Document:

Exhibit 10.6
                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT  AGREEMENT [the "Agreement"] is made as of February 24,
2006, between Ranor, Inc., a Delaware  corporation [the "Company"],  and Stanley
Youtt [the "Employee"].

                                    RECITALS

         On August 17, 2005, Ranor Acquisition LLC, as Purchaser, Green Mountain
Partners III, L.P.,  Phoenix Life Insurance  Company,  Ann Gray, Daniel Justicz,
Jeffery  Lippincott,  William Rose and Stanley Youtt as Sellers,  entered into a
Stock Purchase Agreement ["Stock Purchase Agreement"].

         Simultaneously,  with the execution of this Employment  Agreement,  the
parties closed on the transaction described in the Stock Purchase Agreement.

         The Company  desires to employ the  Employee in the capacity and on the
terms and conditions set forth herein,  and the Employee  desires to be employed
by the Company on the terms and conditions set forth herein.

         In  consideration  of the  premises  hereof and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto agree
as follows:

         1.  Employment.  The Company  agrees to employ the Employee  during the
Term  specified  in  Paragraph 2 hereof and the  Employee  agrees to accept such
employment, upon the terms and conditions hereinafter set forth.

         2. Term.  Subject to the terms and  conditions of this  Agreement,  the
Employee's  employment by the Company shall be for a term commencing on the date
hereof and  expiring  on the close of  business  on the  January  31,  2009 [the
"Initial Term"].

         3. Duties and Responsibilities.

                  a. Employee shall initially  serve as Chief Executive  Officer
["CEO"] of the Company.

                                      -1-
<PAGE>

                  b.  Subject to the  authority of the Board of Directors of the
         Company  ["Board"]  to  modify  the  duties  and   responsibilities  of
         Employee,   Employee's  powers,   duties  and  responsibilities   shall
         initially consist of such powers,  duties and  responsibilities as were
         being  performed by Employee for the Company  immediately  prior to the
         execution of this  Agreement  or as are  customary to the office of the
         Chief Executive Officer of a company similar in size and stature of the
         Company.  The  Employee  shall  report to the Board of the  Company and
         others at the direction of the Board at such time and in such detail as
         the Board shall reasonably require.  Notwithstanding anything contained
         herein to the contrary,  the Employee  shall not be required to perform
         any act which would constitute or require the violation of any federal,
         state or local  law,  rule,  regulation,  ordinance  or the  like.  Any
         substantial  change in Employee's duties or title,  without  Employee's
         consent,  shall be construed as  termination  without cause pursuant to
         paragraph 6[b] below.

                  c. The Employee shall devote not less than an average of forty
         [40] hours per week to  carrying  out his duties  hereunder  and to the
         business of the Company,  and during the Term the Employee  agrees that
         he will [i] devote his best  efforts  and all his skill and  ability to
         the performance of his duties hereunder; [ii] carry out his duties in a
         competent and  professional  manner;  and [iii]  generally  promote the
         interests of the  Company.  During the Term it shall not be a violation
         of this  Agreement  for the  Employee  to serve on civic or  charitable
         boards or committees, to perform speaking engagements, or to manage his
         personal passive investments,  so long as such activities [individually
         or   collectively]  do  not  interfere  with  the  performance  of  the
         Employee's responsibilities as an employee of the Company.

         4. Compensation; Bonus; Stock Options.

                  a. As compensation for services hereunder and in consideration
         of his agreement not to compete as set forth in paragraph 8 hereof, the
         Company  shall pay the Employee a base salary at the annual rate of Two
         Hundred Thousand Dollars [$200,000.00].  Such base salary shall be paid
         in equal installments in accordance with the normal payroll policies of
         the Company, but no less frequently than bi-weekly.

                  b. Employee's base salary as set forth in Paragraph 4[a] above
         may be increased by order of the Board.

                  c. Employee  shall be eligible for an annual cash  performance
         bonus based upon the Company's financial  performance as set forth in a
         resolution  of the Board  within  the first  three  months of each year
         hereunder and based upon the Company's Business Plan.

                  d.  Employee  shall be eligible for any Stock Option Plan,  as
         the Board shall in its sole discretion institute.

                                      -2-
<PAGE>

         5. Expenses; Fringe Benefits.

                  a. The  Company  agrees to pay or to  reimburse  the  Employee
         during the Term for all  reasonable,  ordinary and  necessary  business
         expenses  incurred in the  performance  of his  services  hereunder  in
         accordance with the policies of the Company as are from time to time in
         effect.  The  Employee,  as a condition  to  obtaining  such payment or
         reimbursement,  shall  provide to the Company  any and all  statements,
         bills or receipts  evidencing the travel or out-of-pocket  expenses for
         which  the  Employee  seeks  payment  or  reimbursement,  and any other
         information  or  materials  required by such  Company  policy or as the
         Company may otherwise from time to time reasonably require.

                  b. During the Term the Employee  and, to the extent  eligible,
         his  dependents,  shall be entitled to  participate  in and receive all
         benefits under any welfare  benefit plans and programs  provided by the
         Company [including without  limitation,  medical,  dental,  disability,
         group life [including  accidental death and dismemberment] and business
         travel  insurance  plans  and  programs]  applicable  generally  to the
         employees of the Company, subject, however, to the generally applicable
         eligibility  and other  provisions of the various plans and programs in
         effect from time to time.

                  c.  During  the  Term  the  Employee   shall  be  entitled  to
         participate in all  retirement  plans and programs  [including  without
         limitation any profit  sharing/401[k] plan] applicable generally to the
         employees of the Company,  subject,  however,  to generally  applicable
         eligibility  and other  provisions of the various plans and programs in
         effect from time to time.  In  addition,  during the Term the  Employee
         shall be  entitled  to  receive  fringe  benefits  and  perquisites  in
         accordance  with the plans,  practices,  programs  and  policies of the
         Company  from  time to  time  in  effect,  available  generally  to the
         executive  officers of the Company and  consistent  with the  generally
         applicable guidelines determined by the Board.

                  d. The Employee  shall be entitled to four [4] weeks  vacation
         per  year  and to  holidays;  sick  days  and  personal  days as are in
         accordance  with the Company's  policy then in effect for its employees
         generally, upon such terms as may be provided of general application to
         all employees of the Company.

         6. Termination.

                  a. For Cause.  The Company,  shall have the right to terminate
         the  Employee's  employment  with the Company at any time for  "Cause";
         provided,  that any  termination  by the  Company  for  Cause  shall be
         communicated  by the Company to the Employee in writing  indicating the
         basis for  termination  for  Cause,  and the  employee  shall  have the
         opportunity  for a period of seven [7] days  following  such writing to
         contest his  termination  before the Board.  [The effective date of the
         Employee's  termination of employment  with the Company,  regardless of
         the reason, is referred to as the "Date of Termination"].  For purposes
         of this  Agreement,  the term "Cause" shall be limited to the following
         grounds:

                                      -3-
<PAGE>

                           i. The  Employee's  failure or refusal to perform his
                  material  duties  and  responsibilities  [other  than any such
                  failure  resulting from  Employee's  disability or death which
                  are  governed  by  paragraph  7] or his  repeated  failure  or
                  refusal to follow  lawful  and  reasonable  directives  of the
                  Company;

                           ii. The willful  misappropriation  by Employee of the
                  funds or property of the Company;

                           iii. The commission by the Employee of any willful or
                  intentional  act, which he should  reasonably have anticipated
                  would  reasonably be expected to have the effect of materially
                  injuring the reputation, business or business relationships of
                  the Company.

