Document:

exhibit_10-1.htm

    
      

    

    EXHIBIT
10.1   2007 NON-QUALIFIED STOCK COMPENSATION PLAN

    

    

    2007
NON-QUALIFIED STOCK COMPENSATION PLAN

    

    1.            
Purpose of
Plan

    

    1.1           This
2007 NON-QUALIFIED STOCK COMPENSATION PLAN
(the “Plan”) of CCR Crystal Research Corporation, a Nevada corporation (the
“Company”) for employees, directors, officers consultants, advisors and other
persons associated with the Company, is intended to advance the best interests
of the Company by providing those persons who have a substantial responsibility
for its management and growth with additional incentive and by increasing their
proprietary interest in the success of the Company, thereby encouraging them to
maintain their relationships with the Company.  Further, the
availability and offering of stock options and common stock under the Plan
supports and increases the Company's ability to attract and retain individuals
of exceptional talent upon whom, in large measure, the sustained progress,
growth and profitability of the Company depends.

    

    2.            
Definitions

    

    2.1           For
Plan purposes, except where the context might clearly indicate otherwise, the
following terms shall have the meanings set forth below:

    

    “Board” shall mean the Board of
Directors of the Company.

    

    “Committee”
shall mean the Compensation Committee, or such other committee appointed by the
Board, which shall be designated by the Board to administer the Plan, or the
Board if no committees have been established.  The Committee shall be
composed of one or
more persons as from time to time are appointed to serve by the
Board.  Each member of the Committee, while serving as such, shall be
a disinterested person with the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934.

    

    “Common
Shares” shall mean the Company's Common Shares, $.001 par value per share, or,
in the event that the outstanding Common Shares are hereafter changed into or
exchanged for different shares of securities of the Company, such other shares
or securities.

    

    “Company”
shall mean CR Crystal Research Corporation, a Nevada corporation, and any
subsidiary corporation of CR Crystal Research Corporation, as such terms are
defined in Nevada Business Corporation Act.

    

    “Fair
Market Value” shall mean, with respect to the date a given stock option is
granted or exercised, the average of the highest and lowest reported sales
prices of the Common Shares, as reported by such responsible reporting service
as the Committee may select, or if there were not transactions in the Common
Shares on such day, then the last preceding day on which transactions took
place.  The above withstanding, the Committee may determine the Fair
Market Value in such other
manner as it may deem more equitable for Plan purposes or as is required by
applicable laws or regulations.

     

     

    
      
        
        

      

      
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        2007
NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

     

     

    “Optionee” shall mean an employee of
the company who has been granted one or more Stock Options under the
Plan.

    

    “Common Stock” shall mean shares of
common stock which are issued by the Company pursuant to Section 5,
below.

    

    “Common
Stockholder” means
the employee of, consultant to, or director of the Company or other person to
whom shares of Common Stock are issued pursuant to this Plan.

    

    “Common
Stock Agreement” means an agreement executed by a Common Stockholder and the
Company as contemplated by Section 5, below, which imposes on the shares of
Common Stock held by the Common Stockholder such restrictions as the Board or
Committee deem appropriate.

    

    “Stock Option” or “Non-Qualified Stock
Option” or “NQSO” shall mean a stock option granted pursuant to the terms of the
Plan.

    

    “Stock Option Agreement” shall mean the
agreement between the Company and the Optionee under which the Optionee may
purchase Common Shares hereunder.

    

    3.            
Administration of the
Plan

    

    3.1           The
Committee shall administer the Plan and accordingly, it shall have full power to
grant Stock Options and Common Stock, construe and interpret the Plan, establish
rules and regulations and perform all other acts, including the delegation of
administrative responsibilities, it believes reasonable and proper.

    

    3.2           The
determination of those eligible to receive Stock Options and Common Stock, and
the amount, type and timing of each grant and the terms and conditions of the
respective stock option agreements and Common Stock Agreements shall rest in the
sole discretion of the Committee, subject to the provisions of the
Plan.

    

    3.3           The
Committee may cancel any Stock Options awarded under the Plan if an Optionee
conducts himself in a manner which the Committee determines to be inimical to
the best interest of the Company, as set forth more fully in paragraph 8 of
Article 11 of the Plan.

    

    3.4           The
Board, or the Committee, may correct any defect, supply any omission or
reconcile any inconsistency in the Plan, or in any granted Stock Option, in the
manner and to the extent it shall deem necessary to carry it into
effect.

    

    3.5           Any
decision made, or action taken, by the Committee or the Board arising out of or
in connection with the interpretation and administration of the Plan shall be
final and conclusive.

    
      
         

      

      
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NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

    3.6           The
Committee shall, in its discretion, have the power to issue Common Shares to
holders of non-qualified incentive stock option agreements which are outstanding
as of the date hereof , pursuant to the terms of those option
agreements.

    

    3.7           Meetings
of the Committee shall be held at such times and places as shall be determined
by the Committee.  A majority of the members of the Committee shall
constitute a quorum for the transaction of business, and the vote of a majority
of those members present at any meeting shall decide any question brought before
that meeting.  In addition, the Committee may take any action
otherwise proper under the Plan by the affirmative vote, taken without a
meeting, of a majority of its members.

    

    3.8           No
member of the Committee shall be liable for any act or omission of any other
member of the Committee or for any act or omission on his own part, including,
but not limited to, the exercise of any power or discretion given to him under
the Plan, except those resulting from his own gross negligence or willful
misconduct.

    

    3.9           The
Company, through its management, shall supply full and timely information to the
Committee on all matters relating to the eligibility of Optionees, their duties
and performance, and current information on any Optionee's death, retirement,
disability or other termination of association with the Company, and such other
pertinent information as the Committee may require.  The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties hereunder.

    

    4.            
Shares Subject to the
Plan

    

    4.1           The
total number of shares of the Company available for grants of Stock Options and
Common Stock under the Plan shall be 4,000,000 Common Shares, subject to
adjustment in accordance with Article 7 of the Plan, which shares may be either
authorized but unissued or reacquired Common Shares of the Company.

    

    4.2           If
a Stock Option or portion thereof shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares covered by such
NQSO shall be available for future grants of Stock Options.

    

    5.           
 Award Of Common
Stock

    

    5.1           The
Board or Committee from time to time, in its absolute discretion, may (a) award
Common Stock to employees of, consultants to, and directors of the Company, and
such other persons as the Board or Committee may select, and (b) permit Holders
of Options to exercise such Options prior to full vesting therein and hold the
Common Shares issued upon exercise of the Option as Common Stock.  In
either such event, the owner of such Common Stock shall hold such stock subject
to such vesting schedule as the Board or Committee may impose or such vesting
schedule to which the Option was subject, as determined in the discretion of the
Board or Committee.

    
      
         

      

      
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NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

    5.2           Common
Stock shall be issued only pursuant to a Common Stock or Consulting Agreement,
which shall be executed by the Common Stockholder and the Company and which
shall contain such terms and conditions as the Board or Committee shall
determine consistent with this Plan, including such restrictions on transfer as
are imposed by the Common Stock or Consulting Agreement.

    

    5.3           Upon
delivery of the shares of Common Stock to the Common Stockholder, below, the
Common Stockholder shall have, unless otherwise provided by the Board or
Committee, all the rights of a stockholder with respect to said shares, subject
to the restrictions in the Common Stock or Consulting Agreement, including the
right to receive all dividends and other distributions paid or made with respect
to the Common Stock.

    

    5.4.           Notwithstanding
anything in this Plan or any Common Stock or Consulting Agreement to the
contrary, no Common Stockholders may sell or otherwise transfer, whether or not
for value, any of the Common Stock prior to the date on which the Common
Stockholder is vested therein.

    

    5.5           All
shares of Common Stock issued under this Plan (including any shares of Common
Stock and other securities issued with respect to the shares of Common Stock as
a result of stock dividends, stock splits or similar changes in the capital
structure of the Company) shall be subject to such restrictions as the Board or
Committee shall provide, which restrictions may include, without limitation,
restrictions concerning voting rights, transferability of the Common Stock and
restrictions based on duration of employment with the Company, Company
performance and individual performance; provided that the Board or Committee
may, on such terms and conditions as it may determine to be appropriate, remove
any or all of such restric­tions.  Common Stock may not be sold or
encumbered until all applicable restrictions have terminated or
expire.  The restrictions, if any, imposed by the Board or Committee
or the Board under this Section 5 need not be identical for all Common Stock and
the imposition of any restrictions with respect to any Common Stock shall not
require the imposition of the same or any other restrictions with respect to any
other Common Stock.

    

    5.6           Each
Common Stock or Consulting Agreement shall provide that the Company shall have
the right to either cancel or repurchase from the Common Stockholder the
unvested Common Stock upon a termination of employment, termination of
directorship or termination of a consultancy arrangement, as applicable, at a
cash price per share equal to the purchase price paid by the Common Stockholder
for such Common Stock.

    

    5.7           In
the discretion of the Board or Committee, the Common Stock or Consulting
Agreement may provide that the Company shall have the a right of first refusal
with respect to the Common Stock and a right to repurchase the vested Common
Stock upon a termination of the Common Stockholder's employment with the
Company, the termination of the Common Stockholder's consulting arrangement with
the Company, the termination of the Common Stockholder's service on the
Company's Board, or such other events as the Board or Committee may deem
appropriate.

    
      
         

      

      
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NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

    5.8           The
Board or Committee shall cause a legend or legends to be placed on certificates
representing shares of Common Stock that are subject to restrictions under
Common Stock or Consulting Agreements, which legend or legends shall make
appropriate reference to the applicable restrictions.

