Document:

Filed by Filing Services Canada Inc. 403-717-3898

NONQUALIFIED STOCK OPTION AGREEMENT

THIS NONQUALIFIED STOCK OPTION AGREEMENT (“Agreement”) is made and entered into in duplicate this 19th day of August, 2005, by and among Micron Enviro Systems, Inc., a Nevada corporation ("Corporation"), and Jason Gigliotti  ("Grantee"), in his capacity as a consultant of the Corporation with respect to the following facts:

Pursuant and subject to the Micron Enviro Systems, Inc. 2005 Stock Option Plan, a copy of which is furnished to the Grantee with a copy of this Agreement and the provisions of which, by this reference, are made a part of this Agreement as though specified completely and specifically verbatim in this Agreement ("Plan"), the Corporation's Board of Directors has determined that it is in the best interests of the Corporation and its stockholders to grant the option provided for herein to the Grantee, as compensation.  The parties agree as follows:

1.

GRANT OF OPTION.  For value received, the Corporation hereby grants to the Grantee the right and option to purchase, on the terms and subject to the conditions specified in this Agreement, ONE MILLION SEVEN HUNDRED EIGHTY THOUSAND (1,780,000) shares of the Corporation's $.001 par value common stock.  The purchase price shall be $0.016 per share.

2.

TIME AND MANNER OF EXERCISE.  From and after August 19, 2005, and during and until August 18, 2006, the Grantee shall have the right to purchase from the Corporation 1,780,000 shares of the Corporation’s $.001 par value common stock (“Option”). The Grantee shall exercise the Option by delivery to the Corporation of a notice of exercise accompanied by a certified or cashier's check or promissory note in payment of the Option purchase price. Promptly upon receipt of such exercise and such check, the Corporation will deliver or cause to be delivered to Grantee stock certificate(s) representing the number of shares of the Corporation’s $.001 par value common stock purchased in accordance with the provisions of this Agreement and, during Grantee's lifetime, duly registered in the name of the Grantee and, at the Grantee's election, his or her spouse. 

3.

NONASSIGNABILITY. The Option may be exercised only by Grantee during his or her lifetime.  The Grantee will not transfer or assign the Option, except by Will or the laws of intestate succession.

4.

EXPIRATION. The Option shall terminate and expire at 4:00 pm Pacific Time on August 18, 2006, or as specified in Article XI of the Plan, whichever is earlier. 

5.

REPRESENTATIONS OF CORPORATION. During such time as the Option remains outstanding and unexpired, the Corporation will reserve for issuance, 

1

upon the exercise of the Option, the number of shares of the Corporation’s $.001 par value common stock that are subject to the Option.  

6.

CAPITAL ADJUSTMENTS.  (a) The existence of the Option shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Corporation's capital structure or the Corporation’s business, or any merger or consolidation of the Corporation or any issue of bonds, debentures, preferred stock having a preference to or affecting the Corporation’s capital stock or the rights thereof, or the issuance of any securities convertible into any such capital stock or of any rights, options, or warrants to purchase any such capital stock, or the dissolution or liquidation of the Corporation, any sale or transfer of all or any part of the Corporation’s assets or business, or any other act or proceeding of the Corporation, whether of a similar character or otherwise. 

(b) The securities with respect to which the Option is granted are shares of the $.001 par value common stock of the Corporation as presently constituted, but if and whenever, prior to the delivery by the Corporation of all the shares of the $.001 par value common stock with respect to which the Option is granted, the Corporation shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of such common stock issued and outstanding without receiving compensation therefore in money, services, or property, the number of shares of such common stock then remaining subject to the Option shall (a) in the event of an increase in the number of outstanding shares of such common stock, be proportionately
increased, and the cash consideration payable per share of such common stock shall be proportionately reduced; and (b) in the event of a reduction in the number of outstanding shares of such common stock, be proportionately reduced, and the cash consideration payable per share of such common stock shall be proportionately increased. 

7.  MERGER AND CONSOLIDATION. (a) Following the merger of one or more corporations with and into the Corporation or any consolidation of the Corporation and one or more corporations in which the Corporation is the surviving corporation, the exercise of the Option shall apply to the shares of common stock of the surviving corporation. 

(b) Notwithstanding any other provision of this Agreement, the Option shall terminate on the dissolution or liquidation of the Corporation, or on any merger or consolidation in which the Corporation is not the surviving corporation. 

8.

RIGHTS AS SHAREHOLDER.  The Grantee will not be deemed to be the Grantee of any shares of the Corporation’s  $.001 par value common stock pursuant to the exercise of the Option until a stock certificate is delivered to the Grantee for those shares. No adjustment shall be made for dividends or other rights for which the record 

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date is prior to the date such stock certificate is delivered. 

9.

BOARD OF DIRECTORS DETERMINATION FINAL.  The interpretation of the Plan and this Agreement, including any inconsistency between the two documents, shall be reserved to and made by the Board of Directors of the Corporation provided for in the Plan.  

10.

GOVERNING LAW.  This Agreement is granted and delivered in the State of Nevada and is intended to be construed and enforced pursuant to the laws thereof.

IN WITNESS WHEREOF, this Option is executed on behalf of the Corporation and its duly authorized officers and by the Grantee as of the date specified in the preamble of this Agreement.

CORPORATION

Micron Enviro Systems, Inc.,

a Nevada corporation

By:

/s/ Bernard McDougall

Its:

Bernard McDougall, President

By:

/s/ Negar Towfigh

Its:

Negar Towfigh, Secretary

GRANTEE

/s/ Jason Gigliotti

Jason Gigliotti

3Exhibit
      4.1

    

    EXERCISABLE
      ONLY PRIOR TO 5:00 P.M., TORONTO TIME,

    ON
      NOVEMBER 4, 2007, AFTER WHICH TIME THESE WARRANTS

    SHALL
      BE NULL AND VOID

    

    AMENDMENT
      TO WARRANTS TO PURCHASE COMMON SHARES

    

    OF

    

    APOLLO
      GOLD CORPORATION

    (governed
      by the laws of the Yukon Territory)

    
      	 	 	 	 
	 	 	 	
              Number
                of Warrants

              represented
                by this amending certificate - ● 

            

    

    

    WHEREAS________________
      (the “Holder”) is entitled to purchase one common share in the capital stock of
      APOLLO GOLD CORPORATION (the “Company”), for each of the ●
      (●)
      Warrants evidenced by a warrant certificate originally dated the 4th
      day of
      November, 2004 (the “Warrant Certificate”), an original copy of which is
      attached hereto;

    

    AND
      WHEREAS
      the
      Company has agreed to amend the Exercise Price (as that term is defined in
      the
      Warrant Certificate);

    

    THIS
      CERTIFIES THAT
      the
      Warrant Certificate is hereby amended by changing the definition of "Exercise
      Price" to be US$0.40.

    

    In
      all
      other respects the terms and conditions set forth in the Warrant Certificate
      shall remain unamended, and time shall remain of the essence.

    

    IN
      WITNESS WHEREOF
      the
      Company has caused this Warrant Amending Certificate to be signed by its duly
      authorized officer as of this 16th day of January, 2006.

    
      	 	 	 
	 	APOLLO
              GOLD CORPORATION
	 	 
	 	 
	 	Per:
              _________________________

    

     

    

    
      	 
	
              This
                Warrant Amending Certificate is null and
                void if not accompanied by the original Warrant
                Certificate.Exhibit
      10.1

    
 

    GENERAL
      SECURITY AGREEMENT

     

    THIS
      AGREEMENT
      made as
      of the 4th day of January, 2006.

     

    BY:

     

    APOLLO
      GOLD CORPORATION,
      a
      corporation existing under the laws of the Yukon Territory

     

    (the
      "Debtor")

     

    IN
      FAVOUR OF:

     

    THE
      CANADA TRUST COMPANY, a
      trust
      company amalgamated under the laws of Canada, as Trustee for the benefit of
      the
      Debentureholders (as hereinafter defined)

     

    (the
      "Secured
      Party")

     

    WHEREAS
      the
      Debtor, Apollo Gold Inc. ("AGI")
      and
      the Secured Party entered into a trust indenture dated November 4, 2004 (as
      supplemented by a first supplemental indenture dated December 13, 2004)
      (collectively, the "Indenture")
      providing for the issue of up to U.S.$12,500,000 principal amount of 12% Series
      2004-B convertible secured debentures of the Debtor (collectively, the
      "Debentures");

     

    AND
      WHEREAS pursuant
      to the terms of the Indenture, the Debtor and AGI originally provided the
      Secured Party with security over the Existing Security (as defined in the
      Indenture) as security for, among other things, the payment of the principal
      sum, interest and all other amounts from time to time owing or payable under
      the
      Debentures, and the performance by the Debtor and AGI of all their obligations
      under the Debentures and the Indenture;

     

    AND
      WHEREAS
      pursuant
      to a cash collateral trust agreement dated November 18, 2005, the Debtor and
      AGI
      substituted the Existing Security with the Cash Collateral Trust, in accordance
      with the terms of the Indenture;

     

    AND
      WHEREAS
      in
      accordance with the terms of the Indenture the Debtor and AGI wish to substitute
      the Cash Collateral Trust with the Black Fox Charge (as defined in the
      Indenture), in accordance with the terms of the Indenture;

     

    NOW
      THEREFORE
      in
      consideration of the sum of $1.00 and for other good and valuable consideration
      (the receipt and sufficiency of which are hereby acknowledged), the Debtor
      agrees with the Secured Party as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE 1

    INTERPRETATION

     

    1.1    Definitions

     

