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                                                                    EXHIBIT 10.7

PRIVATE & CONFIDENTIAL

Gryphon Gold Corporation
Suite 300 - 905 West Pender Street
Vancouver, BC  V6C 1L6

ATTENTION:        Albert Matter, Director, Chairman
                  Tony Ker, Executive Vice President, Treasurer
                  Thomas Sitar, Chief Financial Officer

RE: INVESTMENT ADVISORY RETAINER

Dear Sirs:

We understand that Gryphon Gold Corporation (the "Company", "you" or "Gryphon")
is interested in engaging Desjardins Securities Inc. ("Desjardins", "we", "our"
or "us") as its agent and financial advisor for a transaction designed to
enhance the value of and create liquidity in and for the Company and its
shareholders (the "Proposed Transaction").

1.       The form of the Proposed Transaction (the "Offering") will be
         determined by a proposal from Desjardins that is acceptable to the
         Company, acting reasonably. Based on Desjardins' current understanding
         of the Company and the state of the equity markets, the most likely
         form of the Offering will be an initial public offering ("IPO") of
         securities in Canada, but it may also be a reverse take-over of a
         publicly listed vehicle or other transaction, depending on Desjardins'
         judgement as to the best way to increase value and create liquidity for
         the Company's securities.

2.       The issue size for the Offering is expected to be approximately US$15
         million, although minimum and maximum size of the Offering will be a
         mutually acceptable size that is determined by Desjardins and Gryphon
         before filing of the final prospectus.

3.       The securities will be offered pursuant to a prospectus that is
         qualified in all provinces and territories of Canada, including Quebec.
         The Offering may also be conducted in the United States by way of a
         private placement in accordance with applicable laws.

4.       The Offering will qualify only the issue of securities from treasury.
         For greater certainty, the Company will not use the prospectus for the
         Offering to qualify the sale of securities that were issued prior to
         the Closing, and the Company acknowledges that Desjardins owes no duty
         to the Company or to the relevant security holders with respect to all
         prior issuances of securities by the Company. The terms of the Offering
         will be subject to Gryphon meeting the minimum listing requirements of
         the Toronto Stock Exchange (the "TSX") or the TSX Venture Exchange
         ("TSXV"), completion of technical reports on each material property of
         the Company in compliance with National Instrument 43-101 and the
         provisions of a definitive Agency Agreement (the "Agency Agreement")
         which will include, among other things, the following:



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         (a)      completion of due diligence to the satisfaction of Desjardins
                  and their legal counsel;

         (b)      implementing corporate governance provisions in compliance
                  with applicable securities regulatory and stock exchange
                  rules, guidelines and procedures, including as they relate to
                  independence of the board of directors, and such other
                  corporate governance procedures to the satisfaction of
                  Desjardins and the Company, both acting reasonably;

         (c)      the Company agreeing not to issue any special warrants, common
                  shares or financial instruments convertible or exchangeable
                  into common shares of the Company, other than for purposes of
                  employee stock options or to satisfy existing instruments
                  already issued as of the date hereof for a period of 120 days
                  following the closing of the Offering (the "Closing"), without
                  the prior written consent of Desjardins, such consent not to
                  be unreasonably withheld;

         (d)      in addition to the escrow requirements required by applicable
                  regulatory authorities, the Company obtaining lock-up
                  agreements from significant existing shareholders prohibiting
                  the sale of listed securities for a period of up to twelve
                  months following the Closing; and

         (e)      such other terms and conditions as are customary in an Agency
                  Agreement including, but not limited to, industry standard
                  representations, warranties, covenants, conditions and
                  indemnities, and also to include a disaster out clause, market
                  out clause and a material adverse change clause, in each case
                  exercisable prior to Closing.

5.       By your acceptance of this letter (the "Agreement"), you hereby appoint
         Desjardins Securities Inc. and we hereby agree to act as your exclusive
         agent, financial advisor and consultant in respect of the Proposed
         Transaction, on the terms and conditions set out herein.