    

    6.            
Stock Option Terms and
Conditions

    

    6.1           Consistent
with the Plan's purpose, Stock Options may be granted to non-employee directors
of the Company or other persons who are performing or who have been engaged to
perform services of special importance to the management, operation or
development of the Company.

    

    6.2           All
Stock Options granted under the Plan shall be evidenced by agreements which
shall be subject to applicable provisions of the Plan, and such other provisions
as the Committee may adopt, including the provisions set forth in paragraphs 2
through 10 of this Section 6.

    

    6.3           All
Stock Options granted hereunder must be granted within ten years from the
earlier of the date of this Plan is adopted or approved by the Company's
shareholders.

    

    6.4           No
Stock Option granted to any employee or 10% Shareholder shall be exercisable
after the expiration of ten years from the date such NQSO is
granted.  The Committee, in its discretion, may provide that an Option
shall be exercisable during such ten year period or during any lesser period of
time.

    

    The
Committee may establish installment exercise terms for a Stock Option such that
the NQSO becomes fully exercisable in a series of cumulating
portions.  If an Optionee shall not, in any given installment period,
purchase all the Common Shares which such Optionee is entitled to purchase
within such installment period, such Optionee's right to purchase any Common
Shares not purchased in such installment period shall continue until the
expiration or sooner termination of such NQSO.  The Committee may also
accelerate the exercise of any NQSO.  However, no NQSO, or any portion
thereof, may be exercisable until thirty (30) days following date of grant
(“30-Day Holding Period.”).

    

    6.5           A
Stock Option, or portion thereof, shall be exercised by delivery of
(i)  a written notice of exercise of the Company specifying the number
of common shares to be purchased, and (ii)  payment of the full price
of such Common Shares, as fully set forth in paragraph 6 of this Section
6.

    

    No NQSO
or installment thereof shall be exercisable except with respect to whole shares,
and fractional share interests shall be disregarded.  Not less than
100 Common Shares may be purchased at one time unless the number purchased is
the total number at the time available for purchase under the
NQSO.  Until the Common Shares represented by an exercised NQSO are
issued to an Optionee, he shall have none of the rights of a
shareholder.

    

    

    
      
         

      

      
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NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

    6.6           The
exercise price of a Stock Option, or portion thereof, may be paid:

    

    A.           In
United States dollars, in cash or by cashier's check, certified check, bank
draft or money order, payable to the order of the Company in an amount equal to
the option price;  or

    

    B.           At
the discretion of the Committee, through the delivery of fully paid and
nonassessable Common Shares, with an aggregate Fair Market Value on the date the
NQSO is exercised equal to the option price, provided such tendered Shares have
been owned by the Optionee for at least one year prior to such
exercise;  or

    

    C.           By
a combination of both A and B above.

    

    The Committee shall determine
acceptable methods for tendering Common Shares as payment upon exercise of a
Stock Option and may impose such limitations and prohibitions on the use of
Common Shares to exercise an NQSO as it deems appropriate.

    

    6.7           With
the Optionee's consent, the Committee may cancel any Stock Option issued under
this Plan and issue a new NQSO to such Optionee.

    

    6.8           Except
by will or the laws of descent and distribution, no right or interest in any
Stock Option granted under the Plan shall be assignable or transferable, and no
right or interest of any Optionee shall be liable for, or subject to, any lien,
obligation or liability of the Optionee.  Stock Options shall be
exercisable during the Optionee's lifetime only by the Optionee or the duly
appointed legal representative of an incompetent Optionee.

    

    6.9           If
the Optionee shall die while associated with the Company or within three months
after termination of such association, the personal representative or
administrator of the Optionee's estate or the person(s) to whom an NQSO granted
hereunder shall have been validly transferred by such personal representative or
administrator pursuant to the Optionee's will or the laws of descent and
distribution, shall have the right to exercise the NQSO for one year after the
date of the Optionee's death, to the extent (i)  such NQSO was
exercisable on the date of such termination of employment by death, and (ii)
such NQSO was not exercised, and (iii)  the exercise period may not be
extended beyond the expiration of the term of the Option.

    

    No
transfer of a Stock Option by the will of an Optionee or by the laws of descent
and distribution shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and an authenticated copy of the
will and/or such other evidence as the Committee may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferee
of the terms and conditions by such Stock Option.

    

    In the
event of death following termination of the Optionee's association with the
Company while any portion of an NQSO remains exercisable, the Committee, in its
discretion, may provide for an extension of the exercise period of up to one
year after the Optionee's death but not beyond the expiration of the term of the
Stock Option.

    
      
         

      

      
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NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

    

    6.10           Any
Optionee who disposes of Common Shares acquired on the exercise of a NQSO by
sale or exchange either (i) within two years after the date of the grant of the
NQSO under which the stock was acquired, or (ii) within one year after the
acquisition of such Shares, shall notify the Company of such disposition and of
the amount realized upon such disposition.  The transfer of Common
Shares may also be Common by applicable provisions of the Securities Act of
1933, as amended.

    

    7.            
Adjustments or Changes in
Capitalization

    

    7.1           In
the event that the outstanding Common Shares of the Company are hereafter
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of merger, consolidation, other
reorganization, recapitalization, reclassification, combination of shares, stock
split-up or stock dividend:

    

    A.           Prompt,
proportionate, equitable, lawful and adequate adjustment shall be made of the
aggregate number and kind of shares subject to Stock Options which may be
granted under the Plan, such that the Optionee shall have the right to purchase
such Common Shares as may be issued in exchange for the Common Shares
purchasable on exercise of the NQSO had such merger, consolidation, other
reorganization, recapitalization, reclassification, combination of shares, stock
split-up or stock dividend not taken place;

    

    B.           Rights
under unexercised Stock Options or portions thereof granted prior to any such
change, both as to the number or kind of shares and the exercise price per
share, shall be adjusted appropriately, provided that such adjustments shall be
made without change in the total exercise price applicable to the unexercised
portion of such NQSO's but by an adjustment in the price for each share covered
by such NQSO's; or

    

    C.           Upon
any dissolution or liquidation of the Company or any merger or combination in
which the Company is not a surviving corporation, each outstanding Stock Option
granted hereunder shall terminate, but the Optionee shall have the right,
immediately prior to such dissolution, liquidation, merger or combination, to
exercise his NQSO in whole or in part, to the extent that it shall not have been
exercised, without regard to any installment exercise provisions in such
NQSO.

    

    7.2           The
foregoing adjustments and the manner of application of the foregoing provisions
shall be determined solely by the Committee, whose determination as to what
adjustments shall be made and the extent thereof, shall be final, binding and
conclusive.  No fractional Shares shall be issued under the Plan on
account of any such adjustments.

    

    8.           
 Merger, Consolidation or
Tender Offer

    

    8.1           If
the Company shall be a party to a binding agreement to any merger, consolidation
or reorganization or sale of substantially all the assets of the Company, each
outstanding Stock Option shall pertain and apply to the securities and/or
property which a shareholder of the number of Common Shares of the Company
subject to the NQSO would be entitled to receive pursuant to such merger,
consolidation or reorganization or sale of assets.

    
      
         

      

      
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NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

     

    8.2           In
the event that:

    

    A.           Any
person (other than the Company or a director or officer of the Company) shall
acquire more than 20% of the Common Shares of the Company through a tender
offer, exchange offer or otherwise;

    

    B.           A
change in the “control” of the Company occurs, as such term is defined in Rule
405 under the Securities Act of 1933;

    

    C.           There
shall be a sale of all or substantially all of the assets of the
Company;

    

    any then
outstanding Stock Option held by an Optionee, who is deemed by the Committee to
be a statutory officer (“Insider”) for purposes of Section 16 of the Securities
Exchange Act of 1934 shall be entitled to receive, subject to any action by the
Committee revoking such an entitlement as provided for below, in lieu of
exercise of such Stock Option, to the extent that it is then exercisable, a cash
payment in an amount equal to the difference between the aggregate exercise
price of such NQSO, or portion thereof, and, (i)  in the event of an
offer or similar event, the final offer price per share paid for Common Shares,
or such lower price as the Committee may determine to conform an option to
preserve its Stock Option status, times the number of Common Shares covered by
the NQSO or portion thereof, or (ii)  in the case of an event covered
by B or C above, the aggregate Fair Market Value of the Common Shares covered by
the Stock Option, as determined by the Committee at such time.

    

    8.3           Any
payment which the Company is required to make pursuant to paragraph 8.2 of this
Section 8 shall be made within 15 business days, following the event which
results in the Optionee's right to such payment.  In the event of a
tender offer in which fewer than all the shares which are validly tendered in
compliance with such offer are purchased or exchanged, then only that portion of
the shares covered by an NQSO as results from multiplying such shares by a
fraction, the numerator of which is the number of Common Shares acquired
pursuant to the offer and the denominator of which is the number of Common
Shares tendered in compliance with such offer shall be used to determine the
payment thereupon.  To the extent that all or any portion of a Stock
Option shall be affected by this provision, all or such portion of the NQSO
shall be terminated.

    

    8.4           Notwithstanding
paragraphs 8.1 and 8.3 of this Section 8, the Committee may, by unanimous vote
and resolution, unilaterally revoke the benefits of the above provisions;
provided, however, that such vote is taken no later than ten business days
following public announcement of the intent of an offer or the change of
control, whichever occurs earlier.