    Unless
      the context requires otherwise, or unless expressly defined, all capitalized
      terms used herein will have the meanings specified in the Indenture. Where
      used
      herein or in any amendments or schedules hereto, the following terms shall
      have
      the following meanings:

     

    "Accessions"
      means
      Goods that are installed in or affixed to other Goods;

     

    "Accounts"
      means
      all debts, accounts, demands, claims and choses in action which now are, or
      which may at any time hereafter be, due or owing to or owned by the Debtor;
      all
      securities, mortgages, bills, notes and other documents now held or owned,
      or
      which may be hereafter taken, held or owned, by or on behalf of the Debtor,
      in
      respect of the said debts, accounts, demands, claims and choses in action or
      any
      part thereof; and all books, documents and papers recording, evidencing or
      relating to the said debts, accounts, demands, claims and choses in action
      or
      any part thereof, all of which are herein collectively called the "Accounts";

     

    "this
      Agreement",
      "hereto", "herein", "hereof", "hereby", "hereunder" and any similar expressions
      refer to this Agreement as it may be amended, supplemented, restated or replaced
      from time to time, and not to any particular Article, section or other portion
      hereof;

     

    "Applicable
      Law"
      means,
      at any time, with respect to any Person, property, transaction or event, the
      common law and all applicable laws, statutes, regulations, treaties, judgments
      and decrees and, provided in each case they have the force of law, all then
      applicable official directives, requirements, orders and policies of any
      governmental authorities made under such laws, by-laws, statutes and
      regulations;

     

    "Black
      Fox Property"
      means
      the real and immovable property described in Schedule "A" annexed hereto
      together with all abutting real property and non-abutting real property acquired
      by the Debtor in the future in the area located approximately 10 kilometers
      east
      of the Town of Matheson, Ontario along the east-west 200 km Destor-Porcupine
      Fault Zone, together with all rights, options, interests, and mining and mineral
      rights and interests therein, now owned or hereafter acquired by the Debtor
      including, without limitation, all licences, easements, rights-of-way,
      privileges, benefits, immunities, rights and options connected therewith and/or
      appertaining thereto and all amendments thereto, replacements thereof and
      substitutions therefor from time to time, and all buildings, erections,
      structures, improvements, fixtures, fixed plant, fixed machinery, fixed
      equipment and all personal property of every kind and nature at present situate
      thereon or therein or which may at any time hereafter be constructed or brought
      or placed thereon or therein or used in connection therewith or related thereto,
      including in each and all cases any greater or other right, title and interest
      therein or in any part thereof which the Debtor may acquire and hold during
      the
      currency of the Indenture, and all proceeds in connection
      therewith;

     

    "Business
      Day"
      means
      any day other than Saturday, Sunday or any statutory holiday on which banks
      are
      generally open for business in Toronto, Ontario;

     

    "Chattel
      Paper"
      means
      one or more than one writing that evidences both a monetary obligation and
      a
      security interest in or a lease of specific Goods;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Collateral"
      means
      all of the present and future undertaking, property, both real and personal,
      and
      assets of the Debtor which is located on or related to the Black Fox Property
      subject to, or intended to be subject to, the Security Interest, and any
      reference to "Collateral" shall be deemed to be a reference to "Collateral
      or
      any part thereof" except where otherwise specifically provided;

     

    "Debentures"
      has the
      meaning attributed to such term in the recitals hereto;

     

    "Documents"
      means
      all books, accounts, invoices, letters, papers, documents and other records
      in
      any form evidencing or relating to collateral subject to the Security Interest,
      all of which are herein collectively called the "Documents";

     

    "Document
      of Title"
      means
      any writing that purports to be issued by or addressed to a bailee and purports
      to cover such Goods in the bailee's possession as are identified or fungible
      portions of an identified mass, and that in the ordinary course of business
      is
      treated as establishing that the Person in possession of it is entitled to
      receive, hold and dispose of the documents and the Goods it covers;

     

    "Encumbrance"
      means
      any encumbrance of any kind whatsoever, choate or inchoate, whether arising
      by
      contract, statute or otherwise, including, without limitation, any mortgage,
      debenture, pledge, hypothec, lien, charge, assignment by way of security,
      consignment, lease, hypothecation, security interest or other security
      agreement, trust or deemed trust, conditional sales agreement, or arrangement
      having the effect of granting security for the payment or performance of any
      debt, liability or obligation, and "Encumbrances", "Encumber" and "Encumbered"
      shall have corresponding meanings;

     

    "Equipment"
      means
      Goods that are not Inventory or consumer goods (as such term is defined in
      the
      PPSA);

     

    "Events
      of Default"
      has the
      meaning attributed to such term in Section 7.1 hereto;

     

    "GAAP"
      means
      generally accepted accounting principles from time to time approved by the
      Canadian Institute of Chartered Accountants or any successor institute including
      those set out in the Handbook of the Canadian Institute of Chartered
      Accountants, consistently applied;

     

    "Goods"
      means
      all now owned or after acquired tangible personal property located on or related
      to the Black Fox Property (whether or not physically located on the Black Fox
      Property) other than Chattel Paper, Documents of Title, Instruments, Money
      and
      Securities, and includes fixtures and minerals and hydrocarbons to be
      extracted;

     

    "Indebtedness"
      means
      the obligations, indebtedness and liability of the Debtor (i) for payment of
      the
      principal sum, interest and all amounts from time to time owing or payable
      under
      the Debentures and the performance of all its obligations under the Debentures;
      and (ii) the Debtor's obligations under the Indenture;

     

    "Indenture"
      has the
      meaning attributed to such term in the recitals hereto as the same may be
      amended, modified, supplemented, restated or updated from time to
      time;

     

    "Instrument"
      means,

     

    
      	(a)  	
              a
                bill, note or cheque within the meaning of the Bills of Exchange
                Act
                (Canada) or any other writing that evidences a right to the payment
                of
                Money and is of a type that in the ordinary course of business is
                transferred by delivery with any necessary endorsement or assignment,
                or

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(b)  	
              a
                letter of credit and an advice of credit if the letter or advice
                states
                that it must be surrendered upon claiming payment
                thereunder;

            

    

     

    but
      does
      not include a writing that constitutes part of Chattel Paper, a Document of
      Title or a Security;

     

    "Intangibles"
      means
      all intangible property now owned or hereafter acquired by the Debtor and which
      is not Accounts including, without limitation, all contractual rights, chattel
      paper, goodwill, patents, trademarks, trade names, copyrights and other
      intellectual property of the Debtor, all of which are herein collectively called
      the "Intangibles";

     

    "Inventory"
      means
      Goods that are held by a Person for sale or lease or that have been leased
      or
      that are to be furnished or have been furnished under a contract of service,
      or
      that are raw materials, work in process or materials used or consumed in a
      business or profession;

     

    "Lien"
      means
      any mortgage, pledge, charge, assignment, security interest, hypothec, lien
      or
      other encumbrance, including, without limitation, any agreement to give any
      of
      the foregoing, or any conditional sale or other title retention
      agreement;

     

    "Money"
      means a
      medium of exchange authorized or adopted by the Parliament of Canada as part
      of
      the currency of Canada or by a foreign government as part of its
      currency;

     

    "Obligations"
      means
      the aggregate of all indebtedness, liabilities or other obligations of the
      Debtor to the Secured Party, under or in respect of the Indebtedness, the Black
      Fox Charge and this Agreement, whether actual or contingent, direct or indirect,
      matured or not, wheresoever and however incurred, prior to, at the time of,
      or
      subsequent to the execution hereof, whether incurred alone or with another
      or
      others including extensions and renewals and now existing or hereafter
      arising;

     

    "Permitted
      Encumbrances"
      means
      the encumbrances described in Schedule "B" annexed hereto;

     

    "Person"
      means
      any individual, partnership, limited partnership, joint venture, syndicate,
      sole
      proprietorship, company or corporation with or without share capital,
      unincorporated association, trust, trustee, executor, administrator or other
      legal personal representative, regulatory body or agency, government or
      governmental agency, authority or entity however designated or
      constituted;

     

    "PPSA"
      means
      the Personal
      Property Security Act
      (Ontario), or other jurisdictional equivalents as amended from time to time,
      and
      any Act substituted therefor and amendments thereto;

     

    "Proceeds"
      means
      identifiable or traceable personal property in any form derived directly or
      indirectly from any dealing with property or the proceeds therefrom, and
      includes any payment representing indemnity or compensation for loss of or
      damage to property or proceeds therefrom;

     

    "Security"
      means
      all present and future securities, as defined in the Securities
      Act
      (Ontario), held by the Debtor, including shares, options, rights, warrants,
      joint venture interests, interests in limited partnerships, bonds, debentures
      and all other documents which constitute evidence of a share, participation
      or
      other interest of the Debtor in property or in an enterprise or which constitute
      evidence of an obligation of the issuer; and including an uncertificated
      security within the meaning of Part VI (Investment Securities) of the
Business
      Corporations Act
      (Ontario) and all substitutes therefor and dividends and income derived
      therefrom, all of which are herein collectively called the "Securities";

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Security
      Interest"
      has the
      meaning attributed to such term in Section 2.1 hereto; and

     

    "Undertaking"
      means
      all present and future personal property, business, and undertaking of the
      Debtor not being Inventory, Equipment, Accounts, Intangibles, Documents of
      Title, Instruments, Money, Securities or Documents all of which is herein
      collectively called the "Undertaking".

     

    1.2    Headings

     

    The
      inclusion of headings in this Agreement is for convenience of reference only
      and
      shall not affect the construction or interpretation hereof.

     

    1.3    References
      to Articles and Sections

     

    Whenever
      in this Agreement a particular Article, section or other portion thereof is
      referred to then, unless otherwise indicated, such reference pertains to the
      particular Article, section or portion thereof contained herein.

