    <TD>&nbsp;</TD>
    <TD align="left">
Director</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->III-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="padding-top: 1em"><!-- Blank Space -->
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ Ed Levy*
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Ed Levy</TD>
    <TD>&nbsp;</TD>
    <TD align="left">
Director</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em"><!-- Blank Space -->
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ J. Mark Lievonen*
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
J. Mark Lievonen</TD>
    <TD>&nbsp;</TD>
    <TD align="left">
Director</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em"><!-- Blank Space -->
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">/s/ Jim Dinning*
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Jim Dinning</TD>
    <TD>&nbsp;</TD>
    <TD align="left">
Director</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD valign="top">*By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/  Douglas A. Ball
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Douglas A. Ball&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>


<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">
Pursuant to powers of attorney executed by the persons named above
whose signatures are marked by an asterisk, Douglas A. Ball, as
attorney-in-fact, does hereby sign this amendment to the registration
statement on behalf of each such person, in each case in the capacity
indicated, on the date indicated. Such powers of attorney were filed
as a part of the signature block of the Registrant&#146;s Form F-10, filed
with the Commission on February&nbsp;5, 2007.
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->III-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 12pt; margin-top: 12pt"><B>Authorized representative</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized
Representative has signed this Registration Statement, solely in his capacity as the duly
authorized representative of Oncolytics Biotech Inc. in the United States, in the State of
California, on February&nbsp;14, 2007.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/  Karl Mettinger
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Karl Mettinger&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Chief Medical Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->III-4<!-- /Folio -->
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<FILENAME>o34728exv3w1.htm
<DESCRIPTION>UNDERWRITING AGREEMENT DATED FEBRUARY 6, 2007
<TEXT>
<HTML>
<HEAD>
<TITLE>exv3w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><FONT face="Helvetica,Arial,sans-serif"><B>Exhibit
3.1</B></FONT>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>UNDERWRITING AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">February&nbsp;6, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Oncolytics Biotech Inc.<BR>
210-1167 Kensington Cr. N.W.<BR>
Calgary, Alberta<BR>
T2N 1X7

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attention:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">D.A. (Doug) Ball</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Sirs:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Canaccord Capital Corporation (the &#147;<B>Underwriter</B>&#148;) hereby offers to purchase from Oncolytics
Biotech Inc. (the &#147;<B>Company</B>&#148;) 4,000,000 units of the Company (the &#147;<B>Units</B>&#148;) at a price of $3.00 per
Unit (the &#147;<B>Offering Price</B>&#148;) for gross proceeds to the Company of $12,000,000. Each Unit shall
consist of one common share (a &#147;<B>Unit Share</B>&#148;) and one half of one common share purchase warrant (a
&#147;<B>Unit Warrant</B>&#148;) of the Company. Each whole Unit Warrant shall be exercisable into one common share
of the Company (a &#147;<B>Unit Warrant Share</B>&#148;) for a period of 36&nbsp;months from the Closing Date (as defined
in Section&nbsp;4 below) at an exercise price of $3.50 per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the Company wishes to grant to the Underwriter an over-allotment option (the
&#147;<B>Over-Allotment Option</B>&#148;), to purchase and offer for sale to the public pursuant to the terms and
conditions contained herein for up to thirty (30)&nbsp;days following the Closing Date, up to an
aggregate of 600,000 additional Units (the &#147;<B>Over-Allotment Units</B>&#148;), which Over-Allotment Option
shall be exercisable in whole or in part by the Underwriter at the Offering Price by providing two
(2)&nbsp;Business Days (meaning a day which is not a Saturday, a Sunday or a statutory or civic holiday
in the City of Calgary or the City of New York) written notice to the Company prior to the exercise
thereof. In the event that the Over-Allotment Option is exercised, a separate closing (the
&#147;<B>Over-Allotment Closing</B>&#148;) shall be held, and all of the terms and conditions relating to the
closing herein (including the payment of the Underwriter&#146;s Fee (as hereinafter defined)) shall
apply to the Over-Allotment Closing, except as otherwise agreed upon by the Company and the
Underwriter in writing. The Units, together with the Over-Allotment Units, are collectively
referred to herein as the &#147;<B>Offered Units</B>&#148;. Reference herein to the Unit Shares, the Unit Warrants
and the Unit Warrant Shares shall include reference to those Unit Shares, Unit Warrants and Unit
Warrant Shares issuable upon exercise of the Over-Allotment Option, assuming exercise thereof,
unless the context otherwise requires. The Unit Shares, the Unit Warrants and the Unit Warrant
Shares are collectively referred to herein as the &#147;<B>Offered Securities</B>&#148;. The offering of the Offered
Securities is referred to herein as the &#147;<B>Offering</B>&#148;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Underwriter is prepared to purchase the Offered Units from the Company, subject to the
terms and conditions described herein. The Underwriter acknowledges the filing on February&nbsp;5, 2007
of a preliminary short form prospectus (including the documents incorporated by reference therein,
in the English Language, the &#147;<B>Initial Preliminary Prospectus</B>&#148;) qualifying the distribution of,
<I>inter alia</I>, the Offered Units with the Canadian Securities Commissions
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;2&nbsp;-
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(as hereinafter defined) and the issuance on February&nbsp;5, 2007 of a Mutual Reliance Review System
(the &#147;<B>MRRS</B>&#148;) decision document issued by the Alberta Securities Commission (the &#147;<B>Reviewing
Authority</B>&#148;) in its capacity as principal regulator, pursuant to the MRRS evidencing that a receipt
has been issued for the Initial Preliminary Prospectus by the Canadian Securities Commissions. The
Underwriter also acknowledges the filing on February&nbsp;5, 2007 with the United States Securities and
Exchange Commission (the &#147;<B>SEC</B>&#148;), in accordance with the provisions of the United States Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively, the &#147;<B>1933 Act</B>&#148;),
of a registration statement (including documents incorporated by reference therein, as it has been
and may be further amended from time to time, the &#147;<B>Registration Statement</B>&#148;) on Form F-10 covering
the sale of, <I>inter alia</I>, the Offered Units under the 1933 Act which includes the Initial
Preliminary Prospectus (with such conditions as are permitted or required by Form F-10 and the
applicable rules and regulations of the SEC), along with the filing with the SEC of an appointment
for agent for service of process upon the Company on Form F-X in conjunction with the filing of the
Registration Statement (the &#147;<B>Form&nbsp;F-X</B>&#148;). Finally, the Underwriter acknowledges the Company&#146;s
issuance of a press release in compliance with SEC Rule&nbsp;134 announcing the Offering immediately
upon the filing of the Registration Statement. The obligation of the Underwriter to purchase any
Offered Units shall, in addition to being subject to the other terms and conditions described
herein, be conditional on the following steps having been taken within the time frames described
below:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall file an amended and restated preliminary short form
prospectus, in form and substance satisfactory to the Underwriter, acting reasonably
(including the documents incorporated by reference therein, in the English language, as
it may be amended from time to time, the &#147;<B>Canadian Preliminary Prospectus</B>&#148;), qualifying
the distribution of, <I>inter alia</I>, the Offered Units with the Reviewing Authority and the
securities regulatory authorities in the Provinces of British Columbia, Alberta,
Manitoba, and Ontario (collectively, the <B>&#147;Qualifying Provinces</B>&#148;), and shall obtain a
MRRS decision document issued by the Reviewing Authority in its capacity as principal
regulator, pursuant to the MRRS evidencing that a receipt has been issued for the
Canadian Preliminary Prospectus by the securities regulatory authorities in each of the
Qualifying Provinces (collectively, the &#147;<B>Canadian Securities Commissions</B>&#148;) dated
February&nbsp;6, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall file with the SEC, in form and substance satisfactory to the
Underwriter, acting reasonably, and in accordance with the provisions of the 1933 Act,
an amendment to the Registration Statement (including documents incorporated by
reference therein) on Form F-10 covering the sale of the Offered Securities under the
1933 Act which includes the Canadian Preliminary Prospectus (with such additions and
deletions as are permitted or required by Form F-10 and the applicable rules and
regulations of the SEC) (the &#147;<B>U.S. Preliminary Prospectus</B>&#148;) as soon as possible after
the filing of the Canadian Preliminary Prospectus on February&nbsp;6, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall use its best efforts to resolve all comments on the Canadian
Preliminary Prospectus that are received from the Canadian Securities Commissions (as
well as any comments on the Registration Statement that are
</TD>
</TR>
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;3&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>received from the SEC) as soon as possible after receipt of such comments and on a
basis satisfactory to the Underwriter, acting reasonably;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall (i)&nbsp;file with the Reviewing Authority and the other Canadian
Securities Commissions, within prescribed time periods, any amendment or supplement to
the Canadian Preliminary Prospectus and shall obtain an MRRS decision document issued
by the Reviewing Authority in its capacity as principal regulator, pursuant to the MRRS
evidencing that a receipt has been issued for the Canadian Preliminary Prospectus, as
amended or supplemented, by each of the Canadian Securities Commissions, and (ii)
forthwith after any such filing in Canada file with the SEC, in accordance with the
provisions of the 1933 Act, an amendment to the Registration Statement which includes
any such amendment or supplement to the Canadian Preliminary Prospectus;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall file a final short form prospectus, in form and substance
satisfactory to the Underwriter, acting reasonably (including the documents
incorporated by reference therein, in the English language, the &#147;<B>Canadian Final
Prospectus</B>&#148;), qualifying the distribution of, <I>inter alia</I>, the Offered Units with the
Reviewing Authority and the other Canadian Securities Commissions, and shall obtain an
MRRS decision document issued by the Reviewing Authority in its capacity as principal
regulator, pursuant to the MRRS evidencing that a receipt has been issued for the
Canadian Final Prospectus by each of the Canadian Securities Commissions, as soon as
practicable after comments on the Canadian Preliminary Prospectus are settled and, in
any event, by no later than February&nbsp;14, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall file with the SEC, in form and substance satisfactory to the
Underwriter, acting reasonably, and in accordance with the provisions of the 1933 Act,
an amendment to the Registration Statement which includes the Canadian Final Prospectus
(with such additions and deletions as are permitted or required by Form F-10 and the
applicable rules and regulations of the SEC) (the &#147;<B>U.S. Final Prospectus</B>&#148;) by no later
than February&nbsp;14, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall file with the Reviewing Authority as soon as possible, and in
any event no later than four (4)&nbsp;Business Days following the date of this Agreement, a
preliminary base shelf prospectus, in form and substance satisfactory to the
Underwriter, acting reasonably, and in accordance with the procedures set out in
National Instrument 44-102 (the &#147;<B>Canadian Preliminary Warrant Prospectus</B>&#148;) relating to
the Unit Warrant Shares;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall file with the Reviewing Authority as soon as possible a final
base shelf prospectus and supplement thereto in form and substance satisfactory to the
Underwriter, acting reasonably, and in accordance with the procedures set out in
National Instrument 44-102 relating to the Unit Warrant Shares (the &#147;<B>Final Warrant
Prospectus</B>&#148;) and shall obtain a final decision document of the Reviewing Authority in
respect thereof (the &#147;<B>Warrant Decision Document</B>&#148;) no later than on the Business Day
prior to the Closing Date. Reference to &#147;<B>Canadian Warrant Prospectus</B>&#148; herein shall
mean the Final Warrant</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;4&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Prospectus for which a Warrant Decision Document has been obtained from the
Reviewing Authority, including the documents incorporated by reference therein and
prospectus supplement thereto. The Company acknowledges and agrees that under no
circumstances whatsoever shall the Underwriter be required to execute a certificate
page in respect of the Canadian Preliminary Warrant Prospectus or the Canadian
Warrant Prospectus;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall file with the SEC as soon as possible, and in any event no
later than four (4)&nbsp;Business Days following the date of this Agreement, (i)&nbsp;a shelf
registration statement on Form F-10, in form and substance satisfactory to the
Underwriter, acting reasonably, providing for the registration of the Unit Warrant
Shares under the 1933 Act, including the Canadian Preliminary Warrant Prospectus (with
such deletions therefrom and additions thereto as are permitted or required by Form
F-10 and the applicable rules and regulations of the SEC); and (ii)&nbsp;an appointment of
agent for service of process upon the Company on Form F-X in conjunction with the
filing of such registration statement (the &#147;<B>Warrant Form&nbsp;F-X</B>&#148;); and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall file with the SEC as soon as possible an amendment to the
registration statement on Form F-10, in form and substance satisfactory to the
Underwriter, acting reasonably, providing for the registration of the Unit Warrant
Shares, including the Final Warrant Prospectus (with such deletions therefrom and
additions thereto as are permitted or required by Form F-10 and the applicable rules
and regulations of the SEC), and the Company will cause such registration statement to
become effective pursuant to Rule&nbsp;467 of the 1933 Act no later than on the Business Day
prior to the Closing Date. Such registration statement, including any exhibits and all
documents incorporated therein by reference, as of the time it becomes effective, and
in the event of any post-effective amendments, as of the date of the effectiveness of
such amendment, is referred to herein as the &#147;<B>Warrant Registration Statement</B>&#148;. The
Company shall file with the SEC as soon as possible after the effectiveness of the
Warrant Registration Statement, and in any event no later than the Business Day prior
to the Closing Date, pursuant to General Instruction II.L of Form F-10, a prospectus
supplement to the Warrant Registration Statement relating to the Unit Warrant Shares.
Such filing shall, in accordance with General Instruction II.L of Form F-10 be filed
with the SEC within one Business Day after such supplement is filed with the Reviewing
Authority. The prospectus included in the Warrant Registration Statement shall be
referred to herein as the &#147;<B>U.S. Warrant Base Prospectus</B>&#148;, and the U.S. Warrant Base
Prospectus together with the prospectus supplement, including all documents
incorporated by reference, relating to the offering of the Unit Warrant Shares filed
with the Commission pursuant to General Instruction II.L of Form F-10 following the
execution of this agreement by the parties hereto is referred to herein as the &#147;<B>U.S.
Warrant Prospectus</B>&#148;; <U>provided</U> that, prior to the filing of such supplement, the
term &#147;U.S. Warrant Prospectus&#148; shall mean the U.S. Warrant Base Prospectus, including
all documents incorporated by reference, together with any preliminary prospectus
supplement relating to the offering of the Unit Warrant Shares. The Company shall use
its reasonable efforts to maintain the effectiveness of the Warrant</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;5&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Registration Statement or another shelf registration statement providing for the
registration of the offering of the Unit Warrant Shares until the earlier of the
expiration date of the Warrants and the date upon which all such Unit Warrants have
been exercised.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For greater certainty, the parties agree that if the Company fails to meet the deadlines specified
above for any reason whatsoever (including, without limitation, being unable to resolve any
comments on the Canadian Preliminary Prospectus from the Canadian Securities Commissions on a basis
satisfactory to the Underwriter, acting reasonably, within the time frames described above), the
Underwriter shall be entitled to exercise the termination rights
provided for in Section 9 hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall pay to the Underwriter a fee (the &#147;<B>Underwriter&#146;s Fee</B>&#148;) at the Closing Time
(as defined in Section&nbsp;4 below) equal to 8% of the aggregate gross proceeds of the Offering in
consideration of the services to be rendered by the Underwriter in connection with the Offering.
Such services shall include, without limitation: (i)&nbsp;acting as financial advisor to the Company in
the preparation of documentation relating to the sale of the Offered Units; (ii)&nbsp;forming and
managing banking, selling and other groups for the sale of the Offered Units; (iii)&nbsp;distributing
the Offered Units to the public both directly and through other registered dealers and brokers;
(iv)&nbsp;assisting the Company in connection with the preparation and finalization of the Canadian
Prospectus (as hereinafter defined) and the U.S. Prospectus (as hereinafter defined); (v)
performing administrative work in connection with these matters; and (vi)&nbsp;all other services
arising out of the agreement resulting from the Company&#146;s acceptance of this offer. In the event
that Canada Revenue Agency determines that GST is exigible on the Underwriter&#146;s Fee, the Company
agrees to pay the amount of GST forthwith upon the request of the Underwriter.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the Company shall subdivide, consolidate, reclassify or otherwise exchange
the common shares in the capital of the Company during the period in which the Over-Allotment
Option and/or Unit Warrants are exercisable, the Company hereby agrees to make corresponding
adjustments to the applicable exercise price of the Over-Allotment Option and/or the Unit Warrants
(pursuant to the terms of the Warrant Indenture (as hereinafter defined), as the case may be, and
to the number of Units and/or Unit Warrant Shares, as the case may be, issuable upon the exercise
thereof, as applicable, such that the Underwriter shall be entitled to receive the same number and
type of securities that it would have otherwise received had it exercised the Over-Allotment Option
and/or Unit Warrants, as the case may be, prior to such occurrence. Reasonable notice shall be
given to the Underwriter of such adjustment(s). In the event that the Underwriter shall disagree
with the foregoing adjustment(s), the Company&#146;s auditors, absent manifest error, at the Company&#146;s
expense, shall determine such adjustment(s) conclusively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U><B>Representations and Warranties of the Company.</B></U> The Company represents and warrants to
and agrees with the Underwriter that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company meets the general eligibility requirements for use of Form F-10
under the 1933 Act and is eligible to file a short form prospectus under National
Instrument 44-101 of the Canadian Securities Administrators.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Initial Preliminary Prospectus was prepared, and the Canadian Preliminary
Prospectus, the Canadian Final Prospectus, the Canadian Preliminary Warrant</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;6&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Prospectus and the Final Warrant Prospectus will be prepared (the Initial
Preliminary Prospectus, the Canadian Preliminary Prospectus, the Canadian Final
Prospectus, the Canadian Preliminary Warrant Prospectus and the Final Warrant
Prospectus each referred to herein as a &#147;<B>Canadian Prospectus</B>&#148;), and filed in
compliance in all material respects with the securities laws in each of the
Qualifying Provinces, as applicable, and the respective rules and regulations under
such laws, together with the published policy statements, blanket orders and notices
of the Canadian Securities Commissions (the &#147;<B>Canadian Securities Laws</B>&#148;), as
applicable, and, at the time of delivery of the Offered Units to the Underwriter,
the Canadian Final Prospectus will comply in all material respects with the Canadian
Securities Laws and the Company shall fulfill and comply with the necessary
requirements of the Canadian Securities Laws in order to enable the Offered Units to
be lawfully distributed in the Qualifying Provinces through the Underwriter or any
other investment dealers or brokers registered as such in the Qualifying Provinces
and acting in accordance with the terms of their registrations and the Canadian
Securities Laws.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>None of the Canadian Securities Commissions, the SEC, any stock exchange in
Canada or the United States or any other regulatory authority or court has issued an
order preventing or suspending the use or effectiveness, as the case may be, of any
Canadian Prospectus, the Disclosure Package (as hereinafter defined), the U.S. Final
Prospectus, the Registration Statement or the Warrant Registration Statement relating
to the proposed Offering or preventing the distribution of the Offered Units or the
exercise of the Unit Warrant Shares or instituted proceedings for any such purpose and
no proceedings for any such purpose are pending or, to the knowledge of the Company,
are contemplated by any of the aforementioned parties, and any request on the part of
such parties for additional information from the Company has been complied with.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each Canadian Prospectus was or shall, as the case may be, as of its respective
date of filing and, except as amended prior to the Closing Date in accordance with
Canadian Securities Laws, as of the Closing Date (i)&nbsp;constitutes full, true and plain
disclosure of all material facts relating to the Company and the Offered Securities,
(ii)&nbsp;contains no misrepresentation, as defined under Canadian Securities Laws, and
(iii)&nbsp;does not omit any information which is necessary to make the statements contained
therein not misleading. The documents incorporated by reference in each Canadian
Prospectus and the U.S. Prospectus, when filed with the Reviewing Authority and the
SEC, were prepared in accordance with the Canadian Securities Laws, and any further
documents so filed and incorporated by reference in any Canadian Prospectus and the
U.S. Prospectus prior to the termination of the distribution of the Offered Units, or
any further amendment or supplement thereto, when such documents are filed with the
Reviewing Authority and the SEC, will be prepared in accordance with the Canadian
Securities Laws.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Registration Statement, the U.S. Preliminary Prospectus and the U.S. Final
Prospectus (together, the &#147;<B>U.S. Prospectus</B>&#148;) conforms or will conform, as the case may
be, to the Initial Preliminary Prospectus, Canadian Preliminary</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;7&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Prospectus and Canadian Final Prospectus, respectively, except for such deletions
therefrom and additions thereto as are permitted or required by Form F-10 and the
applicable rules and regulations of the SEC. In addition, as of their respective
dates, the Registration Statement, the Form F-X, the U.S. Preliminary Prospectus and
the U.S. Final Prospectus, as amended or supplemented, if applicable, comply or will
comply, as the case may be, in all material respects with the 1933 Act.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of the date and time the Registration Statement was declared effective (the
&#147;<B>Effective Time</B>&#148;), neither the Registration Statement nor any amendment or supplement
thereto contains or shall contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of the date and time immediately prior to the Effective Time (the
&#147;<B>Applicable Time</B>&#148;), the U.S. Preliminary Prospectus, any &#147;free writing prospectus&#148; as
defined in Rule&nbsp;405 of the 1933 Act (a &#147;<B>Free Writing Prospectus</B>&#148;) and any &#147;issuer free
writing prospectus&#148; as defined in Rule&nbsp;433 of the 1933 Act (an &#147;<B>Issuer Free Writing
Prospectus</B>&#148; and, together with any Free Writing Prospectus and the U.S. Preliminary
Prospectus, the &#147;<B>Disclosure Package</B>&#148;), when taken together as a whole, will not, as of
the Applicable Time, and on the Closing Date and on any settlement date, contain any
untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under which
they were made, not misleading.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each Issuer Free Writing Prospectus will not include any information that
conflicts with the information contained in the Registration Statement or the
applicable Canadian Prospectus, including any document incorporated by reference
therein and any prospectus supplement deemed to be a part thereof that has not been
superseded or modified.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At the time the Warrant Registration Statement becomes effective under the 1933
Act: (i)&nbsp;the Canadian Warrant Prospectus will comply in all material respects with
Canadian Securities Laws as interpreted and applied by the Alberta Securities
Commission; (ii)&nbsp;the U.S. Warrant Prospectus will conform to the Canadian Warrant
Prospectus, except for such deletions therefrom and additions thereto as are permitted
or required by Form F-10 and the applicable rules and regulations of the Commission;
(iii)&nbsp;the Warrant Registration Statement, and any amendments or supplements thereto
will comply in all material aspects with the requirements of the 1933 Act; (iv)&nbsp;none of
the Warrant Registration Statement, or any amendment or supplement thereto will contain
an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and (v)&nbsp;each
of the U.S. Warrant Prospectus, the Canadian Warrant Prospectus, and any Supplementary
Material (as defined in Section 7) or any amendment or
supplement thereto will constitute full, true and plain disclosure of all material
facts relating to the Company and the Unit Warrant Shares, and will not include an
untrue statement of a material fact or omit to state a material fact necessary in order
to make the</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;8&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>statements therein, in the light of the circumstances under which they were made,
not misleading.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The representations and warranties contained in paragraphs (c), (d), (e), (f), (g), (h)&nbsp;and (i)
above shall not apply to statements or omissions in a Canadian Prospectus or the U.S. Prospectus
that are made in reliance upon and in conformity with information furnished to the Company by the
Underwriter expressly for use in a Canadian Prospectus or the U.S. Prospectus.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>There are:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>no reports or information that in accordance with the
requirements of the Canadian Securities Laws must be made publicly available in
connection with the Offering that have not been or will not be made publicly
available as required, and there are no documents required to be filed with the
Canadian Securities Commissions in connection with a Canadian Prospectus that
have not been filed (or that will not be filed prior to the Closing Date in
accordance with Canadian Securities Laws) as required pursuant to Canadian
Securities Laws and delivered to the Underwriter; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>no contracts, documents or other materials required to be
described or referred to in a Canadian Prospectus or the U.S. Prospectus or to
be filed as exhibits to the Registration Statement that will not be described,
referred to or filed as required and, in the case of those documents filed,
delivered to the Underwriter.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company was not and is not an &#147;ineligible issuer&#148; as defined in Rule&nbsp;405 of
the 1933 Act (an &#147;<B>Ineligible Issuer</B>&#148;), without taking account of any determination by
the SEC pursuant to Rule&nbsp;405 of the 1933 Act that it is not necessary that the Company
be considered an Ineligible Issuer (i)&nbsp;at the time of filing the Registration
Statement, and (ii)&nbsp;as of the date and time this Agreement is executed and delivered by
the parties hereto (the &#147;<B>Execution Time</B>&#148;) (with such date being used as the
determination date for purposes of this clause (ii)),</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(l)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company is, and upon completion of the transactions described herein, and
assuming the anticipated use of the proceeds thereof to be described in each Canadian
Prospectus, the Disclosure Package and the U.S. Final Prospectus, will be, a &#147;foreign
private issuer&#148; within the meaning of Rule&nbsp;3b-4 under the U.S. Securities Exchange Act
of 1934, as amended (the &#147;<B>1934 Act</B>&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(m)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The audited and unaudited financial statements of the Company that are to be
included or incorporated by reference in the Registration Statement, each Canadian
Prospectus, the Disclosure Package and the U.S. Final Prospectus will present fairly in
all material respects the financial position of the Company as of the dates indicated
and the results of operations and the changes in financial position of the Company for
the periods specified (subject, in the case of interim financial information, to
year-end adjustments); and such financial statements have been (or will be) prepared in
conformity with generally accepted accounting principles in Canada, consistently
applied throughout the periods involved, and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;9&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>have been reconciled to generally accepted accounting principles in the United
States in accordance with Item&nbsp;18 of Form 20-F. The summary and selected financial
data to be included or incorporated by reference in the Registration Statement, each
Canadian Prospectus, the Disclosure Package and the U.S. Final Prospectus present
fairly the information shown therein and have been compiled on a basis consistent
with that of the audited and unaudited financial information included or
incorporated by reference in the Registration Statement, each Canadian Prospectus,
the Disclosure Package and the U.S. Final Prospectus.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(n)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company does not owe any money to, does not have any present loans to, has
not borrowed any monies from, and is not otherwise indebted to any officer, director,
employee, shareholder or any person not dealing &#147;arm&#146;s length&#148; (as such term is defined
in the Tax Act) with the Company except as set forth in the audited financial
statements of the Company to be included or incorporated by reference in the
Registration Statement, each Canadian Prospectus, the Disclosure Package and the U.S.
Final Prospectus, and except for payroll obligations in the normal course of business.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(o)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company does not have any agreements of any nature whatsoever to acquire or
merge with any entity, or to acquire or lease any other business operations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(p)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Ernst &#038; Young LLP, who have reported upon the audited financial statements of
the Company to be included or incorporated by reference in the Registration Statement,
each Canadian Prospectus, Disclosure Package and the U.S. Final Prospectus, are, and
during the periods covered by its reports were, independent with respect to the Company
within the meaning of the <I>Business Corporations Act </I>(Alberta) and applicable Canadian
Securities Laws, and are independent as required by the 1933 Act and there has never
been any reportable event (within the meaning of Canadian Securities Laws) with the
present or any former auditor of the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(q)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has been duly incorporated, is validly existing as a corporation in
good standing under the <I>Business Corporations Act </I>(Alberta), has the corporate power
and authority to own its property and to conduct its business as will be described in
the Registration Statement, each Canadian Prospectus, the Disclosure Package and the
U.S. Final Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse effect on
the assets or properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company considered as a whole (a &#147;<B>Material Adverse
Effect</B>&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(r)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has not committed an act of bankruptcy nor is insolvent, has
proposed a compromise or arrangement to its creditors generally, has had a petition or
a receiving order in bankruptcy filed against it, has made a voluntary assignment in
bankruptcy, has taken any proceedings with respect to a compromise or arrangement, has
taken any proceedings to have itself declared</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;10&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>bankrupt or wound-up, has taken any proceedings to have a receiver appointed for any
of its property or has had any execution or distress become enforceable or become
levied upon any of its property.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(s)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except for 80,000 common shares in the capital of BCY Lifesciences Inc., the
Company does not own securities of any person and, for greater certainty, does not have
any subsidiaries.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(t)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has the corporate power and authority to execute, deliver and
perform its obligations under this Agreement, the certificates representing the Unit
Warrants and the Warrant Indenture (collectively, the &#147;<B>Transaction Documents</B>&#148;), and
each Transaction Document has been duly authorized, executed and delivered by the
Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(u)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The authorized capital of the Company conforms in all material respects to the
description thereof to be contained in each Canadian Prospectus, the Registration
Statement, the Disclosure Package and the U.S. Final Prospectus.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Since December&nbsp;31, 2005, other than in respect of material change reports filed
on a confidential basis and in respect of which the material change so reported did not
come to fruition or as described in the Company&#146;s subsequently filed interim financial
statements:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>there has not been any material change (as defined in the
<I>Securities Act </I>(Alberta)) in the assets, liabilities or obligations (absolute,
accrued, contingent or otherwise) of the Company that has not been publicly
disclosed;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>there has not been any material change in the capital stock or
long-term debt of the Company that has not been publicly disclosed;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>there has not been any material change in the business,
business prospects, condition (financial or otherwise) or results of the
operations of the Company that has not been publicly disclosed; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company has carried on its business in the ordinary course.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(w)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All common shares of the Company outstanding immediately prior to the issuance
of the Unit Shares have been or will be duly authorized and are validly issued, fully
paid and non-assessable.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(x)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>There are no outstanding securities convertible into or exchangeable for, or
warrants, rights or options to purchase from the Company, or obligations of the Company
to issue, common shares of the Company or any other class of shares of the Company,
except, as of the date hereof, common share purchase options and common share purchase
warrants to acquire 3,637,950 and 2,672,000, common shares of the Company,
respectively.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;11&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(y)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Unit Shares and the Unit Warrant Shares have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered in
accordance with the terms of this Agreement, will be validly allotted and issued as
fully paid and non-assessable shares of the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(z)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The execution and delivery of the Transaction Documents, the fulfillment of the
terms thereof including, but not limited to, the issue, sale and delivery of the Unit
Shares, the creation, issue and delivery of the Unit Warrants, the issue and delivery
of the Unit Warrant Shares upon exercise of the Unit Warrants, and the grant of the
Over-Allotment Option, do not and will not result in a breach of and do not create a
state of facts which, after notice or lapse of time or both, will result in a breach
of, and do not and will not conflict with, any of the terms, conditions or provisions
of: (i)&nbsp;the constating documents of the Company; (ii)&nbsp;any laws of Alberta or the
federal laws of Canada applicable therein; (iii)&nbsp;any provision of law binding on the
Company; (iv)&nbsp;any agreement or other instrument binding upon the Company; or (v)&nbsp;any
judgment, order or decree of any governmental body, agency or court having jurisdiction
over the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(aa)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No approval, consent, authorization, order or license of, or qualification with
any government, governmental body or agency or court of (i)&nbsp;any province of Canada;
(ii)&nbsp;the federal government of Canada; (iii)&nbsp;the federal government of the United
States; or (iv)&nbsp;the various states of the United States in which the Offered Units are
to be offered for sale or sold, or of any political subdivision of any thereof, is
required to be obtained by the Company for the performance by the Company of its
obligations under this Agreement, except such as have already been received or as may
be required by the Toronto Stock Exchange (the &#147;<B>TSX</B>&#148;), the NASDAQ Capital Market
(&#147;<B>NASDAQ</B>&#148;), the 1933 Act, the securities or &#147;blue sky&#148; laws of the various states of
the United States and the Canadian Securities Laws in connection with the offer and
sale of the Offered Units.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(bb)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the ownership of the Company or in the earnings, business or
operations of the Company from that to be set forth in each Canadian Prospectus, the
Registration Statement, the Disclosure Package and the U.S. Final Prospectus.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(cc)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except as to be disclosed in each Canadian Prospectus, the Registration
Statement, the Disclosure Package and the U.S. Final Prospectus, there are no actions,
proceedings or investigations (whether or not purportedly by or on behalf of the
Company) pending or threatened against or affecting the Company or any of its
properties at law or in equity (whether in any court, arbitration or similar tribunal)
or before or by any federal, provincial, state, municipal, or other governmental
department, commission, board or agency, domestic or foreign, required to be disclosed
therein.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(dd)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company is a &#147;reporting issuer&#148; in British Columbia, Alberta, Ontario and
Quebec, and is not in default under Canadian Securities Laws and is in full compliance
with the by-laws, rules and regulations of the TSX and NASDAQ.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