6.       RESPONSIBILITIES.

In connection with the Offering we will act as agent for the sale of the
securities under the Offering on a reasonable best efforts basis and will
otherwise provide support and assistance as follows:

         (a)      provide advice as to the size, pricing, timing and structure
                  of the Offering;

         (b)      assist with the preparation of the preliminary prospectus and
                  the final prospectus relating to the Offering;

         (c)      assist with the listing of the securities on the TSX or the
                  TSXV;

         (d)      assist with the marketing of the Offering, including
                  preparation of roadshow presentations and materials;


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         (e)      assist in dealings with legal counsel and auditors and in
                  securing regulatory approvals, as required; and

         (f)      provide you with such other financial advisory services in
                  connection with the Offering as you and we agree are
                  appropriate in the circumstances.

7.       FEES.

In consideration for acting as your agent, financial advisor and consultant
hereunder, you agree:

         (a)      To compensate us at the time of Closing of the Offering with:

                  (i)      in the case of an IPO, a cash fee equal to 8% of your
                           gross proceeds from the sale of securities pursuant
                           to the Offering (including in connection with the
                           exercise of the Over-Allotment Option) or, if the
                           Offering is not an IPO, a cash fee consistent with
                           our commercial rates which are applicable to a
                           transaction of that kind; and

                  (ii)     compensation options entitling us to purchase that
                           number of securities equal to 10% of the total number
                           of securities sold or issued by you pursuant to the
                           Offering (including in connection with the exercise
                           of the Over-Allotment Option) exercisable, in whole
                           or in part, at a price equal to the price at which
                           securities are sold by you (or the value at which
                           shares are issued by you) to third parties pursuant
                           to the Offering and having a term expiring
                           twenty-four months from the Closing;

         (b)      notwithstanding any termination of this Agreement, if during
                  the term of this Agreement or within nine months of the
                  termination or expiry of this Agreement you consummate a
                  financing transaction or commence a financing transaction, as
                  evidenced by execution of one or more agreements relating to
                  the financing transaction, that is later consummated, with any
                  person that was introduced to you by Desjardins, you will pay
                  to us full compensation for that transaction consistent with
                  the fees set forth in paragraph (a) hereof and otherwise in
                  accordance with this Agreement. Such compensation applies to
                  all payments applicable to such a financing transaction,
                  including payments made after the date that is nine months
                  from the termination or expiry of this Agreement. For the
                  purposes hereof, a transaction is consummated when the
                  transaction closes

         (c)      if the Offering is not completed due to a decision by Gryphon,
                  for whatever reason, not to proceed, then in addition to the
                  amount to be reimbursed under paragraph 17 Gryphon will
                  forthwith pay to Desjardins a work fee equal to C$100,000; and

         (d)      if the Offering does not proceed and Gryphon completes an
                  Alternative Transaction (as defined below) that commences or
                  is completed during the term of this Agreement or within 12
                  months of the termination or expiry of this Agreement, Gryphon
                  agrees to pay to Desjardins the following in addition to any



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                  amounts required to be reimbursed under paragraph 17 (less any
                  fee paid pursuant to paragraph (c)):

                  (i)      if such a transaction occurs prior to the filing of a
                           preliminary prospectus, a payment equal to C$250,000;
                           or

                  (ii)     if between the filing of the preliminary prospectus
                           and the filing of a (final) prospectus for the
                           Offering, C$500,000; or

                  (iii)    if between the pricing and closing of the Offering,
                           C$750,000,

                  provided, that the fees outlined in this paragraph shall not
                  be payable if (i) Gryphon is obligated to pay the fee
                  contemplated in paragraph (b); or (ii) both the Offering did
                  not proceed as a result of Desjardins determining not to
                  proceed due to adverse market conditions and none of the
                  persons involved in the Alternative Transaction were
                  identified or introduced to Gryphon by the Agents (as defined
                  below).