     

    1.4    Currency

     

    Except
      where otherwise expressly provided, all amounts in this Agreement are stated
      and
      shall be paid in U.S. dollars.

     

    1.5    Gender
      and Number

     

    In
      this
      Agreement, unless the context otherwise requires, words importing the singular
      include the plural and vice versa and words importing gender include all
      genders.

     

    1.6    Invalidity
      of Provisions

     

    Each
      of
      the provisions contained in this Agreement is distinct and severable and a
      declaration of invalidity or unenforceability of any such provision or part
      thereof by a court of competent jurisdiction shall not affect the validity
      or
      enforceability of any other provision hereof. To the extent permitted by
      applicable law, the parties waive any provision of law which renders any
      provision of this Agreement invalid or unenforceable in any
      respect.

     

    1.7    Amendment,
      Waiver

     

    No
      amendment or waiver of this Agreement shall be binding unless executed in
      writing by the party to be bound thereby and in the case of the Secured Party,
      such waiver to be obtained in accordance with the terms of the Indenture. No
      waiver of any provision of this Agreement shall constitute a waiver of any
      other
      provision nor shall any waiver of any provision of this Agreement constitute
      a
      continuing waiver unless otherwise expressly provided.

     

    1.8    Governing
      Law, Attornment

     

    This
      Agreement and all documents delivered pursuant hereto shall be governed by
      and
      construed in accordance with the PPSA and the other laws of the Province of
      Ontario and the federal laws of Canada applicable therein and the Debtor hereby
      irrevocably attorns to the non-exclusive jurisdiction of the courts of
      Ontario.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE 2

    SECURITY
      INTEREST

     

    2.1    Creation
      of Security Interest

     

    Subject
      to Sections 2.2 and 2.3 hereof, as continuing collateral security for the due
      and timely payment and performance by the Debtor of the Obligations, the Debtor
      hereby mortgages, charges, pledges, assigns, transfers, and sets over to the
      Secured Party a general and continuing security interest (the "Security
      Interest")
      in all
      of the present and future undertaking, property, both real and personal, and
      assets of the Debtor which is located on or related to or used in connection
      with the Black Fox Property including, without limitation of the
      foregoing;

     

    
      	(a)  	
              all
                Goods (including without limitation all parts, accessories, attachments,
                additions and Accessions to all such Goods) whether or not such Goods
                are
                now or hereafter become fixtures, and all other tangible personal
                property
                located on or related to the Black Fox Property, if any, in each
                case now
                owned or hereafter acquired by or on behalf of the Debtor or in respect
                of
                which the Debtor now or hereafter has any right, title or interest
                (including, without limitation, such as may be returned to or repossessed
                by the Debtor);

            

    

     

    
      	(b)  	
              all
                Inventory located on or related to the Black Fox
                Property;

            

    

     

    
      	(c)  	
              all
                Accounts related to the Black Fox
                Property;

            

    

     

    
      	(d)  	
              all
                Equipment (other than Inventory) located on or related to the Black
                Fox
                Property, including, without limitation, all machinery, tools, apparatus,
                plant, furniture, fixtures and vehicles of whatsoever nature or
                kind;

            

    

     

    
      	(e)  	
              all
                Documents related to the Black Fox
                Property;

            

    

     

    
      	(f)  	
              all
                Documents of Title related to the Black Fox
                Property;

            

    

     

    
      	(g)  	
              all
                Intangibles related to the Black Fox
                Property;

            

    

     

    
      	(h)  	
              all
                Securities related to the Black Fox
                Property;

            

    

     

    
      	(i)  	
              all
                Undertakings related to the Black Fox
                Property;

            

    

     

    
      	(j)  	
              all
                renewals of, accretions to and substitutions for any of the property
                described in Sections 2.1(a) through (e);
                and

            

    

     

    
      	(k)  	
              all
                Proceeds (including Proceeds of Proceeds) of any of the property
                described
                in Sections 2.1(a) through 2.1(e).

            

    

     

    For
      greater certainty, the Secured Party will only have a Secured Interest in
      Accounts, Documents, Documents of Title, Intangibles, Securities and
      Undertakings to the extent any of the foregoing items are related to or used
      in
      connection with the Black Fox Property.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.2    Exception
      for Last Day of Leases

     

    The
      last
      day of any term of years reserved by any lease or any extension or renewal
      thereof, oral or written, or any agreement therefor, now held or hereafter
      acquired by the Debtor, is hereby excepted out of the security created hereby
      or
      by any other instrument supplemental hereto and does not and shall not form
      part
      of the Collateral or by any such other instrument, but the Debtor shall stand
      possessed of the reversion remaining in the Debtor of any leasehold interest
      for
      the time being demised as aforesaid, upon trust to assign and dispose thereof
      as
      the Secured Party shall direct; and upon any sale of the leasehold interest,
      or
      any part thereof, the Secured Party for the purpose of vesting the aforesaid
      reversion of any such term or any renewal thereof in any purchaser or purchasers
      thereof, shall be entitled by deed or other writing to appoint such purchaser
      or
      purchasers or any other person or persons a new trustee or trustees of the
      aforesaid reversion of any such term or renewal thereof in the place of the
      Debtor and to vest the same accordingly in the new trustee or trustees so
      appointed, freed and discharged from any obligation respecting the
      same.

     

    2.3    Exception
      for Contractual Rights

     

    Notwithstanding
      anything else herein, the security interests in the Collateral when created
      hereby shall not extend to, and the Collateral shall not include, any agreement,
      right, license or permit (the "Contractual
      Rights")
      to
      which the Debtor is party or of which the Debtor has the benefit, to the extent
      that the creation of the security interests herein would constitute a breach
      of
      the terms, or permit any person to terminate the Contractual Rights, but in
      such
      event the Debtor shall hold its interest in such Contractual Rights in trust
      for
      the Secured Party for the benefit of the Debentureholders with the obligation
      to
      assign same to any person acquiring all or any part of the Collateral in the
      course of enforcement of the security interests herein created. The Debtor
      covenants and agrees to use its commercially reasonable efforts to obtain any
      consent to assign the Contractual Rights to the Secured Party as may be
      requested by the Secured Party from time to time.

     

    2.4    Attachment
      and Value

     

    The
      Debtor acknowledges and agrees that:

     

    
      	(i)  	
              value
                has been given, and

            

    

     

    
      	(ii)  	
              the
                security interests created hereby attach to the Collateral immediately
                upon execution of this Agreement and the Secured Party and the Debtor
                have
                not agreed to postpone the time of attachment of either such pledge
                by the
                Debtor;

            

    

     

    and,
      to
      the extent that the Debtor does not acquire rights or interests in any of the
      Collateral until after the execution and delivery of this Agreement, the
      security interests created hereby shall attach to such Collateral at the time
      the Debtor acquires rights or interests therein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE 3

    OBLIGATIONS
      SECURED

     

    3.1    Obligations
      Secured

     

    The
      Security Interest granted hereby secures payment, performance and satisfaction
      of the Obligations.

     

     

    ARTICLE 4

    REPRESENTATIONS
      AND WARRANTIES OF THE DEBTOR

     

    4.1    Representations
      and Warranties of the Debtor

     

    The
      Debtor represents and warrants and so long as this Agreement remains in effect
      shall be deemed to continuously represent and warrant that:

     

    
      	(a)  	
              The
                Collateral is genuine and owned by the Debtor free of all Liens,
                save for
                the Permitted Encumbrances.

            

    

     

    
      	(b)  	
              The
                Debtor is the sole legal and beneficial owner of the Black Fox
                Property.

            

    

     

    
      	(c)  	
              No
                other Real Property - The Debtor does not own any abutting lands
                to the
                Black Fox Property. The Debtor represents and warrants that the Black
                Fox
                Property is all of the real property in which it owns or has an interest
                within a five (5) kilometer radius of the boundaries of the Black
                Fox
                Property.

            

    

     

    
      	(d)  	
              Right
                to Encumber - The Debtor has good right and lawful authority to grant,
                assign, transfer, mortgage and charge the Collateral as provided
                in and by
                this Agreement.

            

    

     

    
      	(e)  	
              Permitted
                Encumbrances - The Collateral is free and clear of any Liens except
                the
                security created or intended to be created by this Agreement, the
                Black
                Fox Charge and the Permitted
                Encumbrances.

            

    

     

    
      	(f)  	
              No
                Orders, Notices - Except as disclosed on Schedule "C", there are
                no
                outstanding orders, notices or similar requirements relating to the
                Collateral issued by any building, environmental, fire, health, labour
                or
                police authorities or from any other federal, provincial or municipal
                authority and there are no matters under discussion with any such
                authorities relating to orders, notices or similar
                requirements.

            

    

     

    
      	(g)  	
              Environmental
                -

            

    

     

    
      	(i)  	
              The
                Collateral and the activities and operations of the Debtor, and to
                the
                Debtor’s best knowledge, those of owner, lessee, licensee or other
                occupant comply in all material respects with Environmental Law,
                and are
                not subject to any existing judicial, governmental, regulatory or
                other
                investigations, proceedings, inquiries or notices, and neither the
                Debtor
                nor any present or prior lessee, owner, occupant or licensee of the
                Collateral or any part thereof, or any person having the charge,
                management or control thereof, has filed any notice or report pursuant
                to
                any Environmental Law in connection with the
                Collateral;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(ii)  	
              the
                Debtor has no knowledge of any Environmental Activity in respect
                of the
                Release of any Contaminant at, upon, under, over, within or with
                respect
                to the Collateral or any contiguous real or immovable property to
                or from
                which the Release of a Contaminant could reasonably be
                anticipated;

            

    

     

    
      	(iii)  	
              neither
                the Debtor nor any other party has been, or is, involved in any operations
                at, near or with respect to the Collateral which operations could
                lead to
                the imposition of liability on the Debtor or on any subsequent or
                former
                owner or occupier or person who has or will have the charge, management
                or
                control of the Collateral, or the creation of a lien or charge on
                any
                property under any Environmental Law;
                and

            

    

     

    
      	(iv)  	
              no
                underground storage tanks or surface impoundments or equipment containing,
                or that has contained PCBs or related chemical substances, are located
                on
                or under any property.