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</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;12&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ee)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The common shares of the Company are listed and posted for trading on the TSX
and NASDAQ under the stock symbols &#147;ONC&#148; and &#147;ONCY&#148;, respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ff)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To the knowledge of the Company, the Company is not and, after giving effect to
the Offering and the application of the proceeds thereof to be described in each
Canadian Prospectus, the Disclosure Package, the Registration Statement and the U.S.
Final Prospectus, will not be required to register as an &#147;investment company&#148; as such
term is defined in the Investment Company Act of 1940, as amended.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(gg)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>There are no &#147;significant acquisitions&#148;, &#147;significant dispositions&#148; and
&#147;significant probable acquisitions&#148; for which the Company is required, pursuant to
applicable Canadian Securities Laws to include additional financial disclosure.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(hh)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To the knowledge of the Company, the Company is in compliance with any and all
applicable foreign, federal, provincial, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>There are no restrictions upon or impediment to, the declaration or payment of
dividends by the Company in the constating documents of the Company or in any
agreement, mortgage, note, debenture, indenture or other instrument or document to
which the Company is a party or by which it is bound.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(jj)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has filed all federal, provincial, state, local and foreign tax
returns that are required to be filed or has requested extensions thereof (except in
any case in which the failure so to file would not have a Material Adverse Effect) and
have paid all taxes required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in good
faith. None of Canada Revenue Agency or any foreign taxation authority has asserted or,
to the best of the Company&#146;s knowledge, threatened to assert any reassessment, claim or
liability for taxes due or to become due in connection with any review or examination
of the tax returns of the Company filed for any year which would have a Material
Adverse Effect.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(kk)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except as to be disclosed in each Canadian Prospectus, the Registration
Statement, the Disclosure Package and the U.S. Final Prospectus, the Company currently
holds in good standing all material permits, licenses, franchises and approvals of
governmental authorities and agencies necessary for the present use, ownership and
operation of its business (except where the failure to do so would not, individually or
in the aggregate, have a Material Adverse Effect), and no revocation or limitation of
any such permit, license, franchise or approval is pending or, to the knowledge of the
Company, threatened and the Company is not in default or violation of any such permit,
license, franchise or approval (except where such revocation, limitation, default or
violation would not, individually or in the aggregate, have a Material Adverse Effect),
and the authorization, issuance and delivery of the Offered Securities and the
compliance by the Company with the terms of this Agreement do not and will not conflict
with, or result in a breach</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;13&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>of any of the terms or provisions of, or constitute a default under, any of such
permits, licenses, franchises and approvals. Except as to be disclosed in each
Canadian Prospectus, the Registration Statement, the Disclosure Package and the U.S.
Final Prospectus, to the knowledge of the Company, there is no threatened or pending
change in any law, rule or regulation referred to above that would, individually or
in the aggregate, have a Material Adverse Effect.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ll)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Intellectual Property (as hereinafter defined) of the Company: (i)&nbsp;is
validly owned by or licensed to the Company; (ii)&nbsp;is not the subject of any
oppositions, challenges or other litigation, pending or threatened; (iii)&nbsp;in the case
of patents owned by the Company, have been assigned to the Company, and have been
validly and effectively obtained by or on behalf of the Company in all jurisdictions in
which it is advisable, in the Company&#146;s opinion, acting reasonably, to be registered;
and (iv)&nbsp;in the case of trade-marks owned by the Company, have been validly registered
by or on behalf of the Company in all jurisdictions in which it is advisable, in the
Company&#146;s opinion, acting reasonably, to be registered. Furthermore, the Company, and
its products and services associated with the business of the Company, have not been
the subject of any litigation or infringement action, pending or threatened, relating
to the intellectual property of other parties.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;<B>Intellectual Property</B>&#148; means, collectively, all intellectual property rights of
whatsoever nature, kind or description including:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all trade-marks, service marks, trade-mark and service mark
registrations, trade-mark and service mark applications, rights under
registered user agreements, trade names and other trade-mark and service mark
rights;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all copyrights and applications therefor, including all
computer software and rights related thereto;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all Patent Rights (as hereinafter defined);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all trade secrets and proprietary and confidential information;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all industrial designs, design patents, design applications,
and registrations thereof and applications therefor;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(vi)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all renewals, modifications, developments and extensions of any
of the items listed in clauses (i)&nbsp;through (v)&nbsp;above; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(vii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all patterns, plans, designs, research data, other proprietary
know-how, processes, drawings, technology, inventions, formulae,
specifications, performance data, quality control information, unpatented blue
prints, flow sheets, equipment and parts lists, instructions, manuals, records
and procedures, and all licenses, agreements and other contracts and
commitments relating to any of the foregoing.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;14&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;<B>Patent Rights</B>&#148; means all patents and patent applications of the Company and
all other patents and patent applications issuing therefrom, claiming,
relating to or associated with the business of the Company or its respective
products and all improvements thereto, including, all divisions,
continuations, partial continuations, extensions, substitutions,
confirmations, registrations, revalidations, additions or reissues of or to
any of the patents or patent applications.</TD>
</TR>
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(mm)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company (or parties under contractual obligation to the Company) now hold
or are now in the process of obtaining, and as of the Closing Date will hold or will be
in the process of obtaining, all licenses, certificates, approvals and permits from all
provincial, federal, state, United States, foreign and other regulatory authorities,
including but not limited to the United States Food and Drug Administration (the
&#147;<B>FDA</B>&#148;), Health Canada (&#147;<B>HC</B>&#148;), the United Kingdom Medicines and Healthcare Products
Regulatory Agency (&#147;<B>MHRA</B>&#148;) and any foreign regulatory authorities performing functions
similar to those performed by the FDA, HC and MHRA, that are material to the conduct of
the business of the Company (as such business is currently conducted), all of which are
valid and in full force and effect (and there is no proceeding pending or, to the
knowledge of the Company, threatened which may cause any such license, certificate,
approval or permit to be withdrawn, cancelled, suspended or not renewed). The Company
is not in violation of any material law, order, rule, regulation, writ, injunction or
decree of any court or governmental agency or body, applicable to the investigation of
new drugs in humans and animals, including, but not limited to, those promulgated by
the FDA, HC or MHRA.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(nn)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The clinical studies and tests (including, but without limitation the human and
animal clinical trials) conducted by the Company or in which the Company has
participated that are described in the publicly filed documents of the Company or will
be described in each Canadian Prospectus, the Disclosure Package, the Registration
Statement and the U.S. Final Prospectus or the results of which are referred to in the
publicly filed documents of the Company or will be referred to in each Canadian
Prospectus, the Disclosure Package, the Registration Statement and the U.S. Final
Prospectus and such studies and test that were conducted on behalf of the Company, were
and, if still pending, are being conducted in all material respects (i)&nbsp;in accordance
with the good clinical practice (&#147;<B>GCP</B>&#148;) and protocols, procedures and controls for such
studies and tests of new medical devices or biologic products, as the case may be, and
(ii)&nbsp;in accordance with all applicable laws, rules and regulations; the descriptions of
the results of such studies and tests contained in the publicly filed documents of the
Company and in, as and when filed, each Canadian Prospectus, the Disclosure Package,
the Registration Statement and the U.S. Final Prospectus are accurate, complete and
fair, and the Company has no knowledge of any other studies or tests, the results of
which call into question the results described or referred to in such publicly filed
documents of the Company and the Company has not received any notices or correspondence
from the FDA, HC, MHRA or any other governmental agency requiring the termination,
suspension or modification of any studies or tests conducted by, or on behalf of, the
Company or in which the Company has</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;15&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>participated that are described in the publicly filed documents of the Company or
the results of which are referred to in the publicly filed documents of the Company
that would cause the Company to change the descriptions in such publicly filed
documents of the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(oo)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company is in compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment, pay equity and wages, except
where such non-compliance would not have a Material Adverse Effect, and has not and is
not engaged in any unfair labour practice.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(pp)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except as to be disclosed in each Canadian Prospectus, the Disclosure Package,
the Registration Statement and the U.S. Final Prospectus:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company is not a party to any contract with any labour
union or employee association or made commitments to or conducted negotiations
with any labour union or employee association with respect to any future
agreement and, to the best of the knowledge of the Company, there are no
current attempts to organize or establish any labour union or employee
association, and there is no certification of any such union with regard to a
bargaining unit; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>no labor problem or dispute with the employees or former
employees of the Company exists or is threatened or imminent, and the Company
is not aware of any existing or imminent labor disturbance by the employees of
any of its principal suppliers, contractors or customers, that could reasonably
be expected to have a Material Adverse Effect.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(qq)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except as disclosed in the notes to the Company&#146;s audited financial statements,
or as disclosed in writing to the Underwriter, and not material, the Company has good
title to the items of real and personal property which are to be referred to in the
Registration Statement, each Canadian Prospectus, the Disclosure Package and the U.S.
Final Prospectus as being owned by them, and have valid and enforceable leasehold
interests in the items of real and personal property to be referred to in the
Registration Statement, each Canadian Prospectus, the Disclosure Package and the U.S.
Final Prospectus as being leased by them, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other than those which do not
interfere with the use made or intended to be made of such property by the Company or
do not and will not have a Material Adverse Effect.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(rr)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company is not (i)&nbsp;in violation of its charter documents or by-laws, or
(ii)&nbsp;in default in the observance or performance of any term or obligation to be
performed by it under any agreement, lease, contract, mortgage, loan agreement, note,
indenture or other instrument or obligation to which the Company is a party or by which
the Company or any of its respective properties is bound and which breach or default,
individually or in the aggregate, if not cured or otherwise corrected within the
respective period specified for such cure or correction, would have a Material Adverse
Effect.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">




</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;16&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ss)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Computershare Trust Company of Canada (&#147;<B>Computershare</B>&#148;), at its principal
offices in the Canadian cities of Calgary and Toronto, has been duly appointed as the
registrar and transfer agent in respect of the common shares of the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(tt)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Prior to the filing of the Canadian Final Prospectus and the U.S. Final
Prospectus, the Unit Shares and the Unit Warrant Shares will have been conditionally
approved for listing on the TSX and NASDAQ.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(uu)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The net proceeds of the Offering will be used by the Company as described in
each Canadian Prospectus, Registration Statement, Disclosure Package and the U.S. Final
Prospectus.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(vv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary in the
business in which it is engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or its businesses, assets, employees, officers and directors are
in full force and effect; the Company is in compliance with the terms of such policies
and instruments in all material respects; and, there are no claims by the Company under
any such policy or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause. The Company has not been refused any
insurance coverage sought or applied for the Company and does not have any reason to
believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material Adverse
Effect.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ww)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that: (i)&nbsp;transactions are executed in accordance with
management&#146;s general or specific authorizations; (ii)&nbsp;transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally
accepted accounting principles in Canada and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management&#146;s general or specific
authorization; and (iv)&nbsp;the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to
any differences. The Company is not aware of any material weakness in their internal
controls over financial reporting.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(xx)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company maintains &#147;disclosure controls and procedures&#148; (as such term is
defined in Rule&nbsp;13a-15(e) under the 1934 Act) and the Company believes that such
disclosure controls and procedures are effective.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(yy)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>There is and has been no failure on the part of the Company or any of the
Company&#146;s directors or officers, in their capacities as such, to comply with any
applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith, including Section&nbsp;402 related to loans and
Sections&nbsp;302 and 906 related to certifications.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">