                           iv.  Use of  alcohol  to  excess  or  illegal  drugs,
                  continuing after written warning;

                           v. Any breach by the Employee  [not covered by any of
                  clauses [i] through [iv] and other than in connection with the
                  death or  disability  of Employee as set forth in paragraph 7]
                  of any material provision of this Agreement.

Upon the  termination of the Employee's  employment  with the Company for Cause,
the Company shall pay the Employee, subject to appropriate offsets [as permitted
by  applicable  law] for debts or money due to the  Company,  including  without
limitation  personal loans to the Employee and travel advances  ["Offset"],  his
salary  compensation  only  through,   and  any  unpaid  reimbursable   expenses
outstanding  as of, the Date of  Termination.  Any benefits to which Employee or
his  beneficiaries  may be entitled  under the plans and  programs  described in
paragraphs 5[b] and [c] hereof as of his Date of Termination shall be determined
in accordance  with the terms of such plans and programs.  Except as provided in
this subparagraph,  in connection with the Employee's termination by the Company
for Cause,  the Company  shall have no further  liability to the Employee or the
Employee's heirs, beneficiaries or estate for damages,  compensation,  benefits,
indemnities or other amount of whatever nature.

                  b. Without  Cause.  The Company may terminate  the  Employee's
         employment  Without Cause at any time. In the event of a termination of
         the Executive's employment during the Employment Period by the Company,
         Without Cause the Company shall  nonetheless pay to the Employee or his
         estate,  in a lump sum payment an amount equal to the  Employee's  base
         salary for the remainder of the Term.  Additionally,  the Company shall
         provide to the Executive,  and his dependents,  continued  coverage for
         one year  thereafter  under all health,  life,  disability  and similar
         employee benefit plans and programs of the Company on the same basis as
         the  Employee  and  his   dependents   were  entitled  to   participate
         immediately prior to such  termination,  provided that the Employee and
         his dependent's  continued  participation is possible under the general
         terms and provisions of such plans and programs.

                                      -4-
<PAGE>

         7. Disability; Death.

                  a. In the event the  Employee  shall be unable to perform  the
         essential  functions  of his duties  hereunder  by virtue of illness or
         physical or mental  incapacity or disability  [from any cause or causes
         whatsoever]  in  substantially  the manner and to the extent  performed
         prior to the  commencement  of such  disability  [all such causes being
         referred to as  "disability"]  and the  Employee  shall fail to perform
         such duties for periods  aggregating  ninety  [90] days  [inclusive  of
         non-business days], whether or not continuous, in any continuous period
         of one hundred and eighty [180] days,  the Company shall have the right
         to terminate the Employee's  employment  hereunder as at the end of any
         calendar month during the  continuance of such disability upon at least
         ten [10] days prior written  notice to him. In the event of termination
         under this  paragraph  7[a],  the Employee shall be entitled to receive
         when otherwise payable, subject to any Offsets, all salary compensation
         earned  but  unpaid  as of the  Date  of  Termination  and  any  unpaid
         reimbursable  expenses outstanding as of such date; and any benefits to
         which the Employee or his beneficiaries may be entitled under the plans
         and  programs  described in  paragraphs  5[b] and [c] hereof as of such
         Date of Termination shall be determined in accordance with the terms of
         such  plans and  programs.  Nothing  contained  herein is  intended  to
         nullify or diminish the  Employee's  rights under,  and this  paragraph
         7[a] is subject to, the Americans with Disabilities Act of 1990 and the
         Family and Medical  Leave Act of 1993, as such Acts may be amended from
         time to time.

                  b. The  employment  of the  Employee  with the  Company  shall
         terminate  on the date of the  Employee's  death and in such  event the
         Employee's estate shall be entitled to receive when otherwise  payable,
         subject to any Offsets, all salary compensation earned but unpaid as of
         the date of his death and any unpaid reimbursable  expenses outstanding
         as of such date. In the event of the Employee's  death, any benefits to
         which the Employee or his beneficiaries may be entitled under the plans
         and  programs  described  in  paragraphs  5[b] and [c] hereof  shall be
         determined in accordance with the terms of such plans and programs.

                  c.  Except as  provided  in  paragraphs  7[a] and [b]  hereof,
         in the event of the Employee's termination due to disability or  death,
         the  Company  shall  have  no further  liability to the Employee or the
         Employee's heirs, beneficiaries or  estate  for  damages, compensation,
         benefits,  indemnities  or  other  amounts  of  whatever nature.

                                      -5-
<PAGE>

         8. Non-Competition and Protection of Confidential Information.

                  a. The Employee agrees that his services to the Company are of
         a special,  unique,  extraordinary  and intellectual  character and his
         position with the Company  places him in a position of  confidence  and
         trust  with  the  employees  and  customers  of  the  Company  and  its
         affiliates. Consequently, the Employee agrees that it is reasonable and
         necessary for the  protection of the goodwill,  intellectual  property,
         trade secrets,  designs,  proprietary  information  and business of the
         Company  that  the  Employee  make  the  covenants   contained  herein.
         Accordingly,  the  Employee  agrees  that,  during  the  period  of the
         Employee's  employment  hereunder  and for the  period  of one [1] year
         immediately following the termination of his employment  hereunder,  he
         shall not, directly or indirectly:

                           i.  own,  operate,   manage  or  be  employed  by  or
                  affiliated with any person or entity  headquartered  within or
                  with a management  office in the United States that engages in
                  any business then being engaged or planned to be engaged in by
                  the Company or its subsidiaries or affiliates.

                           ii.  attempt  in  any  manner  to  solicit  from  any
                  customer or supplier  business of the type performed for or by
                  The  Company or  persuade  any  customer  or  supplier  of The
                  Company  to cease to do  business  or to reduce  the amount of
                  business  which any such customer or supplier has  customarily
                  done or  contemplates  doing with The Company,  whether or not
                  the  relationship  between The  Company  and such  customer or
                  supplier  was  originally  established  in  whole  or in  part
                  through his efforts; or

                           iii. employ as an employee or retain as a consultant,
                  or persuade  or attempt to  persuade  any person who is at the
                  Date of  Termination  or at any time during the preceding year
                  was,  or in the  six [6]  months  following  such  termination
                  becomes, an employee of or exclusive consultant to the Company
                  to leave the  Company or to become  employed as an employee or
                  retained as a consultant by anyone other than the Company.

                           iv. As used in this paragraph 8, the term: "customer"
                  and  "supplier"  shall  mean any  person or  entity  that is a
                  customer   or   supplier   of  the  Company  at  the  Date  of
                  Termination,  or at any time during the preceding year was, or
                  in the six [6] months  following such termination  becomes,  a
                  customer  or  supplier of The  Company,  or if the  Employee's
                  employment  shall  not  have  terminated,  at the  time of the
                  alleged prohibited conduct.