            

    

     

    
      	(h)  	
              Enforceability
                - This Agreement has been duly executed and delivered by the Debtor
                and,
                subject to any applicable bankruptcy, insolvency, reorganization,
                liquidation and other similar laws from time to time in effect affecting
                the rights of creditors generally and the availability of equitable
                remedies, constitutes a valid and legally binding obligation of the
                Debtor
                enforceable against the Debtor in accordance with its
                terms.

            

    

     

    
      	(i)  	
              Due
                Authorization and No Conflict - The Debtor has taken or caused to
                be taken
                all necessary corporate action to authorize the creation, execution,
                delivery and performance of this Agreement and the borrowing of money
                hereunder, and no such action requires the consent or approval of
                any
                Governmental Authority or any other Person, nor is any such action
                in
                contravention of or in conflict with any applicable law, rule or
                regulation, or the articles, by-laws or resolutions of Directors
                or
                shareholders of the Debtor or the provisions of any material term,
                covenant or condition under or in respect of any judgment, order,
                indenture, instrument, agreement or undertaking to which the Debtor
                or any
                of its subsidiaries is a party or by which its assets or properties
                are
                bound, except those that have been obtained. The entering into of
                this
                Agreement will not result in the acceleration of any indebtedness
                under
                any other agreements to which the Debtor or any of its subsidiaries
                is a
                party.

            

    

     

    
      	(j)  	
              Permitted
                Encumbrances. - The Debtor is not in breach of any of its obligations
                under those Permitted Encumbrances set out in paragraph (10) through
                to
                (14) inclusive contained in Schedule "B"
                hereto.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(k)  	
              UCC
                Registration - Except in connection with the filing of any Uniform
                Commercial Code financing statements to perfect the Security Interest
                granted under this Agreement, to the best of the Debtor's knowledge,
                after
                due inquiry, the Debtor is not aware of, and has not authorized,
                the
                filing of any Uniform Commercial Code financing statements against
                it with
                respect to the Collateral since the search conducted on January 5,
                2006
                with the currency date of January 4, 2006 of the Article 9 Uniform
                Commercial Code electronic records maintained by the Colorado Secretary
                of
                State.

            

    

     

     

    ARTICLE 5

    COVENANTS
      OF THE DEBTOR

     

    5.1    Negative
      Covenants of the Debtor. 

     

    
      	(a)  	
              The
                Debtor hereby covenants and agrees with the Secured Party on behalf
                of the
                Holders that it will not, without the prior written consent of the
                Secured
                Party (which consent shall only be given if proved by Debentureholders
                by
                an Extraordinary Resolution), do the
                following:

            

    

     

    
      	(i)  	
              at
                any time agree to create or suffer to exist any mortgage, charge,
                pledge,
                lien, privilege, security interest or other encumbrance of any nature
                upon
                the Collateral, except for

            

    

     

    
      	(1)  	
              encumbrances
                in favour of the Secured Party for the benefit of the Holders; and
                

            

    

     

    
      	(2)  	
              the
                Permitted Encumbrances; provided that no provision hereof or elsewhere
                including in the Indenture shall be construed as a subordination
                or
                postponement of the security interest and charge created hereunder
                to or
                in favour of any other charge, lien, security interest or encumbrance,
                whether or not it is a Permitted Encumbrance;

            

    

     

    
      	(ii)  	
              so
                long as any monies secured by this Agreement and the Indenture remain
                outstanding, sell, remove, lease, destroy or otherwise dispose of
                all or
                any part of the Black Fox Property except as contemplated by Sections
                5.1.1(c) and 5.4.1(a)(ii) of the Indenture; and except that the Debtor
                may
                sell or otherwise dispose of furniture, machinery, equipment, vehicles
                and
                accessories subject to the Security Interest created hereunder which
                may
                have become worn out or damaged or otherwise unsuitable for their
                purpose
                on condition that it shall substitute therefor, subject to the lien
                hereof
                and free from prior liens or charges except Permitted Encumbrances,
                property of equal value so that the security hereby constituted shall
                not
                be in any way reduced or impaired;
                or

            

    

     

    
      	(iii)  	
              consolidate,
                amalgamate or merge with any other corporation or
                entity.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(b)  	
              The
                Debtor covenants that, in order to prevent any accumulation after
                maturity
                of unpaid interest or of unpaid Debentures, the Debtor will not directly
                or indirectly extend or assent to the extension of time for payment
                of any
                interest upon any Debentures or of any principal payable in respect
                of any
                Debentures and that it will not directly or indirectly be or become
                a
                party to or approve any such arrangement by purchasing or funding
                any
                interest on the Debentures or any principal thereof or in any other
                manner
                and that the Debtor will deliver to the Secured Party all Debentures
                when
                paid as evidence of such payment.

            

    

     

    
      	(c)  	
              If
                the time for the payment of any interest or principal shall be so
                extended, whether or not such extension is by or with the consent
                of the
                Debtor, notwithstanding anything herein or in the Debentures contained,
                such interest or principal shall not be entitled, in case of default
                hereunder, to the benefit of this Agreement except subject to the
                prior
                payment in full of the principal of all the Debentures then outstanding
                and of all matured interest on such Debentures the payment of which
                has
                not been so extended.

            

    

     

    
      	(d)  	
              The
                Debtor shall not change its name or address without giving at least
                ten
                days’ prior notice to the Secured Party of the new name or address and
                the
                date upon which such change of name or address is to take effect
                and,
                within five Business Days of the change of name or address, the Debtor
                shall provide the Secured Party
                with:

            

    

     

    
      	(i)  	
              a
                notarial or certified copy of the articles of amendment effecting
                the
                change of name;

            

    

     

    
      	(ii)  	
              an
                opinion from legal counsel to the Debtor satisfactory to the Secured
                Party
                as to the correct name of the Debtor and confirming that all appropriate
                registrations, filings or recordings have been made to ensure the
                continued validity and enforceability of this Agreement, the Indenture
                and
                the Black Fox Charge; and

            

    

     

    
      	(iii)  	
              a
                Certificate of the Debtor stating the new address of the
                Debtor.

            

    

     

    
      	(e)  	
              The
                Debtor shall not permit any Person (including any subsidiary of the
                Debtor) to acquire any property which forms part of the Collateral,
                without the prior written consent of the Secured
                Party.

            

    

     

    5.2    Covenants
      of the Debtor.

     

    The
      Debtor hereby covenants and agrees with the Secured Party on behalf of the
      Debentureholders as follows:

     

    
      	(a)  	
              The
                Debtor will duly and punctually pay or cause to be paid to every
                Debentureholder the principal, Redemption Premium and interest accrued
                on
                the Debentures of which he is the Holder (including, in the case
                of
                default, interest on the amount in default) on the dates, at the
                places,
                in the money, and in the manner mentioned in the Indenture and in
                the
                Debentures.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(b)  	
              Corporate
                Existence, etc. - The Debtor will maintain its corporate existence
                and
                those of its subsidiaries’ corporate existence and preserve all of their
                rights, powers, licenses, privileges, franchises and
                goodwill.

            

    

     

    
      	(c)  	
              Defence
                of Interest - The Debtor will, and will cause its subsidiaries to,
                defend
                their respective right, title and interest in and to their respective
                properties (including in the case of the Debtor the Collateral) against
                all claims and demands whatsoever of all persons
                whomsoever.

            

    

     

    
      	(d)  	
              Registrations
                - The Debtor will register this Agreement or notice thereof without
                delay
                at every office where the registration or recording thereof may,
                in the
                opinion of Counsel for the Secured Party, be necessary or desirable
                to
                preserve, perfect or protect the security hereby created, and it
                will
                deliver or exhibit to the Secured Party, on demand, certificates,
                or other
                evidence satisfactory to the Secured Party, establishing such registration
                or recording, and from time to time renew the same, if such renewal
                is, in
                the opinion of Counsel for the Secured Party, necessary or desirable
                to
                preserve, perfect or protect the security hereby
                created.

            

    

     

    
      	(e)  	
              Rents,
                Taxes, etc. - The Debtor will from time to time pay or cause to be
                paid
                all rents, taxes, rates, levies or assessments, ordinary or extraordinary,
                government fees or dues, lawfully levied, assessed or imposed upon
                the
                Collateral or any part thereof, as and when the same become due and
                payable, save and except when and so long as the validity of any
                such
                rents, taxes, rates, levies, assessments, fees or dues is in good
                faith
                being contested by the Debtor by proper legal proceedings, provided
                that
                in such case the Debtor shall satisfy the Secured Party, and if required
                furnish security satisfactory to it, that any such contestation will
                involve no forfeiture of any part of the Collateral. If the Debtor
                defaults in payment of any such rents, taxes, rates, levies, assessments,
                fees or dues then the Secured Party shall be entitled (but not obligated)
                to pay the same in accordance with Section 6.5 of the
                Indenture.