</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;17&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(zz)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The minute books and corporate records of the Company made available to Fasken
Martineau DuMoulin LLP, Canadian counsel to the Underwriter in connection with its due
diligence investigation of the Company for the period from its date of incorporation to
the date of examination thereof are copies of the original minute books and records of
the Company and contain copies of all proceedings (or certified copies thereof) of the
shareholders, the board of directors (other than minutes in respect of the January&nbsp;29,
2007 meeting) and all committees of the board of directors of the Company and there
have been no other meetings, resolutions or proceedings of the shareholders, board of
directors or any committee of the board of directors of the Company to the date of
review of such corporate records and minute books not reflected in such minute books
and other records other than those which have been disclosed to the Underwriter or
which are not material to the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(aaa)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has not withheld from the Underwriter any facts relating to the
Company or to the Offering that would be material to a prospective purchaser of the
Offered Units.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(bbb)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All of the representations and warranties made by the Company in this
Agreement will continue to be true and correct as of the Closing Time.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. <U><B>Agreements to Sell and Purchase.</B></U> The Company hereby agrees to sell the Offered Units to
the Underwriter, and the Underwriter hereby agrees to purchase the Offered Units from the Company,
all on the terms and conditions described herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. <U><B>Terms of Public Offering.</B></U> The Company has been advised that the Offered Units are to be
offered to the public in the Qualifying Provinces, the United States and other jurisdictions
(provided any offers in jurisdictions other than Canada and the United States will be made on a
basis which is exempt from registration and prospectus requirements under applicable laws), either
directly through the Underwriter or through members of a selling syndicate to be established by the
Underwriter. The Underwriter will comply with all applicable laws in connection with the offer and
sale of the Offered Units. The Underwriter agrees that any sales of Offered Units in the United
States will be conducted through an affiliate of the Underwriter duly registered to do so in the
relevant jurisdiction in which such sales are being made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. <U><B>Closing, Payment and Delivery.</B></U> The closing of the Offering will be completed at the
offices of Bennett Jones LLP, 4500 Bankers Hall East, 855 2<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP> Street SW, Calgary,
Alberta T2P 4K7 on February&nbsp;22, 2007 or such later date as the parties may mutually agree to in
writing, but in any event no later than March&nbsp;22, 2007 (the &#147;<B>Closing Date</B>&#148;), at 6:30 a.m. (Calgary
time) (such time on the Closing Date is referred to herein as the &#147;<B>Closing Time</B>&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the Closing Time, the Company shall deliver to the Underwriter against delivery to the
Company by the Underwriter of the gross proceeds of the Offering:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>certificates representing the Unit Shares and Unit Warrants comprising the
Offered Units to be purchased by the Underwriter in accordance with the terms of this
agreement duly registered as the Underwriter shall have directed 48 hours prior to the
Closing Time on the Closing Date;</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;18&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>payment of the Underwriter&#146;s Fee, together with the Underwriter&#146;s expenses and
fees described in Section 7 hereof;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>executed copies of the standstill agreements (the &#147;<B>Standstill Agreements</B>&#148;) in
the form of Schedule &#147;A&#148; hereto addressed to the Underwriter from each of the directors
and officers of the Company pursuant to which such persons agree not to sell, transfer,
assign, pledge or otherwise dispose of any securities of the Company owned by any such
persons, directly or indirectly, until the 90<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day following the Closing
Date, without the prior written consent of the Underwriter;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the requisite legal opinions and certificates and covenants as contemplated
herein; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>such further documentation as may be contemplated herein or as counsel to the
Underwriter or the applicable regulatory authorities may reasonably require.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Furthermore, the Company shall, prior to the Closing Time:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>make all necessary arrangements for the exchange on the date of delivery of the
certificate or certificates issued as aforesaid at the principal offices of
Computershare in the City of Toronto for certificates representing such number of the
Unit Shares registered in such names as shall be designated in writing by the
Underwriter not less than 48 hours prior to the Closing Time. The Company shall pay
all fees and expenses payable to Computershare in connection with the preparation,
delivery, certification and exchange of the Unit Shares and the certificate therefor
contemplated hereunder and the fees and expenses payable to Computershare in connection
with the initial or additional transfers as may be required in the course of the
distribution of the Unit Shares; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>enter into a warrant indenture (the &#147;<B>Warrant Indenture</B>&#148;) in form and on terms
satisfactory to the Underwriter, acting reasonably, with Computershare governing the
issue and exercise of the Unit Warrants and pursuant to which the Company shall appoint
Computershare as warrant agent with respect to the Unit Warrants.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. <U><B>Conditions to the Underwriter&#146;s Obligations.</B></U> The obligations of the Underwriter to
purchase and pay for the Offered Units on the Closing Date are, in addition to the conditions
described elsewhere in this Agreement, subject to the following further conditions:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Registration Statement and the Warrant Registration Statement shall have
become effective and no stop order suspending the effectiveness of the Registration
Statement or the Warrant Registration Statement or preventing or suspending the use of
the U.S. Prospectus or any Free Writing Prospectus or Issuer Free Writing Prospectus
shall have been issued under the 1933 Act and no proceedings for that purpose shall
have been instituted or shall be pending or, to the knowledge of the Underwriter or the
knowledge of the Company, shall be contemplated by the SEC. In addition, no order
having the effect of ceasing or suspending the distribution of the Offered Units or the
trading in the common shares of the Company or any other securities of the Company
shall have been issued by any securities commission, securities regulatory authority or
stock exchange in Canada or the United States and no proceedings for that purpose shall
have been instituted or pending or, to the knowledge of the Company, shall be
contemplated by any securities commission, securities regulatory authority or stock</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">-&nbsp;19&nbsp;-
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>exchange in Canada or the United States. Any request on the part of any Canadian
Securities Commission or the SEC for additional information from the Company shall have
been complied with and the Company shall have complied with all filing requirements
applicable to any Issuer Free Writing Prospectus used or referred to after the date
hereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Underwriter shall have received on the Closing Date a certificate, dated
the Closing Date and signed by the Chief Executive Officer and Chief Financial Officer
of the Company, in their capacity as such and not in their personal capacity, in a form
satisfactory to the Underwriter and its counsel, acting reasonably, certifying, among
other things, that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the Company has complied
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date. The officers signing
and delivering such certificate may rely upon the best of their knowledge.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Underwriter shall have received on the Closing Date a favourable opinion of
Bennett Jones LLP, Canadian counsel to the Company, dated the Closing Date, with
respect to such matters as the Underwriter and its counsel may reasonably request,
including those matters identified in Schedule &#147;B&#148; hereto. In giving such opinion,
such counsel may rely, as to all matters governed by the laws of jurisdictions other
than the laws of the Provinces of Alberta and Ontario and the federal laws of Canada
applicable therein, upon opinions of local counsel, who shall be counsel satisfactory
to counsel for the Underwriter, acting reasonably, in which case the opinion shall
state that they believe that they and the Underwriter are justified in relying upon
such opinion. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and certificates of public officials, provided that such
certificates have been delivered to the Underwriter. The opinion letter referred to in
this paragraph (c)&nbsp;shall be rendered to the Underwriter at the request of the Company
and shall so state therein.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Underwriter shall have received on the Closing Date a favourable opinion of
Dorsey &#038; Whitney LLP, special United States counsel for the Company, dated the Closing
Date, with respect to such matters as the Underwriter and its counsel may reasonably
request, including those matters identified in Schedule &#147;C&#148; hereto. The opinion letter
referred to in this paragraph (d)&nbsp;shall be rendered to the Underwriter at the request
of the Company and shall so state therein.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Underwriter shall have received on the Closing Date a favourable opinion of
the Company&#146;s intellectual property counsel, dated the Closing Date, with respect to
such matters as the Underwriter may reasonably request relating to the Company&#146;s
intellectual property, acceptable in all reasonable respects to the Underwriter&#146;s
counsel, including, without limiting the generality of the foregoing,</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">- 20 -
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">that such counsel has reviewed the disclosure (the &#147;<B>Intellectual Property
Disclosure</B>&#148;) in each Canadian Prospectus, the Disclosure Package, the Registration
Statement and the U.S. Final Prospectus and in this agreement respecting the
Intellectual Property of the Company, and such counsel is not aware of any:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>untrue statements of material facts in the Intellectual
Property Disclosure;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>omissions to state material facts which are necessary in order
to make the statements made in the Intellectual Property Disclosure not
misleading in light of the circumstances under which they were made; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>misrepresentations in the Intellectual Property Disclosure.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Underwriter shall have received on the Closing Date an opinion, dated the
Closing Date, of Fasken Martineau DuMoulin LLP, Canadian counsel for the Underwriter,
dated the Closing Date, in form and substance satisfactory to the Underwriter, acting
reasonably.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Underwriter shall have received on the Closing Date an opinion, dated the
Closing Date, of White &#038; Case LLP, United States counsel for the Underwriter, dated the
Closing Date, in form and substance satisfactory to the Underwriter, acting reasonably.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Underwriter shall have received, on each of the date of the Canadian Final
Prospectus and the Closing Date, a letter dated the date of the Canadian Final
Prospectus and the Closing Date, as the case may be, in form and substance satisfactory
to the Underwriter, acting reasonably, from Ernst &#038; Young LLP, independent chartered
accountants, containing statements and information of the type ordinarily included in
accountants&#146; &#147;comfort letters&#148; to underwriters with respect to the financial statements
and certain financial and statistical information included or incorporated by reference
in the Canadian Final Prospectus and the U.S. Final Prospectus.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Unit Shares and the Warrant Unit Shares shall have been approved for
listing by NASDAQ subject only to official notice of issuance thereof, and shall have
been conditionally approved for listing by the TSX, subject only to official notice of
issuance thereof and customary post-closing filing requirements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The National Association of Securities Dealers, Inc. (&#147;<B>NASD</B>&#148;) shall not have
raised any objection with respect to the fairness or reasonableness of the
underwriting, or other arrangements of the transactions, contemplated hereby.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>On or before the Closing Date, the Underwriter and counsel for the Underwriter
shall have received from the Company such further certificates, documents and other
information as they may reasonably request.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">6. <U><B>Further Covenants.</B></U> In further consideration of the agreements of the Underwriter herein
contained, the Company covenants with the Underwriter as follows:
</DIV>

</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 21 -<!-- /Folio -->

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To not issue or announce the issuance of any equity securities or any
securities convertible into, exchangeable for or exercisable to acquire equity
securities of the Company without the prior consent of the Underwriter during a period
commencing from the date of this Agreement and ending ninety (90)&nbsp;days from the Closing
Date, other than pursuant to: (i)&nbsp;presently outstanding rights, or agreements,
including options, warrants and other convertible securities and any rights which have
been granted, issued or will be issued under the Offering, subject to any necessary
regulatory approval; (ii)&nbsp;presently outstanding options granted to officers, directors,
employees or consultants of the Company or any subsidiary thereof pursuant to the
Company&#146;s stock option plan as detailed in the Company&#146;s most recent proxy information
circular (the &#147;<B>Option Plan</B>&#148;); (c)&nbsp;the Option Plan; or (d)&nbsp;arm&#146;s length corporate
alliances, partnerships, mergers or acquisitions.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Until the Closing Time, to notify the Underwriter promptly, and confirm the
notice in writing:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>when any Issuer Free Writing Prospectus shall have first been
used, when any post-effective amendment to the Registration Statement or the
Warrant Registration Statement shall have been filed with the SEC or shall have
become effective, and when any supplement to the U.S. Prospectus or any
Canadian Prospectus or any amended U.S. Prospectus or any Canadian Prospectus
shall have been filed;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>of the receipt of any comments from the Canadian Securities
Commissions or the SEC;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>of any request by any of the Canadian Securities Commissions
to amend any Canadian Prospectus or for additional information or of any
request by the SEC to amend the Registration Statement or to amend or
supplement the U.S. Prospectus or for additional information;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the Warrant Registration
Statement or of any order preventing or suspending the use of any prospectus,
or of the suspension of the qualification of the Offered Units for offering and
sale in any jurisdiction, or of the institution or, to the knowledge of the
Company, threatening of any proceedings for any of such purposes; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>of the issuance by any of the Canadian Securities Commissions
or any stock exchange of any order having the effect of ceasing or suspending
the distribution of the Offered Units or the trading in the common shares of
the Company, or of the institution or, to the knowledge of the Company,
threatening of any proceedings for any such purpose.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">The Company will use every reasonable commercial effort to prevent the issuance of
any stop order, any order preventing or suspending the use of any prospectus or any
order ceasing or suspending the distribution of the Offered Units or the
</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 22 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">trading in the common shares of the Company and, if any such order is issued, to
obtain the revocation thereof at the earliest possible time.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not to file or to make at any time any amendment to the Registration Statement,
any amendment or supplement to any Canadian Prospectus or the U.S. Prospectus, of which
the Underwriter shall not have previously been advised and furnished a copy or to which
the Underwriter shall have reasonably objected promptly after reasonable notice
thereof; provided, however, that this provision shall not prohibit the Company from
complying with its timely disclosure and other obligations under applicable securities
legislation and the requirements of any relevant stock exchange arising out of any
material change or change in material information.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To furnish to the Underwriter, without charge:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a signed copy of each Canadian Prospectus, the Registration
Statement and the Warrant Registration Statement (including all exhibits
thereto, documents filed therewith (including photocopies of the Form F-X and
Warrant Form F-X) and amendments thereof) and an additional conformed copy of
the Registration Statement and the Warrant Registration Statement (without
exhibits thereto); and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at any time beginning on the date hereof and ending at the end
of the period described in Section 6(f) below, at the place or places which the
Underwriter may reasonably request, the Underwriter&#146;s reasonable requirements
of the commercial copies of each Canadian Prospectus, the U.S. Prospectus and
any Free Writing Prospectus or Issuer Free Writing Prospectus. Such deliveries
shall be made as soon as possible after the filing of such documents and, in
any event, within one Business Day of such filing.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company agrees that it has not and, unless it obtains the prior written
consent of the Underwriter, the Company will not make any offer relating to the Offered
Units that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a Free Writing Prospectus required to be filed by the Company with the SEC
or retained by the Company under Rule&nbsp;433 of the 1933 Act. Any free writing prospectus
consented to by the Underwriter is hereinafter referred to as a &#147;<B>Permitted Free Writing
Prospectus</B>.&#148; The Company agrees that (i)&nbsp;it will treat each Permitted Free Writing
Prospectus as an Issuer Free Writing Prospectus, and (ii)&nbsp;it will comply with the
requirements of Rules&nbsp;164 and 433 under the 1933 Act applicable to any Permitted Free
Writing Prospectus, including in respect of timely filing with the SEC, legending and
record keeping.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If, at any time in the period after the time of the initial distribution of the
Offered Units until the completion of the distribution of the Canadian Preliminary
Prospectus and the U.S. Preliminary Prospectus to offerees of the Offered Units, any
event shall occur or condition exist as a result of which it is necessary to amend the
Disclosure Package, Registration Statement or supplement or amend the U.S. Prospectus
or any Canadian Prospectus in order that the Disclosure</TD>
</TR>

</TABLE>
</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 23 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">Package, Registration Statement, U.S. Prospectus or any Canadian Prospectus will not
include any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser (or in lieu
thereof, the notice referred to in Rule&nbsp;173 of the 1933 Act) or if, in the opinion
of the Company, it is necessary to amend the Disclosure Package, Registration
Statement or amend or supplement any Canadian Prospectus or the U.S. Prospectus to
comply with the Canadian Securities Laws, the 1933 Act or the applicable rules and
regulations thereunder, forthwith to prepare, file with the SEC or any Canadian
Securities Commission and furnish to the Underwriter and to the dealers (whose names
and addresses the Underwriter will furnish to the Company) to which Offered Units
may have been sold by the Underwriter and to any other dealers upon request, either
amendments or supplements to the U.S. Prospectus or any Canadian Prospectus (in the
English language) (to be effected, if necessary, by the filing with the SEC of a
post-effective amendment to the Registration Statement) so that the statements in
the U.S. Prospectus or any Canadian Prospectus as so amended or supplemented will
not include any untrue statements of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances when the U.S. Prospectus or any Canadian Prospectus is delivered to a
purchaser, not misleading or so that the Disclosure Package, Registration Statement,
the U.S. Prospectus or each Canadian Prospectus, as amended or supplemented, will
comply with applicable law. The expense of complying with this Section 6(f) shall
be borne by the Company in respect of any amendment or supplement required during
the nine month period after the effectiveness of the Registration Statement or any
Canadian Prospectus, as the case may be, and by the Underwriter thereafter.
Concurrently with the delivery of an amendment or supplement to the Canadian
Preliminary Prospectus and the Canadian Final Prospectus to the Underwriter, the
Company shall deliver to the Underwriter documents similar to those referred to in
Section&nbsp;5(h), in each case in respect of and dated the date of the amendment or
supplement to the Canadian Preliminary Prospectus or the Canadian Final Prospectus,
as applicable.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To use its reasonable efforts to qualify the Offered Units for offer and sale
under the securities or &#147;blue sky&#148; laws of such United States jurisdictions as the
Underwriter shall reasonably request.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>During the period when the U.S. Prospectus is required to be delivered under
the 1933 Act:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to file promptly all documents required to be filed by the
Company with the SEC pursuant to Section&nbsp;13 or 15(d) of 1934 Act subsequent to
the time the Registration Statement becomes effective; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the event that any document is filed with any Canadian
Securities Commission or the SEC subsequent to the time the Registration
Statement becomes effective that is deemed to be incorporated by reference in
each Canadian Prospectus, if required by the 1933 Act, to file such document as</TD>
</TR>

</TABLE>
</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 24 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 7%">an exhibit to the Registration Statement by post-effective amendment or
otherwise in accordance with the 1933 Act or the 1934 Act.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To comply to the best of its ability with the 1933 Act and the 1934 Act and the
Canadian Securities Laws so as to permit the completion of the distribution of the
Offered Units as contemplated in this Agreement and in the Canadian Final Prospectus
and in the U.S. Prospectus.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not to issue any press release or other public announcement between the date
hereof and the Closing Date without first consulting with the Underwriter.</TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In further consideration of the agreements of the Company herein contained, the Underwriter
covenants with the Company as follows:</TD>
</TR>

</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has not and will not use, authorize use of, refer to, or participate in the
planning for use of, any &#147;free writing prospectus&#148; as defined in Rule&nbsp;405 under the
1933 Act (which term includes use of any written information furnished to the SEC by
the Company and not incorporated by reference into the Registration Statement and any
press release issued by the Company) other than (i)&nbsp;a free writing prospectus that
contains no &#147;issuer information&#148; (as defined in Rule&nbsp;433(h)(2) under the 1933 Act) that
was not included (including through incorporation by Reference) in the U.S. Preliminary
Prospectus as supplemented or amended at the Executive Time or a previously filed Free
Writing Prospectus, or (ii)&nbsp;any Free Writing Prospectus approved by the Company in
advance in writing.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(l)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It will not distribute any free writing prospectus referred to in Section
(k)(i) above in a manner reasonably designed to lead to its broad unrestricted
dissemination.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(m)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It will not, without the prior written consent of the Company, use any free
writing prospectus (including any free writing prospectus that contains the final terms
of the Offered Units); provided that the Company shall file any free writing prospectus
that contains the final terms of the Offered Units with the SEC pursuant to Rule&nbsp;433 of
the 1933 Act.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(n)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It will, pursuant to reasonable procedures developed in good faith, retain
copies of each free writing prospectus used or referred to by it, to the extent
required by Rule&nbsp;433 under the 1933 Act.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">7. <U><B>Expenses.</B></U> The Company agrees to pay or cause to be paid:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether or not the transactions contemplated in this Agreement are consummated
or this Agreement is terminated, all expenses incident to the performance of the
Company&#146;s obligations under this Agreement, including: the fees, disbursements and
expenses of the Company&#146;s Canadian, United States and other counsel and the Company&#146;s
accountants in connection with the registration and delivery of the Offered Units under
the 1933 Act and under the Canadian Securities Laws and all other fees or expenses in
connection with the preparation and filing of the Registration Statement, the Form F-X,
the Warrant Registration Statement, the Warrant Form F-X, each Canadian Prospectus, the
U.S. Prospectus, any Issuer</TD>
</TR>

</TABLE>
</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 25 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">Free Writing Prospectus and any amendments thereto (the &#147;<B>Supplementary Material</B>&#148;),
including all printing costs associated therewith, and the mailing and delivering of
copies thereof to the Underwriter and dealers;
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provided the closing of the Offering occurs, unless the Offering is not
completed due to any failure of the Company to comply with the terms and its
obligations under this Agreement, the fees of the Underwriter&#146;s Canadian, United States
and other counsel in connection with the registration and delivery of the Offered Units
under the 1933 Act and under the Canadian Securities Laws to a maximum of (i) $100,000,
exclusive of disbursements and applicable taxes, with respect to the Underwriter&#146;s
Canadian counsel, and (ii)&nbsp;US$100,000, exclusive of disbursements and applicable taxes,
with respect to the Underwriter&#146;s United States counsel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all costs and expenses related to the transfer and delivery of the Offered
Units to the Underwriter, including any transfer or other taxes payable thereon;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the cost of printing or producing any &#147;blue sky&#148; or legal investment memorandum
in connection with the offer and sale of the Offered Units under state securities laws
and all expenses in connection with the qualification of the Offered Units for offer
and sale under state securities laws as provided in Section 6(g) hereof, including
filing fees and the reasonable fees and disbursements of counsel in connection with
such qualification and in connection with the &#147;blue sky&#148; or legal investment
memorandum;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all filing fees and disbursements of counsel to the Underwriter incurred in
connection with the review and qualification of the terms of the sale of the Offered
Units by the NASD;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all fees and expenses in connection with the preparation and filing of the
Registration Statement and all costs and expenses incident to listing the Unit Shares
and the Unit Warrant Shares on the TSX and NASDAQ;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the cost of printing certificates representing the Offered Units;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the costs and charges of any transfer agent, registrar or depositary;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the costs and expenses of the Company in connection with the marketing of the
Offering; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all other costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in this Section.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">8. <U><B>Indemnity and Contribution.</B></U> The Company covenants and agrees to indemnify the
Underwriter, each person, if any, who controls the Underwriter within the meaning of either Section
15 of the 1933 Act or Section&nbsp;20 of the 1934 Act and its respective directors, officers, employees
and agents (individually, an &#147;<B>Indemnified Party</B>&#148; and collectively, the &#147;<B>Indemnified Parties</B>&#148;),
against all losses (other than a loss of profits or consequential damages), claims, damages,
liabilities, costs or expenses caused or incurred by reason of:
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 26 -<!-- /Folio -->

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any breach of or default under any representation, warranty,
covenant or agreement of the Company contained herein or any other document or
certificate to be delivered by the Company pursuant hereto or the failure of
the Company to comply with any of its covenants or other obligations hereunder,
or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any statement, other than a statement relating solely to, or
provided solely by, the Underwriter, contained in any Canadian Prospectus, the
U.S. Prospectus, the Registration Statement, the Warrant Registration
Statement, the Free Writing Prospectus or the Issuer Free Writing Prospectus
(including any documents incorporated therein by reference) or in any
Supplemental Material or additional or ancillary material, information,
evidence, return, report, application, statement or document (collectively, the
&#147;<B>Additional Material</B>&#148;) that has been filed by or on behalf of the Company under
the Canadian Securities Laws or 1933 Act which at the time and in the light of
the circumstances under which it was made contains or is alleged to contain a
misrepresentation; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any order made or inquiry, investigation or proceeding
commenced or threatened by any securities commission or other competent
authority based upon any misrepresentation or alleged misrepresentation in any
Canadian Prospectus, the U.S. Prospectus, the Registration Statement, the
Warrant Registration Statement, the Free Writing Prospectus or the Issuer Free
Writing Prospectus (or any document incorporated therein by reference) or any
Additional Material, other than a statement relating solely to, or provided
solely by, the Underwriter, which prevents or restricts the trading in the
distribution to the public, as the case may be, of the Offered Units; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any non-compliance by the Company with any requirement of any
Canadian Securities Laws, regulatory requirements (including any filing or
notice in connection with any United States federal and state securities laws)
or rules of any stock exchange or quotation system except as such
non-compliance shall be as a result of the activities of the Underwriter,</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">except where such losses, claims, damages, liabilities, costs or expenses arose primarily from the
negligence, wilful misconduct or fraudulent misrepresentation of an Indemnified Party.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that any Indemnified Party is not a party to this agreement, the Underwriter
shall obtain and hold the right and benefit of the above-noted indemnity in trust for and on behalf
of such Indemnified Party and the Company hereby consents to the enforcement by such non-signatory
of its rights hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any matter or thing contemplated by this Section shall be asserted against any Indemnified
Party in respect of which indemnification is or might reasonably be considered to be provided, such
Indemnified Party will notify the Company as soon as possible of the nature of such claim and the
Company shall be entitled (but not required) to assume the defence of any suit brought to enforce
such claim; provided, however, that the defence shall be through legal counsel acceptable to such
Indemnified Party, acting reasonably, and that no admission of
</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 27 -<!-- /Folio -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">liability or settlement may be made by the Company or such Indemnified Party without the prior
written consent of the other, acting reasonably.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In any such claim, such Indemnified Party shall have the right to retain other counsel to act
on such Indemnified Party&#146;s behalf provided that the fees and disbursements of such other counsel
shall be paid by such Indemnified Party, unless: (i)&nbsp;the Company and such Indemnified Party
mutually agree to retain other counsel; or (ii)&nbsp;such Indemnified Party reasonably believes that the
representation of the Company and such Indemnified Party by the same counsel would be inappropriate
due to actual or potential differing interests, in which event such fees and disbursements shall be
paid by the Company to the extent that they have been reasonably incurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the indemnity provided for in this Section is declared by a court of
competent jurisdiction to be illegal or unenforceable as being contrary to public policy or for any
other reason, the Underwriter and the Company shall contribute to the aggregate of all losses,
claims, costs, damages, expenses or liabilities (except loss of profits or consequential damages)
of the nature provided for above such that the Underwriter shall be responsible for that portion
represented by the percentage that the portion of the Underwriter&#146;s Fee payable by the Company to
the Underwriter bears to the gross proceeds realized from the sale of the Offered Units whether or
not the Underwriter has been sued together or separately and the Company shall be responsible for
the balance, provided that, in no event, shall the Underwriter be responsible for any amount in
excess of the portion of the Underwriter&#146;s Fee actually received by it. In the event that the
Company is held to be entitled to contribution from the Underwriter under the provisions of any
statute or law, the Company shall be limited to contribution from the Underwriter in an amount not
exceeding the lesser of: (a)&nbsp;the portion of the full amount of losses, claims, costs, damages,
expenses, liabilities, giving rise to such contribution for which each Underwriter is responsible,
as determined above; and (b)&nbsp;the amount of the Underwriter&#146;s Fee actually received by the
Underwriter. Notwithstanding the foregoing, a person guilty of fraudulent misrepresentation or
negligence or wilful misconduct shall not be entitled to contribution from any other party. Any
party entitled to contribution will, promptly after receiving notice of commencement of any claim,
action, suit or proceeding against such party in respect of which a claim for contribution may be
made against another party or parties under this Section, notify such party or parties from whom
contribution may be sought. In no case shall such party from whom contribution may be sought be
liable under this agreement unless such notice shall have been provided, but the omission to so
notify such party shall not relieve the party from whom contribution may be sought from any other
obligation it may have otherwise than under this Section. The right to contribution provided in
this Section shall be in addition and not in derogation of any other right to contribution which
the Underwriter may have by statute or otherwise by law.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">9. <U><B>Termination.</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company does not comply in all material respects with the conditions
hereof, and such non-compliance does or would reasonably be expected to prevent,
restrict or otherwise adversely affect the distribution of the Offered Units in
accordance with the terms hereof or would reasonably be expected to impact adversely on
the investment quality or marketability of the Offered Units in any of the
jurisdictions in which the Offered Units may be sold under the terms</TD>
</TR>