                                      -6-
<PAGE>

                  b. The Employee  agrees that he will not at any time  [whether
         during the Term or after termination of this Agreement for any reason],
         disclose to anyone, any confidential  information or trade secret of or
         utilize  such  confidential  information  or trade  secret  for his own
         benefit,  or for the benefit of third  parties,  and all  memoranda  or
         other  documents  compiled by him or made  available  to him during the
         Term pertaining to the business of The Company shall be the property of
         The  Company  and  shall be  delivered  to The  Company  on the Date of
         Termination or at any other time, as reasonable, upon request. The term
         "confidential  information  or  trade  secret"  does  not  include  any
         information which [i] becomes  generally  available to the public other
         than by breach of this provision or [ii] is required to be disclosed by
         law or legal process.

                  c. If the  Employee  commits a breach or threatens to commit a
         breach of any of the provisions of paragraphs  8[a] or [b] hereof,  the
         Company shall have the right to have the  provisions of this  Agreement
         specifically  enforced by any court having  jurisdiction  without being
         required to post bond or other security and without having to prove the
         inadequacy of any other available  remedies,  it being acknowledged and
         agreed  that any such  breach  will  cause  irreparable  injury  to The
         Company and that money  damages will not provide an adequate  remedy to
         the Company or The Company. In addition,  the Company may take all such
         other actions and seek such other remedies available to it in law or in
         equity  and shall be  entitled  to such  damages  as it can show it has
         sustained by reason of such breach.

                  d. The  parties  acknowledge  that the  type  and  periods  of
         restriction imposed in the provisions of paragraphs 8[a] and [b] hereof
         are fair and reasonable and are reasonably  required for the protection
         of The Company and the  goodwill  associated  with the  business of The
         Company; and that the time, scope, geographic area and other provisions
         of this paragraph 8 have been specifically  negotiated by sophisticated
         parties and accordingly it is reasonable that the restrictive covenants
         set forth herein are not limited by narrow  geographic  area. If any of
         the covenants in paragraphs 8[a] or [b] hereof, or any part thereof, is
         hereafter construed to be invalid or unenforceable, it is the intention
         of the  parties  that the same shall not affect  the  remainder  of the
         covenant or covenants, which shall be given full effect, without regard
         to  the  invalid  portions.  If  any  of  the  covenants  contained  in
         paragraphs   8[a]  or  [b],  or  any  part  thereof,   is  held  to  be
         unenforceable  because of the  duration of such  provision  or the area
         covered  thereby,   the  parties  agree  that  the  court  making  such
         determination should reduce the duration and/or areas of such provision
         such  that,  in  its  reduced  form,   said  provision  shall  then  be
         enforceable.  The parties intend to and hereby confer  jurisdiction  to
         enforce the  covenants  contained in  paragraphs  8[a] and [b] upon the
         courts  of any  jurisdiction  within  the  geographical  scope  of such
         covenants.  In the  event  that the  courts  of any one or more of such
         jurisdictions shall hold such covenants wholly  unenforceable by reason
         of the  breadth  of such  time,  scope or  geographic  area,  it is the
         intention of the parties hereto that such  determination  not bar or in
         any way affect the Company's  right to the relief provided above in the
         courts of any other jurisdiction  within the geographical scope of such
         covenants,  as to breaches of such  covenants in such other  respective
         jurisdictions,  the above covenants as they relate to each jurisdiction
         being,  for  this  purpose,  severable  into  diverse  and  independent
         covenants.

                                      -7-
<PAGE>

                  e. If the  non-competition  provision  of the  Stock  Purchase
         Agreement  among  Ranor  Acquisition  LLC and  Employee  and  others is
         broader or of longer  duration than the provisions of this Paragraph 8,
         such broader and/or longer provisions shall govern.

         9. Intellectual  Property.  During the Term, the Employee will disclose
to the Company all ideas,  inventions,  advertising campaigns,  designs,  logos,
slogans, processes, operations, products or improvements which may be patentable
or  copyrightable  or subject to any trade or service mark or name, and business
plans  developed  by  him  during  such  period,   either   individually  or  in
collaboration  with  others,  which  relate  to  the  business  of  the  Company
["Intellectual  Property"].  The Employee agrees that such Intellectual Property
will be the sole  property  of the  Company  and  that he will at the  Company's
request  and cost do  whatever  is  reasonably  necessary  to secure  the rights
thereto by patent, copyright, trademark or otherwise to the Company.

         10. Enforceability.  The failure of either party at any time to require
performance by the other party of any provision hereunder shall in no way affect
the right of that party  thereafter to enforce the same, nor shall it affect any
other  party's  right to  enforce  the  same,  or to  enforce  any of the  other
provisions in this Agreement; nor shall the waiver by either party of the breach
of any provision hereof be taken or held to be a waiver of any subsequent breach
of such provision or as a waiver of the provision itself.

         11. Assignment.  This Agreement is binding on and is for the benefit of
the  parties  hereto  and  their  respective   successors,   heirs,   executors,
administrators and other legal  representatives.  Neither this Agreement nor any
right or obligation  hereunder may be sold,  transferred,  assigned,  pledged or
hypothecated  by either party hereto  without the prior  written  consent of the
other party;  provided,  the Company may assign its rights and obligations under
the  Agreement  without  written  consent in  connection  with the sale or other
transfer of all or substantially  all of the Company's  business [whether by way
of sale of stock, assets, merger or otherwise.

         12. Severability. In the event any provision of this Agreement is found
to be void and unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall nevertheless be binding upon the parties with
the same effect as though the void or  unenforceable  part had been  severed and
deleted.

                                      -8-
<PAGE>

         13. Life Insurance. The Employee agrees that the Company shall have the
right to obtain life  insurance on the  Employee's  life, at the Company's  sole
expense and with the Company as the sole  beneficiary  thereof to that end,  the
Employee  shall [a]  cooperate  fully with the  Company in  obtaining  such life
insurance, [b] sign any necessary consents, applications and other related forms
or documents and [c] take any reasonably required medical examinations.

         14.  Notice.  Any notice,  request,  instrument or other document to be
given  under this  Agreement  by either  party  hereto to the other  shall be in
writing and shall be deemed effective [a] upon personal  delivery,  if delivered
by hand,  [b] three [3] days after the date of  deposit  in the  mails,  postage
prepaid,  if mailed by certified or registered mail, or [c] on the next business
day, if sent by a prepaid overnight courier service,  and in each case addressed
as follows:

         If to the Employee:  Mr. Stanley Youtt
                              5 Taymax Road
                              Westminster, MA 01473

         If to the Company:   Mr. James G. Reindl, Chairman
                              Ranor, Inc.
                              Bella Drive - P.O. Box 458
                              Westminster, MA 01473

Any party may  change  the  address  to which  notices  are to be sent by giving
notice  of such  change  of  address  to the other  party in the  manner  herein
provided for giving notice.

         15. No Conflict.  The Employee  represents  and warrants that he is not
subject to any agreement,  instrument, order, judgment or decree of any kind, or
any other restrictive  agreement of any character,  which would prevent him from
entering into this Agreement or which would be breached by the Employee upon the
performance of his duties pursuant to this Agreement.

         16. Miscellaneous.

                  a. The headings  contained in this Agreement are for reference
         purposes  only, and shall not affect the meaning or  interpretation  of
         this Agreement.

                  b. The Company may withhold from any amount payable under this
         Agreement such federal, state or local taxes as shall be required to be
         withheld pursuant to applicable law or regulation.

                  c.  This  Agreement  shall be  governed  by and  construed  in
         accordance with the laws of the State of Massachusetts  conflict of law
         principles thereof.  Any action arising out of the breach or threatened
         breach of this  Agreement  shall be  commenced  in a state court of the
         State of Delaware of the parties hereby submits to the  jurisdiction of
         such courts for the purpose of enforcing this Agreement.