            

    

     

    
      	(f)  	
              Insurance

            

    

     

    
      	(i)  	
              The
                Debtor will insure and keep insured the Black Fox Property against
                loss or
                damage by fire and other insurable hazards and perils which such
                several
                assets are commonly insured against in the jurisdiction in which
                the
                Collateral are located to the full insurable value thereof. The Debtor
                will provide the Secured Party with certificates of such insurance
                and, if
                required, duplicate originals thereof. Each policy of insurance shall
                show
                the Secured Party as loss payee (and named insured under any and
                all
                liability insurance), as its interest may appear, and the Debtor
                will
                cause to be affixed to each policy of insurance a mortgage clause
                or
                mortgage endorsement in form satisfactory to the Secured Party and
                providing for a minimum of 30 days’ notice to the Secured Party of
                cancellation or lapse. If the Debtor fails to obtain any such insurance
                the Secured Party shall be entitled (but not obligated) to obtain
                such
                insurance in accordance with Section 6.5 of the
                Indenture.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(ii)  	
              Any
                proceeds of insurance received by, or payable to, the Secured Party
                under
                the terms hereof shall be payable as in accordance with Section Section
                6.11 of the Indenture.

            

    

     

    
      	(g)  	
              Maintenance
                of the Collateral - The Debtor will not permit waste to be committed
                or
                suffered on the Black Fox Property or the Collateral, will diligently
                maintain, use, operate and repair the Black Fox Property and will
                carry on
                and conduct its business with respect to the Black Fox Property in
                a
                proper and efficient manner so as to preserve and protect the Collateral
                and the earnings, incomes, rents, issues, profits, benefits and advantages
                thereof. The Secured Party may be entitled (but not obligated) to
                make
                such repairs as it reasonably deems necessary and any such repairs
                shall
                be paid in accordance with Section 6.5 of the
                Indenture.

            

    

     

    
      	(h)  	
              Records
                - The Debtor will, and will cause its Subsidiaries to, keep proper
                books
                of account and records with respect to the operation of, and will,
                upon
                the reasonable request of the Secured Party, provide the Secured
                Party
                with information concerning the Collateral and the business of the
                Debtor
                and the property and business of the Debtor and its
                subsidiaries.

            

    

     

    
      	(i)  	
              Financial
                Statements. - The Debtor will furnish to the Secured Party a copy
                of all
                financial statements, whether annual or interim, of the Debtor and
                the
                report, if any, of the Debtor's auditors thereon and of all annual
                and
                other periodic reports of the Debtor furnished to its shareholders
                at the
                same time as they are furnished to such shareholders. Upon receipt
                of such
                financial statements, the Secured Party shall, while such statements
                are
                current, make such statements available for inspection by Debentureholders
                on their reasonable request. No obligation shall rest with the Secured
                Party to analyze such statements or evaluate the performance of the
                Debtor
                in any matter whatsoever.

            

    

     

    
      	(j)  	
              Other
                Obligations. - The Debtor will duly and punctually perform and carry
                out
                all of the acts or things to be done by it as provided in this Agreement,
                the Indenture and the Black Fox
                Charge.

            

    

     

    
      	(k)  	
              Notice
                of Event of Default. - The Debtor will give notice to the Secured
                Party of
                the occurrence of any Events of Default hereunder, default under
                the
                Indenture or the Black Fox Charge, if then
                effective.

            

    

     

    
      	(l)  	
              Access
                - The Debtor will, and will cause its subsidiaries, from time to
                time
                permit duly authorized agents or representatives of the Secured Party,
                during reasonable business hours, to enter upon and inspect the Black
                Fox
                Property and the Collateral and the business of the Debtor and its
                subsidiaries and their respective books of accounts and
                records.

            

    

     

    
      	(m)  	
              Performance
                of Obligations - The Debtor will comply, and cause its subsidiaries
                to
                comply, with the requirements of agreements and documents to which
                it is a
                party and all applicable laws, consents and directives of any
                administrative, governmental or judicial authority or organization
                or
                body, if non-compliance with such laws, agreements or documents might
                adversely affect the financial condition of the Debtor and its
                subsidiaries, the Debtor’s ability to perform and observe its obligations
                under this Agreement or the validity or priority of the security
                created
                by this Agreement, or if such laws, agreements or documents otherwise
                affect the Black Fox Property and the Collateral. The Debtor will
                forthwith notify the Secured Party of any non-compliance with any
                such
                laws, agreements and documents.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(n)  	
              Further
                Assurances - At any time and all times the Debtor will do, execute,
                acknowledge and deliver or will cause to be done, executed, acknowledged
                and delivered all such further acts, deeds, conveyances, mortgages,
                transfers and assurances in law as is required for the purpose of
                giving
                the Secured Party a valid mortgage, charge or security of the nature
                herein specified upon all property intended to be covered hereby,
                and for
                the better assuring, conveying, mortgaging, assigning, confirmation
                or
                charging unto the Secured Party all and singular the hereditament
                and
                premises, estates and property hereby mortgaged and charged, or intended
                so to be, in favour of the Secured
                Party.

            

    

     

    
      	(o)  	
              Environmental
                Compliance - The Debtor will comply, and will cause all subsidiaries
                and
                occupants and/or users of the Black Fox Property and the Collateral
                to
                comply in all respects with the requirement of any Environmental
                Law
                applicable to the Black Fox Property and the Collateral or the
                subsidiaries.

            

    

     

    
      	(p)  	
              Environmental
                Indemnity - The Debtor shall at all times indemnify and hold harmless
                the
                Secured Party and each Debentureholder, and their respective officers,
                directors, employees, agents, representatives and shareholders against
                and
                from any and all claims, suits, actions, debts, damages, costs, losses,
                obligations, judgments, charges, and expenses, of any nature whatsoever
                suffered or incurred by the Secured Party or Debentureholder, whether
                upon
                realization of the security interests created by this Agreement,
                or as
                successor to or assignee of any right or interest of the Debtor,
                or as a
                result of any order, investigation or action by any governmental
                or
                regulatory authority relating to the Debtor or the subsidiaries or
                their
                respective business, undertaking, property or assets or as privileged
                or
                hypothecary creditor or mortgagee in possession of property or as
                successor or successor-in-interest to the Debtor as a result of any
                taking
                of possession of all or any property or by foreclosure deed or deed
                in
                lieu of foreclosure or by any other means relating to the Debtor
                or its
                subsidiaries, under or on account of any breach of Environmental
                Law, or
                the assertion of any lien thereunder with respect
                to:

            

    

     

    
      	(i)  	
              the
                Release of a Contaminant, the threat of the Release of any Contaminant,
                or
                the presence of any Contaminant affecting the Black Fox Property
                and the
                Collateral, whether or not the same originates or emanates from the
                Black
                Fox Property or any contiguous real or immovable property or personal
                property located thereon, including any loss of value of the Black
                Fox
                Property as a result of any of the
                foregoing;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(ii)  	
              the
                Release of a Contaminant owned by, or under the charge, management
                or
                control of the Debtor, or any predecessor or assignor of the Debtor
                or its
                subsidiaries;

            

    

     

    
      	(iii)  	
              any
                costs incurred by any federal, state, provincial, municipal, local
                or
                other governmental or regulatory authority or any other person or
                damages
                from injury to, destruction of, or loss of natural resources in relation
                to, the Black Fox Property or personal property located thereon including
                the Collateral, including reasonable costs of assessing such injury,
                destruction or loss incurred pursuant to any Environmental
                Law;

            

    

     

    
      	(iv)  	
              liability
                for personal injury or property damage arising by reason of any civil
                law
                offences or quasi-offences or under any statutory or common law tort
                or
                similar theory, including, without limitation, damages assessed for
                the
                maintenance of a public or private nuisance or for the carrying on
                of a
                dangerous activity at, near, or with respect to the Black Fox Property
                or
                property of the subsidiaries or elsewhere,
                and/or

            

    

     

    
      	(v)  	
              any
                other environmental matters affecting the Black Fox Property, the
                Collateral or the operations and activities of the Debtor or its
                subsidiaries within the jurisdiction of any federal, state, provincial,
                municipal or local environmental
                agency.

            

    

     

    The
      Debtor’s obligation under this Section 5.2(p)
      shall
      arise upon the discovery of the presence of any Contaminant, whether or not
      any
      federal, state, provincial, municipal or local environmental agency has taken
      or
      threatened any action in connection with the presence of any Contaminant. The
      Debtor acknowledges that the Secured Party has relied and will continue to
      rely
      as applicable, upon the Debtor’s representations, warranties and covenants. It
      is the intention of the Debtor and the Secured Party that the provisions of
      this
      Section shall supersede any other provisions in this Agreement, and all other
      documents and instruments which in any way limit the liability of the Debtor
      and
      that the Debtor shall be liable for any obligations arising under this Section
      even if the amount of the liability incurred exceeds the aggregate outstanding
      amount of the Debentures. The obligations of the Debtor arising under this
      Section are absolute and unconditional and shall not be affected by any act,
      omission or circumstance whatsoever, except in respect of negligence or wilful
      misconduct by the Secured Party in the case of indemnity in favour of the
      Secured Party and except in respect of negligence or wilful misconduct by a
      Debentureholder in the case of indemnity in favour of a
      Debentureholder.
      This
      Section shall survive the repayment of the principal sum of the Debentures,
      the
      removal or resignation of the Secured Party and the termination of the trusts
      created hereunder and shall survive the transfer of any or all right, title
      and
      interest in and to the Black Fox Property and the Collateral by the Debtor
      to
      any party, whether or not affiliated with the Debtor. Any amount payable or
      owing under this Section 5.2(p)
      shall be
      added to the principal sums of the Debentures on a pro
      rata
      basis
      and shall be secured hereby and shall be payable together with interest thereon
      calculated and payable at the rate and at the times and in the manner provided
      for herein for interest arrears on the principal sum of the Debentures.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(q)  	
              Quiet
                Possession. That on default by the Debtor hereunder the Secured Party
                may
                peaceably and quietly enter into and hold and occupy the Black Fox
                Property and the Collateral without hindrance, interference or denial
                of
                the Debtor or of anyone claiming under it or of any prior encumbrancers
                whatsoever.