</TABLE>
</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 28 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">hereof, the Underwriter may terminate its obligations hereunder by written notice to
that effect given to the Company on or prior to the Closing Time and in such event
the Underwriter&#146;s obligations shall be at an end. It is understood that the
Underwriter may waive in whole or in part non-compliance with any of the conditions
contained herein or extend the time for compliance therewith without prejudice to
such rights in respect of any other condition or conditions or any other or
subsequent breach or non-compliance, provided that any such waiver or extension
shall be binding upon the Underwriter only if the same is in writing.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If, after the Execution Time and prior to the Closing Time, there shall occur
any material adverse change in the business, affairs, operations, assets, liabilities
(contingent or otherwise), capital or control of the Company (the &#147;<B>Condition of the
Company</B>&#148;), or the Underwriter becomes aware of any undisclosed material adverse
information relating to the Company or other adverse material development which, in the
opinion of the Underwriter, acting reasonably, would have a material adverse effect on
the market price of the Offered Units, then the Underwriter shall be entitled, at its
option, to terminate its obligations under this Agreement by written notice to that
effect given to the Company at or prior to the Closing Time.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If after the date hereof and prior to the Closing Time, there shall occur any
change in any applicable securities laws, rules, regulations or policies, or if any
enquiry, action, suit, investigation or other proceeding, whether formal or informal,
in relation to the Company or the distribution of the Offered Units should be
instituted by any securities commission or similar regulatory authority, the TSX,
NASDAQ or any other competent authority or any order under or pursuant to any laws or
regulations of Canada or of any of the Qualifying Provinces or of the United States or
of any of the states thereof or by any relevant stock exchanges or any other regulatory
or governmental authority should be made or issued (except for any such order based
upon the activities or the alleged activities of the Underwriter and not of the
Company) which, in the reasonable opinion of the Underwriter, operates to prevent or
restrict the trading or the distribution of the Offered Units, the Underwriter shall be
entitled, at its option, to terminate its obligations under this Agreement by written
notice to that effect given to the Company at or prior to the Closing Time.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If at any time during the period commencing on the date hereof and ending at
the Closing Time there is any event, accident, law or governmental regulation or other
occurrence of national or international consequence which, in the reasonable opinion of
the Underwriter, seriously adversely affects or would be expected to seriously
adversely affect the financial markets in Canada, in the United States or
internationally, or the business or operations of the Company, or the market price or
value of the Company&#146;s securities, or the ability of the Underwriter to perform its
obligations under this Agreement or a prospective purchaser&#146;s decision to purchase the
Offered Units.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any termination by the Underwriter pursuant to the provisions hereof shall be
effected by notice in writing delivered or delivered by facsimile to the Company</TD>
</TR>

</TABLE>
</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 29 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">at its address as herein set forth. The rights of termination contained in this
Section are in addition to any other rights or remedies the Underwriter may have in
respect of any default, misrepresentation, act or failure to act of the Company in
respect of any matters contemplated by this Agreement. In the event of any such
termination, there shall be no further liability on the part of the Company or the
Underwriter except for any liability provided for in Sections&nbsp;7 and 8 hereof.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">10. <U><B>Counterparts.</B></U> This Agreement may be signed in two or more counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">11. <U><B>Applicable Law.</B></U> This Agreement shall be governed by and construed in accordance with
the laws of the Province of Alberta and federal laws of Canada applicable therein. All parties
hereby attorn to the exclusive jurisdiction of the courts of the Province of Alberta to settle all
disputes which may arise hereunder or in connection herewith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">12. <U><B>Headings.</B></U> The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be a part of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">13. <U><B>Notices.</B></U> All notices or other communications by the terms hereof required or permitted
to be given by one party to another shall be given in writing by personal delivery or by facsimile,
as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">if to the Company at:

</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Oncolytics Biotech Inc.<BR>
Suite&nbsp;210, 1167 Kensington Cr. N.W.<BR>
Calgary, Alberta<BR>
T2N 1X7
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.A. (Doug Ball), Chief Financial Officer<BR>
Facsimile No.: (403)&nbsp;283-0858
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">with a copy to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Bennett Jones LLP<BR>
4500 Bankers Hall East 855 2<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP> Street SW<BR>
Calgary, Alberta
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">T2P 4K7
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brent W. Kraus<BR>
Facsimile No.: (403)&nbsp;265-7219
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 30 -<!-- /Folio -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">if to the Underwriter at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Canaccord Capital Corporation<BR>
BCE Place<BR>
Suite&nbsp;3000, 161 Bay Street<BR>
Toronto, Ontario<BR>
M5J 2S1
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steven L. Winokur<BR>
Facsimile No.: (416)&nbsp;869-7368
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">with a copy to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Fasken Martineau DuMoulin LLP<BR>
2100 &#151; 1075 Georgia Street West<BR>
Vancouver, British Columbia<BR>
V6E 3G2
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iain Mant<BR>
Facsimile No.: (604)&nbsp;632-4734
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and if so given, shall be deemed to have been given and received upon receipt by the addressee or a
responsible officer of the addressee if delivered, or upon receipt of a facsimile transmission
confirmation during normal business hours, as the case may be. Any party may, at any time, give
notice in writing to the others in the manner provided above of any change of address or facsimile
number.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">14. <U><B>Time of Essence.</B></U> Time shall be of the essence in this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">15. <U><B>Representations, Warranties and Agreements Survive Closing.</B></U> The representations,
warranties and agreements herein contained shall survive the purchase by the Underwriter of the
Offered Units and shall continue in full force and effect unaffected by any subsequent disposition
of the Offered Units.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>&#091;EXECUTION PAGE FOLLOWS&#093;</B>
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 31 -<!-- /Folio -->

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this agreement accurately reflects the terms of the transactions which the Underwriter and
the Company are to enter into and if such terms are agreed to by the Company, please communicate
your acceptance by executing where indicated below and returning by facsimile one copy and
returning by courier thereafter five originally executed copies of this agreement to Canaccord
Capital Corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS"><B>CANACCORD CAPITAL CORPORATION</B></FONT>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="66%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B><I>&#147;Steve Winokur&#148;
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV></I></B>
<I>Name: Steve Winokur</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Title: Managing Director</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The foregoing is accepted and agreed to as of the date first above written.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS"><B>ONCOLYTICS BIOTECH INC.</B></FONT>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="66%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B><I>&#147;Bradley G. Thompson&#148;
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV></I></B>
<I>Name: Bradley G. Thompson</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Title: Chief Executive Officer</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE &#147;A&#148;</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Form of Standstill Agreement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">February &#060;*&#062;<I>, </I>2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Canaccord Capital Corporation<BR>
BCE Place<BR>
Suite&nbsp;3000, 161 Bay Street<BR>
Toronto, Ontario<BR>
M5J 2S1
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Sirs:

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="94%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Re:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Oncolytics Biotech Inc.</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The undersigned refers to an underwriting agreement dated February&nbsp;6, 2007 (the &#147;<B>Underwriting
Agreement</B>&#148;) between Oncolytics Biotech Inc. (the &#147;<B>Company</B>&#148;) and Canaccord Capital Corporation (the
"<B>Underwriter</B>&#148;) with respect to a public offering of units of the Company (the &#147;<B>Offering</B>&#148;).
Capitalized terms used but not defined herein shall have the respective meanings attributed thereto
in the Underwriting Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In consideration for the Underwriter completing the Offering on the terms set out in the
Underwriting Agreement and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned hereby covenants and agrees in favour of the
Underwriter that the undersigned will not, without the prior written consent of the Underwriter,
directly or indirectly, offer, sell, assign, pledge, alienate, transfer or otherwise dispose of any
common shares of the Company (&#147;<B>Shares</B>&#148;) or securities convertible or exchangeable into Shares (or
enter into any swap, futures contract or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of the Shares, whether settled by the
delivery of Shares, other securities, cash or otherwise) until the 90<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day following
the Closing Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The foregoing prohibition shall not apply, however, to securities of the Company subscribed for by,
and issued to, the undersigned pursuant to the Offering and with respect to the exercise of
presently outstanding options granted to the undersigned pursuant to the Company&#146;s stock option
plan.
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio --> -33 -<!-- /Folio -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This agreement shall enure to the benefit of and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors and assigns and shall be governed by and
construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable
therein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Yours truly,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>&#091;Name&#093;</I></B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Accepted and acknowledged this <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> day of February, 2007.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left"><FONT style="font-variant: SMALL-CAPS"><B>Canaccord Capital Corporation</B></FONT></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Per:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE &#147;B&#148;</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Opinion of Bennett Jones LLP and Side Letter</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. The Company is a valid and subsisting corporation under the laws of its jurisdiction of
incorporation and has all requisite corporate power and capacity to carry on its business as
presently carried on and to own and lease its assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. The Company has all necessary corporate capacity and authority to enter into the Transaction
Documents and perform its obligations thereunder, to create and issue the Over-Allotment Option and
to issue and sell the Offered Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. All necessary corporate action has been taken by the Company to authorize the execution and
delivery by the Company of the Transaction Documents. The Transaction Documents have been duly
executed and delivered by the Company and constitute legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to usual qualifications and exceptions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. All necessary corporate action has been taken by the Company to validly authorize the issue,
sale and delivery of the Unit Shares, the creation, issue and delivery of the Unit Warrants, the
issue and delivery of the Unit Warrant Shares upon exercise of the Unit Warrants, and the grant of
the Over-Allotment Option. The Unit Shares, and upon receiving the consideration for the issue
thereof, the Unit Warrant Shares, have been or will be validly issued and outstanding as fully paid
and non-assessable shares of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. The execution, delivery by the Company of the Transaction Documents and the performance of its
obligations thereunder do not and will not contravene, breach or result in any default:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>under the constating documents of the Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the resolutions of the directors or shareholders of the
Company; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to the knowledge of counsel, any material agreement or
instrument binding upon the Company filed with Canadian Securities
Administrators on the System for Electronic Document Analysis and Retrieval.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">6. The authorized capital of the Company is as set forth in the Canadian Final Prospectus under the
caption &#147;Details of the Offering &#151; Common Shares&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">7. The Company is a reporting issuer in each of the Qualifying Provinces in which the concept of a
reporting issuer exists and is not on the list of defaulting issuers maintained by the securities
regulatory authorities in such Qualifying Provinces.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">8. All necessary documents have been filed and all necessary proceedings have been taken and all
other legal and regulatory requirements have been fulfilled under the Canadian Securities Laws to
qualify the issuance of the Offered Units to be offered and sold to the public
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio --> B - 2<!-- /Folio -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">in each of the Qualifying Provinces by or through registrants, investment dealers or brokers
registered under the Canadian Securities Laws who have complied with the relevant provisions of
such legislation, and no further consent, approval or authorization of any regulatory authority or
other governmental body in the Qualifying Provinces is required in connection therewith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">9. The statements set forth in Part&nbsp;II of the Registration Statement under the caption
&#147;Indemnification&#148;, insofar as they purport to summarize certain provisions of the articles of the
Company and of the <I>Business Corporations Act </I>(Alberta), are accurate in all material respects.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">10. The TSX has conditionally approved the listing and posting for trading of the Unit Shares and
the Unit Warrant Shares subject to the Company fulfilling all of the requirements of the TSX.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">11. Upon delivery of a copy of the Canadian Final Prospectus in accordance with the Canadian
Securities Laws, the Offered Units will not be subject to any statutory hold period under the
Canadian Securities Laws and no other documents will be required to be filed, proceedings taken or
approvals, permits, consents, orders or authorizations of regulatory authorities required to be
obtained under the Canadian Securities Laws in connection with the first trade of the Offered Units
by such purchaser through registrants registered under the Canadian Securities Laws who have
complied with such applicable laws (unless such trade is a trade from a &#147;control block&#148; or its
equivalent within the meaning ascribed to that term in the Canadian Securities Laws) and provided
the Company is a reporting issuer at the time of the trade.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">12. The Canadian Final Prospectus (excluding the financial statements and other financial data
included or incorporated therein or omitted therefrom) complies as to form in all material respects
to the requirements of the Canadian Securities Laws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">13. The statements in the Canadian Final Prospectus under the heading &#147;Canadian Federal Income Tax
Considerations&#148; is an accurate summary of the principal Canadian federal income tax considerations
under the Tax Act generally applicable to holders of Offered Units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">14. The Offered Units are, at the date hereof, investments which are qualified investments under
the Tax Act for trusts governed by registered retirement savings plans, registered retirement
income funds, registered education savings plans and deferred profit sharing plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">15. Computershare at its principal offices in the Cities of Calgary and Toronto has been duly
appointed the transfer agent and registrar for the common shares of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">16. Such other matters as counsel to the Underwriters may reasonably require.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition to rendering the opinion set forth above, such counsel shall also deliver a separate
letter to the effect that such counsel has participated as Canadian counsel in the preparation of
the Disclosure Package and the Canadian Final Prospectus and in conferences with officers and other
representatives of the Company, U.S. counsel for the Company, representatives of the independent
accountants for the Company, counsel for the Underwriter and representatives of the Underwriter at
which the contents of the Disclosure Package and the Canadian Final Prospectus
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio --> B - 3<!-- /Folio -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and related matters were discussed and although the purpose of such counsel&#146;s engagement was not to
establish or confirm factual matters and such counsel has not independently verified, and (except
as to those matters and to the extent set forth in the opinion as to the matters listed in
paragraphs 9 and 10 above) is not passing upon and does not assume any responsibility for, the
factual accuracy, completeness or fairness of the statements contained in the Disclosure Package
and Canadian Final Prospectus, on the basis of such participation, no facts have come to such
counsel&#146;s attention which have caused such counsel to believe that (i)&nbsp;the documents specified in a
schedule to such counsel&#146;s letter, consisting of those included in the Disclosure Package, when
taken as a whole, as of the Applicable Time, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or (ii)&nbsp;as of the date of the
Canadian Final Prospectus and as of the Closing Date, the Canadian Final Prospectus included an
untrue statement of a material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading
(in each case, other than the financial statements and other financial and statistical information,
information relating to the Company&#146;s patents, and the information derived from the reports of or
attributed to persons named in the Canadian Final Prospectus under the heading &#147;Interest of
Experts&#148;, included or incorporated by reference therein, as to which such counsel need express no
belief). Such letter shall reference the Securities Act (Alberta) definition of &#147;material fact&#148;.
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE &#147;C&#148;</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Opinion of Dorsey &#038; Whitney LLP</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. The Unit Shares and the Unit Warrant Shares are duly listed, and admitted and authorized for
trading, subject to official notice of issuance, on NASDAQ.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. To the knowledge of such counsel, there is no franchise, contract or other document of a
character required to be filed as an exhibit to the Registration Statement that is not filed as
required.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. The statements made in the U.S. Prospectus under the heading &#147;Certain Income Tax Considerations
for U.S. Holders &#151; U.S. Federal Income Tax Consequences&#148;, to the extent that the foregoing
statements constitute matters of law or legal conclusions fairly present the information disclosed
therein in all material respects.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. Each of the Registration Statement and the Warrant Registration Statement has become effective
under the 1933 Act and each of the Form F-X and the Warrant Form F-X was filed with the SEC prior
to the effectiveness of the Registration Statement; the filing of the U.S. Final Prospectus, and
any supplements thereto, has been made in the manner and within the time periods required by Form
F-10 and the applicable rules and regulations of the SEC; to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement or the Warrant Registration
Statement or any notice that would prevent its use has been issued, no proceedings for such purpose
have been instituted or threatened, and the Registration Statement, the Warrant Registration
Statement and the U.S. Final Prospectus (other than the financial statements and other financial
and statistical information contained therein and the information derived from the reports of or
attributed to persons named in the US. Final Prospectus under the heading &#147;Interest of Experts&#148;, as
to which such counsel need express no opinion) and the Form F-X and the Warrant Form F-X comply as
to form in all material respects with the applicable requirements of the 1933 Act and the rules
thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Disclosure Package, will not be an &#147;investment company&#148; as defined in
the Investment Company Act of 1940, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">6. No consent, approval, authorization, filing with or order of any U.S. court or governmental
agency or body is required to be obtained by the Company for the performance of the Company&#146;s
obligations under this Agreement, except such as have been obtained under the 1933 Act and such as
may be required under the &#147;blue sky&#148; laws of any jurisdiction in connection with the purchase and
distribution of the Unit Shares, Unit Warrants and Unit Warrant Shares by the Underwriters in the
manner contemplated in this Agreement and in the U.S. Prospectus and such other approvals as have
been obtained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">7. Neither the issue and sale of the Offered Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof will conflict with, result
in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to any U.S. statute, law, rule, regulation, judgment, order or
decree known to such counsel and applicable to the Company of any U.S.
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio --> C - 2<!-- /Folio -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">court, regulatory body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its properties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">8. To the knowledge of counsel, no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition to rendering the opinions set forth above, such counsel shall also include a statement
to the effect that such counsel has participated in the preparation of the Registration Statement,
the Disclosure Package and the U.S. Prospectus and in conferences with officers and other
representatives of the Company, Canadian counsel for the Company, representatives of the
independent accountants for the Company, counsel for the Underwriter and representatives of the
Underwriter at which the contents of the Registration Statement, the Disclosure Package and U.S.
Final Prospectus and related matters were discussed and although such counsel has not independently
verified, and (except as to those matters and to the extent set forth in the opinions referred to
in paragraph 3 of this Schedule &#147;C&#148;) is not passing upon and does not assume any responsibility
for, the factual accuracy, completeness or fairness of the statements contained in the Registration
Statement, the Disclosure Package and U.S. Final Prospectus, on the basis of such participation,
nothing has come to such counsel&#146;s attention which has caused such counsel to believe that (i)&nbsp;at
the Effective Time, the Registration Statement contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii)&nbsp;the documents specified in a schedule to such counsel&#146;s letter,
consisting of those included in the Disclosure Package, when taken as a whole, as of the Applicable
Time, contained any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or (iii)&nbsp;as of the date of the U.S. Final Prospectus and as of the
Closing Date, the U.S. Final Prospectus included an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (in each case, other than the financial
statements and other financial and statistical information, information relating to the Company&#146;s
patents, and the information derived from the reports of or attributed to persons named in the U.S.
Preliminary Prospectus and the U.S. Final Prospectus under the heading &#147;Interest of Experts&#148;,
included or incorporated by reference therein, as to which such counsel need express no belief).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;References to the U.S. Final Prospectus in this Schedule shall also include any supplements
thereto at the Closing Date.
</DIV>


</DIV>

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</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>o34728exv5w1.htm
<DESCRIPTION>CONSENT OF ERNST & YOUNG LLP DATED FEBRUARY 13, 2007
<TEXT>
<HTML>
<HEAD>
<TITLE>exv5w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><DIV style="font-family: Helvetica,Arial,sans-serif"><B>Exhibit&nbsp;5.1</B></DIV>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 24pt"><DIV style="font-family: Helvetica,Arial,sans-serif"><B>CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B></DIV>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 24pt">We consent to the incorporation by reference therein of our report, dated February&nbsp;8, 2006, in
the amended Registration Statement No.&nbsp;333-140460 on Amendment No.&nbsp;2 to Form F-10 of Oncolytics
Biotech Inc. (&#147;Oncolytics&#148;) filed with the Securities and Exchange Commission (the &#147;Commission&#148;) on
February&nbsp;14, 2006 (the &#147;Registration Statement&#148;), with respect to the audited balance sheets of
Oncolytics as at December&nbsp;31, 2005 and 2004 and the statements of loss and deficit and cash flows
for the three years ended December&nbsp;31, 2005 and the cumulative period from inception on April&nbsp;2,
1998, filed with the Commission as Exhibit&nbsp;2 to the Form 40-F of Oncolytics and included as Exhibit
4.2 to the Registration Statement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 48pt">&nbsp;
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>&#091;signed&#093;</I></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Calgary, Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ernst &#038; Young LLP</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">February&nbsp;14, 2007
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chartered Accountants</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.2
<SEQUENCE>4
<FILENAME>o34728exv5w2.htm
<DESCRIPTION>CONSENT OF BENNETT JONES LLP DATED FEBRUARY 13, 2007
<TEXT>
<HTML>
<HEAD>
<TITLE>exv5w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;5.2</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="o34728o3472802.gif" alt="(BENNETT JONES LLP LETTERHEAD)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">February&nbsp;14, 2007
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Oncolytics Biotech Inc.<BR>
210, 1167 Kensington Crescent N.W.<BR>
Calgary, AB T2N 1X7

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">United States Securities and Exchange Commission
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ladies and Gentlemen:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Re:</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Amendment No.&nbsp;2 to Registration Statement on Form&nbsp;F-10</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We hereby consent to the reference to us in the Amendment No.&nbsp;2 to the Registration Statement on
Form F-10 (the &#147;<B>Registration Statement</B>&#148;) and the related short form prospectus (the &#147;<B>Prospectus</B>&#148;)
of Oncolytics Biotech Inc. relating to the offering of units. We also consent to the use of our
firm name on the cover page of the Prospectus and under the headings &#147;Eligibility for Investment&#148;,
&#147;Enforceability of Civil Liabilities&#148;, &#147;Documents Filed As Part&nbsp;Of The Registration Statement,
&#147;Canadian Federal Income Tax Considerations&#148; and &#147;Legal Matters&#148;. We also consent to the reference
to our opinions under the headings &#147;Eligibility for Investment&#148; and &#147;Canadian Federal Income Tax
Considerations&#148;, all as contained in the Prospectus included in the Registration Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In giving this consent, we do not thereby admit that we come within the category of persons whose
consent is required by the Securities Act of 1933 or the rules and regulations promulgated
thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Yours truly,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>BENNETT JONES LLP</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(Signed) &#147;<I>Bennett Jones LLP</I>&#148;
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.3
<SEQUENCE>5
<FILENAME>o34728exv5w3.htm
<DESCRIPTION>CONSENT OF FASKEN MARTINEAU DUMOULIN LLP DATED FEBRUARY 13, 2007
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><FONT face="Helvetica,Arial,sans-serif"><B>Exhibit 5.3</B></FONT>
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    <TD width="50%">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Fasken Martineau DuMoulin LLP</B><BR>
Barristers and Solicitors<BR>
Patent and Trade-mark Agents
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">www.fasken.com</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Suite&nbsp;2100<BR>
1075 Georgia Street West<BR>
Vancouver, British Columbia, Canada V6E 3G2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><IMG src="o34728o3472803.gif" alt="(FASKEN MARINTINEAU LOGO)"></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">604 631 3131 Telephone<BR>
604 631 3232 Facsimile</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
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</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 18pt">February&nbsp;14, 2007
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 18pt">Oncolytics Biotech Inc.<BR>
210, 1167 Kensington Crescent N.W.<BR>
Calgary, AB T2N 1X7