                                      -9-
<PAGE>

                  d. This Agreement, represents the entire agreement between the
         Company and the Employee with respect to the subject matter hereof, and
         all  prior  agreements  relating  to the  employment  of the  Employee,
         written or oral, are nullified and superseded hereby.

                  e.  This  Agreement  may  not  be  orally  canceled,  changed,
         modified or  amended,  and no  cancellation,  change,  modification  or
         amendment  shall be effective or binding,  unless in writing and signed
         by both  parties to this  Agreement,  and any  provision  hereof may be
         waived only by an instrument in writing  signed by the party or parties
         against whom or which enforcement of such waiver is sought.

                  f. As used in this Agreement,  any gender includes a reference
         to all other  genders  and the  singular  includes a  reference  to the
         plural and vice versa.

      IN WITNESS  WHEREOF,  the parties have executed  this  Agreement as of the
date first written above.

COMPANY:                                             EMPLOYEE:

RANOR, INC.

By: /s/ James G. Reindl                              /s/ Stanley Youtt
    ---------------------------                      ---------------------------
    James G. Reindl, Chairman                        Stanley Youtt

                                      -10-Exhibit 10.1

THIS WARRANT  CERTIFICATE AND THE UNDERLYING  SHARES OF COMMON STOCK REPRESENTED
BY THIS WARRANT CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED,  AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE ACT.

UNLESS PERMITTED UNDER SECURITIES LEGISLATION,  THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE  SECURITY  BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE
LATER OF (i) ____________  2006, AND (ii) THE DATE THE ISSUER BECAME A REPORTING
ISSUER IN ANY PROVINCE OR TERRITORY

                             ________________, 2006

                              CALIBRE ENERGY, INC.

                          COMMON STOCK PURCHASE WARRANT

Void after  ________________,  2008, and subject to earlier termination upon the
terms and conditions set forth herein

         THIS WARRANT (the  "Warrant")  entitles  ______________  (including any
successors  or assigns,  the  "Holder"),  for value  received,  to purchase from
CALIBRE ENERGY, INC., a Nevada corporation (the "Company"), at any time and from
time to time,  subject to the terms and conditions set forth herein,  during the
period  starting  from 5:00 a.m.  on the  Initial  Exercise  Date (as defined in
Section  1 below) to 5:00  p.m.,  Eastern  time,  on the  "Expiration  Date" (as
defined in Section 1 below), immediately following which time this Warrant shall
expire and become  void,  all or any portion of ______  shares of the  Company's
common  stock,  par  value  $0.001  per share  (the  "Warrant  Shares"),  at the
"Exercise  Price" (as defined in Section 1 below).  This Warrant has been issued
to  Holder  pursuant  to the  terms of a  Subscription  Agreement  of even  date
herewith by and between  the  Company  and the  Holder.  This  Warrant is issued
subject to the following terms and conditions:

         1. Definitions. As used in this Warrant, the following terms shall have
the respective meanings set forth below or elsewhere in this Warrant as referred
to below:

         "Affiliate"  means,  with  respect  to any  Person,  any  other  Person
directly or indirectly  controlling or controlled by or under direct or indirect
common  control with such  specified  Person.  For the purposes of this Warrant,
"control,"  when used with  respect to any  specified  Person means the power to
direct or cause the  direction  of the  management  and policies of such Person,
directly or indirectly,  whether through the ownership of voting securities,  by
contract  or  otherwise;  and the  terms  "controlling"  and  "controlled"  have
meanings correlative to the foregoing.

<PAGE>

         "Business  day" (whether such term is capitalized or not) means any day
except Saturday,  Sunday and any day which shall be a federal legal holiday or a
day on which banking institutions in the State of New York or the State of Texas
are authorized or required by law or other governmental action to close.

         "Common Stock" means the common stock,  $0.001 par value per share,  of
the Company (including any securities into which or for which such shares may be
exchanged for, or converted into,  pursuant to any stock dividend,  stock split,
stock combination, recapitalization,  reclassification,  reorganization or other
similar event).

         "Company" has the meaning set forth in the preamble hereof.

         "Exercise  Price" means  initially the Initial  Exercise Price, as such
amount may be adjusted from time to time pursuant to Section 3 hereof.

         "Expiration Date" means ________________, 2008.

         "Fair  Market  Value" shall mean on any date (i) if the Common Stock is
quoted on Nasdaq or listed  on a  national  securities  exchange,  then the last
reported  sale  price  per  share of  Common  Stock on  Nasdaq  or any  national
securities  exchange in which such Common Stock is quoted or listed, as the case
may be, on such date or, if no such sale price is  reported  on such date,  such
price on the next preceding business day in which such price was reported,  (ii)
if the Common  Stock is actively  traded  over-the-counter,  then the last sales
price  quoted,  if  determinable,  or, if not  determinable,  the average of the
closing bid and asked  prices  quoted on the OTCBB (or  similar  system) on such
date or (iii) if such Common Stock is not traded,  quoted or listed on Nasdaq or
any national securities exchange or the  over-the-counter  market, then the fair
market  value of a share of Common  Stock,  as  determined  in good faith by the
Board of Directors of the Company.

         "Holder" has the meaning set forth in the preamble of hereof.

         "Initial Exercise Date" means the date hereof.

         "Initial Exercise Price" means $_____ per share of Common Stock.

         "OTCBB" means the OTC Bulletin Board.

         "Person"  (whether or not  capitalized)  means an  individual,  entity,
partnership,  limited liability company, corporation,  association, trust, joint
venture,   unincorporated   organization,   and  any  government,   governmental
department or agency or political subdivision thereof.

         "Registration  Rights Agreement" means that certain Registration Rights
Agreement,  dated as of the date hereof, as it may be amended from time to time,
by and among the Company and the "Holders" (as such term is defined therein).

         "SEC" means the United States Securities and Exchange Commission.

                                       2
<PAGE>

         "Warrants"  means this  Warrant and any other  warrants,  substantially
identical   hereto,   to   purchase   Common   Stock   issued  by  the   Company
contemporaneously herewith to other Persons.

         2. Exercise of Warrant.

                  2.1 Method of Exercise;  Payment.  Subject to all of the terms
         and conditions  hereof,  this Warrant may be exercised,  in whole or in
         part, with respect to any Warrant Shares,  at any time and from time to
         time  during the period  commencing  on the Initial  Exercise  Date and
         ending at 5:00 p.m., Eastern Time, on the Expiration Date, by surrender
         of this Warrant to the Company at its principal office,  accompanied by
         a subscription  substantially in the form attached hereto,  executed by
         the  Holder  and  accompanied  by  (a)  wire  transfer  of  immediately
         available  funds or (b) certified or official bank check payable to the
         order  of  the  Company,  in  each  case  in  the  amount  obtained  by
         multiplying  (i) the number of Warrant  Shares for which the Warrant is
         being  exercised,  as  designated  in such  subscription,  by (ii)  the
         Exercise Price. Thereupon,  the Holder shall be entitled to receive the
         number of duly authorized, validly issued, fully paid and nonassessable
         Warrant Shares determined as provided for herein.

                  2.2 Delivery of Stock  Certificates  on  Exercise.  As soon as
         practicable after the exercise of this Warrant, and in any event within
         five (5) business days thereafter,  the Company, at its expense, and in
         accordance with applicable  securities laws, will cause to be issued in
         the name of and  delivered  to the Holder,  or as the Holder may direct
         (subject  in all cases,  to the  provisions  of  Section 8  hereof),  a
         certificate or certificates  for the number of Warrant Shares purchased
         by the Holder on such exercise,  plus, in lieu of any fractional  share
         to which the Holder would  otherwise  be  entitled,  cash equal to such
         fraction multiplied by the Fair Market Value.