            

    

     

    
      	(r)  	
              To
                Hold the Proceedings of Unauthorized Sale in Trust. In the event
                the Black
                Fox Property, the Collateral or any part thereof are sold or disposed
                of
                prior to the full discharge of this Agreement, in any manner not
                authorized by this Agreement, the Debtor shall hold all proceeds
                of such
                sale or disposition received by the Debtor as trustee for the Secured
                Party until the Debtor has been fully released from this Agreement
                by the
                Secured Party.

            

    

     

    
      	(s)  	
              Not
                to Remove. Prior to the removal of any of the Black Fox Property
                or the
                Collateral from the province or other jurisdiction in which it is
                situated
                at the date of this Agreement or to leasehold the property, the Debtor
                shall, and shall cause its subsidiaries to, effect such further
                registrations and obtain such other consents and give such other
                security,
                at the sole cost and expense of the Debtor, as may be required or
                desirable to protect or preserve the security hereby created, and
                the
                Debtor shall forthwith notify the Secured Party of the intended removal
                and the action proposed to be
                taken.

            

    

     

     

    ARTICLE 6

    COLLECTION
      OF DEBTS

     

    6.1    Collection
      of Debts

     

    Upon
      the
      occurrence of an Event of Default, the Secured Party may give notice of the
      Security Interest to any Person obligated to pay any debt or liability
      constituting Collateral and may also direct such Person to make all payments
      on
      account of any such debt or liability to the Secured Party. The Debtor
      acknowledges that any payments received by the Debtor from such Persons, whether
      before or after notification of the Security Interest to such Persons and
      whether before or following the occurrence of an Event of Default, shall be
      received and held by the Debtor in trust, or as agent in the Province of Quebec,
      for the Secured Party and shall be turned over to the Secured Party upon
      request.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE 7

    EVENTS
      OF DEFAULT

     

    7.1    Events
      of Default

     

    The
      security hereby constituted shall become enforceable, subject to the terms
      herein contained, in each and every one of the following events (hereinafter
      sometimes referred to as an "Event
      of Default"):

     

    
      	(a)  	
              Failure
                to Pay - If the Debtor does not pay when due any principal, interest
                or
                other amount payable by it under any Debenture at the place and in
                the
                currency in which such amount is expressed to be
                payable.

            

    

     

    
      	(b)  	
              Misrepresentation
                - If any representation or warranty or statement made herein, in
                the
                Indenture or in the Black Fox Charge proves to be untrue when
                made.

            

    

     

    
      	(c)  	
              Default
                in Covenant - If the Debtor makes default in the observance or performance
                of some other thing hereby required to be done or some other covenant
                or
                condition hereby required to be observed or performed under this
                Agreement, the Indenture, the Black Fox Charge, any Debenture or
                an "Event
                of Default" or "Default" shall have occurred under the Black Fox
                Charge.

            

    

     

    
      	(d)  	
              Assignment
                for Benefit of Creditors - If the Debtor or any of its subsidiaries
                makes
                a general assignment for the benefit of creditors; or any proceeding
                is
                instituted by it seeking relief as debtor, or to adjudicate it a
                bankrupt
                or insolvent, or seeking liquidation, winding-up, reorganization,
                arrangement, adjustment or composition of it or its debts or for
                an order
                for similar relief under any law relating to bankruptcy, insolvency,
                reorganization or relief of debtors (including under any statutes
                relating
                to the incorporation of companies) or seeking appointment of a receiver
                or
                trustee, or other similar official for it or for any substantial
                part of
                its properties or assets; or any corporate or partnership action
                is taken
                to authorize any of the actions referred to in this
                Section.

            

    

     

    
      	(e)  	
              Insolvency
                or Bankruptcy Proceedings - If any proceedings are instituted against
                the
                Debtor or any of its subsidiaries seeking to adjudicate it a bankrupt
                or
                insolvent, or seeking liquidation, winding-up, reorganization,
                arrangement, adjustment or composition of it or its debts or an order
                for
                similar relief under any law relating to bankruptcy, insolvency,
                reorganization or relief of debtors (including under any statutes
                relating
                to the incorporation of companies) or seeking appointment of a receiver,
                trustee or other similar official for it or for any substantial part
                of
                its properties or assets.

            

    

     

    
      	(f)  	
              Appointment
                of Receiver, etc. - If a receiver, trustee, or other similar official
                with
                like powers is appointed with respect to, or any encumbrancer shall
                take
                possession of, any of the properties or assets of the Debtor or any
                of its
                subsidiaries.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(g)  	
              CCAA
                Proceedings - If any proceedings with respect to the Debtor or any
                of its
                subsidiaries are commenced under the Companies’
                Creditors Arrangement Act
                (Canada).

            

    

     

    
      	(h)  	
              Encumbrances
                - If an encumbrancer or secured creditor shall appoint a receiver
                or agent
                or other similar official over any part of the Collateral, or take
                possession of any part of the Collateral or the property of any its
                subsidiaries or if any execution, distress or other process of any
                court
                becomes enforceable against any of the Collateral or the property
                of any
                its subsidiaries, or a distress or like process is levied upon any
                of the
                Collateral.

            

    

     

    
      	(i)  	
              Execution,
                Seizure or Garnishment - If any execution, seizure, garnishment,
                sequestration, extent or any other process of any court becomes
                enforceable against the Debtor or if a distress or analogous process
                is
                levied upon the Collateral or the property of any its subsidiaries
                or any
                part thereof.

            

    

     

    
      	(j)  	
              Ceasing
                to Carry on Business - If the Debtor takes any corporate proceedings
                for
                its dissolution, liquidation or amalgamation with any other company
                or if
                the corporate existence of the Debtor or any of its subsidiaries
                shall be
                terminated by expiration, forfeiture or otherwise, or if the Debtor
                ceases
                or threatens to cease, to carry on all or a substantial part of its
                business.

            

    

     

    
      	(k)  	
              Unlawful
                Obligations - If at any time it is unlawful for the Debtor to perform
                any
                of its obligations under this Agreement, the Black Fox Charge or
                the
                Indenture in the manner contemplated hereunder or
                thereunder.

            

    

     

    
      	(l)  	
              Failure
                to Satisfy Environmental Orders - If any environmental order or
                environmental lien is issued under any Environmental Law against
                the
                Collateral or the Debtor or the business or the property of any of
                its
                subsidiaries, provided that any environmental order has not been
                satisfied
                or discharged within thirty (30) days of the date the environmental
                order
                was received by the Debtor.

            

    

     

    7.2    Acceleration
      on Default

     

    If
      any
      Event of Default has occurred and is continuing, the Secured Party may in its
      discretion, and shall upon receipt of a Debentureholders' Request, subject
      to
      Section 7.4 of the Indenture, by notice in writing to the Debtor declare the
      principal of and interest on the Debentures then outstanding and any other
      moneys
      payable hereunder to be due and payable and the same shall forthwith become
      immediately due and payable to the Secured Party and the Debtor shall pay
      forthwith to the Secured
      Party
      for the
      benefit of the Debentureholders the principal of and accrued and unpaid interest
      (including interest on amounts in default) on such Debentures and all other
      moneys payable hereunder, together with subsequent interest thereon at the
      rate
      borne by the Debentures from the date of such declaration until payment is
      received by the Secured
      Party.
      Such
      payment when made shall be deemed to have been made in discharge of the Debtor's
      obligations hereunder and any moneys so received by the Secured
      Party
      shall be
      applied as provided in Section 8.7 of the Indenture. Notwithstanding anything
      contained in the foregoing or elsewhere in this Indenture, in the event that
      the
      Event of Default (other than the Event of Default set out in Sections 7.1.1(d),
      7.1.1(e), 7.1.1(f) and 7.1.1(g) of the Indenture has occurred and
      the
      Applicable Cure Period has expired,
      then
      all principal and interest on the Debentures then outstanding and any other
      monies due and payable hereunder shall forthwith immediately become due and
      payable to the Secured Party without further action by the Secured
      Party.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE 8

    ENFORCEMENT

     

    8.1    Remedies

     

    Whenever
      an Event of Default shall have occurred and the Applicable Cure Period has
      expired, and has not been waived by the Debentureholders in accordance with
      Section 7.4 of the Indenture, the Secured Party on behalf of the
      Debentureholders, may, subject to Section 13.4 of the Indenture, proceed to
      realize the security hereby constituted and to enforce its rights:

     

    
      	(a)  	
              by
                entry, with the right to have, hold, use, occupy, possess and enjoy
                the
                Collateral without the let, suit, hindrance, interruption or denial
                of the
                Debtor, its successors or assigns;

            

    

     

    
      	(b)  	
              by
                entry, with the right to make such arrangements for completing the
                construction of, repairing or putting in order any buildings or other
                improvements on the Collateral, or for inspecting, taking care of,
                leasing, collecting the rents of and managing generally the Collateral
                as
                it may deem expedient, and all reasonable costs, charges and expenses,
                including allowances for the time and service of any employee or
                representative of the Secured Party or other person appointed for
                the
                above purposes shall be paid in accordance with Section 13.4.4 of
                the
                Indenture;

            

    

     

    
      	(c)  	
              by
                the appointment, by an instrument in writing, of any person or persons,
                as
                a receiver (which term includes a receiver and manager) or receivers
                of
                all or any part of the Collateral, and the Secured Party may remove
                any
                receiver or receivers so appointed and appoint another or others
                in his or
                their stead;

            

    

     

    
      	(d)  	
              under
                the provisions of Section 8.4 of the Indenture or other sale permitted
                at
                law;

            

    

     

    
      	(e)  	
              by
                proceedings in any court of competent jurisdiction for the appointment
                of
                a receiver or receivers;

            

    

     

    
      	(f)  	
              by
                proceeding in any court of competent jurisdiction for
                foreclosure;

            

    

     

    
      	(g)  	
              by
                any other action, suit, proceeding or other remedy authorized or
                permitted
                by law or by equity; and

            

    

     

    
      	(h)  	
              enjoy
                and exercise all of the rights and remedies of a secured party under
                the
                PPSA.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.2    Remedies
      Cumulative

     

    No
      such
      remedy for the realization of the security hereby constituted or for the
      enforcement of the rights of the Secured Party shall be exclusive of or
      dependent upon any other such remedy but any one or more of such remedies may
      from time to time be exercised independently or in combination.