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">United States Securities and Exchange Commission
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Sirs/Mesdames:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Re:</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Amendment No.&nbsp;2 to Registration Statement on Form&nbsp;F-10</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We hereby consent to the reference to us in the Amendment No.&nbsp;2 to the Registration Statement on
Form F-10 (the &#147;<B>Registration Statement</B>&#148;) and the related short form prospectus (the &#147;<B>Prospectus</B>&#148;)
of Oncolytics Biotech Inc. relating to the offering of units. We hereby consent to the references
to our firm name on the face-page of the Prospectus and under the headings &#147;Eligibility for
Investment&#148;, &#147;Canadian Federal Income Tax Considerations&#148; and &#147;Legal Matters&#148; in the Prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This letter is solely for the private information of the addressees and is not to be used, quoted
from or referred to, in whole or in part, in the Prospectus or any other document and should not be
relied upon for any other purpose.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Yours truly,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>&#147;Fasken Martineau DuMoulin LLP&#148;</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 48pt">&nbsp;
</DIV>
<DIV align="center">
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<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="8%"></TD>
    <TD width="3%"></TD>
    <TD width="8%"></TD>
    <TD width="3%"></TD>
    <TD width="8%"></TD>
    <TD width="3%"></TD>
    <TD width="8%"></TD>
    <TD width="3%"></TD>
    <TD width="8%"></TD>
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    <TD width="3%"></TD>
    <TD width="8%"></TD>
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<TR valign="bottom">
    <TD align="left" valign="top"><B>Vancouver</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Calgary</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Yellowknife</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Toronto</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Montr&#233;al</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Qu&#233;bec City</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>New York</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>London</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><B>Johannesburg</B></TD>
</TR>
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<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-7.1
<SEQUENCE>6
<FILENAME>o34728exv7w1.htm
<DESCRIPTION>WARRANT INDENTURE DATED FEBRUARY 12, 2007
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;7.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WARRANT INDENTURE</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Providing for the Issue of Warrants
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">BETWEEN
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Oncolytics Biotech Inc.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">- and -
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Computershare Trust Company of Canada</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Dated as of February&nbsp;12, 2007
</DIV>

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<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>THIS WARRANT INDENTURE is made as of the 12th day of February, 2007.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">BETWEEN:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 25%"><B>ONCOLYTICS
BIOTECH INC., </B>a corporation incorporated under the<BR>laws of the Province of Alberta, having an office in the City of Calgary,<BR>
in the Province of Alberta (hereinafter referred to as the &#147;Corporation&#148;)

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">OF THE FIRST PART
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">- and -
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 25%"><B>COMPUTERSHARE
TRUST COMPANY OF CANADA</B>, a trust<BR>company incorporated under
the laws of Canada and authorized to carry<BR>on business in all
provinces of Canada (hereinafter referred to as the<BR>&#147;Trustee&#148;)

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">OF THE SECOND PART
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">WHEREAS:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Corporation has agreed to issue up to 4,600,000 Units (as defined below), each Unit
consisting of one Common Share (as defined below) of the Corporation and one-half of one
Warrant (as defined below) at no additional cost;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>one whole Warrant shall, subject to adjustment, entitle the holder thereof to purchase from
the Corporation one Common Share of the Corporation at the Exercise Price (as defined below)
at any time prior to 5:00 p.m. (Calgary time) on February&nbsp;22, 2010, upon the terms and
conditions herein set forth;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all acts and deeds necessary have been done and performed to make the Warrants, when
certified, issued and delivered as provided in this Indenture, legal, valid and binding upon
the Corporation with the benefits and subject to the terms of this Indenture; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Trustee has agreed to enter into this Indenture and to hold all rights, interests and
benefits contained herein for and on behalf of those persons who from time to time become
holders of Warrants issued pursuant to this Indenture.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>NOW THEREFORE, the parties hereto agree as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE I<BR>
INTERPRETATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Definitions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In this Indenture, including the recitals and schedules hereto, and in all indentures
supplemental hereto:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Applicable Legislation&#148; means the provisions of the <I>Business Corporations Act</I>
(Alberta) as from time to time amended, and any other statute of Canada or a province</TD>
</TR>

</TABLE>
</DIV></DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 2 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>thereof, and the regulations under any such named or other statute, relating to
trust indentures or to the rights, duties and obligations of trustees and of
corporations under trust indentures, to the extent that such provisions are at the
time in force and applicable to this Indenture;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Business Day&#148; means a day which is not Saturday or Sunday or a legal holiday
in the City of Calgary, Alberta;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Closing Date&#148; means February&nbsp;22, 2007 or at such later date as the Corporation
and the Underwriter may agree;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Common Shares&#148; means, subject to Section&nbsp;4.1, fully paid and non-assessable
common shares of the Corporation as presently constituted;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Corporation&#146;s Auditors&#148; means a firm of chartered accountants duly appointed
as auditors of the Corporation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Counsel&#148; means a barrister or solicitor or a firm of barristers and solicitors
retained by the Trustee or retained by the Corporation and acceptable to the Trustee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Current Market Price&#148; of the Common Shares at any date means the closing price
per share for such shares on the last Trading Day prior to such date on the Toronto
Stock Exchange or, if on such date the Common Shares are not listed on the Toronto
Stock Exchange, on such stock exchange upon which such shares are listed and as
selected by the directors, or, if such shares are not listed on any stock exchange,
then on such over-the-counter market or otherwise as may be determined by the
directors, acting reasonably;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;director&#148; means a director of the Corporation for the time being and, unless
otherwise specified herein, reference without more to action &#147;by the directors&#148; means
action by the directors of the Corporation as a board or, whenever duly empowered,
action by any committee of such board;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Effective Date&#148; means the Closing Date;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Exercise Date&#148; means, with respect to any Warrant, the date on which the
Warrant Certificate representing such Warrant is duly surrendered for exercise along
with full payment of the Exercise Price, all in accordance with the terms hereof;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Exercise Price&#148; means Cdn. $3.50 per share;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(l)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Expiry Date&#148; means February&nbsp;22, 2010;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(m)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Extraordinary Resolution&#148; has the meaning set forth in Section&nbsp;7.11;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(n)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;person&#148; means an individual, body corporate, partnership, trust, trustee,
executor, administrator, legal representative or any unincorporated organization;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(o)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;SEC&#148; means the United States Securities and Exchange Commission;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(p)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Shareholder&#148; means a holder of record of one or more Common Shares;</TD>
</TR>

</TABLE>
</DIV></DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 3 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(q)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Subsidiary of the Corporation&#148; or &#147;Subsidiary&#148; means any corporation of which
more than fifty (50%) percent of the outstanding Voting Shares are owned, directly or
indirectly, by or for the Corporation, provided that the ownership of such shares
confers the right to elect at least a majority of the board of directors of such
corporation and includes any corporation in like relation to a Subsidiary;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(r)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Time of Expiry&#148; means 5:00 p.m. (Calgary time) on the Expiry Date;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(s)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Trading Day&#148; means, with respect to a stock exchange, a day on which such
exchange is open for the transaction of business and with respect to the
over-the-counter market means a day on which the Toronto Stock Exchange is open for the
transaction of business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(t)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Trustee&#148; means Computershare Trust Company of Canada or its successors from
time to time in the trust hereby created;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(u)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Underwriter&#148; means Canaccord Capital Corporation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Units&#148; means the units offered pursuant to a short form prospectus dated
February&nbsp;12, 2007 by the Corporation, each such unit consisting of one Common Share and
one-half of one Warrant;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(w)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;U.S. Person&#148; means a &#147;U.S. person&#148; as defined in Rule&nbsp;902 (k)&nbsp;of Regulation&nbsp;S
under the U.S. Securities Act;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(x)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;U.S. Securities Act&#148; means the United States <I>Securities Act of 1933</I>, as
amended;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(y)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Voting Shares&#148; means shares of the capital stock of any class of any
corporation carrying voting rights under all circumstances, provided that, for the
purposes of such definition, shares which only carry the right to vote conditionally on
the happening of an event shall not be considered Voting Shares, whether or not such
event shall have occurred, nor shall any shares be deemed to cease to be Voting Shares
solely by reason of a right to vote accruing to shares of another class or classes by
reason of the happening of any such event;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(z)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Warrant&#148; means the Common Share purchase warrants of the Corporation to be
issued pursuant to this Indenture entitling the holders thereof to acquire one Common
Share at the Exercise Price until the Time of Expiry for each whole warrant held,
subject to the terms and conditions herein;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(aa)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Warrant Agency&#148; means the principal office of the Trustee in the City of
Calgary, Alberta or such other place as may be designated in accordance with Section
3.3;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(bb)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Warrant Certificate&#148; means a certificate, substantially in the form set forth
in Schedule &#147;A&#148;, issued on or after the Effective Date to evidence Warrants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(cc)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;this Warrant Indenture&#148; &#147;this Indenture&#148;, &#147;herein&#148;, &#147;hereby&#148;, &#147;hereof&#148; and
similar expressions mean and refer to this Indenture and any indenture, deed or
instrument supplemental hereto; and the expressions &#147;Article&#148;, &#147;Section&#148;, &#147;subsection&#148;
and &#147;paragraph&#148; followed by a number, letter or both mean and refer to the specified
article, section, subsection or paragraph of this Indenture;</TD>
</TR>

</TABLE>
</DIV></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 4 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(dd)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Warrantholders&#148;, or &#147;holders&#148; means the persons who are registered owners of
Warrants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ee)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Warrantholders&#146; Request&#148; means an instrument signed in one or more
counterparts by Warrantholders entitled to acquire in the aggregate not less than 25%
of the aggregate number of Common Shares which could be acquired pursuant to all
Warrants then unexercised and outstanding, requesting the Trustee to take some action
or proceeding specified therein; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ff)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;written request of the Corporation&#148; and &#147;certificate of the Corporation&#148; mean,
respectively, a written request and certificate signed in the name of the Corporation
by its Chairman, President or Chief Financial Officer and may consist of one or more
instruments so executed.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1.2</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Gender and Number</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless herein otherwise expressly provided or unless the context otherwise requires, words
importing the singular include the plural and vice versa and words importing gender include all
genders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1.3</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Interpretation not Affected by Headings, etc.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The division of this Indenture into Articles and Sections, the provision of a table of
contents and the insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1.4</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Day not a Business Day</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that any day on or before which any action is required to be taken hereunder is
not a Business Day, then such action shall be required to be taken at or before the requisite time
on the next succeeding day that is a Business Day.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1.5</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Time of the Essence</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time shall be of the essence of this Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1.6</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Currency</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise stated, all dollar amounts herein are expressed in Canadian dollars.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1.7</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Applicable Law</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Indenture and the Warrant Certificates shall be governed by and construed in accordance
with the laws of the Province of Alberta and the federal laws applicable therein and shall be
treated in all respects as Alberta contracts. Each of the parties irrevocably attorns to the
exclusive jurisdiction of the courts of the Province of Alberta with respect to all matters arising
out of this Indenture and the transactions contemplated herein.
</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 5 -<!-- /Folio -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE II<BR>
ISSUE OF WARRANTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Issue of Warrants</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A maximum of 2,300,000 Warrants, entitling the holders thereof to acquire up to
2,300,000 Common Shares on the terms and subject to the conditions herein provided are
hereby created and authorized to be issued at any time on or after the Effective Date
and prior to the Time of Expiry.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Warrant Certificates shall be substantially in the form set out in Schedule
&#147;A&#148; hereto, shall be in registered form, shall be dated as of the Effective Date, shall
bear such distinguishing letters and numbers as the Corporation may, with the approval
of the Trustee, prescribe, and shall be issuable in any denomination excluding
fractions. The Warrants hereby created shall be issued by the Trustee in accordance
with the written direction of the Corporation.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.2</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Terms of Warrants</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each whole Warrant shall entitle the holder thereof, upon the exercise thereof
prior to the Time of Expiry, to acquire one (1)&nbsp;Common Share on payment of the Exercise
Price.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No fractional Warrants shall be issued or otherwise provided for hereunder.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The number of Common Shares which may be acquired pursuant to the exercise of
Warrants shall be adjusted in the circumstances and in the manner specified in Article
4.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.3</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Warrantholder not a Shareholder</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing in this Indenture or in the holding of a Warrant or Warrant Certificate or otherwise,
shall, in itself, confer or be construed as conferring upon a Warrantholder any right or interest
whatsoever as a Shareholder or as any other shareholder of the Corporation, including, but not
limited to, the right to vote at, to receive notice of, or to attend, meetings of shareholders or
any other proceedings of the Corporation, or the right to receive dividends and other
distributions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.4</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Warrants to Rank Pari Passu</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All Warrants shall rank pari passu, whatever may be the actual date of issue thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.5</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Form of Warrants</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Warrant Certificates (including all replacements issued in accordance with this Indenture)
shall be substantially in the form set out in Schedule &#147;A&#148; hereto, shall be dated as of the
Effective Date regardless of the date of issuance, shall bear such legends and distinguishing
letters and numbers as the Corporation may, with the approval of the Trustee and subject to
applicable securities laws, prescribe, and shall be issuable in any denomination excluding
fractions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.6</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Signing of Warrant Certificates</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Warrant Certificates shall be signed (with or without the seal of the Corporation) by any
one or more directors or officers of the Corporation. The signatures of any such director or
officer may be mechanically reproduced in facsimile and Warrant Certificates bearing such facsimile
signatures shall be
</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 6 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">binding upon the Corporation as if they had been manually signed by such director or officer.
Notwithstanding that any person whose manual or facsimile signature appears on any Warrant
Certificate as a director or officer may no longer hold office at the date of such Warrant
Certificate or at the date of certification or delivery thereof, any Warrant Certificate signed as
aforesaid shall, subject to Section&nbsp;2.7, be valid and binding upon the Corporation and the holder
thereof shall be entitled to the benefits of this Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.7</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Certification by the Trustee</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No Warrant Certificate shall be issued or, if issued, shall be valid for any
purpose or entitle the holder to the benefit of this Indenture hereof until it has been
certified by manual signature by or on behalf of the Trustee by its authorized signing
officers located in the City of Calgary, Alberta and such certification by the Trustee
upon any Warrant Certificate shall be conclusive evidence as against the Corporation
that the Warrant Certificate so certified has been duly issued hereunder and that the
holder is entitled to the benefits hereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The certification of the Trustee on Warrant Certificates issued hereunder shall
not be construed as a representation or warranty by the Trustee as to the validity of
this Indenture or the Warrant Certificates (except the due certification thereof) and
the Trustee shall in no respect be liable or answerable for the use made of the Warrant
Certificates or any of them or of the consideration therefor except as otherwise
specified herein.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.8</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Issue in Substitution for Warrant Certificates Lost, etc.</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If any Warrant Certificate becomes mutilated or is lost, destroyed or stolen,
the Corporation, subject to applicable law and to subsection (b), shall issue and
thereupon the Trustee shall certify and deliver, a new Warrant Certificate of like
tenor as the one mutilated, lost, destroyed or stolen in exchange for and in place of
and upon cancellation of such mutilated Warrant Certificate, or in lieu of and in
substitution for such lost, destroyed or stolen Warrant Certificate, and the
substituted Warrant Certificate shall be in a form pursuant to the provisions of this
Warrant Indenture and approved by the Trustee and the Warrants evidenced thereby shall
be entitled to the benefits hereof and shall rank equally in accordance with its terms
with all other Warrants issued or to be issued hereunder.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The applicant for the issue of a new Warrant Certificate pursuant to this
Section&nbsp;2.8 shall bear the cost of the issue thereof and in case of loss, destruction
or theft shall, as a condition precedent to the issue thereof, furnish to the
Corporation and to the Trustee such evidence of ownership and of the loss, destruction
or theft of the Warrant Certificate so lost, destroyed or stolen as shall be
satisfactory to the Corporation and to the Trustee, in their sole discretion, and such
applicant may also be required to furnish an indemnity or security in amount and form
satisfactory to the Corporation and the Trustee, in their sole discretion, and shall
pay the reasonable charges of the Corporation and the Trustee in connection therewith.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.9</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Exchange of Warrant Certificates</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any one or more Warrant Certificates representing any number of Warrants may,
upon compliance with the reasonable requirements of the Trustee, be exchanged for one
or</TD>
</TR>

</TABLE>
</DIV></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 7 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>more other Warrant Certificates representing the same aggregate number of Warrants
as represented by the Warrant Certificate or Warrant Certificates tendered for
exchange.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Warrant Certificates may be exchanged only at the Warrant Agency or at any
other place that is designated by the Corporation with the approval of the Trustee.
Any Warrant Certificate tendered for exchange shall be cancelled by the Trustee.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Warrant Certificates issued pursuant to this Section shall be in same form and
shall bear the same legends as those Warrant Certificates they are exchanged for.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.10</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Transfer and Ownership of Warrants</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee will cause to be kept (i)&nbsp;by and at the Warrant Agency, a register
(or registers) of holders in which shall be entered in alphabetical order the names and
addresses of the holders of Warrants and particulars of the Warrants held by them,
respectively, and (ii)&nbsp;by and at the Warrant Agency, a register of transfers in which
all transfers of Warrants and the date and other particulars of each transfer shall be
entered.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Warrants may only be transferred on the register referred to in subsection
(a)&nbsp;by the holder or its legal representatives or its attorney duly appointed by an
instrument in writing in form and execution satisfactory to the Trustee only upon
surrendering to the Trustee the Warrant Certificate or Warrant Certificates
representing the Warrants to be transferred, together with the duly completed Transfer
Form (in the form annexed to the Warrant Certificate), and upon compliance with and,
upon reasonable request of the Corporation or Transfer Agent, satisfactory evidence of:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the conditions set forth in this Indenture;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>such reasonable requirements as the Trustee may prescribe; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all applicable securities legislation and requirements of
regulatory authorities,</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>and such transfer shall be duly noted in such register by the Trustee. Upon
compliance with such requirements, the Trustee shall issue to the transferee one or
more Warrant Certificates representing the Warrants transferred.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Corporation and the Trustee may deem and treat the registered owner of any
Warrant as the beneficial owner thereof for all purposes and neither the Corporation
nor the Trustee shall be affected by any notice or knowledge to the contrary except as
required by statute or court of competent jurisdiction.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Subject to the provisions of this Indenture and Applicable Legislation, the
Warrantholders shall be entitled to the rights and privileges attaching to the Warrants
free from all equities or rights of set off or counterclaims between the Corporation
and the original and any intermediate holder of the Warrants. The issue of Common
Shares by the Corporation upon the exercise or deemed exercise of Warrants in
accordance with the terms and conditions herein contained shall discharge all
responsibilities of the Corporation and the Trustee with respect to such Warrants and
neither the Corporation nor the Trustee shall be bound to inquire into the title of any
such holder.</TD>
</TR>

</TABLE>
</DIV></DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 8 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.11</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Charges for Exchange or Transfer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise herein provided, a reasonable charge shall be levied to the Corporation in
respect of the transfer or the exchange of any Warrant Certificate or the issue of a new Warrant
Certificate(s) pursuant hereto including the reimbursement of the Trustee or the Corporation for
any and all transfer, stamp or similar taxes or other governmental charges required to be paid by
the holder requesting such transfer or exchange as a condition precedent to such transfer or
exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.12</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Cancellation of Surrendered Warrants</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All Warrant Certificates surrendered pursuant to Sections&nbsp;2.8, 2.9, 2.10, 3.1, 3.5 or 5.4
shall be returned to the Trustee for cancellation and, after the expiry of any period of retention
prescribed by law, destroyed by the Trustee. Upon request by the Corporation, the Trustee shall
furnish to the Corporation a destruction certificate identifying the Warrant Certificates so
destroyed, the number of Warrants evidenced thereby and the number of Common Shares, if any, issued
pursuant to such Warrants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2.13</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Assumption by Transferee and Release of Transferor</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon becoming a Warrantholder in accordance with the provisions of this Indenture, the
transferee thereof shall be deemed to have acknowledged and agreed to be bound by this Indenture.
Upon the registration of such transferee as the Warrantholder of a Warrant, the transferor shall
cease to have any further rights under this Indenture with respect to such Warrant or the Common
Share in respect thereof.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE III<BR>
EXERCISE OF WARRANTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>3.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Exercise of Warrants by the Holder</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Subject to the terms hereof, including the provisions of Section&nbsp;3.1(b), each
holder of Warrants may exercise the right conferred on such holder to purchase one
Common Share for each whole Warrant held by surrendering to the Trustee at the Warrant
Agency, after the Effective Date and prior to the Time of Expiry:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Warrant Certificate with a duly completed and executed
Exercise Form in the form substantially set out in Schedule &#147;A&#148;; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>cash or a certified cheque, bank draft or money order in lawful
money of Canada payable to or to the order of the Trustee, at par in the city
where such Warrant Certificate is surrendered in an amount equal to the
Exercise Price multiplied by the number of Common Shares subscribed for.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A Warrant Certificate with the duly completed and executed Exercise Form referred to
in subsection 3.1(a)(i), together with the payment of the Exercise Price of the
Common Shares subscribed for and referred to in subsection 3.1(a)(ii), shall be
deemed to be surrendered only upon personal delivery thereof or, if sent by mail or
other means of transmission, upon actual receipt thereof by the Trustee at the
Warrant Agency.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any provision of this Warrant Indenture to the contrary notwithstanding, unless
a registration statement under the U.S. Securities Act relating to the issuance of the
</TD>
</TR>
</TABLE>
</DIV></DIV>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 9 -<!-- /Folio -->
<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Common Shares underlying the Warrants (&#147;Shelf Registration Statement&#148;) shall have
been filed with the SEC and shall have been declared and remain effective, the
Warrants may be exercised only by persons who certify to the to the satisfaction of
the Corporation or the Trustee, as the case may be, that such person (i)&nbsp;is not a
U.S. Person or in the United States and (ii)&nbsp;is not exercising such Warrant for the
account or benefit of a U.S. Person or a person in the United States. If a Shelf
Registration Statement is not effective at any time when any Warrant is exercised,
as a condition of the exercise of such Warrants, the Corporation and the Trustee may
reasonably require that the holder of such Warrants agree that all offers and sales
of the Common Shares issued pursuant to such exercise shall be made only in
accordance with Regulation&nbsp;S, pursuant to registration under the U.S. Securities Act
or pursuant to an available exemption from the registration requirements of the U.S.
Securities Act. If any person shall fail to certify to the Corporation or Trustee
as is provided above, such holder of the Warrants shall be notified by the Trustee
within three (3)&nbsp;Business Days that the evidence provided has been deemed
insufficient to permit the exercise of such Warrants and providing a description of
the nature of such deficiency. In the case where the Corporation is not satisfied,
it will furnish to the Trustee the proper notice to be delivered. Until such time
as the Corporation or Trustee, as the case may be, acting reasonably, is satisfied
with the evidence provided, the holder of the Warrant shall not be permitted to
exercise the Warrant. Upon the signing of this Warrant Indenture it shall be
assumed by the Trustee that no Shelf Registration Statement is effective. The
Corporation shall provide promptly to the Trustee notice when such Shelf
Registration Statement as the Corporation shall file has been declared effective by
the SEC and the Trustee shall promptly provide such notice to the holders of the
Warrants. Thereafter, the Trustee shall assume that the Shelf Registration
Statement remains effective until otherwise notified by the Corporation that such
Shelf Registration Statement is no longer effective. The Corporation shall at all
times be obligated to provide prompt notice to the Trustee regarding the
effectiveness of any Shelf Registration Statement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Exercise Form referred to in subsection 3.1(a) shall be signed by the
Warrantholder and shall specify:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the number of Common Shares which the holder wishes to acquire
(being not more than the number of Common Shares which the holder is entitled
to acquire pursuant to the Warrant Certificate(s) surrendered);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the person or persons in whose name or names such Common Shares
are to be issued;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the address or addresses of such person or persons; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the number of Common Shares to be issued to each such person if
more than one is so specified.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Warrantholder must comply with all applicable securities laws in connection with
the issuance of Common Shares upon exercise of Warrants.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>3.2</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Transfer Fees and Taxes</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the Common Shares subscribed for are to be issued to a person or persons other than
the Warrantholder, the Warrantholder shall comply with such reasonable requirements as the Trustee
may
</DIV>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 10 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">prescribe and shall pay to the Corporation or the Warrant Agency on behalf of the Corporation,
all applicable transfer or similar taxes and the Corporation shall not be required to issue or
deliver certificates evidencing Common Shares unless or until such Warrantholder shall have paid to
the Corporation, or the Warrant Agency on behalf of the Corporation, the amount of such tax or
shall have established to the satisfaction of the Corporation that such tax has been paid or that
no tax is due.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>3.3</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Warrant Agency</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the exchange or transfer of Warrant Certificates and exercise of Warrants
and compliance with such other terms and conditions hereof as may be required, the Corporation has
appointed the principal office of the Trustee in the City of Calgary, Alberta as the agency at
which Warrant Certificates may be surrendered for exchange or transfer or at which Warrants may be
exercised and the Trustee has accepted such appointment. The Corporation may from time to time
designate alternate or additional places as the Warrant Agency and shall give notice to the Trustee
of any change of the Warrant Agency.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>3.4</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Effect of Exercise of Warrants</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon the exercise of Warrants pursuant to Section&nbsp;3.1 and subject to Section
3.5, the Common Shares to be issued shall be deemed to have been issued and the person
or persons to whom such Common Shares are to be issued shall be deemed to have become
the holder or holders of record of such Common Shares on the Exercise Date unless the
transfer registers of the Corporation shall be closed on such date, in which case the
Common Shares issued upon the exercise of any Warrants shall be deemed to have been
issued and such person or persons deemed to have become the holder or holders of record
of such Common Shares, on the date on which such transfer registers are reopened.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Corporation shall, upon receipt of the Warrant Certificate, the payment of
the Exercise Price and the Exercise Form duly completed, as soon as practicable and in
any event within five (5)&nbsp;Business Days after the Exercise Date, cause to be mailed to
the person or persons in whose name or names the Warrant is registered or, if so
specified in writing by the holder, cause to be delivered to such person or persons at
the Warrant Agency where the Warrant Certificate was surrendered, a certificate or
certificates for the appropriate number of Common Shares issued upon exercise of the
Warrants evidenced by the Warrant Certificate.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>3.5</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Partial Exercise of Warrants; Fractions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The holder of any Warrants may exercise his right to acquire Common Shares in
part and may thereby acquire a number of Common Shares less than the aggregate number
which such holder is entitled to acquire pursuant to the surrendered Warrant
Certificate(s). In the event of any exercise of a number of Warrants less than the
number which the holder is entitled to exercise, the holder of the Warrants upon such
exercise shall, in addition, be entitled to receive, without charge therefor, a new
Warrant Certificate(s) in respect of the balance of the Warrants represented by the
surrendered Warrant Certificate(s) and which were not then exercised.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding anything herein contained including any adjustment provided for
in Article&nbsp;4, the Corporation shall not be required, upon the exercise of any Warrants,
to issue fractions of Common Shares or to distribute certificates or Warrants which
evidence a fractional Common Share. In lieu of a fractional Common Share, the
Corporation shall</TD>
</TR>