                  2.3 Shares To Be Fully  Paid and  Nonassessable.  All  Warrant
         Shares  issued  upon  the  exercise  of  this  Warrant  shall  be  duly
         authorized,  validly issued, fully paid and nonassessable,  free of all
         liens,  taxes,  charges and other  encumbrances or restrictions on sale
         (other than those set forth herein).

                  2.4 Issuance of New Warrants; Company Acknowledgment. Upon any
         partial  exercise of this Warrant,  the Company,  at its expense,  will
         forthwith and, in any event within three (3) business  days,  issue and
         deliver  to the  Holder  a new  warrant  or  warrants  of  like  tenor,
         registered in the name of the Holder,  exercisable,  in the  aggregate,
         for the balance of the Warrant Shares.  Moreover, the Company shall, at
         the time of any  exercise  of this  Warrant,  upon the  request  of the
         Holder,  acknowledge in writing its continuing  obligation to afford to
         the Holder any rights to which the Holder shall continue to be entitled
         after such exercise in accordance  with the provisions of this Warrant;
         provided,  however,  that if the  Holder  shall  fail to make  any such
         request, such failure shall not affect the continuing obligation of the
         Company to afford to the Holder any such rights.

                  2.5 Payment of Taxes and  Expenses.  The Company shall pay any
         recording, filing, stamp or similar tax which may be payable in respect
         of any transfer  involved in the issuance of, and the  preparation  and

                                       3
<PAGE>

         delivery of certificates (if applicable) representing,  (i) any Warrant
         Shares  purchased  upon  exercise  of this  Warrant  and/or (ii) new or
         replacement warrants in the Holder's name or the name of any transferee
         of all or any portion of this Warrant.

                  2.6  Cooperation  with  Filings.  The Company shall assist and
         cooperate  with  any  Holder  required  to  make  any  governmental  or
         regulatory  filings or obtain any governmental or regulatory  approvals
         prior to or in connection with any exercise of this Warrant (including,
         without  limitation,  making  any  filings  required  to be made by the
         Company).

                  2.7  Conditions.  Notwithstanding  any other provision of this
         Warrant, if the exercise of all or any portion of this Warrant is to be
         made in connection  with a registered  public  offering,  a sale of the
         Company or any other  transaction  or event,  such exercise may, at the
         election  of the  Holder,  be  conditioned  upon  consummation  of such
         transaction  or event in which case such  exercise  shall not be deemed
         effective until the consummation of such transaction or event.

         3. Adjustment of Exercise Price and Warrant Shares.  The Exercise Price
and the number of Warrant  Shares  shall be subject to  adjustment  from time to
time upon the happening of certain events as described in this Section 3.

                  3.1  Subdivision or  Combination  of Stock.  If at any time or
         from time to time after the date hereof,  the Company  shall  subdivide
         (by way of stock  dividend,  stock split or otherwise) its  outstanding
         shares of Common Stock, the Exercise Price in effect  immediately prior
         to such subdivision shall be reduced  proportionately and the number of
         Warrant  Shares  (calculated  to the  nearest  whole  share)  shall  be
         increased proportionately, and conversely, in the event the outstanding
         shares of Common Stock shall be combined (whether by stock combination,
         reverse stock split or otherwise) into a smaller number of shares,  the
         Exercise Price in effect immediately prior to such combination shall be
         increased  proportionately and the number of Warrant Shares (calculated
         to the nearest  whole share) shall be  decreased  proportionately.  The
         Exercise Price and the number of Warrant Shares, as so adjusted,  shall
         be readjusted  in the same manner upon the happening of any  successive
         event or events described in this Section 3.1.

                  3.2 Adjustments.

                           (a)  Adjustment for Stock  Dividends.  If at any time
                  after the date hereof, the Company shall declare a dividend or
                  make any other  distribution upon any class or series of stock
                  of the Company payable in shares of Common Stock, the Exercise
                  Price  in  effect  immediately  prior to such  declaration  or
                  distribution shall be reduced  proportionately  and the number
                  of Warrant  Shares  (calculated  to the nearest  whole  share)
                  shall be increased proportionately, to reflect the issuance of
                  any  shares of  Common  Stock,  issuable  in  payment  of such
                  dividend or distribution. The Exercise Price and the number of
                  Warrant  Shares,  as so adjusted,  shall be  readjusted in the
                  same  manner upon the  happening  of any  successive  event or
                  events described in this Section 3.2.

                                       4
<PAGE>

                           (b)    Adjustments    for   Other    Dividends    and
                  Distributions. If the Company at any time or from time to time
                  after the date  hereof  shall  make or issue,  or fix a record
                  date for the determination of holders of Common Stock entitled
                  to  receive,  a  dividend  or other  distribution  payable  in
                  securities of the Company  (other than shares of Common Stock)
                  or in cash or  other  property,  then and in each  such  event
                  provision  shall be made so that the Holder shall receive upon
                  exercise hereof, in addition to the number of shares of Common
                  Stock issuable hereunder, the kind and amount of securities of
                  the Company  and/or cash and other  property  which the Holder
                  would have been  entitled  to receive  had this  Warrant  been
                  exercised  into Common Stock on the date of such event and had
                  the Holder thereafter, during the period from the date of such
                  event to and  including the exercise  date,  retained any such
                  securities  receivable,  giving application to all adjustments
                  called  for  during  such  period  under  this  Section 3 with
                  respect to the rights of the Holder.

                           (c) Adjustments for Reclassifications.  If the Common
                  Stock  issuable  upon the  conversion of this Warrant shall be
                  changed  into the same or a different  number of shares of any
                  class(es)  or series  of stock  and/or  the  right to  receive
                  property, whether by reclassification or otherwise (other than
                  an  adjustment  under  Sections  3.1  and  3.2  or  a  merger,
                  consolidation,  or sale of assets  provided for under  Section
                  3.4),  then and in each such event,  the Holder  hereof  shall
                  have the right  thereafter  to convert each Warrant Share into
                  the kind and  amount of  shares of stock and other  securities
                  and property receivable upon such  reclassification,  or other
                  change by holders of the number of shares of Common Stock into
                  which  such  Warrant   Shares  would  have  been   convertible
                  immediately  prior to such  reclassification  or  change,  all
                  subject to successive adjustments thereafter from time to time
                  pursuant to and in  accordance  with,  the  provisions of this
                  Section 3.