     

    8.3    Receiver

     

    Subject
      to compliance with Section 13.4 of the Indenture and subject to the provisions
      of any instrument in writing appointing a receiver or receivers, upon the
      appointment hereunder of a receiver for the Collateral or any part thereof,
      the
      following provisions shall apply:

     

    
      	(a)  	
              Every
                such receiver shall have unlimited access to the Collateral as agent
                and
                attorney for the Debtor (which right of access shall not be revocable
                by
                the Debtor) and shall have full power and unlimited authority
                to:

            

    

     

    
      	(i)  	
              take
                possession of the Collateral or any part
                thereof;

            

    

     

    
      	(ii)  	
              carry
                on or concur in carrying on the business of the Debtor in respect
                of the
                Collateral;

            

    

     

    
      	(iii)  	
              collect
                the rents and profits from tenancies whether created before or after
                these
                presents;

            

    

     

    
      	(iv)  	
              lease
                or concur in leasing any portion of the Collateral which may become
                vacant
                on such terms and conditions as he considers advisable and enter
                into and
                execute leases, accept surrenders and terminate
                leases;

            

    

     

    
      	(v)  	
              complete
                the construction of any building or buildings or other erections
                or
                improvements on the Collateral left by the Debtor in an unfinished
                state
                or award the same to others to complete and purchase, repair and
                maintain
                any personal property including, without limitation, appliances and
                equipment, necessary or desirable to render the premises operable
                or
                rentable, and take possession of and use or permit others to use
                all or
                any part of the Debtor's materials, supplies, plans, tools, equipment
                (including appliances) and property of every kind and
                description;

            

    

     

    
      	(vi)  	
              insure,
                manage, operate, repair, alter or extend the Collateral;
                and

            

    

     

    
      	(vii)  	
              sell
                or otherwise dispose of all or any part of the
                Collateral;

            

    

     

    and
      the
      Debtor undertakes to ratify and confirm whatever any such receiver may do with
      respect to the Collateral.

     

    
      	(b)  	
              The
                Secured Party may at its discretion vest the receiver with all or
                any of
                the rights and powers of the Secured
                Party.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(c)  	
              The
                Secured Party may fix the reasonable remuneration of the receiver
                who
                shall be entitled to deduct the same out of the revenue or the sale
                proceeds of the Collateral.

            

    

     

    
      	(d)  	
              Every
                such receiver shall be deemed the agent or attorney of the Debtor
                and, in
                no event, the agent of the Secured Party shall not be in any way
                responsible for the acts or omissions of any such
                receiver.

            

    

     

    
      	(e)  	
              The
                appointment of any such receiver by the Secured Party shall not result
                in
                or create any liability or obligation on the part of the Secured
                Party to
                the receiver or to the Debtor or to any other person and no appointment
                or
                removal of a receiver and no actions of a receiver shall constitute
                the
                Secured Party a mortgagee in possession or responsible as
                such.

            

    

     

    
      	(f)  	
              No
                such receiver shall be liable to the Debtor to account for monies
                other
                than monies actually received by him in respect of the Collateral,
                or any
                part thereof, and out of such monies so received every such receiver
                shall, in the following order, pay:

            

    

     

    
      	(i)  	
              his
                remuneration as aforesaid;

            

    

     

    
      	(ii)  	
              all
                costs and expenses of every nature and kind incurred by him in connection
                with the exercise of his powers and authority hereby
                conferred;

            

    

     

    
      	(iii)  	
              interest,
                principal and other money which may, from time to time, be or become
                charged upon the Collateral in priority to these presents, including
                taxes;

            

    

     

    
      	(iv)  	
              to
                the Secured Party all interest, principal and other monies due hereunder
                to be paid in such order as the Secured Party in its discretion shall
                determine;

            

    

     

    
      	(v)  	
              and
                thereafter, every such receiver shall be accountable to the Debtor
                for any
                surplus.

            

    

     

    The
      remuneration and expenses of the receiver shall be paid by the Debtor on demand
      and shall be a charge on the Collateral and shall bear interest from the date
      of
      demand at the interest rate being charged pursuant to Section 2.2.1 of the
      Indenture.

     

    
      	(g)  	
              Save
                as to claims for accounting under Section 8.3.1(f) of the Indenture,
                the
                Debtor hereby releases and discharges any such receiver from every
                claim
                of every nature, whether sounding in damages or not which may arise
                or be
                caused to the Debtor or any person claiming through or under him
                by reason
                or as a result of anything done by such receiver unless such claim
                be the
                direct and proximate result of dishonesty or
                fraud.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(h)  	
              The
                Secured Party may, at any time and from time to time, terminate any
                such
                receivership by notice in writing to the Debtor and to any such
                receiver.

            

    

     

    
      	(i)  	
              The
                statutory declaration of an officer of the Secured Party as to default
                under the provisions of these presents and as to the due appointment
                of
                the receiver pursuant to the terms hereof shall be sufficient proof
                thereof for the purposes of any person dealing with a receiver who
                is
                ostensibly exercising powers herein provided for and such dealing
                shall be
                deemed, as regards such person, to be valid and
                effectual.

            

    

     

    
      	(j)  	
              The
                rights and powers conferred herein in respect of the receiver are
                supplemental to and not in substitution of any other rights and powers
                which the Secured Party may have.

            

    

     

    8.4    Sales

     

    Subject
      to compliance of Section 13.4 of the Indenture, the Secured Party may enforce
      the security granted hereunder as follows:

     

    
      	(a)  	
              Method
                of Sale - If, upon the happening of an Event of Default, the security
                hereby constituted shall become enforceable, the Secured Party may,
                either
                before or after any entry, sell and dispose of the Collateral including,
                without limitation, any rents and profits thereof either as a whole
                or in
                separate parcels, at public auction or by tender or by private sale
                at
                such time or times as the Secured Party may determine, and may make
                such
                sale either for cash or credit or part cash and part credit, and
                with or
                without advertisement, and upon such conditions as to upset and price
                and
                with or without a reserve bid as the Secured Party may deem
                proper.

            

    

     

    
      	(b)  	
              Rescission
                and Resale - The Secured Party may also rescind or vary any contract
                of
                sale that may have been entered into and resell with or under any
                of the
                powers conferred hereunder and adjourn any such sale from time to
                time
                without being answerable for any loss occasioned by such sale or
                by any
                postponement thereof.

            

    

     

    
      	(c)  	
              Deeds
                - The Secured Party may execute and deliver to the purchaser or purchasers
                of the Black Fox Property or any part thereof good and sufficient
                deeds,
                assurances and conveyances for the same, the Secured Party being
                hereby
                constituted the irrevocable attorney of the Debtor for the purpose
                of
                making such sale and executing such deeds, assurances and
                conveyances.

            

    

     

    
      	(d)  	
              Sale,
                Bars, Claims through Debtor - Any such sale made as aforesaid shall
                be a
                perpetual bar both in law and in equity against the Debtor and all
                other
                persons claiming the said property or any part thereof, by, from,
                through
                or under the Debtor.

            

    

     

    
      	(e)  	
              Sale
                Proceeds - In the case of a sale for cash or credit, or part cash
                and part
                credit, the Secured Party shall be bound to pay to the Debtor only
                such
                moneys as have been actually received from purchasers after the
                satisfaction of all claims of the Secured Party including payment
                of any
                costs, charges and expenses incurred by the Secured Party in the
                taking,
                recovering, keeping possession of, and any sale of, the Black Fox
                Property.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.5    Prior
      Encumbrances and Expenses

     

    The
      Secured Party may pay the amount of any encumbrance, lien or charge now or
      hereafter existing, or to arise or to be claimed upon the Black Fox Property
      having priority over this Agreement, including any taxes, utility charges or
      other rates on the Black Fox Property, or any of them, and may pay all costs,
      charges and expenses and all solicitors’ fees as between a solicitor and his
      client, which may be incurred in taking, recovering and keeping possession
      of
      the Black Fox Property, or in protecting, repairing, restoring or preserving
      the
      Black Fox Property, and generally in any proceedings or steps of any nature
      whatever properly taken in connection with or to realize this security, or
      in
      respect of the collection of any overdue interest, principal, insurance premiums
      or any other monies whatsoever payable by the Debtor hereunder whether any
      action or any judicial proceedings to enforce such payments has been taken
      or
      not. The amount so paid shall be added to the debt hereby secured and be a
      charge on the Black Fox Property and shall bear interest at the rate aforesaid,
      and shall be payable forthwith by the Debtor to the Secured Party. Further,
      the
      non-payment of such amount shall be an Event of Default and shall entitle the
      Secured Party to exercise the remedies hereby given. In the event of the Secured
      Party paying the amount of any such encumbrance, lien or charge, taxes or rates,
      either out of the monies advanced on the security or otherwise, the Secured
      Party shall be entitled to all the rights, equities and securities of the person
      or persons, company, corporation, or government so paid.