An "Alternative Transaction" means (a) any transaction or series of transactions
under which Gryphon receives gross proceeds of more than C$3 million through the
issuance of its securities; (b) a transaction or series of transactions which
results in a change of control of Gryphon or any material subsidiary of Gryphon,
(c) a merger, amalgamation, plan of arrangement, take-over bid, insider bid,
issuer bid, reorganization, recapitalization, joint venture, sale or purchase of
all or substantially all assets, proxy contest, exchange of assets or
securities, extraordinary dividend or other distribution out of the ordinary
course of Gryphon's business or any similar material transaction (or series of
transactions) involving Gryphon, or (d) a reorganization or change in Gryphon's
corporate structure that results in a spin-off of any of Gryphon's major assets;
but does not include the private placement initiated in 2004 by the Company in
which it has offered to sell units at US$0.65 per unit for gross proceeds of up
to US$10 million (the "2004 Private Placement") or a property joint venture or
acquisition in the ordinary course of Gryphon's business.

If you agree to pay a commission or fee to anyone else, such commission or fee
shall be for your account and shall not reduce the amount payable to us under
this Agreement.

8.       OVER-ALLOTMENT OPTION.

Gryphon shall grant to Desjardins an over-allotment option (the "Over-Allotment
Option") to cover over-allotments, if any, and for market stabilization. The
Over-Allotment Option shall entitle Desjardins to purchase additional securities
equal to 15% of the total number of securities issued pursuant to the Offering
at the price at which securities are issued in the Offering (the "Offering
Price") for a period of 30 days following Closing.

9.       SYNDICATION.

In the event that Desjardins determines a syndicate should be formed to complete
the Offering, Desjardins will act as lead manager and sole bookrunner for the
Offering. The participation of



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other members of a syndicate (together with Desjardins, the "Agents") in the
Offering will be determined by Desjardins in consultation with Gryphon.

10.      NON-IPO OFFERING.

In the event that the Offering does not proceed as an IPO, the terms described
hereunder as they relate to an IPO, including references to a prospectus, will
be deemed to refer to the closest equivalent of such term for the applicable
transaction, including a detailed information circular and filing statement in
place of prospectus in the case of a reverse takeover. In the event that the
Offering does not proceed as an IPO, the parties agree to use good faith efforts
to negotiate and deliver such further amendments to this Agreement or
incorporate applicable terms into the Agency Agreement as are necessary to
provide equivalent treatment to the parties under the non-IPO transaction as
would occur with respect to an IPO performed under the terms of this Agreement
as they currently exist.

11.      ACCESS TO INFORMATION AND MANAGEMENT.

You will permit Desjardins and its agents to conduct all due diligence that they
deem necessary. You will provide Desjardins and its agents with all corporate,
financial and operating information and documentation regarding Gryphon and its
subsidiaries as well as access to your senior management, facilities, employees,
auditors, legal counsel and consultants which are reasonably necessary and
sufficient to allow us to perform our services hereunder. Without restricting
the generality of the foregoing, you will provide us with copies of all
valuations, appraisals, forecasts and projections relating to Gryphon that are
in your possession or that are reasonably obtainable by you.

It is anticipated that Gryphon's senior management shall make themselves
available as necessary, to participate in the marketing of the Offering by way
of responding to investor queries that Desjardins is not able to address.

12.      ACCURACY OF INFORMATION.

Gryphon with the assistance of the Agents and the advice of their respective
legal counsel, will be responsible for the preparation and filing of the
preliminary and final prospectus for the Offering.

In carrying out our responsibilities hereunder, Desjardins will necessarily rely
on information prepared or supplied by you and other sources believed by us to
be reliable and will apply reasonable standards of diligence to any work which
we perform hereunder in the nature of an assessment or review of data or other
information. Desjardins will be entitled to rely on and assumes no obligation to
verify the accuracy or completeness of such information and under no
circumstances will we be liable to you or any party for any damages arising out
of the inaccuracy or incompleteness of any such information.

You represent and warrant to us that all information and documentation
concerning Gryphon that is provided by you in connection with this engagement
will be accurate and complete in all material respects and not misleading and
will not omit to state any fact or information which


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would be material to a financial advisor and consultant performing the services
contemplated herein.