     

    
      
         

      

      
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NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

    9.            
Amendment and Termination of
Plan

    

    9.1           The
Board may at any time, and from time to time, suspend or terminate the Plan in
whole or in part or amend it from time to time in such respects as the Board may
deem appropriate and in the best interest of the Company.

    

    9.2           No
amendment, suspension or termination of this Plan shall, without the Optionee's
consent, alter or impair any of the rights or obligations under any Stock Option
theretofore granted to him under the Plan.

    

    9.3           The
Board may amend the Plan, subject to the limitations cited above, in such manner
as it deems necessary to permit the granting of Stock Options meeting the
requirements of future amendments or issued regulations, if any, to the
Code.

    

    9.4           No
NQSO may be granted during any suspension of the Plan or after termination of
the Plan.

    

    10.           Government and Other
Regulations

    

    10.1           The
obligation of the Company to issue, transfer and deliver Common Shares for Stock
Options exercised under the Plan shall be subject to all applicable laws,
regulations, rules, orders and approval which shall then be in effect and
required by the relevant stock exchanges on which the Common Shares are traded
and by government entities as set forth below or as the Committee in its sole
discretion shall deem necessary or advisable.  Specifically, in
connection with the Securities Act of 1933, as amended, upon exercise of any
Stock Option, the Company shall not be required to issue Common Shares unless
the Committee has received evidence satisfactory to it to the effect that the
Optionee will not transfer such shares except pursuant to a registration
statement in effect under such Act or unless an opinion of counsel satisfactory
to the Company has been received by the Company to the effect that such
registration is not required.  Any determination in this connection by
the Committee shall be final, binding and conclusive.  The Company
may, but shall in no event be obligated to, take any other affirmative action in
order to cause the exercise of a Stock Option or the issuance of Common Shares
pursuant thereto to comply with any law or regulation of any government
authority.

    

    11.           Miscellaneous
Provisions

    

    11.1           No
person shall have any claim or right to be granted a Stock Option or Common
Stock under the Plan, and the grant of an NQSO or Common Stock under the Plan
shall not be construed as giving an Optionee or Common Stockholder the right to
be retained by the Company.  Furthermore, the Company expressly
reserves the right at any time to terminate its relationship with an Optionee
with or without cause, free from any liability, or any claim under the Plan,
except as provided herein, in an option agreement, or in any agreement between
the Company and the Optionee.

    

    11.2           Any
expenses of administering this Plan shall be borne by the
Company.

    
      
         

      

      
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NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

    11.3           The
payment received from Optionee from the exercise of Stock Options under the Plan
shall be used for the general corporate purposes of the Company.

    

    11.4           The
place of administration of the Plan shall be in the State of Nevada, or such
other place as determined from time to time by the Board, and the validity,
construction, interpretation, administration and effect of the Plan and of its
rules and regulations, and rights relating to the Plan, shall be determined
solely in accordance with the laws of the State of Nevada.

    

    11.5           Without
amending the Plan, grants may be made to persons who are foreign nationals or
employed outside the United States, or both, on such terms and conditions,
consistent with the Plan's purpose, different from those specified in the Plan
as may, in the judgment of the Committee, be necessary or desirable to create
equitable opportunities given differences in tax laws in other
countries.

    

    11.6           In
addition to such other rights of indemnification as they may have as members of
the Board or the Committee, the members of the Committee shall be indemnified by
the Company against all costs and expenses reasonably incurred by them in
connection with any action, suit or proceeding to which they or any of them may
be party by reason of any action taken or failure to act under or in connection
with the Plan or any Stock Option granted thereunder, and against all amounts
paid by them in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except a
judgment based upon a finding of bad faith;  provided that upon the
institution of any such action, suit or proceeding a Committee member shall, in
writing, give the Company notice thereof and an opportunity, at its own expense,
to handle and defend the same, with counsel acceptable to the
Optionee,  before such Committee member undertakes to handle and
defend it on his own behalf.

    

    11.7           Stock
Options may be granted under this Plan from time to time, in substitution for
stock options held by employees of other corporations who are about to become
employees of the Company as the result of a merger or consolidation of the
employing corporation with the Company or the acquisition by the Company of the
assets of the employing corporation or the acquisition by the Company of stock
of the employing corporation as a result of which it becomes a subsidiary of the
Company.  The terms and conditions of such substitute stock options so
granted may vary from the terms and conditions set forth in this Plan to such
extent as the Board of Directors of the Company at the time of grant may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted, but no such variations shall
be such as to affect the status of any such substitute stock options as a stock
option under Section 422A of the Code.

    

    11.8           Notwithstanding
anything to the contrary in the Plan, if the Committee finds by a majority vote,
after full consideration of the facts presented on behalf of both the Company
and the Optionee, that the Optionee has been engaged in fraud, embezzlement,
theft, insider trading in the Company's stock, commission of a felony or proven
dishonesty in the course of his association with the Company or any subsidiary
corporation which damaged the Company or any subsidiary corporation, or for
disclosing trade secrets of the Company or any subsidiary corporation, the
Optionee shall forfeit all unexercised Stock Options and all exercised NQSO's
under which the Company has not yet delivered the certificates and which have
been earlier granted to the Optionee by the Committee.  The decision
of the Committee as to the cause of an Optionee's discharge and the damage done
to the Company shall be final.  No decision of the Committee, however,
shall affect the finality of the discharge of such Optionee by the Company or
any subsidiary corporation in any manner.

     

    12.           Written Agreement

    

    12.1           Each
Stock Option granted hereunder shall be embodied in a written Stock Option
Agreement which shall be subject to the terms and conditions prescribed above
and shall be signed by the Optionee and by the President or any Vice President
of the Company, for and in the name and on behalf of the
Company.  Such Stock Option Agreement shall contain such other
provisions as the Committee, in its discretion shall deem
advisable.

    
      
         

      

      
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        2007
NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

    ATTACHMENT
A

    

    FORM
OF STOCK OPTION AGREEMENT

    

    

    
      	
              Number
      of Shares: __________________

            	
              Date
      of Grant:______________

            

    

    

    FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT

    

    AGREEMENT made this _______ day of _________________________ 200__ , between (the “Optionee”), and
CRC Crystal Research
Corporation. (the “Company”).

    

    1.            
Grant of
Option

    

    The
Company, pursuant to the provisions of the Non-Qualified Stock Compensation Plan
(the “Plan”), adopted by the Board of Directors on December 1, 2007, the Company
hereby grants to the Optionee, subject to the terms and conditions set forth or
incorporated herein, an option to purchase from the Company all or any part of
an aggregate of  shares of its $.001 par value common stock, as such
common stock is now constituted, at the purchase price of $.__ per
share.  The provisions of the Plan governing the terms and conditions
of the Option granted hereby are incorporated in full herein by
reference.

    

    2.            
Exercise

    

    The
Option evidenced hereby shall be exercisable in whole or in part on or after and
on or before, provided that the cumulative number of shares of common stock as
to which this Option may be exercised (except in the event of death, retirement,
or permanent and total disability, as provided in paragraph 6.9 of the Plan)
shall not exceed the following amounts:

     

    
    

     

    
      	
              Cumulative
      Number  

            	 	
              Prior to
      Date

            
	
              of
      Shares

            	 	
              (Note Inclusive
      of)

            

    

     

    
 

    The
Option evidenced hereby shall be exercisable by the delivery to and receipt by
the Company of (i)  written notice of election to exercise, in the
form set forth in Attachment B hereto, specifying the number of shares to be
purchased;  (ii)  accompanied by payment of the full
purchase price thereof in cash or certified check payable to the order of the
Company, or by fully paid and nonassessable common stock of the Company properly
endorsed over to the Company, or by a combination thereof,
and  (iii)  by return of this Stock Option Agreement for
endorsement of exercise by the Company on Schedule I hereof.  In the
event fully paid and nonassessable common stock is submitted as whole or partial
payment for shares to be purchased hereunder, such common stock will be valued
at their Fair Market Value (as defined in the Plan) on the date such shares
received by the Company are applied to payment of the exercise
price.

    
      
         

      

      
        A-1

        
          

        

      

      
         

        2007
NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

     

    3.            
Transferability

    

    The
Option evidenced hereby is not assignable or transferable by the Optionee other
than by the Optionee's will or by the laws of descent and distribution, as
provided in paragraph 6.9 of the Plan.  The Option shall be
exercisable only by the Optionee during his lifetime.

     

    
      
        	 	CRC
      Crystal Research Corporation	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	ATTEST:	 	 	 
	 	 	 	 
	 	 	 	 
	Secretary	 	 	 

      

    

    

 

    Optionee hereby acknowledges receipt of
a copy of the Plan, attached hereto and accepts this Option subject to each and
every term and provision of such Plan.  Optionee hereby agrees to
accept as binding, conclusive and final, all decisions or interpretations of the
of the Board of Directors administering the Plan on any questions arising under
such Plan.  Optionee recognizes that if Optionee's employment with the
Company or any subsidiary thereof shall be terminated without cause, or by the
Optionee, prior to completion or satisfactory performance by Optionee (except as
otherwise provided in paragraph 6 of the Plan) all of the Optionee's rights
hereunder shall thereupon terminate; and that, pursuant to paragraph 6 of the
Plan, this Option may not be exercised while there is outstanding to Optionee
any unexercised Stock Option granted to Optionee before the date of grant of
this Option.

     

    

     

    
      	Dated: __________	 
	 	Optionee
	 	 
	 	 
	 	Print
  Name
	 	 
	 	 
	 	Address
	 	 
	 	 
	 	Social Security
      No.