</TABLE>
</DIV></DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 11 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>pay to the holder who would otherwise be entitled to receive a fractional Common
Share upon an exercise of Warrants, within five (5)&nbsp;Business Days after the Exercise
Date, an amount in lawful money of Canada equal to the Current Market Price of the
Common Shares on the Exercise Date multiplied by an amount equal to the fractional
interest such holder would otherwise be entitled to receive upon such exercise,
provided that the Corporation shall make only one such payment for each beneficial
holder exercising such Warrants and shall not be required to make any payment,
calculated as aforesaid, that is less than $10.00.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>3.6</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Expiration of Warrants</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immediately after the Time of Expiry, all rights under any Warrant in respect of which the
right of acquisition herein and therein provided for shall not have been exercised shall cease and
terminate and such Warrant shall be void and of no further force or effect except to the extent
that the Warrantholder has not received certificates representing the Common Shares held by it, in
which instances the Warrantholder&#146;s rights hereunder shall continue until it has received that to
which it is entitled hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>3.7</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Accounting and Recording</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee shall promptly account to the Corporation with respect to Warrants
exercised. Any securities or other instruments (including any property), from time to
time received by the Trustee shall be received in trust for, and shall be segregated
and kept apart by the Trustee in trust for, the Warrantholders and the Corporation, as
their interests may appear.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee shall record the particulars of Warrants exercised which
particulars shall include the names and addresses of the persons who become holders of
Common Shares and the Exercise Date in respect thereof. The Trustee shall provide such
particulars in writing to the Corporation within five Business Days of any request by
the Corporation therefor.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>3.8</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Securities Restrictions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything herein contained, no Common Shares will be issued pursuant to any
Warrant if the issuance of such Common Shares would constitute a violation of the securities laws
of any applicable jurisdiction, and without limiting the generality of the foregoing, in the event
that the Warrants are exercised pursuant to Section&nbsp;3.1, the certificates representing the Common
Shares thereby issued will bear such legend as may, in the opinion of Counsel to the Corporation,
be necessary in order to avoid a violation of any securities laws of any province in Canada or of
the United States or to comply with the requirements of any stock exchange on which the Common
Shares are listed, provided that if, at any time, in the opinion of Counsel to the Corporation,
such legends are no longer necessary in order to avoid a violation of any such laws, or the holder
of any such legended certificate, at the holder&#146;s expense, provides the Corporation with evidence
satisfactory in form and substance to the Corporation (which may include an opinion of Counsel
satisfactory to the Corporation) to the effect that such holder is entitled to sell or otherwise
transfer such Common Shares in a transaction in which such legends are not required, such legended
certificate may thereafter be surrendered to the Corporation in exchange for a certificate which
does not bear such legend. For greater certainty, should a Shelf Registration Statement not be
effective, pursuant to the provisions of Section&nbsp;3.1(b), no Common Shares will be issued pursuant
to any Warrant held by a U.S. Person or a person holding such Warrant for the account or benefit of
a U.S. Person.
</DIV>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 12 -<!-- /Folio -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE IV<BR>
ADJUSTMENT OF NUMBER OF COMMON SHARES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>4.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Adjustment of Number of Common Shares</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The acquisition rights in effect at any date attaching to the Warrants shall be subject to
adjustment from time to time as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if and whenever at any time from the date hereof and prior to the Exercise
Date, the Corporation shall:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>subdivide, redivide or change its outstanding Common Shares
into a greater number of shares; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reduce, combine or consolidate its outstanding Common Shares
into a smaller number of shares;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the number of Common Shares obtainable under each Warrant shall be adjusted
immediately after the effective date of such subdivision, redivision, change,
reduction, combination or consolidation, by multiplying the number of Common Shares
obtainable immediately prior to such date on the exercise of such Warrant by a
fraction of which the numerator shall be the total number of Common Shares
outstanding immediately after such date and the denominator shall be the total
number of Common Shares outstanding immediately prior to such date and the Exercise
Price in effect immediately after such subdivision, redivision or change shall be
proportionately reduced, and conversely, in case the outstanding Common Shares of
the Corporation shall be reduced, combined or consolidated into a smaller number of
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares, the Exercise Price in effect immediately after such reduction, combination
or consolidation shall be proportionately increased. Such adjustment shall be made
successively whenever any event referred to in this subsection 4.1(a) shall occur;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if and whenever at any time from the date hereof and prior to the Exercise
Date, there is a reclassification of the Common Shares or a capital reorganization of
the Corporation other than as described in subsection 4.1(a) or a consolidation,
amalgamation, arrangement or merger of the Corporation with or into any other body
corporate, trust, partnership or other entity, or a sale, lease, exchange or transfer
of the property and assets of the Corporation as an entirety or substantially as an
entirety to any other body corporate, trust, partnership or other entity, a
Warrantholder shall be entitled to receive and shall accept, in lieu of the number of
Common Shares originally sought to be acquired by it, the number of shares or other
securities or property of the Corporation or of the body corporate, trust, partnership
or other entity resulting from such merger, amalgamation, arrangement or consolidation,
or to which such sale, lease, exchange or transfer may be made, as the case may be,
that such Warrantholder would have been entitled to receive on such reclassification,
capital reorganization, consolidation, amalgamation, merger, sale, lease, exchange or
transfer, if, on the record date or the effective date thereof, as the case may be, the
Warrantholder had been the registered holder of the number of Common Shares originally
sought to be acquired by it and to which it was entitled to acquire upon the exercise
of the Warrants. If determined appropriate by the Trustee to give effect to or to
evidence the provisions of this subsection 4.1(b), the Corporation, its successor, or
such purchasing body corporate, partnership, trust or other entity, as the case may be,
shall, prior to or contemporaneously with any such reclassification, reorganization,
consolidation, amalgamation, arrangement,</TD>
</TR>

</TABLE>
</DIV></DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 13 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>merger, sale, lease, exchange or transfer, enter into an indenture which shall
provide, to the extent possible, for the application of the provisions set forth in
this Indenture with respect to the rights and interests thereafter of the
Warrantholders to the end that the provisions set forth in this Indenture shall
thereafter correspondingly be made applicable, as nearly as may reasonably be, with
respect to any shares, other securities or property to which a Warrantholder is
entitled on the exercise of its acquisition rights thereafter. Any indenture
entered into between the Corporation and the Trustee pursuant to the provisions of
this subsection 4.1(b) shall be a supplemental indenture entered into pursuant to
the provisions of Article&nbsp;8 hereof. Any indenture entered into between the
Corporation, any successor to the Corporation or such purchasing body corporate,
partnership, trust or other entity and the Trustee shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided in this Section&nbsp;4.1 and which shall apply to successive reclassifications,
reorganizations, amalgamations, arrangements, consolidations, mergers, sales, lease,
exchange or transfer; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the adjustments provided for in this Article&nbsp;4 in the number of Common Shares
and classes of securities which are to be received on the exercise of Warrants are
cumulative. After any adjustment pursuant to this Section&nbsp;4.1, the term &#147;Common
Shares&#148; where used in this Indenture shall be interpreted to mean securities of any
class or classes which, as a result of such adjustment and all prior adjustments
pursuant to this Section&nbsp;4.1, the Warrantholder is entitled to receive upon the
exercise of its Warrant, and the number of Common Shares indicated by any exercise made
pursuant to a Warrant shall be interpreted to mean the number of Common Shares or other
property or securities a Warrantholder is entitled to receive, as a result of such
adjustment and all prior adjustments pursuant to this Section&nbsp;4.1, upon the full
exercise of a Warrant.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>4.2</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Entitlement to Shares on Exercise of Warrant</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All shares of any class or other securities which a Warrantholder is at the time in question
entitled to receive on the exercise of its Warrant, whether or not as a result of adjustments made
pursuant to this Article&nbsp;4, shall, for the purposes of the interpretation of this Indenture, be
deemed to be shares which such Warrantholder is entitled to acquire pursuant to such Warrant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>4.3</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Determination by Corporation&#146;s Auditors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any question arising with respect to the adjustments provided for in this
Article&nbsp;4, such question shall be conclusively determined by the Corporation&#146;s Auditors who shall
have access to all necessary records of the Corporation, and such determination shall be binding
upon the Corporation, the Trustee, all Warrantholders and all other persons interested therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>4.4</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Proceedings Prior to any Action Requiring Adjustment</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a condition precedent to the taking of any action which would require an adjustment in any
of the acquisition rights pursuant to any of the Warrants, including the number of Common Shares
which are to be received upon the exercise thereof, the Corporation shall take any corporate action
which may, in the opinion of Counsel, be necessary in order that the Corporation has unissued and
reserved in its authorized capital and may validly and legally issue as fully paid and
non-assessable all the shares which the holders of such Warrants are entitled to receive on the
full exercise thereof in accordance with the provisions hereof.
</DIV>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 14 -<!-- /Folio -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>4.5</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Certificate of Adjustment</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall from time to time immediately after the occurrence of any event which
requires an adjustment or readjustment as provided in Article&nbsp;4, deliver a certificate of the
Corporation to the Trustee specifying the nature of the event requiring the same and the amount of
the adjustment or readjustment necessitated thereby and setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based, which certificate shall
be supported by a certificate of the Corporation&#146;s Auditors verifying such calculation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>4.6</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Notice of Special Matters</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation covenants with the Trustee that, so long as any Warrants remain outstanding,
it will give notice to the Trustee and to the Warrantholders of its intention to fix a record date
that is prior to the Expiry Date for the issuance of rights, options or warrants (other than the
Warrants) to all or substantially all the holders of its outstanding Common Shares. Such notice
shall specify the particulars of such event and the record date for such event, provided that the
Corporation shall only be required to specify in the notice such particulars of the event as shall
have been fixed and determined on the date on which the notice is given. The notice shall be given
in each case at least 14&nbsp;days prior to such applicable record date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>4.7</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>No Action after Notice</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation covenants with the Trustee that it will not close its transfer books or take
any other corporate action which might deprive the holder of a Warrant of the opportunity to have
exercised its right of acquisition pursuant thereto during the period of 14&nbsp;days after the giving
of the notice set forth in Section&nbsp;4.6.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>4.8</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Protection of Trustee</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except as provided in Section&nbsp;9.2, the Trustee:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>shall not at any time be under any duty or responsibility to any Warrantholder
to determine whether any facts exist which may require any adjustment contemplated by
Section&nbsp;4.1, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed in making the same;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>shall not be accountable with respect to the validity or value (or the kind or
amount) of any Common Shares or of any shares or other securities or property which may
at any time be issued or delivered upon the exercise of the rights attaching to any
Warrant;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>shall not be responsible for any failure of the Corporation to issue, transfer
or deliver Common Shares or certificates for the same upon the surrender of any
Warrants for the purpose of the exercise of such rights or to comply with any of the
covenants contained in this Article; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>shall not incur any liability or responsibility whatsoever or be in any way
responsible for the consequences of any breach on the part of the Corporation of any of
the representations, warranties or covenants herein contained or of any acts of the
directors, officers, employees, agents or servants of the Corporation.</TD>
</TR>

</TABLE>
</DIV></DIV>
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<P align="center" style="font-size: 10pt"><!-- Folio -->- 15 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE V<BR>
RIGHTS OF THE CORPORATION AND COVENANTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>5.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>General Covenants</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation covenants with the Trustee that so long as any Warrants remain outstanding:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it will allot and reserve and keep available a sufficient number of Common
Shares for the purpose of enabling it to satisfy its obligations to issue Common Shares
upon the exercise of the Warrants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it will cause the Common Shares and the certificates representing the Common
Shares from time to time acquired pursuant to the exercise of the Warrants to be duly
issued and delivered in accordance with the Warrant Certificates and the terms hereof;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>upon payment of the Exercise Price, all Common Shares which shall be issued
upon exercise of the rights to acquire provided for herein and in the Warrant
Certificates shall be fully paid and non-assessable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it will maintain its corporate existence carry on and conduct its business in a
proper, efficient and business-like manner and, in accordance with good business
practice, keep or cause to be kept proper books of account in accordance with Canadian
generally accepted accounting practice, and, if and whenever required in writing by the
Trustee, file with the Trustee copies of all annual and interim financial statements of
the Corporation furnished to its shareholders during the term of this Indenture;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it will use its best efforts to ensure that all Common Shares outstanding or
issuable from time to time (including without limitation the Common Shares issuable on
the exercise of the Warrants) continue to be or are listed and posted for trading on
the Toronto Stock Exchange;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it will use its reasonable best efforts to maintain its status as a reporting
issuer in good standing, in the provinces of Alberta, British Columbia and Ontario and
it will make all requisite filings to be made by it under applicable Canadian
securities legislation and stock exchange rules including without limitation to report
the exercise of the rights to acquire Common Shares pursuant to Warrants or otherwise;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>generally, it will well and truly perform and carry out all of the acts or
things to be done by it as provided in this Indenture; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>it will file and bring effective a Shelf Registration Statement and use its
reasonable efforts to maintain the effectiveness of such Shelf Registration Statement,
or other Shelf Registration Statement, continuously until the Expiry Date and will
provide the Trustee notice of any change in the effectiveness of any Shelf Registration
Statement.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>5.2</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Trustee&#146;s Remuneration and Expenses</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation covenants that it will pay to the Trustee from time to time reasonable
remuneration for its services hereunder and will pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the Trustee in the
administration or execution of the trusts hereby created (including the reasonable compensation and
the disbursements of
</DIV>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 16 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">its counsel and all other advisers and assistants not regularly in its employ) both before any
default hereunder and thereafter until all duties of the Trustee hereunder shall be finally and
fully performed, except any such expense, disbursement or advance as may arise out of or result
from the Trustee&#146;s negligence, wilful misconduct or bad faith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>5.3</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Performance of Covenants by Trustee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Corporation shall fail to perform any of its covenants contained in this Indenture, the
Trustee may notify the Warrantholders of such failure on the part of the Corporation or may itself
perform any of the covenants capable of being performed by it but, subject to Section&nbsp;9.2, shall be
under no obligation to perform said covenants or to notify the Warrantholders of such performance
by it. All sums expended or advanced by the Trustee in so doing shall be repayable as provided in
Section&nbsp;5.2. No such performance, expenditure or advance by the Trustee shall relieve the
Corporation of any default hereunder or of its continuing obligations under the covenants herein
contained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>5.4</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Optional Purchases by the Corporation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to compliance with applicable securities legislation, the Corporation may purchase
from time to time by private contract or otherwise any of the Warrants. Any such purchase shall be
made at the lowest price or prices at which, in the opinion of the directors, such Warrants are
then obtainable, plus reasonable costs of purchase, and may be made in such manner, from such
persons and on such other terms as the Corporation, in its sole discretion, may determine. Any
Warrant Certificates representing the Warrants purchased pursuant to this Section&nbsp;5.4 shall
forthwith be delivered to and cancelled by the Trustee. No Warrants shall be issued in replacement
thereof.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE VI<BR>
ENFORCEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>6.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Suits by Warrantholders</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All or any of the rights conferred upon any Warrantholder by any of the terms of the Warrant
Certificates or of this Indenture, or of both, may be enforced by the Warrantholder by appropriate
proceedings but without prejudice to the right which is hereby conferred upon the Trustee to
proceed in its own name to enforce each and all of the provisions herein contained for the benefit
of the Warrantholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>6.2</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Immunity of Shareholders, etc.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee and, by the acceptance of the Warrant Certificates and as part of the
consideration for the issue of the Warrants, the Warrantholders hereby waive and release any right,
cause of action or remedy now or hereafter existing in any jurisdiction against any incorporator or
any past, present or future shareholder, director, officer, employee or agent of the Corporation or
of any &#147;successor Corporation&#148; (as such term is defined in Section&nbsp;9.2) on any covenant, agreement,
representation or warranty by the Corporation contained herein or in the Warrant Certificates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>6.3</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Limitation of Liability</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations hereunder are not personally binding upon, nor shall resort hereunder be had
to, the private property of any of the past, present or future shareholders, directors, officers,
employees or
</DIV>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 17 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">agents of the Corporation or of any successor Corporation, but only the property of the
Corporation or of any successor Corporation shall be bound in respect hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>6.4</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Waiver of Default</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the happening of any default hereunder, the Trustee shall provide a notice as provided in
Section&nbsp;10.2 to the Warrantholders setting out, in reasonable detail, the particulars of such
default and:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the holders of not less than 51% of the Warrants then outstanding shall have
the power (in addition to the powers exercisable by Extraordinary Resolution) by
requisition in writing to instruct the Trustee to waive any default hereunder and the
Trustee shall thereupon waive the default upon such terms and conditions as shall be
prescribed in such requisition; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Trustee shall have power to waive any default hereunder upon such terms and
conditions as the Trustee may deem advisable, if, in the Trustee&#146;s opinion, the same
shall have been cured or adequate provision made therefor;</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">provided that no delay or omission of the Trustee or of the Warrantholders to exercise any right or
power accruing upon any default shall impair any such right or power or shall be construed to be a
waiver of any such default or acquiescence therein and provided further that no act or omission
either of the Trustee or of the Warrantholders in the premises shall extend to or be taken in any
manner whatsoever to affect any subsequent default hereunder of the rights resulting therefrom.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE VII<BR>
MEETINGS OF WARRANTHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Right to Convene Meetings</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee may at any time and from time to time, and shall on receipt of a written request
of the Corporation or of a Warrantholders&#146; Request and upon being indemnified to its reasonable
satisfaction by the Corporation or by the Warrantholders signing such Warrantholders&#146; Request
against the cost which may be incurred in connection with the calling and holding of such meeting,
convene a meeting of the Warrantholders. In the event of the Trustee failing to so convene a
meeting within ten (10)&nbsp;days after receipt of such written request of the Corporation or such
Warrantholders&#146; Request and indemnity given as aforesaid, the Corporation or such Warrantholders,
as the case may be, may convene such meeting. Every such meeting shall be held in the City of
Calgary, Alberta or at such other place as may be approved or determined by the Trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.2</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Notice</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At least twenty-one days&#146; prior notice of any meeting of Warrantholders shall be given to the
Warrantholders in the manner provided for in Section&nbsp;10.2 and a copy of such notice shall be sent
by mail to the Trustee (unless the meeting has been called by the Trustee) and to the Corporation
(unless the meeting has been called by the Corporation). Such notice shall state the time when and
the place where the meeting is to be held, shall state briefly the general nature of the business
to be transacted thereat and shall contain such information as is reasonably necessary to enable
the Warrantholders to make a reasoned decision on the matter, but it shall not be necessary for any
such notice to set out the terms of any resolution to be proposed or any of the provisions of this
Article&nbsp;7.
</DIV>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.3</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Chairman</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An individual (who need not be a Warrantholder) designated in writing by the Trustee shall be
chairman of any meeting of Warrantholders and if no individual is so designated, or if the
individual so designated is not present within 15 minutes from the time fixed for the holding of
the meeting, the Warrantholders present in person or by proxy shall choose some individual present
to be chairman.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.4</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Quorum</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the provisions of Section&nbsp;7.11, at any meeting of the Warrantholders a quorum shall
consist of Warrantholders present in person or by proxy and entitled to acquire at least 25% of the
aggregate number of Common Shares which could be acquired pursuant to all the then outstanding
Warrants, provided that at least two persons entitled to vote thereat are personally present. If a
quorum of the Warrantholders shall not be present within 30 minutes from the time fixed for holding
any meeting, the meeting, if summoned by Warrantholders or on a Warrantholders&#146; Request, shall be
dissolved; but in any other case the meeting shall be adjourned to the same day in the next week
(unless such day is not a Business Day, in which case it shall be adjourned to the next following
Business Day) at the same time and place and no notice of the adjournment need be given. Any
business may be brought before or dealt with at an adjourned meeting which might have been dealt
with at the original meeting in accordance with the notice calling the same. No business shall be
transacted at any meeting unless a quorum be present at the commencement of business. At the
adjourned meeting the Warrantholders present in person or by proxy shall form a quorum and may
transact the business for which the meeting was originally convened, notwithstanding that they may
not be entitled to acquire at least 25% of the aggregate number of Common Shares which may be
acquired pursuant to all then outstanding Warrants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.5</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Power to Adjourn</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The chairman of any meeting at which a quorum of the Warrantholders is present may, with the
consent of the meeting, adjourn any such meeting, and no notice of such adjournment need be given
except such notice, if any, as the meeting may prescribe.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.6</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Show of Hands</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Every question submitted to a meeting shall be decided in the first place by a majority of the
votes given on a show of hands except that votes on an Extraordinary Resolution shall be given in
the manner hereinafter provided. At any such meeting, unless a poll is duly demanded as herein
provided, a declaration by the chairman that a resolution has been carried or carried unanimously
or by a particular majority or lost or not carried by a particular majority shall be conclusive
evidence of the fact.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.7</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Poll and Voting</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On every Extraordinary Resolution, and on any other question submitted to a meeting and after
a vote by show of hands when demanded by the chairman or by one or more of the Warrantholders
acting in person or by proxy and entitled to acquire in the aggregate at least 5% of the aggregate
number of Common Shares which could be acquired pursuant to all the Warrants then outstanding, a
poll shall be taken in such manner as the chairman shall direct. Questions other than those
required to be determined by Extraordinary Resolution shall be decided by a majority of the votes
cast on the poll.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On a show of hands, every person who is present and entitled to vote, whether as a
Warrantholder or as proxy for one or more absent Warrantholders, or both, shall have one vote. On
a poll, each Warrantholder present in person or represented by a proxy duly appointed by instrument
in writing shall
</DIV>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 19 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">be entitled to one vote in respect of each whole Common Share which he is entitled to acquire
pursuant to the Warrant or Warrants then held or represented by it. A proxy need not be a
Warrantholder. The chairman of any meeting shall be entitled, both on a show of hands and on a
poll, to vote in respect of the Warrants, if any, held or represented by him.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.8</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Regulations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee, or the Corporation with the approval of the Trustee, may from time to time make
and from time to time vary such regulations as it shall think fit for:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the setting of the record date for a meeting of Warrantholders for the purpose
of determining Warrantholders entitled to receive notice of and to vote at the meeting;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the issue of voting certificates by any bank, trust company or other depositary
satisfactory to the Trustee stating that the Warrant Certificates specified therein
have been deposited with it by a named person and will remain on deposit until after
the meeting, which voting certificate shall entitle the persons named therein to be
present and vote at any such meeting and at any adjournment thereof or to appoint a
proxy or proxies to represent them and vote for them at any such meeting and at any
adjournment thereof in the same manner and with the same effect as though the persons
so named in such voting certificates were the actual bearers of the Warrant
Certificates specified therein;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the deposit of voting certificates and instruments appointing proxies at such
place and time as the Trustee, the Corporation or the Warrantholders convening the
meeting, as the case may be, may in the notice convening the meeting direct;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the deposit of voting certificates and instruments appointing proxies at some
approved place or places other than the place at which the meeting is to be held and
enabling particulars of such instruments appointing proxies to be mailed or telecopied
before the meeting to the Corporation or to the Trustee at the place where the same is
to be held and for the voting of proxies so deposited as though the instruments
themselves were produced at the meeting;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the form of the instrument of proxy; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>generally for the calling of meetings of Warrantholders and the conduct of
business thereat.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any regulations so made shall be binding and effective and the votes given in accordance therewith
shall be valid and shall be counted. Save as such regulations may provide, the only persons who
shall be recognized at any meeting as a Warrantholder, or be entitled to vote or be present at the
meeting in respect thereof (subject to Section&nbsp;7.9), shall be Warrantholders or their counsel, or
proxies of Warrantholders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.9</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Corporation and Trustee May be Represented</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation and the Trustee, by their respective directors and officers, and the Counsel
for the Corporation and for the Trustee may attend any meeting of the Warrantholders, but shall not
be entitled to vote thereat, whether in respect of any Warrants held by them or otherwise.
</DIV>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 20 -<!-- /Folio -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.10</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Powers Exercisable by Extraordinary Resolution</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to all other powers conferred upon them by any other provisions of this Indenture
or by law, the Warrantholders at a meeting shall, subject to the provisions of Section&nbsp;7.11, have
the power, exercisable from time to time by Extraordinary Resolution:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to agree to any modification, abrogation, alteration, compromise or arrangement
of the rights of Warrantholders or the Trustee in its capacity as trustee hereunder or
on behalf of the Warrantholders against the Corporation whether such rights arise under
this Indenture or the Warrant Certificates or otherwise;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to amend, alter or repeal any Extraordinary Resolution previously passed or
sanctioned by the Warrantholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to direct or to authorize the Trustee to enforce any of the covenants on the
part of the Corporation contained in this Indenture or the Warrant Certificates or to
enforce any of the rights of the Warrantholders in any manner specified in such
Extraordinary Resolution or to refrain from enforcing any such covenant or right;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to waive, and to direct the Trustee to waive, any default on the part of the
Corporation in complying with any provisions of this Indenture or the Warrant
Certificates either unconditionally or upon any conditions specified in such
Extraordinary Resolution;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to restrain any Warrantholder from taking or instituting any suit, action or
proceeding against the Corporation for the enforcement of any of the covenants on the
part of the Corporation in this Indenture or the Warrant Certificates or to enforce any
of the rights of the Warrantholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to direct any Warrantholder who, as such, has brought any suit, action or
proceeding to stay or to discontinue or otherwise to deal with the same upon payment of
the costs, charges and expenses reasonably and properly incurred by such Warrantholder
in connection therewith;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to assent to any change in or omission from the provisions contained in the
Warrant Certificates and this Indenture or any ancillary or supplemental instrument
which may be agreed to by the Corporation, and to authorize the Trustee to concur in
and execute any ancillary or supplemental indenture embodying the change or omission;
and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with the consent of the Corporation (which consent shall not be unreasonably
withheld), to remove the Trustee or its successor in office and to appoint a new
trustee or trustees to take the place of the Trustee so removed.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.11</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Meaning of Extraordinary Resolution</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The expression &#147;Extraordinary Resolution&#148; when used in this Indenture means,
subject as hereinafter provided in this Section&nbsp;7.11 and in Section&nbsp;7.14, a resolution
proposed at a meeting of Warrantholders duly convened for that purpose and held in
accordance with the provisions of this Article&nbsp;7 at which there are present in person
or by proxy Warrantholders entitled to acquire at least 25% of the aggregate number of
Common Shares which may be acquired pursuant to all the then outstanding Warrants and
passed by the affirmative votes of Warrantholders entitled to acquire not less than 66 2/3% of the</TD>
</TR>