You will bear sole responsibility for the accuracy and completeness of the
information provided to third parties, except for any information relating
solely to Desjardins. You represent and warrant that the information so provided
to third parties will be accurate and complete in all material respects and not
misleading and will not omit to state any fact or information which would be
material to parties considering the Proposed Transaction. To the extent that
Desjardins assists you with the organization or presentation of any such
information, your concurrence will constitute your endorsement of such
information, and the organization and presentation thereof as your own and
Desjardins assumes no obligation or responsibility relating thereto.

13.      MATERIAL CHANGES.

You will advise us promptly as you become aware of any material change, actual
or contemplated, in the business, affairs or financial condition of Gryphon or
in any information provided to us concerning you or the Proposed Transaction
from the date at which such information is given. Unless advised otherwise,
Desjardins will be entitled to assume that there has been no material change in
such information and will be entitled to rely thereon. You will notify us
promptly of any notice by any regulatory authority requesting any information,
meeting or hearing relating to Gryphon and its affairs or the Proposed
Transaction or any other event or state of affairs that may be relevant to us in
connection with acting as your agent and financial advisor hereunder.

14.      COMPLIANCE WITH LAWS AND USE OF EXPERTS.

You will comply with all applicable laws, regulations and policies, whether
domestic, foreign, federal, national, provincial, state or otherwise, applicable
to the Proposed Transaction. In addition, you will retain, if required by us,
legal, accounting and tax advisors experienced in these matters to work with us
in effecting the Proposed Transaction. The fees and disbursements of such
advisors will be for your account.

15.      POTENTIAL INTERESTED PARTIES.

In order to co-ordinate our efforts on your behalf, during the period of our
engagement pursuant to this Agreement, you will not initiate any discussions
regarding any Proposed Transaction, equity or debt financing or issuance of
securities (other than with respect to the 2004 Private Placement and the
issuance of shares of common stock pursuant to currently outstanding debentures,
warrants and options), except in co-operation with or through us. If you receive
an inquiry concerning any such transaction, you will promptly inform us of such
inquiry so that we can assess such inquiry and assist in any resulting
negotiations.

All inquiries received by you during the term of this Agreement respecting the
Proposed Transaction shall be immediately referred by you to Desjardins.



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16.      COUNSEL TO DESJARDINS.

We will be entitled to retain external counsel of our choice, experienced in
these types of matters and reasonably acceptable to you, to assist us in the
discharge of our duties hereunder.

17.      EXPENSES AND TAXES.

Whether or not the Proposed Transaction herein contemplated shall be completed,
Gryphon will be responsible for all of its expenses and all of the expenses of
Desjardins incurred in relation to the Proposed Transaction, including, without
limitation, all fees and disbursements of legal counsel and all out-of-pocket
expenses incurred by us in connection with our engagement hereunder, including,
but not limited to, advertising, printing, courier, telecommunications, data
searches, travel, entertainment, any other expenses and the fees and
disbursements of experts retained by us, together with related Goods & Services
Tax ("GST") and applicable provincial taxes. Such reimbursements will be payable
upon a request for payment thereof by us whether or not the Proposed Transaction
or any other transaction contemplated by this Agreement is completed. All or
part of the amounts payable under this Agreement may be subject to GST or
applicable provincial tax. We will keep you informed of the scope of our
expenses by providing a general budget at the start of the Offering and
notifying you when accrued expenses approach 80% of that budget.

18.      TERM.

This Agreement will be effective as of the date of this Agreement and will
continue until the earlier of nine months from the date of this Agreement or
completion of the Proposed Transaction. However, your obligations pursuant to
Section 7, 8, 17, 18, 19, 20, 23, 24, 25, and 26 hereof will survive the
completion of our engagement hereunder, any withdrawal or termination of or
decision not to proceed with any Proposed Transaction or the expiry or other
termination or purported termination of this Agreement.