    

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

        2007
NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

    ATTACHMENT
B

    

    NOTICE
OF EXERCISE

    

    

    To:           CRC
Crystal Research Corporation

    

    

    

    (1)           The
undersigned hereby elects to purchase ________ shares of Common Shares (the
“Common Shares”), of CRC Crystal Research Corporation. pursuant to the terms of
the attached Non-Qualified Stock Option Agreement, and tenders herewith payment
of the exercise price in full, together with all applicable transfer taxes, if
any.

     

    (2)           Please
issue a certificate or certificates representing said shares of Common Shares in
the name of the undersigned or in such other name as is specified
below:

     

    

    _______________________________

    (Name)

    

    _______________________________

    (Address)

    _______________________________

    

    

    

    

    Dated:
_________________________

    

    

    ______________________________

    Signature

    

    Optionee: _________________________________ 
Date of Grant: __________________________________

    

    

    

    

    

    

    

    

    
      
         

      

      
        B-1

        
          

        

      

      
         

        2007
NON-QUALIFIED STOCK COMPENSATION PLAN - continued

      

    

    

    SCHEDULE
I

    

    

    
      	
              DATE

            	
              SHARES
      PURCHASED

            	
              PAYMENT
      RECEIVED

            	
              UNEXERCISED

              SHARES

              REMAINING

            	
              ISSUING

              OFFICER

              INITIALS

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

    

    
 

     I-1fc_ex47-80303.htm

    Exhibit
4.7

     

    UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF
(i) FEBRUARY 26, 2008, AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN
ANY PROVINCE OR TERRITORY OF CANADA.

     

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
“OFFSHORE TRANSACTION” IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE TRANSFERRED OTHER THAN IN
ACCORDANCE WITH REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
CORPORATION. THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE
SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN
COMPLIANCE WITH THE SECURITIES ACT.

     

    UNLESS
NOTICE IS OTHERWISE PROVIDED, THE WARRANTS EVIDENCED HEREBY ARE EXERCISABLE ON
OR BEFORE 5:00 PM (TORONTO TIME) ON AUGUST 26,2009, AFTER WHICH TIME THE
WARRANTS EVIDENCED HEREBY SHALL BE DEEMED TO BE VOID AND OF NO FURTHER FORCE AND
EFFECT.

     

    2008
SERIES I WARRANTS TO PURCHASE COMMON SHARES

     

    OF

     

    FIRSTGOLD
CORP.

     

    
      	
               

               

              Certificate
      Number 2008 I-0001

            	
              Number
      of warrants

              represented
      by this

              certificate
      - ______

            

    

     

    THIS CERTIFIES THAT, for value
received, ______________________________________________
is entitled, at any time prior to the Expiry Time, to purchase, at the
Exercise Price, one Common Share in the capital of the Corporation, for each
whole Warrant evidenced hereby, by surrendering to the Corporation, 3108 Ponte
Morino Dr., Suite 210, Cameron Park, CA 95682 Attention: James Kluber, or such
other address as may be notified in writing by the Corporation, this Warrant,
together with a Subscription Form, duly completed and executed, and cash or a
certified cheque, money order or bank draft in lawful money of the United States
of America payable to or to the order of the Corporation for the amount equal to
the Exercise Price per Common Share multiplied by the number of Common Shares
subscribed for, on and subject to the terms and conditions set forth
below.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Nothing
contained herein shall confer any right upon the Holder to subscribe for or
purchase any shares of the Corporation at any time after the Expiry Time, and
from and after the Expiry Time these Warrants and all rights hereunder shall be
void and of no value.

     

    
      1.    Definitions

    

     

    In this
Warrant, including the preamble, unless there is something in the subject matter
or context inconsistent therewith, the following expressions shall have the
following meanings namely:

     

    
      
        	 	
                (a) 

              	
                 “Business Day” means a
      day which is not a Saturday, Sunday, or a civic or statutory holiday in
      the City of Toronto, Ontario;

              

      

    

     

    
      
        	 	
                (b) 

              	
                 “Common Shares” means the
      shares of common stock of the Corporation as such shares were constituted
      on the date hereof, as the same may be reorganized, reclassified or
      redesignated pursuant to any of the events set out in Section 12
      hereof;

              

      

    

     

    
      
        	 	
                (c) 

              	
                 “Corporation” means
      Firstgold Corp., a corporation formed under the laws of Delaware and its
      successors and assigns;

              

      

    

     

    
      
        	 	
                (d) 

              	
                 “Current Market Price” at
      any date, means the weighted average of the sale prices per Common Share
      at which the Common Shares have traded on the Exchange, or, if the Common
      Shares in respect of which a determination of Current Market Price is
      being made are not listed thereon, on such stock exchange on which such
      shares are listed as may be selected for such purpose by the directors,
      or, if the Common Shares are not listed on any stock exchange, then on the
      over-the-counter market, for any 20 consecutive trading days selected by
      the Corporation commencing not later than 45 trading days and ending no
      later than 5 trading days before such date; provided, however, if such
      Common Shares are not traded during such 45 day period for at least 20
      consecutive trading days, the simple average of the following prices
      established for each of 20 consecutive trading days selected by the
      Corporation commencing not later than 45 trading days before such
      date:

              

      

    

     

    
      
        	 	
                (i) 

              	
                the
      average of the bid and ask prices for each day on which there was no
      trading, and

              

      

    

     

    
      
        	 	
                (ii) 

              	
                the
      closing price of the Common Shares for each day that there was
      trading,

              

      

    

     

    or in the
event that at any date the Common Shares are not listed on any exchange or on
the over-the-counter market, the Current Market Price shall be as determined by
the directors or such firm of independent chartered accountants as may be
selected by the directors acting reasonably and in good faith in their sole
discretion; for these purposes, the weighted average price for any period shall
be determined by dividing the aggregate sale prices during such period by the
total number of Common Shares sold during such period;

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                (e) 

              	
                 “Equity Shares” means the
      Common Shares and any shares of any other class or series of the
      Corporation which may from time to time be authorized for issue if by
      their terms such shares confer on the holders hereof the right to
      participate in the distribution of assets upon the voluntary or
      involuntary liquidation, dissolution or winding up of the Corporation
      beyond a fixed sum or a fixed sum plus accrued
  dividends;

              

      

    

     

    
      
        	 	
                (f) 

              	
                 “Exchange” means the
      Toronto Stock Exchange;

              

      

    

     

    
      
        	 	
                (g) 

              	
                 “Exercise Price” means
      US$0.80 per Common Share, unless such price shall have been adjusted in
      accordance with the provisions of Section 12, in which case it shall mean
      the adjusted price in effect at such
time;

              

      

    

     

    
      
        	 	
                (h) 

              	
                 “Expiry Time” means 5:00
      in the afternoon, Toronto time, on August 26,
  2008;

              

      

    

     

    
      
        	 	
                (i) 

              	
                 “Form of Transfer” means
      the form of transfer annexed hereto as Schedule
  “B”;

              

      

    

     

    
      
        	 	
                (j) 

              	
                 “Holder” means the
      registered holder of this
Warrant;

              

      

    

     

    
      
        	 	
                (k) 

              	
                 “person” means an
      individual, corporation, partnership, unincorporated syndicate,
      unincorporated organization, trust, trustee, executor, administrator, or
      other legal representative, or any group or combination
      thereof;

              

      

    

     

    
      
        	 	
                (l) 

              	
                 “Subscription Form” means
      the form of subscription annexed hereto as Schedule
  “A”;

              

      

    

     

    
      
        	 	
                (m) 

              	
                 “this Warrant”, “Warrant”, “herein”, “hereby”, “hereof”, “hereto”, “hereunder” and similar
      expressions mean or refer to this Warrant and any deed or instrument
      supplemental or ancillary thereto and any schedules hereto or thereto and
      not to any particular article, section, subsection, clause, subclause or
      other portion hereof; and

              

      

    

     

    
      
        	 	
                (n) 

              	
                 “Warrant Shares” means
      the Common Shares issuable at any time upon the exercise of this
      Warrant.

              

      

    

     

    
      2.    Expiry
Time

    

     

    After the
Expiry Time, all rights under any Warrants evidenced hereby, in respect of which
the right of subscription and purchase herein provided for shall not theretofore
have been exercised, shall wholly cease and terminate and such Warrants shall be
void and of no value or effect.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    
      3.    Exercise
Procedure

    

     

    The
Holder may exercise the right of purchase herein provided for by surrendering or
delivering to the Corporation at the address set forth on the face page hereof
or such other address as may be notified in writing by the Corporation, prior to
the Expiry Time:

     

    
      	
               
      

            	
              (a)

            	
              this
      Warrant, with the Subscription Form duly completed and executed by the
      Holder or its legal representative or attorney, duly appointed by an
      instrument in writing in form and manner satisfactory to the Corporation,
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              cash
      or a certified cheque, money order or bank draft payable to or to the
      order of the Corporation in lawful money of the United States of America
      in an amount equal to the Exercise Price multiplied by the number of
      Common Shares for which subscription is being
  made.

            

    

     

    Any
Warrant and cash, certified cheque, money order or bank draft referred to in the
foregoing clauses (a) and (b) shall be deemed to be surrendered only upon actual
receipt by the Corporation.

     

    This
Warrant is exchangeable, upon the surrender hereof by the Holder, for new
warrants of like tenor, and bearing the same legends, representing, in the
aggregate, the right to subscribe for the number of Common Shares which may be
subscribed for hereunder.