</TABLE>
</DIV></DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 21 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>aggregate number of Common Shares which may be acquired pursuant to all the then
outstanding Warrants represented at the meeting and voted on the poll upon such
resolution.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If, at the meeting at which an Extraordinary Resolution is to be considered,
Warrantholders entitled to acquire at least 25% of the aggregate number of Common
Shares which may be acquired pursuant to all the then outstanding Warrants are not
present in person or by proxy within 30 minutes after the time appointed for the
meeting, then the meeting, if convened by Warrantholders or on a Warrantholders&#146;
Request, shall be dissolved; but in any other case it shall stand adjourned to such
day, being not less than 15 or more than 60&nbsp;days later, and to such place and time as
may be appointed by the chairman. Not less than ten days&#146; prior notice shall be given
of the time and place of such adjourned meeting in the manner provided for in Section
10.2. Such notice shall state that at the adjourned meeting the Warrantholders present
in person or by proxy shall form a quorum but it shall not be necessary to set forth
the purposes for which the meeting was originally called or any other particulars. At
the adjourned meeting the Warrantholders present in person or by proxy shall form a
quorum and may transact the business for which the meeting was originally convened and
a resolution proposed at such adjourned meeting and passed by the requisite vote as
provided in subsection 7.11(a) shall be an Extraordinary Resolution within the meaning
of this Indenture notwithstanding that Warrantholders entitled to acquire at least 25%
of the aggregate number of Common Shares which may be acquired pursuant to all the then
outstanding Warrants are not present in person or by proxy at such adjourned meeting.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Votes on an Extraordinary Resolution shall always be given on a poll and no
demand for a poll on an Extraordinary Resolution shall be necessary.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.12</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Powers Cumulative</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any one or more of the powers or any combination of the powers in this Indenture stated to be
exercisable by the Warrantholders by Extraordinary Resolution or otherwise may be exercised from
time to time and the exercise of any one or more of such powers or any combination of powers from
time to time shall not be deemed to exhaust the right of the Warrantholders to exercise such power
or powers or combination of powers then or thereafter from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.13</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Minutes</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minutes of all resolutions and proceedings at every meeting of Warrantholders shall be made
and duly entered in books to be provided from time to time for that purpose by the Trustee at the
expense of the Corporation, and any such minutes as aforesaid, if signed by the chairman or the
secretary of the meeting at which such resolutions were passed or proceedings had shall be prima
facie evidence of the matters therein stated and, until the contrary is proved, every such meeting
in respect of the proceedings of which minutes shall have been made shall be deemed to have been
duly convened and held, and all resolutions passed thereat or proceedings taken shall be deemed to
have been duly passed and taken.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.14</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Instruments in Writing</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All actions which may be taken and all powers that may be exercised by the Warrantholders at a
meeting held as provided in this Article&nbsp;7 may also be taken and exercised by Warrantholders
entitled to acquire at least 66 2/3% of the aggregate number of Common Shares which may be acquired
pursuant to all the then outstanding Warrants by an instrument in writing signed in one or more
counterparts by such
</DIV>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 22 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Warrantholders in person or by attorney duly appointed in writing, and the expression
&#147;Extraordinary Resolution&#148; when used in this Indenture shall include an instrument so signed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.15</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Binding Effect of Resolutions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Every resolution and every Extraordinary Resolution passed in accordance with the provisions
of this Article&nbsp;7 at a meeting of Warrantholders shall be binding upon all the Warrantholders,
whether present at or absent from such meeting, and every instrument in writing signed by
Warrantholders in accordance with Section&nbsp;7.14 shall be binding upon all the Warrantholders,
whether signatories thereto or not, and each and every Warrantholder and the Trustee (subject to
the provisions for indemnity herein contained) shall be bound to give effect accordingly to every
such resolution and instrument in writing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7.16</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Holdings by Corporation Disregarded</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining whether Warrantholders holding Warrant Certificates evidencing the entitlement
to acquire the required number of Common Shares are present at a meeting of Warrantholders for the
purpose of determining a quorum or have concurred in any consent, waiver, Extraordinary Resolution,
Warrantholders&#146; Request or other action under this Indenture, Warrants owned legally or
beneficially by the Corporation or any Subsidiary of the Corporation shall be disregarded in
accordance with the provisions of Section&nbsp;10.6.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE VIII<BR>
SUPPLEMENTAL INDENTURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>8.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Provision for Supplemental Indentures for Certain Purposes</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time the Corporation (when authorized by action of the directors) and the Trustee
may, subject to the provisions hereof, and they shall, when so directed in accordance with the
provisions hereof, execute and deliver by their proper officers, indentures or instruments
supplemental hereto, which thereafter shall form part hereof, for any one or more or all of the
following purposes:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>setting forth any adjustments resulting from the application of the provisions
of Article&nbsp;4;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adding to the provisions hereof such additional covenants and enforcement
provisions as, in the opinion of Counsel, are necessary or advisable in the premises,
provided that the same are not in the opinion of the Trustee prejudicial to the
interests of the Warrantholders as a group;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>giving effect to any Extraordinary Resolution passed as provided in Article&nbsp;7;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>making such provisions not inconsistent with this Indenture as may be necessary
or desirable with respect to matters or questions arising hereunder or for the purpose
of obtaining a listing or quotation of the Warrants on any stock exchange, provided
that such provisions are not, in the opinion of the Trustee, prejudicial to the
interests of the Warrantholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adding to or altering the provisions hereof in respect of the transfer of
Warrants, making provision for the exchange of Warrant Certificates, and making any
modification in the form of the Warrant Certificates which does not affect the
substance thereof;</TD>
</TR>

</TABLE>
</DIV></DIV>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 23 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>modifying any of the provisions of this Indenture, including relieving the
Corporation from any of the obligations, conditions or restrictions herein contained,
provided that such modification or relief shall be or become operative or effective
only if, in the opinion of the Trustee, such modification or relief in no way
prejudices any of the rights of the Warrantholders or of the Trustee, and provided
further that the Trustee may in its sole discretion decline to enter into any such
supplemental indenture which in its opinion may not afford adequate protection to the
Trustee when the same shall become operative; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>for any other purpose not inconsistent with the terms of this Indenture,
including the correction or rectification of any ambiguities, defective or inconsistent
provisions, errors, mistakes or omissions herein, provided that in the opinion of the
Trustee the rights of the Trustee and of the Warrantholders are in no way prejudiced
thereby.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>8.2</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Successor Corporations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the case of the consolidation, amalgamation, merger or transfer of the undertaking or
assets of the Corporation as an entirety or substantially as an entirety to another Corporation
(&#147;successor Corporation&#148;), the successor Corporation resulting from such consolidation,
amalgamation, merger or transfer (if not the Corporation) shall expressly assume, by supplemental
indenture satisfactory in form to the Trustee and executed and delivered to the Trustee, the due
and punctual performance and observance of each and every covenant and condition of this Indenture
to be performed and observed by the Corporation.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE IX<BR>
CONCERNING THE TRUSTEE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Trust Indenture Legislation</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If and to the extent that any provision of this Indenture limits, qualifies or
conflicts with a mandatory requirement of Applicable Legislation, such mandatory
requirement shall prevail.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Corporation and the Trustee agree that each will, at all times in relation
to this Indenture and any action to be taken hereunder, observe and comply with and be
entitled to the benefits of Applicable Legislation.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.2</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Rights and Duties of Trustee</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the exercise of the rights and duties prescribed or conferred by the terms
of this Indenture, the Trustee shall exercise that degree of care, diligence and skill
that a reasonably prudent trustee and/or custodian would exercise in comparable
circumstances. No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure to act,
or its own wilful misconduct or bad faith.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The obligation of the Trustee to commence or continue any act, action or
proceeding for the purpose of enforcing any rights of the Trustee or the Warrantholders
hereunder shall be conditional upon the Warrantholders furnishing, when required by
notice by the Trustee, sufficient funds to commence or to continue such act, action or
proceeding and</TD>
</TR>

</TABLE>
</DIV></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 24 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an indemnity reasonably satisfactory to the Trustee to protect and to hold harmless
the Trustee against the costs, charges and expenses and liabilities to be incurred
thereby and any loss and damage it may suffer by reason thereof. None of the
provisions contained in this Indenture shall require the Trustee to expend or to
risk its own funds or otherwise to incur financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers unless
indemnified as aforesaid.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee may, before commencing or at any time during the continuance of any
such act, action or proceeding, require the Warrantholders, at whose instance it is
acting to deposit with the Trustee the Warrants held by them, for which Warrants the
Trustee shall issue receipts.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Every provision of this Indenture that by its terms relieves the Trustee of
liability or entitles it to rely upon any evidence submitted to it is subject to the
provisions of Applicable Legislation, of this Section&nbsp;9.2 and of Section&nbsp;9.3.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.3</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Evidence, Experts and Advisers</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In addition to the reports, certificates, opinions and other evidence required
by this Indenture, the Corporation shall furnish to the Trustee such additional
evidence of compliance with any provision hereof, and in such form, as may be
prescribed by Applicable Legislation or as the Trustee may reasonably require by
written notice to the Corporation.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the exercise of its rights and duties hereunder, the Trustee may, if it is
acting in good faith, rely as to the truth of the statements and the accuracy of the
opinions expressed in statutory declarations, opinions, reports, written requests,
consents, or orders of the Corporation, certificates of the Corporation or other
evidence furnished to the Trustee pursuant to a request of the Trustee, provided that
such evidence complies with Applicable Legislation and that the Trustee complies with
Applicable Legislation and that the Trustee examines the same and determines that such
evidence complies with the applicable requirements of this Indenture.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever it is provided in this Indenture or under Applicable Legislation that
the Corporation shall deposit with the Trustee resolutions, certificates, reports,
opinions, requests, orders or other documents, it is intended that the trust, accuracy
and good faith on the effective date thereof and the facts and opinions stated in all
such documents so deposited shall, in each and every such case, be conditions precedent
to the right of the Corporation to have the Trustee take the action to be based
thereon.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Proof of the execution of an instrument in writing, including a Warrantholders&#146;
Request, by any Warrantholder may be made by the certificate of a notary public, or
other officer with similar powers, that the person signing such instrument acknowledged
to it the execution thereof, or by an affidavit of a witness to such execution or in
any other manner which the Trustee may consider adequate.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee may employ or retain such Counsel, accountants, appraisers or other
experts or advisers as it may reasonably require for the purpose of discharging its
duties hereunder and may pay reasonable remuneration for all services so performed by
any of them, without taxation of costs of any Counsel, and shall not be responsible for
any</TD>
</TR>

</TABLE>
</DIV></DIV>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 25 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>misconduct or negligence on the part of any such experts or advisers who have been
appointed with due care by the Trustee.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.4</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Documents, Monies, etc. Held by Trustee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any securities, documents of title or other instruments that may at any time be held by the
Trustee subject to the trusts hereof may be placed in the deposit vaults of the Trustee or of any
Canadian chartered bank listed in Schedule&nbsp;I of the Bank Act (Canada) or deposited for safekeeping
with any such bank. Unless herein otherwise expressly provided, any monies so held pending the
application or withdrawal thereof under any provisions of this Indenture, upon the direction of the
Corporation, shall be or, with the consent of the Corporation, may be:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>deposited in the name of the Trustee in any Canadian chartered bank listed in
Schedule&nbsp;I of the Bank Act (Canada) at the rate of interest (if any) then current on
similar deposits;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>deposited in the deposit department of the Trustee; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>invested in securities issued or guaranteed by the Government of Canada or a
province thereof, any Canadian chartered bank listed in Schedule&nbsp;I of the Bank Act
(Canada) or the Trustee, provided that the securities shall not have a maturity date of
more than 60&nbsp;days from the date of investment. Unless the Corporation shall be in
default hereunder or unless otherwise specifically provided herein, all interest or
other income received by the Trustee in respect of such deposits and investments shall
belong to the Corporation.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.5</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Actions by Trustee to Protect Interest</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee shall have power to institute and to maintain such actions and proceedings as it
may consider necessary or expedient to preserve, protect or enforce its interests and the interests
of the Warrantholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.6</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Trustee Not Required to Give Security</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee shall not be required to give any bond or security in respect of the execution of
the trusts and powers of this Indenture or otherwise in respect of the premises.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.7</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Protection of Trustee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By way of supplement to the provisions of any law for the time being relating to trustees it
is expressly declared and agreed as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Trustee shall not be liable for or by reason of any statements of fact or
recitals in this Indenture or in the Warrant Certificates (except the representation
contained in Section&nbsp;9.9 or in the certificate of the Trustee on the Warrant
Certificates) or be required to verify the same, but all such statements or recitals
are and shall be deemed to be made by the Corporation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>nothing herein contained shall impose any obligation on the Trustee to see to
or to require evidence of the registration or filing (or renewal thereof) of this
Indenture or any instrument ancillary or supplemental hereto;</TD>
</TR>

</TABLE>
</DIV></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 26 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Trustee shall not be bound to give notice to any person or persons of the
execution hereof; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Corporation indemnifies and saves harmless the Trustee and its officers
from and against any and all liabilities, losses, costs, claims, actions, or demands
whatsoever which may be brought against the Trustee or which it may suffer or incur as
a result of or arising out of the performance of its duties and obligations under this
Indenture, save only in the event of the negligent failure to act, or the wilful
misconduct or bad faith of the Trustee. It is understood and agreed that this
indemnification shall survive the termination or discharge of this Indenture or the
resignation of the Trustee.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.8</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Replacement of Trustee; Successor by Merger</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee may resign its trust and be discharged from all further duties and
liabilities hereunder, subject to this Section&nbsp;9.8, by giving to the Corporation not
less than 90&nbsp;days&#146; prior notice in writing or such shorter prior notice as the
Corporation may accept as sufficient. The Warrantholders by Extraordinary Resolution
shall have power at any time to remove the existing Trustee and to appoint a new
Trustee. In the event of the Trustee resigning or being removed as aforesaid or being
dissolved, becoming bankrupt, going into liquidation or otherwise becoming incapable of
acting hereunder, the Corporation shall forthwith appoint a new trustee unless a new
trustee has already been appointed by the Warrantholders; failing such appointment by
the Corporation, the retiring Trustee or any Warrantholder may apply to a justice of
the Court of Queen&#146;s Bench of the Province of Alberta on such notice as such justice
may direct, for the appointment of a new trustee; but any new trustee so appointed by
the Corporation or by the Court shall be subject to removal as aforesaid by the
Warrantholders. Any new trustee appointed under any provision of this Section&nbsp;9.8
shall be a Corporation authorized to carry on the business of a trust company in the
Province of Alberta and, if required by the Applicable Legislation for any other
provinces, in such other provinces. On any such appointment the new trustee shall be
vested with the same powers, rights, duties and responsibilities as if it had been
originally named herein as Trustee hereunder.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon the appointment of a successor trustee, the Corporation shall promptly
notify the Warrantholders thereof in the manner provided for in Section&nbsp;10.2 hereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any corporation into or with which the Trustee may be merged or consolidated or
amalgamated, or any corporation resulting therefrom to which the Trustee shall be a
party, or any corporation succeeding to the trust business of the Trustee shall be the
successor to the Trustee hereunder without any further act on its part or any of the
parties hereto, provided that such corporation would be eligible for appointment as a
successor trustee under subsection 9.8(a).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Warrant Certificates certified but not delivered by a predecessor trustee
may be certified by the successor trustee in the name of the predecessor or successor
trustee.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.9</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Conflict of Interest</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee represents to the Corporation that at the time of execution and
delivery hereof no material conflict of interest exists between its role as a trustee
hereunder and its role in any other capacity and agrees that in the event of a material
conflict of interest arising hereafter it will, within 90&nbsp;days after ascertaining that
it has such material conflict</TD>
</TR>

</TABLE>
</DIV></DIV>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 27 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>of interest, either eliminate the same or assign its trust hereunder to a successor
trustee approved by the Corporation and meeting the requirements set forth in
subsection 9.8(a). Notwithstanding the foregoing provisions of this subsection
9.9(a), if any such material conflict of interest exists or hereafter shall exist,
the validity and enforceability of this Indenture and the Warrant Certificate shall
not be affected in any manner whatsoever by reason thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Subject to subsection 9.9(a), the Trustee, in its personal or any other
capacity, may buy, lend upon and deal in securities of the Corporation and generally
may contract and enter into financial transactions with the Corporation or any
Subsidiary of the Corporation without being liable to account for any profit made
thereby.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.10</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Acceptance of Trust</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee hereby accepts the trusts in this Indenture declared and provided for and agrees
to perform the same upon the terms and conditions herein set forth.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.11</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Trustee Not to be Appointed Receiver</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee and any person related to the Trustee shall not be appointed a receiver, a
receiver and manager or liquidator of all or any part of the assets or undertakings of the
Corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.12</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Anti-Money Laundering and Anti-Terrorist Legislation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee shall retain the right not to act and shall not be liable for refusing to act if,
due to lack of information or for any other reason whatsoever, the Trustee, in its sole judgment,
determines that such act might cause it to be in non-compliance with any applicable anti-money
laundering or anti-terrorist legislation, regulation or guideline. Further, should the Trustee, in
its sole judgment, determine at any time that its acting under this Indenture has resulted in its
being in non-compliance with any applicable anti-money laundering or anti-terrorist legislation,
regulation or guideline, then it shall have the right to resign on ten (10)&nbsp;days written notice to
the Corporation, provided that (a)&nbsp;the Trustee&#146;s written notice shall describe the circumstances of
such non-compliance; and (b)&nbsp;if such circumstances are rectified to the Trustee&#146;s satisfaction
within such ten (10)&nbsp;day period, then such resignation shall not be effective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9.13</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Accounts Opened for Corporation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation hereby represents to the Trustee that any account to be opened by, or interest
to held by, the Trustee in connection with this Indenture, for or to the credit of the Corporation,
either (a)&nbsp;is not intended to be used by or on behalf of any third party; or (b)&nbsp;is intended to be
used by or on behalf of a third party, in which case the Corporation hereto agrees to complete and
execute forthwith a declaration in the Trustee&#146;s prescribed form as to the particulars of such
third party.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE X<BR>
GENERAL</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>10.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Notice to the Corporation and the Trustee</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless herein otherwise expressly provided, any notice to be given hereunder to
the Corporation or the Trustee shall be deemed to be validly given if delivered or if
sent by registered letter, postage prepaid or if telecopied:</TD>
</TR>