                  3.3 Adjustments for Merger or  Consolidation.  If, at any time
         or from  time to time  after the date  hereof,  the  Company  shall (a)
         effect a  reorganization,  (b) consolidate with or merge into any other
         Person,  or  (c)  sell  or  transfer  all or  substantially  all of its
         properties  or assets or more than 50% of the voting  capital  stock of
         the  Company  (whether  issued  and  outstanding,  newly  issued,  from
         treasury,  or any  combination  thereof) to any other  person under any
         plan or arrangement  contemplating the consolidation or merger, sale or
         transfer, or dissolution of the Company (each, a "Merger Transaction"),
         then, in each such case, the Holder,  upon the exercise of this Warrant
         as  provided  in  Section  2.1 or the  conversion  of this  warrant  as
         provided  in Section  2.1 hereof at any time or from time to time after
         the consummation of such reorganization,  consolidation, merger or sale
         or the effective  date of such  dissolution,  as the case may be, shall
         receive,  in lieu  of the  Warrant  Shares  issuable  on such  exercise
         immediately  prior to such  consummation or such effective date, as the
         case may be,  the  stock  and  property  (including  cash) to which the
         Holder  would  have  been  entitled  upon  the   consummation  of  such
         consolidation  or merger,  or sale or transfer,  or in connection  with
         such  dissolution,  as the case may be, if the Holder had so  exercised
         this Warrant  immediately  prior  thereto  (assuming the payment by the

                                       5
<PAGE>

         Holder of the  Exercise  Price  therefor as  required  hereby in a form
         permitted hereby,  which payment shall be included in the assets of the
         Company  for the  purposes  of  determining  the amount  available  for
         distribution),  all subject to successive  adjustments  thereafter from
         time to time pursuant to, and in  accordance  with,  the  provisions of
         this Section 3. The Company  shall not effect any such  reorganization,
         consolidation,   merger,   sale  or  transfer  unless,   prior  to  the
         consummation  thereof, the successor entity (if other than the Company)
         resulting  from the  consolidation  or merger or the entity  purchasing
         such assets assumes by written  instrument the obligation to deliver to
         each holder of Warrants such shares of stock,  securities or assets as,
         in  accordance  with  the  foregoing  provisions,  such  holder  may be
         entitled to acquire;  provided,  that any assumption  shall not relieve
         the Company of its obligations hereunder.

                  3.4   Continuation   of   Terms.   Upon  any   reorganization,
         consolidation,  merger or transfer (and any  dissolution  following any
         such  transfer)  referred  to in this  Section  3, this  Warrant  shall
         continue  in full  force  and  effect  and the  terms  hereof  shall be
         applicable  to the  shares of Common  Stock  and other  securities  and
         property  receivable  upon  the  exercise  of this  Warrant  after  the
         consummation  of such  reorganization,  consolidation  or merger or the
         effective date of dissolution  following any such transfer, as the case
         may be, and shall be binding  upon the issuer of any such Common  Stock
         or other securities,  including,  in the case of any such transfer, the
         Person acquiring all or  substantially  all of the properties or assets
         or more than 50% of the voting  capital  stock of the Company  (whether
         issued  and   outstanding,   newly  issued  or  from  treasury  or  any
         combination  thereof),  whether or not such Person shall have expressly
         assumed the terms of this Warrant.

                  3.5 Minimum Adjustment of Exercise Price. If the amount of any
         adjustment of the Exercise  Price  required  pursuant to this Section 3
         would be less than one-tenth (1/10) of one percent (1%) of the Exercise
         Price in effect at the time such adjustment is otherwise so required to
         be made,  such  amount  shall be carried  forward and  adjustment  with
         respect  thereto made at the time of and together  with any  subsequent
         adjustment  which,  together  with such amount and any other  amount or
         amounts so carried  forward,  shall aggregate at least one tenth (1/10)
         of one percent (1%) of such Exercise Price.

                  3.6 Certificate as to Adjustments. Upon the occurrence of each
         adjustment or  readjustment of the Exercise Price and number of Warrant
         Shares  pursuant to this  Section 3, this  Warrant  shall,  without any
         action on the part of the Holder,  be adjusted in accordance  with this
         Section 3, and the Company, at its expense, promptly shall compute such
         adjustment  or  readjustment  in  accordance  with the terms hereof and
         prepare  and  furnish to the Holder a  certificate  setting  forth such
         adjustment or readjustment, showing in detail the facts upon which such
         adjustment or readjustment is based.  The Company will forthwith send a
         copy of each such  certificate to the Holder in accordance with Section
         9.4 below.

         4. Registration Rights. The initial holders of the Warrant Shares shall
be entitled  to the  registration  rights and other  rights  applicable  to such
shares provided by the Registration Rights Agreement.

         5. Notices of Record Date. Upon (a) any establishment by the Company of
a record  date of the  holders  of any class of  securities  for the  purpose of
determining  the  holders  thereof who are  entitled to receive any  dividend or
other distribution,  or right or option to acquire securities of the Company, or
any  other  right,   or  (b)  any  capital   reorganization,   reclassification,

                                       6
<PAGE>

recapitalization,  merger or consolidation of the Company with or into any other
Person,  any transfer of all or substantially all the assets of the Company,  or
any  voluntary  or  involuntary  dissolution,  liquidation  or winding up of the
Company,  or the sale, in a single  transaction,  of a majority of the Company's
voting stock (whether newly issued,  or from treasury,  or previously issued and
then  outstanding,  or any combination  thereof),  the Company shall mail to the
Holder at least ten (10) business days, or such longer period as may be required
by law,  prior to the  record  date  specified  therein  and at  least  ten (10)
business  days prior to the date  specified  in clause (ii) or (iii)  hereof,  a
notice specifying (i) the date established as the record date for the purpose of
such dividend, distribution, option or right and a description of such dividend,
distribution,  option or right, (ii) the date on which any such  reorganization,
reclassification,  transfer, consolidation,  merger, dissolution, liquidation or
winding up, or sale is expected to become  effective and (iii) the date, if any,
fixed as to when the  holders of record of Common  Stock  shall be  entitled  to
exchange  their  shares  of  Common  Stock  for  securities  or  other  property
deliverable upon such reorganization, reclassification, transfer, consolidation,
merger,  dissolution,  liquidation  or winding up. Nothing herein shall prohibit
the Holder from  exercising this Warrant during the ten (10) business day period
commencing on the date of such notice.

         6. Exchange of Warrant.  Subject to the  provisions of Section 7 hereof
(if and to the extent applicable), this Warrant shall be exchangeable,  upon the
surrender hereof by the Holder at the principal  office of the Company,  for new
warrants of like tenor, each registered in the name of the Holder or, subject to
compliance with  applicable  federal and state  securities  laws, in the name of
such other  Persons as the Holder may direct (upon  payment by the Holder of any
applicable  transfer taxes).  Each of such new warrants shall be exercisable for
such number of Warrant  Shares as the Holder shall direct,  provided that all of
such new warrants shall represent,  in the aggregate,  the right to purchase the
same number of Warrant Shares and cash,  securities or other  property,  if any,
which may be purchased  by the Holder upon  exercise of this Warrant at the time
of its surrender.

         7. Transfer Provisions, etc.

                  7.1 Legends. Each certificate  representing any Warrant Shares
         issued upon exercise of this Warrant, and of any shares of Common Stock
         into  which  such  Warrant  Shares  may be  converted,  shall  bear the
         following legends or substantially similar language:

                  "THE  SHARES  REPRESENTED  BY THIS  CERTIFICATE  HAVE NOT BEEN
                  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  AND
                  MAY NOT BE  OFFERED  OR SOLD IN THE  ABSENCE  OF AN  EFFECTIVE
                  REGISTRATION  STATEMENT  UNDER  SAID  ACT  OR  PURSUANT  TO AN
                  AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
                  REGISTRATION UNDER SAID ACT."