     

    
      4.    Entitlement
to Certificate

    

     

    Upon such
delivery and payment as aforesaid, the Corporation shall cause to be issued to
the Holder hereof the Common Shares subscribed for not exceeding those which
such Holder is entitled to purchase pursuant to this Warrant and the Holder
hereof shall become a shareholder of the Corporation in respect of such shares
with effect from the date of such delivery and payment and shall be entitled to
delivery of a certificate or certificates evidencing such shares and the
Corporation shall cause such certificate or certificates to be mailed to the
Holder hereof at the address or addresses specified in such subscription within
five (5) business days of such delivery and payment.

     

    
      5.    Register
of Warrantholders and Transfer of Warrants

    

     

    The
Corporation shall cause a register to be kept in which shall be entered the
names and addresses of all holders of the Warrants and the number of Warrants
held by them. No transfer of Warrants shall be valid unless made by the Holder
or its executors, administrators or other legal representatives or its attorney
duly appointed by an instrument in writing in form and execution satisfactory to
the Corporation upon compliance with such reasonable requirements as the
Corporation may prescribe, including compliance with all applicable securities
legislation, and recorded on the register of holders of Warrants maintained by
the Corporation, nor until stamp or governmental or other charges arising by
reason of such transfer have been paid.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    The
transferee of a Warrant shall, after a Form of Transfer is duly completed and
the Warrant is lodged with the Corporation and upon compliance with all other
reasonable requirements of the Corporation or law, be entitled to have its name
entered on the register as the owner of such Warrant, free from all equities or
rights of set-off or counterclaim between the Corporation and the transferor or
any previous holder of such Warrant, save in respect of equities of which the
Corporation is required to take notice by statute or by order of a court of
competent jurisdiction. The Corporation may treat the registered holder of any
Warrant certificate as the absolute owner of the Warrants represented thereby
for all purposes, and the Corporation shall not be affected by any notice or
knowledge to the contrary except where the Corporation is required to take
notice by statute or by order of a court of competent jurisdiction.

     

    
      6.    Partial
Exercise

    

     

    The
Holder may subscribe for and purchase a number of Common Shares less than the
number the Holder is entitled to purchase pursuant to this Warrant. In the event
of any such subscription and purchase prior to the Expiry Time, the Holder shall
in addition be entitled to receive, without charge, a new Warrant certificate in
respect of the balance of the Common Shares of which he was entitled to purchase
pursuant to this certificate and which were then not purchased.

     

    
      7.    No
Fractional Shares

    

     

    Notwithstanding
any adjustments provided for in Section 12 hereof or otherwise, the Corporation
shall not be required upon the exercise of any Warrants, to issue fractional
Common Shares in satisfaction of its obligations hereunder. Where a fractional
Common Share would, but for this Section 7, have been issued upon exercise of a
Warrant, in lieu thereof, the holder of this Warrant shall receive the number of
shares rounded up or down to the nearest whole share.

     

    
      8.    Not
a Shareholder

    

     

    Nothing
in this certificate or in the holding of the Warrants evidenced hereby shall be
construed as conferring upon the Holder any right or interest whatsoever as a
shareholder of the Corporation.

     

    
      9.    No
Obligation to Purchase

    

     

    Nothing
herein contained or done pursuant hereto shall obligate the Holder to purchase
or pay for or the Corporation to issue any shares except those shares in respect
of which the Holder shall have exercised its right to purchase hereunder in the
manner provided herein.

     

    
      10.    Ranking
of Warrants

    

     

    All 2008
Series I warrants shall rank pari passu, notwithstanding
the actual date of the issue thereof.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    
      11.    Covenants

    

     

    
      
        	 	
                (a) 

              	
                 The
      Corporation covenants and agrees
that:

              

      

    

     

    
      
        	 	
                (i) 

              	
                 so
      long as any Warrants evidenced hereby remain outstanding, it shall reserve
      and there shall remain unissued out of its authorized capital a sufficient
      number of Common Shares to satisfy the right of purchase herein provided
      for should the Holder determine to exercise its rights in respect of all
      the Common Shares for the time being called for by such outstanding
      Warrants; and

              

      

    

     

    
      
        	 	
                (ii) 

              	
                 all
      Common Shares which shall be issued upon the exercise of the right to
      purchase herein provided for, upon payment therefor of the amount at which
      such Common Shares may at the time be purchased pursuant to the provisions
      hereof, shall be issued as fully paid and non-assessable Common Shares and
      the holders thereof shall not be liable to the Corporation or to its
      creditors in respect thereof.

              

      

    

     

    
      
        	 	
                (b) 

              	
                 The
      Corporation shall make all requisite filings under the applicable
      securities legislation.

              

      

    

     

    
      
        	  	
                (c) 

              	
                 The
      Corporation shall use all reasonable efforts to preserve and maintain its
      corporate existence.

              

      

    

     

    
      12.    Adjustment
to Exercise Price

    

     

    The
Exercise Price in effect at any time is subject to adjustment from time to time
in the events and in the manner provided as follows:

     

    
      
        	 	
                (a) 

              	
                 If
      and whenever at any time after the date hereof the
      Corporation:

              

      

    

     

    
      
        	 	
                (i) 

              	
                 issues
      Common Shares or securities exchangeable for or convertible into Common
      Shares to all or substantially all the holders of the Common Shares as a
      stock dividend; or

              

      

    

     

    
      
        	 	
                (ii) 

              	
                 makes
      a distribution on its outstanding Common Shares payable in Common Shares
      or securities exchangeable for or convertible into Common Shares;
      or

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                 subdivides
      its outstanding Common Shares into a greater number of shares;
      or

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                 consolidates
      its outstanding Common Shares into a smaller number of
    shares;

              

      

    

     

    (any of
such events being called a “Common Share Reorganization”),
then the Exercise Price will be adjusted effective immediately after the
effective date or record date for the happening of a Common Share
Reorganization, as the case may be, at which the holders of Common Shares are
determined for the purpose of the Common Share Reorganization by multiplying the
Exercise Price in effect immediately prior to such effective date or record date
by a fraction, the numerator of which is the number of Common Shares outstanding
on such effective date or record date before giving effect to such Common Share
Reorganization and the denominator of which is the number of Common Shares
outstanding immediately after giving effect to such Common Share Reorganization
(including, in the case where securities exchangeable for or convertible into
Common Shares are distributed, the number of Common Shares that would have been
outstanding had all such securities been exchanged for or converted into Common
Shares on such effective date or record date).

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                (b) 

              	
                 If
      and whenever at any time after the date hereof the Corporation fixes a
      record date for the issue of rights, options or warrants to the holders of
      all or substantially all of its outstanding Common Shares under which such
      holders are entitled to subscribe for or purchase Common Shares or
      securities exchangeable for or convertible into Common Shares,
      where:

              

      

    

     

    
      
        	 	
                (i) 

              	
                 the
      right to subscribe for or purchase Common Shares, or the right to exchange
      securities for or convert securities into Common Shares, expires not more
      than 45 days after the date of such issue (the period from the record date
      to the date of expiry being herein in this Section 12 called the “Rights Period”),
      and

              

      

    

     

    
      
        	 	
                (ii) 

              	
                 the
      cost per Common Share during the Rights Period (inclusive of any cost of
      acquisition of securities exchangeable for or convertible into Common
      Shares in addition to any direct cost of Common Shares) (herein in this
      Section 12 called the “Per Share Cost”) is less
      than 95% of the Current Market Price of the Common Shares on the record
      date,

              

      

    

     

    (any of
such events being called a “Rights Offering”), then the
Exercise Price will be adjusted effective immediately after the end of the
Rights Period to a price determined by multiplying the Exercise Price in effect
immediately prior to the end of the Rights Period by a fraction:

     

    
      
        	 	
                (A) 

              	
                 the
      numerator of which is the aggregate
of:

              

      

    

     

    
      
        	 	
                (1) 

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

              

      

    

     

    
      
        	 	
                (2) 

              	
                 a
      number determined by dividing the product of the Per Share Cost
      and:

              

      

    

     

    
      
        	
              	
                (I) 

              	
                 where
      the event giving rise to the application of this subsection 12(b) was the
      issue of rights, options or warrants to the holders of Common Shares under
      which such holders are entitled to subscribe for or purchase additional
      Common Shares, the number of Common Shares so subscribed for or purchased
      during the Rights Period, or

              

      

    

     

    
      
        	
              	
                (II) 

              	
                 where
      the event giving rise to the application of this subsection 12(b) was the
      issue of rights, options or warrants to the holders of Common Shares under
      which such holders are entitled to subscribe for or purchase securities
      exchangeable for or convertible into Common Shares, the number of Common
      Shares for which those securities so subscribed for or purchased during
      the Rights Period could have been exchanged or into which they could have
      been converted during the Rights
Period,

              

      

    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    by the
Current Market Price of the Common Shares as of the record date for the Rights
Offering; and

     

    
      
        	 	
                (B) 

              	
                 the
      denominator of which is:

              

      

    

     

    
      
        	 	
                (1) 

              	
                 in
      the case described in subparagraph 12(b)(ii)(A)(2)(I), the number of
      Common Shares outstanding, or

              

      

    

     

    
      
        	
              	
                (2) 

              	
                 in
      the case described in subparagraph 12(b)(ii)(A)(2)(II), the number of
      Common Shares that would be outstanding if all the Common Shares described
      in subparagraph 12(b)(ii)(A)(2)(II) had been
  issued,

              

      

    

     

    as at the
end of the Rights Period.