19.      FUTURE OFFERINGS.

Conditional upon the successful completion of the Offering, Gryphon agrees that,
for a period of 12 months from the date of Closing, Desjardins shall have a
right of first refusal to act as the lead agent of any private placement or
public offering for shares or other securities of the Company in Canada or the
U.S. or to act as financial advisor for the Company.

20.      ADDITIONAL SERVICES.

If Desjardins is requested to perform any other services in addition to those
described above, the terms and conditions relating to such services will be
outlined in a separate letter of agreement and the fees for such services will
be in addition to the fees payable hereunder, will be negotiated separately and
in good faith and will be consistent with fees paid to investment bankers in
North America for similar services.


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21.      ANTICIPATED TIMING.

It is anticipated that Gryphon's senior management shall make themselves
available as necessary, to participate in the marketing of the Offering by way
of responding to investor queries that Desjardins is not able to address.
Desjardins and Gryphon shall endeavour to close the Proposed Transaction on or
before December 15, 2005 assuming this agreement is executed by March 7, 2005
and shall work collaboratively towards achieving this targeted closing date.

22.      USE OF DESJARDINS' ADVICE.

You acknowledge and agree that all written and oral opinions, advice and
materials provided by Desjardins in connection with our engagement hereunder are
intended solely for your benefit and for your internal use only in considering
the Proposed Transaction and you covenant and agree that no such opinion, advice
or material shall be used for any other purpose whatsoever or reproduced,
disseminated quoted from or referred to in whole or in part at any time, in any
manner or for any purpose, without our prior written consent in each specific
instance. Desjardins expressly disclaims any liability or responsibility by
reason of any unauthorized use, publication, distribution of or reference to any
oral or written opinions or advice or materials provided by us or any
unauthorized reference to Desjardins or this engagement.

Any advice or opinions given by Desjardins hereunder will be made subject to and
will be based upon such assumptions, limitations, qualifications and
reservations as we, in our sole judgment, deem necessary or prudent in the
circumstances.

23.      INDEMNITY.

You agree to indemnify and save harmless Desjardins, its affiliates and their
respective directors, officers, employees, partners, agents, advisors and
shareholders in accordance with Schedule A hereto, which Schedule forms part of
this Agreement and the consideration for which is the entering into of this
Agreement. Such indemnity (the "Indemnity") shall be in addition to, and not in
substitution of, any liability which you or any other person may have to
Desjardins or other persons indemnified pursuant to the Indemnity apart from
such Indemnity. The Indemnity shall apply to all services contemplated herein,
including, without limitation, any "Additional Services" contemplated by Section
20 hereof.

24.      CONFIDENTIALITY.

Subject to the terms hereof, Desjardins and its affiliates will maintain as
confidential all information provided to us by you hereunder and will use such
information only for the purposes set out herein and for no competitive or other
purposes whatsoever, unless such information: (a) is already in our possession
and not subject to any obligation of confidentiality; (b) is or becomes
generally available to the public other than as a result of unauthorized
disclosure by or through us; (c) is or becomes available to us on a
non-confidential basis from you or from a source other than you, any party
related to you or your advisors, provided that such source is not known by us to
be bound by any obligation of confidentiality; or (d) is required to be
disclosed by operation of applicable law or regulatory requirement.


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Gryphon agrees to maintain the existence and the terms of this Agreement in
confidence and shall not make any public disclosure with respect to the Proposed
Transaction without the prior written approval of Desjardins, except if such
disclosure is required by law and then only after having provided Desjardins
with as much prior notice as is possible in the circumstances during which time
Desjardins and Gryphon shall discuss in good faith the necessity for and the
contents of any proposed disclosure.

25.      ADVERTISEMENTS.

You agree, if so requested by us, to include a reference to us and our role in
any press release or other public communication issued by you with respect to
the Proposed Transaction. If the Proposed Transaction is successfully completed,
and provided Desjardins is not in breach of any material provision hereof, we
shall be permitted to publish, at our own expense, such advertisements or
announcements relating to the services provided hereunder in such newspaper or
other publications as we consider appropriate.

26.      SUCCESSORS AND ASSIGNS.

This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns provided that no party may
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other.