                  "UNLESS  PERMITTED UNDER  SECURITIES  LEGISLATION,  A CANADIAN
                  HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE
                  DATE THAT IS FOUR  MONTHS AND A DAY AFTER THE LATER OF (i) THE
                  DATE OF  ISSUANCE,  AND  (ii) THE  DATE  THE  ISSUER  BECAME A
                  REPORTING ISSUER IN ANY PROVINCE OR TERRITORY"

                                       7
<PAGE>

                  7.2 Mechanics of Transfer.

                           (a)  Any  transfer  of  all or any  portion  of  this
                  Warrant (and the Warrant Shares), or of any interest herein or
                  therein,  that is otherwise in compliance  with applicable law
                  shall be effected by surrendering  this Warrant to the Company
                  at its principal office, together with a duly executed form of
                  assignment,  in  the  form  attached  hereto.  Upon  any  such
                  transfer  of  this  Warrant,   subject  to   compliance   with
                  applicable  federal  and state  securities  laws,  the Company
                  shall  issue a new  warrant or  warrants  of like tenor to the
                  transferee(s),  representing,  in the aggregate,  the right to
                  purchase   the  same  number  of  Warrant   Shares  and  cash,
                  securities or other  property,  if any, which may be purchased
                  by the Holder upon exercise of this Warrant at the time of its
                  surrender, in accordance with Section 2 hereof.

                           (b)  In  the  event  of  any  transfer  of all or any
                  portion of this  Warrant in  accordance  with  Section  7.2(a)
                  above, the Company shall issue (i) a new warrant of like tenor
                  to the  transferee,  representing  the right to  purchase  the
                  number  of  Warrant  Shares,  and  cash,  securities  or other
                  property,  if any, which were purchasable by the Holder of the
                  transferred  portion  of  this  Warrant  at the  time  of said
                  transfer,  and (ii) a new warrant of like tenor to the Holder,
                  representing  the right to  purchase  the  number  of  Warrant
                  Shares,  if any, and cash,  securities or other  property,  if
                  any,  purchasable by the Holder of the un-transferred  portion
                  of this Warrant.  Until this Warrant or any portion thereof is
                  transferred on the books of the Company, the Company may treat
                  the  Holder as the  absolute  holder of this  Warrant  and all
                  right,   title  and   interest   therein  for  all   purposes,
                  notwithstanding any notice to the contrary.

                  7.3 No  Restrictions  on Transfer.  Subject to compliance with
         applicable  federal and state  securities  laws,  this  Warrant and any
         portion  hereof,  the Warrant  Shares and the rights  hereunder  may be
         transferred by the Holder in its sole discretion at any time and to any
         Person  or  Persons,   including  without  limitation   Affiliates  and
         affiliated groups of such Holder, without the consent of the Company.

                  7.4 Warrant Register.  The Company shall keep at its principal
         office a register for the registration,  and registration of transfers,
         of the Warrants.  The name and address of each Holder of one or more of
         the Warrants,  each  transfer  thereof and the name and address of each
         transferee  of one or more of the Warrants  shall be registered in such
         register.  The Company  shall give to any Holder of a Warrant  promptly
         upon  request  therefor,  a complete  and correct copy of the names and
         addresses of all registered Holders of the Warrants.

         8. Lost,  Stolen or Destroyed  Warrant.  Upon receipt by the Company of
evidence  satisfactory to it of loss,  theft,  destruction or mutilation of this
Warrant  and,  in the  case of loss,  theft or  destruction,  on  delivery  of a
customary affidavit of the Holder and customary  unsecured indemnity  agreement,

                                       8
<PAGE>

or, in the case of mutilation,  upon  surrender of this Warrant,  the Company at
its expense  will execute and deliver,  or will  instruct its transfer  agent to
execute and deliver,  a new Warrant of like tenor and date and  representing the
same rights represented by such lost, stolen, destroyed or mutilated warrant and
any such lost,  stolen,  mutilated or destroyed  Warrant  thereupon shall become
void.

         9. General.

                  9.1 Authorized Shares,  Reservation of Shares for Issuance. At
         all times while this Warrant is outstanding, the Company shall maintain
         its  corporate  authority  to issue,  and  shall  have  authorized  and
         reserved for issuance  upon  exercise of this  Warrant,  such number of
         shares of Common Stock, and any other capital stock or other securities
         as shall be  sufficient to perform its  obligations  under this Warrant
         (after giving effect to any and all  adjustments to the number and kind
         of Warrant Shares purchasable upon exercise of this Warrant).

                  9.2 No  Impairment.  The Company will not, by amendment of its
         Certificate of Incorporation or through any reorganization, transfer of
         assets,  consolidation,   merger,  dissolution,  issuance  or  sale  of
         securities,  sale or other transfer of any of its assets or properties,
         or any other voluntary action, avoid or seek to avoid the observance or
         performance of any of the terms of this Warrant,  but will at all times
         in good faith  assist in the  carrying out of all such terms and in the
         taking of all such action as may be necessary or  appropriate  in order
         to  protect  the  rights of the Holder  hereunder  against  impairment.
         Without limiting the generality of the foregoing,  the Company (a) will
         not  increase  the par value of any shares of Common  Stock  receivable
         upon the exercise of this Warrant above the amount payable  therefor on
         such  exercise,  and (b) will take all action that may be  necessary or
         appropriate  in order that the Company  may  validly and legally  issue
         fully paid and  nonassessable  shares of Common Stock upon the exercise
         of this Warrant.

                  9.3 No  Rights  as  Stockholder.  Except  as  provided  herein
         (including  Sections 3 and 5), the Holder shall not be entitled to vote
         or to receive dividends or to be deemed the holder of Common Stock that
         may at any time be  issuable  upon  exercise  of this  Warrant  for any
         purpose whatsoever, nor shall anything contained herein be construed to
         confer  upon the  Holder  any of the  rights  of a  stockholder  of the
         Company or any right to vote for the  election of directors or upon any
         matter submitted to stockholders at any meeting thereof,  or to give or
         withhold   consent  to  any   corporate   action   (whether   upon  any
         recapitalization,  issuance or reclassification of stock, change of par
         value or  change  of stock to no par  value,  consolidation,  merger or
         conveyance or otherwise),  or to receive notice of meetings  (except to
         the extent otherwise provided in this Warrant), or to receive dividends
         or  subscription  rights,  until the Holder shall have  exercised  this
         Warrant  and  been  issued  Warrant  Shares  in  accordance   with  the
         provisions hereof and continues to hold Warrant Shares.

                  9.4  Notices.  Any  notices,  reports or other  correspondence
         (hereinafter collectively referred to as "correspondence")  required or
         permitted to be given  hereunder shall be sent by postage prepaid first
         class mail, overnight courier or facsimile  transmission,  or delivered
         by hand to the  party  to  whom  such  correspondence  is  required  or
         permitted to be given hereunder. The date of giving any notice shall be
         the date of its actual receipt.

                                       9
<PAGE>

                           (a)  All  correspondence  to  the  Company  shall  be
                  addressed as follows:

                                    Calibre Energy, Inc.
                                    1667 K St., NW, Ste. 1230
                                    Washington, DC 20006
                                    Attn:  Chief Financial Officer
                                    Facsimile: (202) 223-4406

                                    with a copy to:

                                    Vinson & Elkins LLP
                                    First City Tower
                                    1001 Fannin Street, Suite 2300
                                    Houston, Texas 77002-676
                                    Attn:  Michael C. Blaney
                                    Facsimile: (713) 758-2222

                           (b)  All   correspondence  to  the  Holder  shall  be
                  addressed to the Holder at its address  appearing in the books
                  maintained by the Company.