     

    Any
Common Shares owned by or held for the account of the Corporation or any
subsidiary or affiliate (as defined in the Securities Act (Ontario)) of
the Corporation will be deemed not to be outstanding for the purpose of any such
computation.

     

    If by the
terms of the rights, options or warrants referred to in this Section 12, there
is more than one purchase, conversion or exchange price per Common Share, the
aggregate price of the total number of additional Common Shares offered for
subscription or purchase, or the aggregate conversion or exchange price of the
convertible securities so offered, will be calculated for purposes of the
adjustment on the basis of:

     

    
      
        	
              	
                (I) 

              	
                 the
      lowest purchase, conversion or exchange price per Common Share, as the
      case may be, if such price is applicable to all Common Shares which are
      subject to the rights, options or warrants,
and

              

      

    

     

    
      
        	
              	
                (II) 

              	
                 the
      average purchase, conversion or exchange price per Common Share, as the
      case may be, if the applicable price is determined by reference to the
      number of Common Shares
acquired.

              

      

    

     

    To the
extent that any adjustment in the Exercise Price occurs pursuant to this Section
12 as a result of the fixing by the Corporation of a record date for the
distribution of rights, options or warrants referred to in this Section 12, the
Exercise Price will be readjusted immediately after the expiration of any
relevant exchange, conversion or exercise right to the Exercise Price which
would then be in effect based upon the number of Common Shares actually issued
and remaining issuable after such expiration, and will be further readjusted in
such manner upon expiration of any further such right.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    If the
Holder has exercised this Warrant in accordance herewith during the period
beginning immediately after the record date for a Rights Offering and ending on
the last day of the Rights Period therefor, the Holder will, in addition to the
Common Shares to which it is otherwise entitled upon such exercise, be entitled
to that number of additional Common Shares equal to the result obtained when the
Exercise Price in effect immediately prior to the end of such Rights Offering
pursuant to this subsection is multiplied by the number of Common Shares
received upon the exercise of this Warrant during such period, and the resulting
product is divided by the Exercise Price as adjusted for such Rights Offering
pursuant to this subsection; provided that the provisions of Section 7 will be
applicable to any fractional interest in a Common Share to which such Holder
might otherwise be entitled. Such additional Common Shares will be deemed to
have been issued to the Holder immediately following the end of the Rights
Period and a certificate for such additional Common Shares will be delivered to
such Holder within ten (10) Business Days following the end of the Rights
Period.

     

    
      
        	 	
                (c) 

              	
                 If
      and whenever at any time after the date hereof the Corporation fixes a
      record date for the issue or the distribution to the holders of all or
      substantially all its Common Shares
of:

              

      

    

     

    
      
        	 	
                (i) 

              	
                 shares
      of the Corporation of any class other than Common
  Shares;

              

      

    

     

    
      
        	 	
                (ii) 

              	
                 rights,
      options or warrants to acquire shares or securities exchangeable for or
      convertible into shares or property or other assets of the
      Corporation;

              

      

    

     

    
      
        	 	
                (iii) 

              	
                 evidence
      of indebtedness; or

              

      

    

     

    
      
        	
              	
                (iv) 

              	
                 any
      property or other assets,

              

      

    

     

    and if
such issuance or distribution does not constitute (A) a Common Share
Reorganization, (B) a Rights Offering or (C) the issue of rights, options or
warrants to the holders of all or substantially all of its outstanding Common
Shares under which such holders are entitled to subscribe for or purchase Common
Shares or securities exchangeable for or convertible into Common Shares,
where:

     

    
      	
               
      

            	
              (x)

            	
              the
      right to subscribe for or purchase Common Shares, or the right to exchange
      securities for or convert securities into Common Shares, expires not more
      than 45 days after the date of such issue,
and

            

    

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (y)

            	
              the
      cost per Common Share during the Rights Period, inclusive of the Per Share
      Cost, is 95% or more than the Current Market Price of the Common Shares on
      the record date

            

    

     

    (any of
such non-excluded events being called a “Special Distribution”), the
Exercise Price will be adjusted effective immediately after such record date to
a price determined by multiplying the Exercise Price in effect on such record
date by a fraction:

     

    
      
        	 	
                (A) 

              	
                 the
      numerator of which is:

              

      

    

     

    
      
        	
              	
                (1) 

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

              

      

    

     

    
      
        	
              	
                (2) 

              	
                 the
      aggregate fair market value (as determined by action by the directors of
      the Corporation, subject, however, to the prior written consent of the
      Exchange, where required) to the holders of the Common Shares of such
      securities or property or other assets so issued or distributed in the
      Special Distribution; and

              

      

    

     

    
      
        	
              	
                (B) 

              	
                 the
      denominator of which is the number of Common Shares outstanding on such
      record date multiplied by the Current Market Price of the Common Shares on
      such record date.

              

      

    

     

    Any
Common Shares owned by or held for the account of the Corporation or any
subsidiary or affiliate (as defined in the Securities Act (Ontario)) of
the Corporation will be deemed not to be outstanding for the purpose of any such
computation.

     

    
      
        	 	
                (d) 

              	
                 If
      and whenever at any time after the date hereof there is a Common Share
      Reorganization, a Rights Offering, a Special Distribution, a
      reclassification or redesignation of the Common Shares outstanding at any
      time or change of the Common Shares into other shares or into other
      securities (other than a Common Share Reorganization), or a consolidation,
      amalgamation or merger of the Corporation with or into any other
      corporation or other entity (other than a consolidation, amalgamation or
      merger which does not result in any reclassification or redesignation of
      the outstanding Common Shares or a change of the Common Shares into other
      shares), or a transfer of the undertaking or assets of the Corporation as
      an entirety or substantially as an entirety to another corporation or
      other entity (any of such events being called a “Capital
      Reorganization”), the Holder, upon exercising this Warrant after
      the effective date of such Capital Reorganization, will be entitled to
      receive in lieu of the number of Common Shares to which such Holder was
      theretofore entitled upon such exercise, the aggregate number of shares,
      other securities or other property which such Holder would have been
      entitled to receive as a result of such Capital Reorganization if, on the
      effective date thereof, the Holder had been the registered holder of the
      number of Common Shares to which such Holder was theretofore entitled upon
      exercise of this Warrant. If determined appropriate by action of the
      directors of the Corporation, appropriate adjustments will be made as a
      result of any such Capital Reorganization in the application of the
      provisions set forth in this Section 12 with respect to the rights and
      interests thereafter of the Holder to the end that the provisions set
      forth in this Section 12 will thereafter correspondingly be made
      applicable as nearly as may reasonably be in relation to any shares, other
      securities or other property thereafter deliverable upon the exercise
      hereof. Any such adjustment must be made by and set forth in an amendment
      to this Warrant approved by action by the directors of the Corporation and
      will for all purposes  be conclusively deemed to be an
      appropriate adjustment.

              

      

    

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (e) 

              	
                 If
      at any time after the date hereof and prior to the Expiry Time any
      adjustment in the Exercise Price shall occur as a result
    of:

              

      

    

     

    
      
        	 	
                (i) 

              	
                 an
      event referred to in subsection
12(a);

              

      

    

     

    
      
        	 	
                (ii) 

              	
                 the
      fixing by the Corporation of a record date for an event referred to in
      subsection 12(b); or

              

      

    

     

    
      
        	 	
                (iii) 

              	
                 the
      fixing by the Corporation of a record date for an event referred to in
      subsection 12(c) if such event constitutes the issue or distribution to
      the holders of all or substantially all of its outstanding Common Shares
      of (A) Equity Shares, or (B) securities exchangeable for or convertible
      into Equity Shares at an exchange or conversion price per Equity Shares
      less than the Current Market Price on such record date or (C) rights,
      options or warrants to acquire Equity Shares at an exercise, exchange or
      conversion price per Equity Share less than the Current Market Price on
      such record date,

              

      

    

     

    then,
where required, the number of Common Shares purchasable upon the subsequent
exercise of this Warrant shall be simultaneously adjusted by multiplying the
number of Common Shares purchasable upon the exercise of this Warrant
immediately prior to such adjustment by a fraction which shall be the reciprocal
of the fraction employed in the adjustment of the Exercise Price. To the extent
any adjustment in subscription rights occurs pursuant to this subsection 12(e)
as a result of a distribution of exchangeable or convertible securities other
than Equity Shares referred to in subsection 12(a) or as a result of the fixing
by the Corporation of a record date for the distribution of rights, options or
warrants referred to in subsection 12(b), the number of Common Shares
purchasable upon exercise of this Warrant shall be readjusted immediately after
the expiration of any relevant exchange, conversion or exercise right to the
number of Common Shares which would be purchasable based upon the number of
Common Shares actually issued and remaining issuable immediately after such
expiration, and shall be further readjusted in such manner upon expiration of
any further such right. To the extent that any adjustment in subscription rights
occurs pursuant to this subsection 12(e) as a result of the fixing by the
Corporation of a record date for the distribution of exchangeable or convertible
securities other than Equity Shares or rights, options or warrants referred to
in subsection 12(c), the number of Common Shares purchasable upon exercise of
this Warrant shall be readjusted immediately after the expiration of any
relevant exchange, conversion or exercise right to the number which would be
purchasable pursuant to this subsection 12(e) if the fair market value of such
securities or such rights, options or warrants had been determined for purposes
of the adjustment pursuant to this subsection 12(e) on the basis of the number
of Equity Shares issued and remaining issuable immediately after such
expiration, and shall be further readjusted in such manner upon expiration of
any further such right.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    
      13.    Rules
Regarding Calculation of Adjustment of Exercise Price

    

     

    
      
        	 	
                (a) 

              	
                 The
      adjustments provided for in Section 12 are cumulative and will, in the
      case of adjustments to the Exercise Price, be computed to the nearest
      one-tenth of one cent and will be made successively whenever an event
      referred to therein occurs, subject to the following subsections of this
      Section 13.