</TABLE>
</DIV></DIV>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 28 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If to the Corporation:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Oncolytics Biotech Inc.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;210, 1167 Kensington Cr. N.W.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calgary, Alberta<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T2N 1X7<BR>
Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President<BR>
Telecopier:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(403)&nbsp;270-8124</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 23pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>With a copy to:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bennett Jones LLP<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4500, 855 2nd Street S.W.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calgary, Alberta<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T2P 4K7<BR>
Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brent Kraus<BR>
Telecopier:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(403)&nbsp;265-7219</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 23pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If to the Trustee:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Computershare Trust Company of Canada<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;710, 530 &#150; 8th Avenue S.W.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calgary, Alberta<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;T2P 3S8<BR>
Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manager, Corporate Trust Department<BR>
Telecopier:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(403)&nbsp;267-6598</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>and any such notice delivered in accordance with the foregoing shall be deemed to
have been received on the date of delivery or, if mailed, on the fifth Business Day
following the actual posting of the notice, or if telecopied, the next Business Day
after transmission provided that transmission has been completely and accurately
transmitted.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Corporation or the Trustee, as the case may be, may from time to time
notify the other in the manner provided in subsection 10.1(a) of a change of address
which, from the effective date of such notice and until changed by like notice, shall
be the address of the Corporation or the Trustee, as the case may be, for all purposes
of this Indenture.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If, by reason of a strike, lockout or other work stoppage, actual or
threatened, involving postal employees, any notice to be given to the Trustee or to the
Corporation hereunder could reasonably be considered unlikely to reach its destination,
such notice shall be valid and effective only if it is delivered or sent by telecopier
at the appropriate address or number provided in subsection 10.1(a).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>10.2</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Notice to Warrantholders</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless otherwise provided herein, any notice to the Warrantholders under the
provisions of this Indenture shall be valid and effective if delivered or if sent by
telecopier or letter or circular through the ordinary post addressed to such holders at
their post office addresses appearing on the register hereinbefore mentioned and shall
be deemed to have been effectively given on the date of delivery or, if mailed, five
Business Days following actual posting of the notice, or if telecopied, the next
Business Day after transmission provided that transmission has been completely and
accurately transmitted.</TD>
</TR>

</TABLE>
</DIV></DIV>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 29 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If, by reason of a strike, lockout or other work stoppage, actual or
threatened, involving postal employees, any notice to be given to the Warrantholders
hereunder could reasonably be considered unlikely to reach its destination, such notice
shall be valid and effective only if it is delivered or sent by telecopier at the
appropriate address or number referred to in subsection 10.2(a).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>10.3</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Counterparts</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Indenture may be executed in several counterparts, each of which when so executed shall
be deemed to be an original and such counterparts together shall constitute one and the same
instrument and notwithstanding their date of execution they shall be deemed to be dated as of the
date hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>10.4</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Satisfaction and Discharge of Indenture</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the earlier of:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the date by which there shall have been delivered to the Trustee for exercise
or destruction all Warrant Certificates theretofore certified hereunder; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Time of Expiry,</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and if all certificates representing Common Shares and Warrants required to be issued in compliance
with the provisions hereof have been issued and delivered hereunder or to the Trustee in accordance
with such provisions and if all payments required to be made in compliance with the provisions of
Article&nbsp;4 have been made in accordance with such provisions, this Indenture shall cease to be of
further effect and the Trustee, on demand of and at the cost and expense of the Corporation and
upon delivery to the Trustee of a certificate of the Corporation stating that all conditions
precedent to the satisfaction and discharge of this Indenture have been complied with, shall
execute proper instruments acknowledging satisfaction of and discharging this Indenture.
Notwithstanding the foregoing, the indemnities provided to the Trustee by the Corporation hereunder
shall remain in full force and effect and survive the termination of this Indenture.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>10.5</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Provisions of Indenture and Warrants for the Sole Benefit of Parties, Agent and Warrantholders</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing in this Indenture or in the Warrant Certificates, expressed or implied, shall give or
be construed to give to any person other than the parties hereto and the Warrantholders, as the
case may be, any legal or equitable right, remedy or claim under this Indenture, or under any
covenant or provision herein or therein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and the Warrantholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>10.6</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Warrants Owned by the Corporation or its Subsidiaries &#151; Certificate to be Provided</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the purpose of disregarding any Warrants owned legally or beneficially by the Corporation
or any Subsidiary of the Corporation in Section&nbsp;7.16, the Corporation shall provide to the Trustee,
from time to time, a certificate of the Corporation setting forth as at the date of such
certificate:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the names (other than the name of the Corporation) of the registered holders of
Warrants which, to the knowledge of the Corporation, are owned by or held for the
account of the Corporation or any Subsidiary of the Corporation; and</TD>
</TR>

</TABLE>
</DIV></DIV>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 30 -<!-- /Folio -->

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the number of Warrants owned legally or beneficially by the Corporation or any
Subsidiary of the Corporation;</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and the Trustee, in making the computations in Section&nbsp;7.16, shall be entitled to rely on such
certificate without any additional evidence.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>10.7</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Evidence of Ownership</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon receipt of a certificate of any bank, trust company or other depositary
satisfactory to the Trustee stating that the Warrants specified therein have been
deposited by a named person with such bank, trust company or other depositary and will
remain so deposited until the expiry of the period specified therein, the Corporation
and the Trustee may treat the person so named as the owner, and such certificate as
sufficient evidence of the ownership by such person of such Warrant during such period,
for the purpose of any requisition, direction, consent, instrument or other document to
be made, signed or given by the holder of the Warrant so deposited.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Corporation and the Trustee may accept as sufficient evidence of the fact
and date of the signing of any requisition, direction, consent, instrument or other
document by any person:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the signature of any officer of any bank, trust company, or
other depositary satisfactory to the Trustee as witness of such execution,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the certificate of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded at the place where
such certificate is made that the person signing acknowledged to him the
execution thereof,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a statutory declaration of a witness of such execution, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>such other documentation as is satisfactory to the Trustee.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>10.8</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Privacy Laws</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation and the Trustee acknowledge that federal and/or provincial legislation that
addresses the protection of individuals&#146; personal information (collectively, &#147;Privacy Laws&#148;)
applies to obligations and activities under this Indenture. Despite any other provision of this
Indenture, neither party shall take or direct any action that would contravene, or cause the other
to contravene, applicable Privacy Laws. The Corporation shall, prior to transferring or causing to
be transferred personal information to the Trustee, obtain and retain required consents of the
relevant individuals to the collection, use and disclosure of their personal information, or shall
have determined that such consents either have previously been given upon which the parties can
rely or are not required under the Privacy Laws. The Trustee shall use commercially best efforts
to ensure that its services hereunder comply with Privacy Laws. Specifically, the Trustee agrees:
(a)&nbsp;to have a designated chief privacy officer; (b)&nbsp;to maintain policies and procedures to protect
personal information and to receive and respond to any privacy complaint or injury; (c)&nbsp;to use
personal information solely for the purposes of providing its services under or ancillary to this
Indenture and not to use it for any other purpose except with the consent of or direction from the
Corporation or the individual involved; (d)&nbsp;not to sell or otherwise improperly disclose personal
information to any third party; and (e)&nbsp;to employ administrative, physical and technological
safeguards to reasonably secure and protect personal information against loss, theft, or
unauthorized access, use or modification.
</DIV>
</DIV>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 31 -<!-- /Folio -->

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF the parties hereto have executed this Indenture under their respective
corporate seals and the hands of their proper officers in that behalf.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DATED this 12th day of February, 2007.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>ONCOLYTICS BIOTECH
INC.</B><BR><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">Per:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Doug Ball&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>


<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>


<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>COMPUTERSHARE TRUST<BR>
COMPANY OF CANADA</B><BR><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">Per:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">Per:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="margin-top: 6pt; margin-left: 10%; margin-right:10%; font-size: 10pt">THIS IS SCHEDULE &#147;A&#148; to the Warrant Indenture made as of
February&nbsp;12, 2007 between Oncolytics Biotech Inc. and Computershare
Trust Company of Canada as Trustee.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WARRANT CERTIFICATE</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 9pt"><B>ONCOLYTICS BIOTECH INC.<BR>
(Incorporated under the laws of the Province of Alberta)</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>CUSIP 682310131&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">WARRANT</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">CERTIFICATE NO. <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> WARRANTS entitling the holder to
acquire, subject to adjustment, one (1)&nbsp;Common
Share and for each whole Warrant represented
hereby.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">THIS IS TO CERTIFY THAT</DIV></TD>

    <TD colspan="2" align="left" valign="top" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 48pt">(hereinafter referred to as the &#147;holder&#148;), subject to the terms, covenants, conditions and
provisions of that Warrant Indenture between Oncolytics Biotech Inc. and Computershare Trust
Company of Canada, dated February&nbsp;12, 2007 (the &#147;Indenture&#148;) is entitled at any time prior to 5:00
p.m. (Calgary time) on February&nbsp;22, 2010 (the &#147;Time of Expiry&#148;) to acquire in the manner and
subject to the restrictions and adjustments set forth herein, one (1)&nbsp;fully paid and non-assessable
common share (&#147;Common Share&#148;) of Oncolytics Biotech Inc. (the &#147;Corporation&#148;), as such shares were
constituted on the Effective Date, upon payment of Cdn. $3.50 per share payable to the Trustee by
way of cash, certified cheque, money order or bank draft. Any Warrants not exercised prior to the
Time of Expiry shall be void and of no effect. Any terms utilized herein and not otherwise defined
shall have the meanings ascribed thereto in the Indenture.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The certificates representing the Common Shares issued may be obtained upon duly completing
and executing the Exercise Form attached hereto and surrendering this Warrant Certificate to the
Trustee at the principal office of the Trustee in the City of Calgary, Alberta, together with cash,
certified cheque, bank draft or money order payable to the Trustee for the applicable Exercise
Price. These Warrants shall be deemed to be surrendered only upon personal delivery hereof or, if
sent by mail or other means of transmission, upon actual receipt thereof by the Trustee at the
office referred to above, unless the Corporation accepts another form of delivery.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon surrender of these Warrants, the person or persons in whose name or names the Common
Shares issuable upon exercise of the Warrants are to be issued shall be deemed for all purposes
(except as provided in the Indenture) to be the holder or holders of record of such Common Shares
and the Corporation has covenanted that it will (subject to the provisions of the Indenture) use
its reasonable best efforts to cause a certificate or certificates representing such Common Shares
to be delivered to the
</DIV>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 2 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Warrant Agency or to be mailed to the person or persons at the address or addresses specified
in the Exercise Form within five Business Days of the receipt of this Warrant Certificate and the
Exercise Form duly completed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registered holder of these Warrants may only acquire that number of Common Shares that is
equal to the number of Common Shares which may be acquired for the Warrants represented by this
Warrant Certificate. The registered holder of these Warrants may acquire any lesser number of
Common Shares than the total number of Common Shares that may be acquired upon the exercise of the
Warrants represented by this Warrant Certificate. In such event, the holder shall be entitled to
receive a new Warrant Certificate for the balance of the Common Shares which may be acquired. No
fractional Common Shares will be issued.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Warrants represented by this certificate are issued under and pursuant to the Indenture
between the Corporation and the Trustee. <B>Reference is made to the Indenture and any instruments
supplemental thereto for a full description of the rights of the holders of the Warrants and the
terms and conditions upon which the Warrants are, or are to be, issued and held, with the same
effect as if the provisions of the Indenture and all instruments supplemental thereto were herein
set forth. </B>By acceptance hereof, the holder assents to all provisions of the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Warrants evidenced hereby shall not be exercised by any &#147;U.S. person&#148; (a &#147;U.S. Person&#148;) as
defined in Rule&nbsp;902 (k)&nbsp;of Regulation&nbsp;S under the United States </B><B><I>Securities Act of 1933</I></B><B>, as amended
(the &#147;U.S. Securities Act&#148;) or any person holding such Warrants for the account or benefit of a
U.S. Person at any time when no shelf registration statement under the U.S. Securities Act
registering the Common Shares issuable upon the exercise of the Warrants evidence hereby (a &#147;Shelf
Registration Statement&#148;) is effective. During any such time when a Shelf Registration Statement is
not effective, any holder of the Warrants evidenced hereby may be required to agree that all offers
and sales of the Common Shares issued pursuant to such exercise shall be made only in accordance
with Regulation&nbsp;S, pursuant to registration under the U.S. Securities Act or pursuant to an
available exemption from the registration requirements of the U.S. Securities Act. Reference is
made to Section&nbsp;3.1 (b)&nbsp;of the Indenture for a description of the restrictions on the exercise of
the Warrants evidenced hereby.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holder of this Warrant Certificate may, at any time prior to the Time of Expiry, upon
surrender hereof to the Trustee at its principal office in the City of Calgary, Alberta, exchange
this Warrant Certificate for other Warrant Certificates entitling the holder to acquire, in the
aggregate, the same number of Common Shares as may be acquired under this Warrant Certificate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holding of the Warrants evidenced by this Warrant Certificate shall not constitute the
holder hereof a shareholder of the Corporation or entitle the holder to any right or interest in
respect thereof except as expressly provided in the Indenture and in this Warrant Certificate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture provides that all holders of Warrants shall be bound by any resolution passed at
a meeting of the holders of Warrants held in accordance with the provisions of the Indenture and
resolutions signed by the holders of Warrants entitled to acquire a specified majority of the
Common Shares which may be acquired pursuant to all then outstanding Warrants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Warrants evidenced by this Warrant Certificate may be transferred on the register kept at
the office of the Trustee by the registered holder hereof or its legal representatives or its
attorney duly appointed by an instrument in writing in form and execution satisfactory to the
Trustee, upon compliance with the conditions prescribed in the Indenture including the execution of
the Transfer Form attached to
</DIV>
</DIV>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 3 -<!-- /Folio -->


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">this Warrant Certificate and all applicable laws and upon compliance with such reasonable
requirements as the Trustee may prescribe.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Warrant Certificate shall not be valid for any purpose whatever unless and until it has
been certified by or on behalf of the Trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time shall be of the essence hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be signed by its
duly authorized officer as of the date hereof.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>ONCOLYTICS BIOTECH INC.</B><BR><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">Per:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Doug Ball
Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Certified by:
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="3" align="left"><B>COMPUTERSHARE TRUST COMPANY OF CANADA</B><BR><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">Per:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Patricia Selby&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Professional, Corporate Trust&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD valign="top">Per:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Cristian Couchot&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Professional, Corporate Trust&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</DIV>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>TRANSFER FORM</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-top: 1px solid #000000">(full name of Transferee)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-top: 1px solid #000000">(full address of Transferee)</TD>
</TR>

<!-- End Table Head -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Warrants of Oncolytics Biotech Inc. registered in the name of the
undersigned on the records of Oncolytics Biotech Inc. represented by the Warrant Certificate
attached and irrevocably appoints Computershare Trust Company of Canada the attorney of the
undersigned to transfer the said securities on the books or register with full power of
substitution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">DATED the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> day of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-top: 1px solid #000000">Signature Guaranteed</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-top: 1px solid #000000">(Signature of Special Warrantholder)</TD>
</TR>

<!-- End Table Head -->
</TABLE>
</DIV>







<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Instructions:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The signature of the Warrantholder must be the signature of the person appearing on the face
of this Warrant Certificate.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Transfer Form is signed by a trustee, executor, administrator, curator, guardian,
attorney, officer of a corporation or any person acting in a judiciary or representative
capacity, the certificate must be accompanied by evidence of authority to sign satisfactory to
the Trustee and the Corporation.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The signature on the Transfer Form must be guaranteed by an authorized officer of a chartered
bank, trust company or an eligible guarantor institution with membership in an approved
signature guarantee medallion program.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Warrants shall only be transferable in accordance with applicable laws.</TD>
</TR>

</TABLE>
</DIV></DIV>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>EXERCISE FORM</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>TO:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Oncolytics Biotech Inc. and</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Computershare Trust Company of Canada</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby exercises the right to acquire Common Shares of Oncolytics Biotech Inc.
as constituted on February&nbsp;22, 2007 (or such number of other securities or property to which such
Warrants entitle the undersigned in lieu thereof or in addition thereto under the provisions of the
Indenture referred to in the accompanying Warrant Certificate) in accordance with and subject to
the provisions of such Indenture and in connection therewith has enclosed cash, certified cheque,
money order or bank draft payable to Computershare Trust Company of Canada in an amount equal to
Cdn. $3.50 (or price as adjusted pursuant to the Indenture) in respect of each Common Share to be
issued.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Shares (or other securities or property) are to be issued as follows:
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 1px solid #000000">&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address in full:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 1px solid #000000">&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 1px solid #000000">&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Social Insurance Number:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 1px solid #000000">&nbsp;&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Number of Common Shares:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 1px solid #000000">&nbsp;&nbsp;&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note: If further nominees intend, please attach (and initial) a schedule giving these
particulars.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DATED this <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> day of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>,
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

</DIV>


<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px; border-top: 1px solid #000000">Signature Guaranteed
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">(Signature of Warrantholder)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">(Print full name)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">(Print full address)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- 2 -<!-- /Folio -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Instructions:</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registered holder may receive its Common Shares by completing this form and surrendering
this form and the Warrant Certificate representing the Warrants to Computershare Trust Company
of Canada at its principal office at 600, 530- 8th Avenue S.W., Calgary, Alberta, T2P 3S8.
The Corporation will use its reasonable best efforts to cause certificates for Common Shares
to be delivered to the Warrant Agency or to be mailed to the registered holder within five
Business Days after receipt of the Warrant Certificates and this form duly completed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Exercise Form indicates that Common Shares are to be issued to a person or persons
other than the registered holder of the Warrant Certificate, the signature of such holder on
the Exercise Form <U>must</U> be guaranteed by an authorized officer of a chartered bank,
trust company or an eligible guarantor institution with membership in an approved signature
guarantee medallion program</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Exercise Form is signed by a trustee, executor, administrator, curator, guardian,
attorney, officer of a corporation or any person acting in a judiciary or representative
capacity, the certificate must be accompanied by evidence of authority to sign satisfactory to
the Trustee and the Corporation.</TD>
</TR>

</TABLE>
</DIV></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="79%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><B>ARTICLE I INTERPRETATION</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">1.1</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Definitions</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 1</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">1.2</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Gender and Number</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 4</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">1.3</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Interpretation not Affected by Headings, etc.</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 4</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">1.4</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Day not a Business Day</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 4</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">1.5</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Time of the Essence</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 4</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">1.6</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Currency</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 4</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">1.7</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Applicable Law</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 4</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><B>ARTICLE II ISSUE OF WARRANTS</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>5</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.1</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Issue of Warrants</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 5</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.2</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Terms of Warrants</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 5</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.3</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Warrantholder not a Shareholder</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 5</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.4</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Warrants to Rank Pari Passu</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 5</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.5</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Form of Warrants</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 5</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.6</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Signing of Warrant Certificates</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 5</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.7</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Certification by the Trustee</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 6</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.8</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Issue in Substitution for Warrant Certificates Lost, etc.</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 6</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.9</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Exchange of Warrant Certificates</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 6</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.10</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Transfer and Ownership of Warrants</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 7</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.11</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Charges for Exchange or Transfer</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 8</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.12</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Cancellation of Surrendered Warrants</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 8</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">2.13</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Assumption by Transferee and Release of Transferor</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 8</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><B>ARTICLE III EXERCISE OF WARRANTS</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>8</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">3.1</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Exercise of Warrants by the Holder</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 8</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">3.2</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Transfer Fees and Taxes</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS"> 9</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">3.3</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Warrant Agency</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">10</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">3.4</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Effect of Exercise of Warrants</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">10</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">3.5</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Partial Exercise of Warrants; Fractions</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">10</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">3.6</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Expiration of Warrants</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">11</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">3.7</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Accounting and Recording</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">11</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">3.8</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Securities Restrictions</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">11</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><B>ARTICLE IV ADJUSTMENT OF NUMBER OF COMMON SHARES</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>12</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">4.1</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Adjustment of Number of Common Shares</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">12</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">4.2</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Entitlement to Shares on Exercise of Warrant</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">13</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">4.3</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Determination by Corporation&#146;s Auditors</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">13</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">4.4</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Proceedings Prior to any Action Requiring Adjustment</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">13</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">4.5</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Certificate of Adjustment</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">14</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">4.6</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Notice of Special Matters</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">14</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">4.7</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">No Action after Notice</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">14</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">4.8</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Protection of Trustee</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">14</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><B>ARTICLE V RIGHTS OF THE CORPORATION AND COVENANTS</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>15</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">5.1</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">General Covenants</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">15</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">5.2</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Trustee&#146;s Remuneration and Expenses</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">15</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">5.3</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Performance of Covenants by Trustee</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">16</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">5.4</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Optional Purchases by the Corporation</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">16</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><B>ARTICLE VI ENFORCEMENT</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>16</B></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="center" style="font-size: 10pt"><!-- Folio -->- ii -<!-- /Folio -->
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="79%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">6.1</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Suits by Warrantholders</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">16</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">6.2</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Immunity of Shareholders, etc.</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">16</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">6.3</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Limitation of Liability</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">16</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">6.4</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Waiver of Default</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">17</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><B>ARTICLE VII MEETINGS OF WARRANTHOLDERS</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>17</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.1</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Right to Convene Meetings</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">17</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.2</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Notice</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">17</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.3</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Chairman</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">18</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.4</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Quorum</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">18</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.5</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Power to Adjourn</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">18</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.6</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Show of Hands</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">18</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.7</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Poll and Voting</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">18</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.8</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Regulations</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">19</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.9</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Corporation and Trustee May be Represented</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">19</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.10</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Powers Exercisable by Extraordinary Resolution</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">20</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.11</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Meaning of Extraordinary Resolution</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">20</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.12</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Powers Cumulative</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">21</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.13</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Minutes</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">21</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.14</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Instruments in Writing</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">21</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.15</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Binding Effect of Resolutions</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">22</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">7.16</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Holdings by Corporation Disregarded</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">22</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><B>ARTICLE VIII SUPPLEMENTAL INDENTURES</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>22</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">8.1</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Provision for Supplemental Indentures for Certain Purposes</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">22</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">8.2</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Successor Corporations</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">23</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><B>ARTICLE IX CONCERNING THE TRUSTEE</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>23</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.1</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Trust Indenture Legislation</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">23</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.2</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Rights and Duties of Trustee</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">23</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.3</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Evidence, Experts and Advisers</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">24</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.4</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Documents, Monies, etc. Held by Trustee</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">25</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.5</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Actions by Trustee to Protect Interest</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">25</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.6</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Trustee Not Required to Give Security</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">25</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.7</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Protection of Trustee</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">25</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.8</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Replacement of Trustee; Successor by Merger</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">26</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.9</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Conflict of Interest</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">26</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.10</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Acceptance of Trust</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">27</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.11</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Trustee Not to be Appointed Receiver</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">27</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.12</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Anti-Money Laundering and Anti-Terrorist Legislation</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">27</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">9.13</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Accounts Opened for Corporation</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">27</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" align="left"><B>ARTICLE X GENERAL</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>27</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">10.1</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Notice to the Corporation and the Trustee</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">27</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">10.2</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Notice to Warrantholders</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">28</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">10.3</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Counterparts</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">29</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">10.4</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Satisfaction and Discharge of Indenture</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">29</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">10.5</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Provisions of Indenture and Warrants for the Sole Benefit of Parties, Agent and Warrantholders</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">29</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">10.6</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Warrants Owned by the Corporation or its Subsidiaries &#151; Certificate to be Provided</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">29</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">10.7</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Evidence of Ownership</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">30</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right"><FONT style="font-variant: SMALL-CAPS">10.8</FONT></TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><FONT style="font-variant: SMALL-CAPS">Privacy Laws</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><FONT style="font-variant: SMALL-CAPS">30</FONT></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