27.      GOVERNING LAW.

This Agreement is made pursuant to and shall be construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein. You
and we hereby submit to the non-exclusive jurisdiction of the courts of the
Province of Ontario.

28.      COMMITTEE APPROVAL.

This entire Agreement is subject to the approval of Desjardins' New Business
Committee, which shall review the Agreement.

29.      NOTICES.

Any notice or other communication required or permitted to be given under this
Agreement will be in writing and will be delivered to:

(a)   in the case of Gryphon:             (b)   in the case of Desjardins:

      Attention: Tony Ker                       Attention: Teo Dechev
      Gryphon Gold Corporation                  Desjardins Securities Inc.
      Suite 300 - 905 West Pender Street        145 King Street West, Suite 2750
      Vancouver, BC  V6C 1L6                    Toronto, Ontario
      Fax: (604) 608-3262                       M5H 1J8
                                                Fax: 416-861-9992



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The parties may change their respective addresses for notices by notice given in
the manner set out above. Any notice or other communication will be in writing,
and unless delivered personally to the addressee or to a responsible officer of
the addressee, as applicable, will be given by telecopy and will be deemed to
have been given when (i) in the case of a notice delivered personally to a
responsible officer of the addressee, when so delivered; and (ii) in the case of
a notice delivered or given by telecopy, on the first business day following the
day on which it is sent.

If the foregoing is in accordance with your understanding, please indicate your
agreement to the above terms and conditions by signing the enclosed copy of this
Agreement and returning the same to us.


Yours truly,

DESJARDINS SECURITIES INC.



By: /s/ Steven Altmann
    ___________________________________________
    Name:  Steven Altmann
    Title: Vice President

Acknowledged and agreed by us as of the date first written above.



GRYPHON GOLD CORPORATION



By: /s/ Tony Ker
    ____________________________________________
    Name:  Tony Ker
    Title: Executive V.P. Treasurer


        9th March 2005
<PAGE>

                                   SCHEDULE A

                                    INDEMNITY

In consideration for Desjardins Securities Inc. ("Desjardins") accepting the
engagement (the "Engagement") pursuant to the engagement letter (the
"Agreement") to which this Schedule A is attached, Gryphon Gold Corporation
("Gryphon") agrees to indemnify and save harmless Desjardins, its affiliates and
its respective directors, officers, employees, partners, agents, advisors and
shareholders (collectively, the "Indemnified Parties" and individually, an
"Indemnified Party") from and against any and all losses, claims, actions,
suits, proceedings, damages, liabilities or expenses of whatsoever nature or
kind (excluding loss of profits), including the aggregate amount paid in
reasonable settlement of any actions, suits, proceedings, investigations or
claims and the reasonable fees, disbursements and taxes of their counsel in
connection with any action, suit, proceeding, investigation or claim that may be
made or threatened against any Indemnified Party or in enforcing this indemnity
(collectively, the "Claims") to which an Indemnified Party may become subject or
otherwise involved in any capacity insofar as the Claims relate to, are caused
by, result from, arise out of or are based upon, directly or indirectly, the
Engagement whether performed before or after Gryphon's execution of the
Agreement and to reimburse each Indemnified Party forthwith, upon demand, for
any legal or other expenses reasonably incurred by such Indemnified Party in
connection with any Claim.

Gryphon also agrees that no Indemnified Party shall have any liability (either
direct or indirect, in contract or tort or otherwise) to Gryphon or any person
asserting claims on Gryphon's behalf or in right for or in connection with the
Engagement, except to the extent that any losses, expenses, claims, actions,
damages or liabilities incurred by Gryphon are determined by a court of
competent jurisdiction in a final judgement that has become non-appealable to
have resulted from the gross negligence, wilful misconduct or breach of
applicable legislation by such Indemnified Party.

In the event and to the extent that a court of competent jurisdiction in a final
judgement that has become non-appealable determines that an Indemnified Party
was grossly negligent or guilty of wilful misconduct in connection with a Claim
in respect of which Gryphon has advanced funds to the Indemnified Party pursuant
to this indemnity, such Indemnified Party shall reimburse such funds to Gryphon
and thereafter this indemnity shall not apply to such Indemnified Party in
respect of such Claim.