              

      

    

     

    
      
        	 	
                (b) 

              	
                 No
      adjustment in the Exercise Price is required to be made unless such
      adjustment would result in a change of at least 1% in the prevailing
      Exercise Price; provided, however, that any adjustments which, except for
      the provisions of this subsection, would otherwise have been required to
      be made, will be carried forward and taken into account in any subsequent
      adjustments.

              

      

    

     

    
      
        	 	
                (c) 

              	
                 No
      adjustment in the Exercise Price will be made in respect of any event
      described in Section 12, other than the events referred to in clauses
      12(a)(iii) and (iv), if the Holder is entitled to participate in such
      event on the same terms, mutatis mutandis, as if
      the Holder had exercised this Warrant prior to or on the effective date or
      record date of such event.

              

      

    

     

    
      
        	 	
                (d) 

              	
                 No
      adjustment in the Exercise Price will be made under Section 12 in respect
      of the issue from time to time of Common Shares issuable from time to time
      as dividends paid in the ordinary course to holders of Common Shares who
      exercise an option or election to receive substantially equivalent
      dividends in Common Shares in lieu of receiving a cash dividend, and any
      such issue will be deemed not to be a Common Share
      Reorganization.

              

      

    

     

    
      
        	 	
                (e) 

              	
                 If
      at any time a dispute arises with respect to adjustments provided for in
      Section 12 or the failure to make adjustments, such dispute will be
      conclusively determined by the auditors of the Corporation or if they are
      unable or unwilling to act, by such other firm of independent chartered
      accountants certified by the United States Public Accounting Oversight
      Board as may be selected by action by the directors of the Corporation and
      any such determination, where required, will be binding upon the
      Corporation, the Holder and shareholders of the Corporation. The
      Corporation will provide such auditors or accountants with access to all
      necessary records of the
Corporation.

              

      

    

     

    
      
        	
              	
                (f) 

              	
                 In
      case the Corporation after the date of issuance of this Warrant takes any
      action affecting the Common Shares, other than action described in Section
      12, which in the opinion of the board of directors of the Corporation
      would materially affect the rights of the Holder, the Exercise Price will
      be adjusted in such manner, if any, and at such time, by action by the
      directors of the Corporation but subject in all cases to the prior written
      consent of the Exchange, where required, and any necessary regulatory
      approval.  Failure of the taking of action by the directors of
      the Corporation so as to provide for an adjustment on or prior to the
      effective date of any action by the Corporation affecting the Common
      Shares will be conclusive evidence that the board of directors of the
      Corporation has determined that it is equitable to make no adjustment in
      the circumstances.

              

      

    

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (g) 

              	
                 If
      the Corporation sets a record date to determine the holders of the Common
      Shares for the purpose of entitling them to receive any dividend or
      distribution or sets a record date to take any other action and,
      thereafter and before the distribution to such shareholders of any such
      dividend or distribution or the taking of any other action, decides not to
      implement its plan to pay or deliver such dividend or distribution or take
      such other action, then no adjustment in the Exercise Price will be
      required by reason of the setting of such record
  date.

              

      

    

     

    
      
        	
              	
                (h) 

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

              

      

    

     

    
      
        	
              	
                (i) 

              	
                 As
      a condition precedent to the taking of any action which would require any
      adjustment to this Warrant, including the Exercise Price, the Corporation
      must take any corporate action which may be necessary in order that the
      Corporation have unissued and reserved in its authorized capital and may
      validly and legally issue as fully paid and non-assessable all the shares
      or other securities which the Holder is entitled to receive on the full
      exercise thereof in accordance with the provisions
  hereof.

              

      

    

     

    
      
        	
              	
                (j) 

              	
                 The
      Corporation will from time to time, immediately after the occurrence of
      any event which requires an adjustment or readjustment as provided in
      Section 12, forthwith give notice to the Holder specifying the event
      requiring such adjustment or readjustment and the results thereof,
      including the resulting Exercise
Price.

              

      

    

     

    
      
        	
              	
                (k) 

              	
                 The
      Corporation covenants to and in favour of the Holder that so long as this
      Warrant remains outstanding, it will give notice to the Holder of its
      intention to fix a record date for any event referred to in subsections
      12(a), (b) or (c) (other than the subdivision or consolidation of the
      Common Shares) which may give rise to an adjustment in the Exercise Price,
      and, in each case, such notice must specify the particulars of such event
      and the record date and the effective date for such event; provided that
      the Corporation is only required to specify in such notice such
      particulars of such event as have been fixed and determined on the date on
      which such notice is given. Such notice shall be given not less than 14
      days prior to each such applicable record date or effective
      date.

              

      

    

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    
      14.    Consolidation
and Amalgamation

    

     

    
      
        	 	
                (a) 

              	
                 The
      Corporation shall not enter into any transaction whereby all or
      substantially all of its undertaking, property and assets would become the
      property of any other corporation (herein called a “successor corporation”)
      whether by way of reorganization, reconstruction, consolidation,
      amalgamation, merger, transfer, sale, disposition or otherwise, unless
      prior to or contemporaneously with the consummation of such transaction
      the Corporation and the successor corporation shall have executed such
      instruments and done such things as, in the opinion of counsel to the
      Holder, are necessary or advisable to establish that upon the consummation
      of such transaction:

              

      

    

     

    
      
        	 	
                (i) 

              	
                 the
      successor corporation will have assumed all the covenants and obligations
      of the Corporation under this Warrant,
and

              

      

    

     

    
      
        	  	
                (ii) 

              	
                 the
      Warrant will be a valid and binding obligation of the successor
      corporation entitling the Holder, as against the successor corporation, to
      all the rights of the Holder under this
Warrant.

              

      

    

     

    
      
        	 	
                (b) 

              	
                 Whenever
      the conditions of subsection 14(a) shall have been duly observed and
      performed the successor corporation shall possess, and from time to time
      may exercise, each and every right and power of the Corporation under this
      Warrant in the name of the Corporation or otherwise and any act or
      proceeding by any provision hereof required to be done or performed by any
      director or officer of the Corporation may be done and performed with like
      force and effect by the like directors or officers of the successor
      corporation.

              

      

    

     

    
      15.    Representation
and Warranty of Corporation

    

     

    The
Corporation hereby represents and warrants with and to the Holder that the
Corporation is duly authorized and has the corporate and lawful power and
authority to create and issue this Warrant and the Common Shares issuable upon
the exercise hereof and perform its obligations hereunder and that this Warrant
represents a valid, legal and binding obligation of the Corporation enforceable
in accordance with its terms.

     

    
      16.    United
States Securities Law Matters

    

     

    
      
        	 	
                (a) 

              	
                 Neither
      this Warrant nor the Warrant Shares have been registered under the U.S.
      Securities Act, or any state securities
laws.

              

      

    

     

    
      
        	 	
                (b) 

              	
                 By
      subscribing for this Warrant the Holder is deemed to have represented to
      the Corporation that this Warrant and, if applicable, the Warrant Shares
      (collectively, the "Securities") have been acquired for investment for the
      Holder’s own account, not as a nominee agent, and not with a view to the
      resale or distribution of any part thereof to any U.S. Person within the
      meaning of Regulation S under the U.S. Securities Act, the Holder has no
      present intention of selling, granting any participation in, or otherwise
      distributing the same to any U.S. Person and the Holder does not have any
      contract, undertaking, agreement or arrangement with any U.S. Person to
      sell, transfer or grant participations to such person or to any third
      person residing in the United States, with respect to any of the
      Securities.

              

      

    

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                (c) 

              	
                 The
      Securities shall be deemed restricted securities under the U.S. Securities
      Act and may not be resold in the United States unless they are registered
      under the Act and any applicable state securities law, or in the opinion
      of counsel in form and substance reasonably satisfactory to the
      Corporation, an exemption from such registration is
    available.

              

      

    

     

    
      
        	 	
                (d) 

              	
                 Rule
      144 promulgated under the U.S. Securities Act provides, in substance, that
      (1) after one year from the date restricted securities have been
      purchased and fully paid for, a holder may transfer restricted securities
      in the United States provided certain conditions are met, e.g., certain
      public information is available about the Corporation, and specific
      limitations on the amount of shares which can be sold within certain
      periods and the manner in which such shares must be sold are complied
      with, and (2) after two years from the date the Securities have been
      purchased and fully paid for, holders who are not “affiliates” of the
      Corporation may sell restricted securities in the United States without
      satisfying such conditions.

              

      

    

     

    
      
        	 	
                (e) 

              	
                 If the requirements of Rule 144
      are not met, registration under the U.S. Securities Act, compliance with
      Regulation A, or some other registration exemption will be required for
      any disposition of the Securities in the United States The United States
      Securities and Exchange Commission has expressed its opinion that persons
      proposing to sell restricted securities other than in a registered
      offering or other than pursuant to Rule 144 will have a substantial burden
      of proof in establishing that an exemption from registration is available
      for such offers or sales in the United States and such persons and the
      brokers who participate in the transactions do so at their own
      risk.