         10.  Amendment  and  Waiver.  No  failure  or  delay of the  Holder  in
exercising any power or right hereunder  shall operate as a waiver thereof,  nor
shall  any  single  or  partial  exercise  of any such  right or  power,  or any
abandonment  or  discontinuance  of steps  to  enforce  such a right  or  power,
preclude  any other or further  exercise  thereof or the  exercise  of any other
right or power.  The rights and  remedies of the Holder are  cumulative  and not
exclusive of any rights or remedies which it would  otherwise have. This Warrant
is one of a series of warrants issued by the Company,  all dated the date hereof
and of like  tenor,  except as to the number of shares of Common  Stock  subject
thereto (collectively,  the "Company Warrants"). Any term of this Warrant may be
amended or waived  upon the  written  consent of the  Company and the holders of
Company  Warrants  representing  at least a majority  of the number of shares of
Common Stock then subject to outstanding Company Warrants; provided that (i) any
such  amendment or waiver must apply to all Company  Warrants then  outstanding;
(ii) the number of Warrant Shares subject to this Warrant, the Exercise Price or
Expiration  Date of this  Warrant  and the  number  of  shares or class of stock
obtainable  upon  exercise of this  Warrant  may not be  amended,  and (iii) any
amendment that adversely  affects any particular  Holder without a corresponding
effect upon all Holders must be approved by the  particular  Holder so affected;
provided an amendment to or waiver under any of the  provisions  of Section 3 of
this  Warrant  shall not be  considered  an  amendment  of the number of Warrant
Shares or the Exercise  Price.  The Company  shall  promptly  give notice to all
holders of the Company  Warrants of any amendments  effected in accordance  with
this  Section  10.  No  special  consideration  may be  given to any  holder  as
inducement  to waive or amend this Warrant  unless such  consideration  is given
equally and ratably to all holders of Company Warrants.

                                       10
<PAGE>

         11.  Governing  Law. This Warrant shall be governed by and construed in
accordance  with the laws of the State of  Nevada,  as such laws are  applied to
contracts entered into and wholly to be performed within the State of Nevada and
without giving effect to any principles of conflicts or choice of law that would
result in the application of the laws of any other jurisdiction.

         12.   Covenants  To  Bind   Successor  and  Assigns.   All   covenants,
stipulations,  promises and agreements in this Warrant contained by or on behalf
of the Company shall bind its  successors  and assigns,  whether so expressed or
not.

         13.  Severability.  In case any one or more of the provisions contained
in this Warrant shall be invalid,  illegal or unenforceable in any respect,  the
validity,  legality and  enforceability  of the remaining  provisions  contained
herein shall not in any way be affected or impaired  thereby.  The parties shall
endeavor  in  good  faith  negotiations  to  replace  the  invalid,  illegal  or
unenforceable  provisions  with valid  provisions  the economic  effect of which
comes as close as  possible  to that of the  invalid,  illegal or  unenforceable
provisions.

         14.  Construction.  The definitions of this Warrant shall apply equally
to both the  singular and the plural  forms of the terms  defined.  Wherever the
context may require,  any pronoun  shall  include the  corresponding  masculine,
feminine and neuter forms.  The section and  paragraph  headings used herein are
for  convenience of reference  only, are not part of this Warrant and are not to
affect the construction of or be taken into  consideration in interpreting  this
Warrant.

         15. Remedies. The Holder, in addition to being entitled to exercise all
rights  granted by law,  including  recovery  of  damages,  will be  entitled to
specific  performance of its rights under this Warrant.  The Company agrees that
monetary  damages  would not be adequate  compensation  for any loss incurred by
reason of a breach by it of the  provisions of this Warrant and hereby agrees to
waive the defense in any action for  specific  performance  that a remedy at law
would be adequate.  In any action or proceeding brought to enforce any provision
of this Warrant or where any provision  hereof is validly asserted as a defense,
the successful  party to such action or proceeding  shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.

                           [SIGNATURE PAGE TO FOLLOW]

                                       11
<PAGE>

         IN WITNESS WHEREOF, the Company has executed this Common Stock Purchase
Warrant as of the date first written above.

                                    COMPANY:

                                    CALIBRE ENERGY, INC.

                                    By:  ______________________________________
                                         Prentis B. Tomlinson, Jr., President

                                [SIGNATURE PAGE]
<PAGE>

                                   NOTICE AND
                                  SUBSCRIPTION

To:      Calibre Energy, Inc.
         --------------------
         --------------------

         The  undersigned  hereby  irrevocably  elects to exercise  the right of
purchase  represented by the attached  Warrant for, and to exercise  thereunder,
__________ shares of Common Stock, of CALIBRE ENERGY, INC., a Nevada corporation
(the "Company"),  and tenders herewith payment of $__________,  representing the
aggregate  purchase  price for such shares based on the price per share provided
for in such Warrant.  Such payment is being made in accordance with Section 0 of
the attached Warrant.

         The undersigned hereby represents and warrants as follows:

         (a) the  undersigned  is acquiring  such shares of Common Stock for its
own account  for  investment  and not for resale or with a view to  distribution
thereof  in  violation  of the  Securities  Act of  1933,  as  amended,  and the
regulations promulgated thereunder (the "Securities Act"); and

         (b) the undersigned is an "accredited  investor" as defined in Rule 501
of Regulation D promulgated  under the  Securities Act and was not organized for
the  purpose of  acquiring  the  Warrant  or such  shares of Common  Stock.  The
undersigned's  financial  condition  is such that it is able to bear the risk of
holding such securities for an indefinite period of time and the risk of loss of
its entire investment.  The undersigned has sufficient  knowledge and experience
in investing  in  companies  similar to the Company so as to be able to evaluate
the risks and merits of its investment in the Company.

         Please issue a certificate  or  certificates  for such shares of Common
Stock  in the  following  name or  names  and  denominations  and  deliver  such
certificate  or  certificates  to the  person or persons  listed  below at their
respective address set forth below:

                  -----------------------------------------
                  -----------------------------------------
                  -----------------------------------------
                  -----------------------------------------

         If said number of shares of Common Stock shall not be all the shares of
Common Stock issuable upon exercise of the attached Warrant, a new Warrant is to
be issued  in the name of the  undersigned  for the  remaining  balance  of such
shares of Common Stock less any fraction of a share of Common Stock paid in cash
pursuant to Section 2.1 of the attached warrant.

Dated:  ___________, ______                          __________________________
                                                           Signature

<PAGE>

         The undersigned  Calibre Energy,  Inc. hereby  acknowledges  receipt of
this Notice and  Subscription  and  authorizes  issuance of the shares of Common
Stock described above.

Calibre Energy, Inc.

By:      ____________________________________________
Title:   ____________________________________________
Date:    ____________________________________________

<PAGE>

                               FORM OF ASSIGNMENT

                   (To be executed upon assignment of Warrant)

         For value  received,  __________________________________  hereby sells,
assigns and transfers unto  __________________  the attached Warrant [__% of the
attached Warrant], together with all right, title and interest therein, and does
hereby  irrevocably  constitute  and  appoint  ____________________  attorney to
transfer said Warrant [said  percentage of said Warrant] on the books of CALIBRE
ENERGY,  INC.,  a Nevada  corporation,  with full power of  substitution  in the
premises.

         If not  all of the  attached  Warrant  is to be so  transferred,  a new
Warrant is to be issued in the name of the  undersigned  for the balance of said
Warrant.

         The  undersigned  hereby  agrees  that it will  not  sell,  assign,  or
transfer the right,  title and interest in and to the Warrant unless  applicable
federal and state securities laws have been complied with.

Dated:  ___________, ______              _______________________________________
                                         Signature

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