Gryphon agrees to waive any right Gryphon might have of first requiring the
Indemnified Party to proceed against or enforce any other right, power, remedy
or security or claim payment from any other person before claiming under this
indemnity.

In case any action, suit, proceeding or claim is brought against an Indemnified
Party or an Indemnified Party has received notice of the commencement of any
investigation in respect of which indemnity may be sought against Gryphon, the
Indemnified Party will give Gryphon, prompt written notice of any such action,
suit, proceeding, claim or investigation of which the Indemnified Party has
knowledge and Gryphon will undertake the investigation and defence thereof on
behalf of the Indemnified Party, including the prompt employment of counsel
acceptable to the Indemnified Parties affected and the payment of all expenses.
Failure by the Indemnified Party to so notify shall not relieve Gryphon of its
obligation of indemnification


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                                     - 2 -


hereunder unless (and only to the extent that) such failure results in
forfeiture by Gryphon of substantive rights or defences.

No admission of liability and no settlement, compromise or termination of any
action, suit, proceeding, claim, or investigation shall be made without
Gryphon's consent and the consent of the Indemnified Parties affected, such
consents not to be unreasonably withheld.

Notwithstanding that Gryphon will undertake the investigation and defence of any
Claim, an Indemnified Party will have the right to employ separate counsel with
respect to any Claim and participate in the defence thereof, but the fees and
expenses of such counsel will be at the expense of the Indemnified Party unless:

         (a)      employment of such counsel has been authorized in writing by
                  Gryphon;

         (b)      Gryphon has not assumed the defence of the action within a
                  reasonable period of time after receiving notice of the claim;

         (c)      the named parties to any such claim include both Gryphon and
                  the Indemnified Party and the Indemnified Party shall have
                  been advised by counsel to the Indemnified Party that there
                  may be a conflict of interest between Gryphon and the
                  Indemnified Party; or

         (d)      there are one or more defences available to the Indemnified
                  Party which are different from or in addition to those
                  available to Gryphon;

in which case such fees and expenses of such counsel to the Indemnified Party
will be for Gryphon's account.

The rights accorded to the Indemnified Parties hereunder shall be in addition to
any rights an Indemnified Party may have at common law or otherwise.

If for any reason the foregoing indemnification is unavailable (other than in
accordance with the terms hereof) to the Indemnified Parties (or any of them) or
is insufficient to hold them harmless, Gryphon will contribute to the amount
paid or payable by the Indemnified Parties as a result of such Claims in such
proportion as is appropriate to reflect not only the relative benefits received
by Gryphon on the one hand and the Indemnified Parties on the other, but also
the relative fault of the parties and other equitable considerations which may
be relevant. Notwithstanding the foregoing, Gryphon will in any event contribute
to the amount paid or payable by the Indemnified Parties as a result of such
Claim any amount in excess of the fees actually received by the Indemnified
Parties hereunder.

Gryphon hereby constitutes Desjardins as trustee for each of the other
Indemnified Parties of Gryphon's covenants under this indemnity with respect to
such persons and Desjardins agrees to accept such trust and to hold and enforce
such covenants on behalf of such persons.

Gryphon agrees to reimburse Desjardins monthly for the time spent by Desjardins'
personnel in connection with any Claim at their normal per diem rates. Gryphon
also agrees that if any action, suit, proceeding or claim shall be brought
against, or an investigation commenced in respect of Gryphon and Desjardins and
personnel of Desjardins shall be required to testify,



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                                     - 3 -


participate or respond in respect of or in connection with the Engagement,
Desjardins shall have the right to employ its own counsel in connection
therewith and Gryphon will reimburse Desjardins monthly for the time spent by
its personnel in connection therewith at their normal per diem rates together
with such disbursements and reasonable out-of-pocket expenses as may be
incurred, including fees and disbursements of Desjardins' counsel.