              

      

    

     

    
      17.    If
Share Transfer Books Closed

    

     

    The
Corporation shall not be required to deliver certificates for Common Shares
while the share transfer books of the Corporation are properly closed, prior to
any meeting of shareholders or for the payment of dividends or for any other
purpose and in the event of the surrender of any Warrant in accordance with the
provisions hereof and the making of any subscription and payment for the Common
Shares called for thereby during any such period delivery of certificates for
Common Shares may be postponed for not exceeding five (5) Business Days after
the date of the re-opening of said share transfer books. Provided however that
any such postponement of delivery of certificates shall be without prejudice to
the right of the Holder, if the Holder has surrendered the same and made payment
during such period, to receive such certificates for the Common Shares called
for after the share transfer books have been re-opened.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    
      18.    Protection
of Shareholders, Officers and Directors

    

     

    Subject
as herein provided, all or any of the rights conferred upon the Holder may be
enforced by the Holder by appropriate legal proceedings. No recourse under or
upon any obligation, covenant or agreement herein contained or in any of the
Warrants represented hereby shall be taken against any shareholder, officer or
director of the Corporation, either directly or through the Corporation, it
being expressly agreed and declared that the obligations under the Warrants
evidenced hereby, are solely corporate obligations of the Corporation and that
no personal liability whatever shall attach to or be incurred by the
shareholders, officers, or directors of the Corporation or any of them in
respect thereof, any and all rights and claims against every such shareholder,
officer or director being hereby expressly waived as a condition of and as a
consideration for the issue of the Warrants evidenced hereby.

     

    
      19.    Lost
Certificate

    

     

    If the
Warrant certificate evidencing the Warrants issued hereby becomes stolen, lost,
mutilated or destroyed the Corporation may, on such terms, as it may in its
discretion impose, respectively issue and countersign a new warrant of like
denomination, tenor and date as the certificate so stolen, lost mutilated or
destroyed.

     

    
      20.    Governing
Law

    

     

    The
corporate laws of the State of Delaware shall govern all issues concerning the
relative rights of the Corporation and its stockholders.  All other
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by the internal laws of the State of
California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of California.

     

    
      21.    Severability

    

     

    If any
one or more of the provisions or parts thereof contained in this Warrant should
be or become invalid, illegal or unenforceable in any respect in any
jurisdiction, the remaining provisions or parts thereof contained herein shall
be and shall be conclusively deemed to be, as to such jurisdiction, severable
therefrom and:

     

    
      
        	 	
                (i) 

              	
                 the
      validity, legality or enforceability of such remaining provisions or parts
      thereof shall not in any way be affected or impaired by the severance of
      the provisions or parts thereof severed;
and

              

      

    

     

    
      
        	 	
                (ii) 

              	
                 the
      invalidity, illegality or unenforceability of any provision or part
      thereof contained in this Warrant in any jurisdiction shall not affect or
      impair such provision or part thereof or any other provisions of this
      Warrant in any other
jurisdiction.

              

      

    

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    
      22.    Headings

    

     

    The
headings of the articles, sections, subsections and clauses of this Warrant have
been inserted for convenience and reference only and do not define, limit, alter
or enlarge the meaning of any provision of this Warrant.

     

    
      23.    Numbering
of Articles, etc.

    

     

    Unless
otherwise stated, a reference herein to a numbered or lettered article, section,
subsection, clause, subclause or schedule refers to the article, section,
subsection, clause, subclause or schedule bearing that number or letter in this
Warrant.

     

    
      24.    Gender

    

     

    Whenever
used in this Warrant, words importing the singular number only shall include the
plural, and vice versa, and words importing the masculine gender shall include
the feminine gender.

     

    
      25.    Day
not a Business Day

    

     

    In the
event that any day on or before which any action is required to be taken
hereunder is not a Business Day, then such action shall be required to be taken
on or before the requisite time on the next succeeding day that is a Business
Day. If the payment of any amount is deferred for any period, then such period
shall be included for purposes of the computation of any interest payable
hereunder.

     

    
      26.    Computation
of Time Period

    

     

    Except to
the extent otherwise provided herein, in the computation of a period of time
from a specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but
excluding”.

     

    
      27.    Binding
Effect

    

     

    This
Warrant and all of its provisions shall enure to the benefit of the Holder and
his heirs, executors, administrators, legal personal representatives, permitted
assigns and successors and shall be binding upon the Corporation and its
successors and permitted assigns.

     

    
      28.    Notice

    

     

    Any
notice, document or communication required or permitted by this Warrant to be
given by a party hereto shall be in writing and is sufficiently given if
delivered personally, or if sent by prepaid registered mail, or if transmitted
by any form of recorded telecommunication tested prior to transmission, to such
party addressed as follows:

     

    
      
        	 	
                (i) 

              	
                 to
      the Holder, in the register to be maintained pursuant to Section 5 hereof;
      and

              

      

    

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                (ii) 

              	
                 to
      the Corporation at:

              

      

    

     

    3108
Ponte Morino Dr.

    Suite
210

    Cameron
Park, CA 95682

    Attention:
James Kluber

    Telecopier:  (530)
677-7626

     

    Notice so
mailed shall be deemed to have been given on the third (3rd)
Business Day after deposit in a post office or public letter box. Neither party
shall mail any notice, request or other communication hereunder during any
period in which applicable postal workers are on strike or if such strike is
imminent and may reasonably be anticipated to affect the normal delivery of
mail. Notice transmitted by a form of recorded telecommunication or delivered
personally shall be deemed given on the day of transmission or personal
delivery, as the case may be. Any party may from time to time notify the other
in the manner provided herein of any change of address which thereafter, until
change by like notice, shall be the address of such party for all purposes
hereof.

     

    
      29.    Time
of Essence

    

     

    Time
shall be of the essence hereof.

     

    IN WITNESS WHEREOF the
Corporation has caused this Warrant certificate to be signed by its duly
authorized officer as of this _______ day of ________, 2008.

     

    
      	
              FIRSTGOLD
      CORP.

            
	
              Per:

            	 
      
	 
      	
              Authorized
      Signing Officer

            

    

     

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    SCHEDULE
“A”

     

    SUBSCRIPTION
FORM

     

    
      	
              TO:
       

            	
              FIRSTGOLD
      CORP.

            

    

    3108
Ponte Morino Dr.

    Suite
210

    Cameron
Park, CA 95682

     

    The
undersigned holder of the within Warrant certificate hereby irrevocably
subscribes for                          
Common Shares of Firstgold
Corp. (the “Corporation”) pursuant to the
within Warrant certificate at the Exercise Price per share specified in the said
Warrant certificate and encloses herewith cash or a certified cheque, money
order or bank draft payable to the order of the Corporation in payment of the
subscription price therefor.  Capitalized terms used herein have the
meanings set forth in the within Warrant certificate.

     

    The
undersigned hereby acknowledges that the following legends will be placed on the
certificates representing the Common Shares being acquired if the Warrants are
exercised prior to expiry of the hold periods applicable to the
Warrants:

     

    UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF
(i) February 26, 2008, AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN
ANY PROVINCE OR TERRITORY OF CANADA.

     

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
“OFFSHORE TRANSACTION” IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”) AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING
TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE
SECURITIES ACT.

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
undersigned hereby certifies that the undersigned is not a U.S. Person or a
person in the United States, and is not acquiring any of the Common Shares
issuable upon the exercise of the Warrants for the account or benefit of a U.S.
Person or a person in the United States.  For purposes hereof “United
States” and “U.S. Person” shall have the meanings given to such terms in
Regulation S under the United States Securities Act of 1933, as
amended.

     

    DATED this     day of                                      ,
200     .

     

    
      	 
      	 
      	
              NAME:

            	 
      
	 
      	 
      	
              Signature:

            	 
      
	 
      	 
      	
              Address:

            	 
      
	 
      	 
      	 
      	 
      

    

     

    
      	[   
      ]	
              Please
      check box if these Common Share certificates are to be delivered at the
      office where this Warrant certificate is surrendered, failing which the
      Common Shares certificates will be mailed to the subscriber at the address
      set out above.

            	 
      

    

     

    
      If any
Warrants represented by this certificate are not being exercised, a new Warrant
certificate will be issued and delivered with the Common Share
certificates.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    SCHEDULE
“B”

     

    Form
of Transfer

     

    THE
WARRANTS REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S PROMULGATED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”), PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT,
THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
CORPORATION.

     

    FOR VALUE RECEIVED,
the undersigned hereby sells, assigns and transfers unto (name)                                          
(the “Transferee”),
of                                                                                                                                    
(residential address)
                   
Warrants of Firstgold
Corp. (the “Corporation”) registered in
the name of the undersigned on the records of the Corporation represented by the
within certificate, and irrevocably appoints the Secretary of the Corporation as
the attorney of the undersigned to transfer the said securities on the books or
register of transfer, with full power of substitution.

     

    The undersigned hereby certifies that
the transfer of these securities is not being made to, and the offer of these
securities was not made to, and the person named above is not, a person in the
United States or a U.S. person (as such terms are defined in Regulation S under
the United States Securities Act of 1933) unless an effective U.S.
registration statement covering these securities is in place or a U.S. exemption
from registration is available.

     

    DATED the         
day of                                 ,
200    .

     

    
      	 
      	 
      	 
      
	
              Signature
      Guaranteed

            	 
      	
              (Signature
      of Warrant Holder, to be the same as appears on the face of this Warrant
      Certificate)

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