     

    8.6    Enforcement
      by the Secured Party

     

    If
      an
      Event of Default shall have occurred hereunder or default shall have occurred
      under the Black Fox Charge, but subject to Sections 7.4 and 13.4 of the
      Indenture and to the provisions of any Extraordinary Resolution that may be
      passed by the Debentureholders as provided in the Indenture:

     

    
      	(a)  	
              the
                Secured Party may in its discretion proceed to enforce the rights
                of the
                Secured Party and of the Debentureholders by any action, suit, remedy
                or
                proceeding authorized or permitted by this Agreement, the Indenture,
                the
                Black Fox Charge or by law or equity; and may file such proofs of
                claim
                and other papers or documents as may be necessary or advisable in
                order to
                have the claims of the Secured Party and of the Debentureholders
                filed in
                any bankruptcy, insolvency, winding-up or other judicial proceedings
                relating to the Debtor or AGI;

            

    

     

    
      	(b)  	
              no
                such remedy for the enforcement of the rights of the Secured Party
                or the
                Debentureholders shall
                be
                exclusive of or dependent on any other such remedy but any one or
                more of
                such remedies may from time to time be exercised independently or
                in
                combination;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(c)  	
              all
                rights
                of action hereunder may be enforced by the Secured Party without
                the
                possession of any of the Debentures or the production thereof on
                the trial
                or other proceedings relating thereto;
                and

            

    

     

    
      	(d)  	
              upon
                receipt of a Debentureholders' Request and upon receiving sufficient
                funds
                and being indemnified to its satisfaction as provided in Section
                13.4 of
                the Indenture, the Secured Party shall exercise or take such one
                or more
                of such remedies as the Debentureholders' Request may direct, provided
                that if any such Debentureholders' Request directs the Secured Party
                to
                take proceedings out of court the Secured Party may in its discretion
                take
                judicial proceedings in lieu
                thereof.

            

    

     

     

    ARTICLE 9

    GENERAL

     

    9.1    Power
      of Attorney

     

    To
      the
      extent permitted by Applicable Law, the Debtor hereby appoints the Secured
      Party
      as the Debtor's attorney, with full power of substitution, in the name and
      on
      behalf of the Debtor, to execute, deliver and do all such acts, deeds, leases,
      documents, transfers, demands, conveyances, assignments, contracts, assurances,
      consents, financing statements and things as the Debtor has herein agreed to
      execute, deliver and do or as may be required by the Secured Party or any
      Receiver to give effect to this Agreement or in the exercise of any rights,
      powers or remedies hereby conferred on the Secured Party, and generally to
      use
      the name of the Debtor in the exercise of all or any of the rights, powers
      or
      remedies hereby conferred on the Secured Party. This appointment, coupled with
      an interest, shall not be revoked by the insolvency, bankruptcy, dissolution,
      liquidation or other termination of the existence of the Debtor or for any
      other
      reason.

     

    9.2    Perfection
      of Security

     

    The
      Debtor will register this Agreement or notice thereof without delay at every
      office where the registration or recording thereof may, in the opinion of
      Counsel for the Secured Party, be necessary or desirable to preserve, perfect
      or
      protect the security hereby created, and it will deliver or exhibit to the
      Secured Party, on demand, certificates, or other evidence satisfactory to the
      Secured Party, establishing such registration or recording, and from time to
      time renew the same, if such renewal is, in the opinion of Counsel for the
      Secured Party, necessary or desirable to preserve, perfect or protect the
      security hereby created.

     

    9.3    Notice

     

    
      	(a)  	
              Any
                notice to the Debtor under the provisions of this Agreement shall
                be valid
                and effective if delivered personally or by courier to, or by facsimile
                transmission, addressed to, the Debtor
                at:

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5655
      South Yosemite Street

    Suite
      200

    Greenwood
      Village, Colorado

    80111-3220

    

    Fax:  720-482-0957

    Attn:
       President

     

    with
      a
      copy to:

     

    Fogler,
      Rubinoff LLP

    95
      Wellington Street West, Suite 1200

    Toronto-Dominion
      Centre

    Toronto,
      Ontario

    M5J
      2Z9

    

    Fax:
       416-941-8828

    Attn: Michael
      Hobart

     

    and
      to

     

    Davis
      Graham & Stubbs LLP

    1550
      17th
      Street, Suite 500

    Denver,
      Colorado

    80202-1500

     

    Fax:  303-892-7400

    Attn: Deborah
      Friedman

     

    and
      shall
      be deemed to have been given on the date of delivery. The Debtor may from time
      to time notify the Secured Party of a change in address which thereafter, until
      changed by further notice, shall be the address of the Debtor for all purposes
      of this Agreement.

     

    
      	(b)  	
              Any
                notice to the Secured Party under the provisions of this Agreement
                shall
                be valid and effective if delivered personally to, or by facsimile
                transmission, or, subject to Section 12.4 of the Indenture, if given
                by
                registered mail, postage prepaid, addressed to, the Secured Party
                at:

            

    

     

    The
      Canada Trust Company

    79
      Wellington Street West

    8th
      Floor

    TD
      Waterhouse Tower

    Toronto-Dominion
      Centre

    Toronto,
      Ontario

    M5K
      1A2

     

    Fax: 416-983-2044

    Attn: Vice
      President Corporate Trust and Registered Plan Trust Services

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    with
      a
      copy contemporaneously hand delivered or by facsimile to:

     

    WeirFoulds
      LLP

    Suite
      1600, 130 King Street West

    Toronto,
      Ontario

    M5X
      1J5

     

    Fax: 416-365-1876

    Attn.: David
      S.
      Brown

     

    
      	(c)  	
              Any
                notice, consent, waiver, direction or other communication aforesaid
                shall,
                if delivered, be deemed to have been given and received on the date
                on
                which it was delivered to the address provided herein (if a Business
                Day
                and, if not, the next succeeding Business Day) and if sent by facsimile
                transmission be deemed to have been given and received at the time
                of
                receipt unless actually received after 5:00 p.m. at the point of
                delivery
                in which case it shall be deemed to have been given and received
                on the
                next Business Day. The Secured Party may from time to time notify
                the
                Debtor of a change in address which thereafter, until changed by
                further
                notice, shall be the address of the Secured Party for all purposes
                of this
                Agreement.

            

    

     

    9.4    Discharge

     

    Upon
      proof being given to the reasonable satisfaction of the Secured Party that
      all
      the Debentures and interest (including interest on amounts in default) thereon
      have been paid or satisfied or that all the outstanding Debentures having
      matured or having been duly called for redemption or the Secured Party having
      been given irrevocable instructions by the Debtor to give within 90 days notice
      pursuant to Section 3.3 of the Indenture of redemption of all the outstanding
      Debentures, such payment or redemption has been duly provided for by payment
      to
      the Secured Party or otherwise, and upon payment of all costs, charges and
      expenses properly incurred by the Secured Party in relation to Indenture, this
      Agreement and the Black Fox Charge, and all interest thereon and the
      remuneration of the Secured Party, or upon provision satisfactory to the Secured
      Party being made therefor, the Secured Party shall, at the request and at the
      expense of the Debtor, execute and deliver to the Debtor such deeds or other
      instruments as shall be necessary to evidence the satisfaction and discharge
      of
      the Indenture, this Agreement and the Black Fox Charge, and to release the
      Debtor from its covenants contained herein and in the Indenture except those
      relating to the indemnification of the Secured Party.

     

    9.5    Liability
      for Deficiency

     

    If
      the
      proceeds of realization by or on behalf of the Secured Party from the
      disposition of the Collateral are not sufficient to satisfy the Obligations
      in
      full, the Debtor shall be liable to pay such deficiency to the Secured Party
      forthwith on demand.

     

    9.6  Conflict
      with Indenture

     

    In
      the
      event of any conflict, contradiction or inconsistency between this Agreement
      and
      the Indenture, or in the event that any matter is dealt with in different terms
      not necessarily in conflict, the Secured Party shall have the sole right to
      determine which provision or provisions apply.

     

    9.7    Amendment

     

    This
      Agreement may only be amended, supplemented or terminated by a written agreement
      signed by the Debtor and the Secured Party.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9.8    Entire
      Agreement

     

    There
      are
      no representations, agreements, warranties, conditions, covenants or terms,
      express or implied, collateral or otherwise, affecting this Agreement or the
      Security Interest, the Collateral, or the Debtor's Obligations and liabilities
      hereunder other than as expressed herein.

     

    9.9    Fax

     

    This
      Agreement may be executed by facsimile or electronic copy, such copy when so
      executed being deemed to be an original.

     

    9.10   Further
      Assurances

     

    The
      Debtor shall do, execute, acknowledge and deliver or cause to be done, executed,
      acknowledged and delivered such further acts, deeds, mortgages, transfers,
      assurances or other documents as the Secured Party shall reasonably require
      to
      give effect to or preserve and perfect the Security Interest in the Collateral
      intended to be granted to the Secured Party hereunder, or any security interest
      the Debtor may hereafter grant or become bound to grant to the Secured Party
      for
      the purpose of accomplishing and effecting the intention of this Agreement.
      The
      Debtor hereby irrevocably appoints the Secured Party to be attorney of the
      Debtor, coupled with interest, with full power of substitution for and in the
      name of the Debtor to execute and to do any deeds, documents, transfers,
      demands, assignments, assurances, consents and things which the Debtor is
      obliged to sign, execute or do hereunder.

     

    IN
      WITNESS WHEREOF
      the
      Debtor has executed this Agreement as of the date first written
      above.

     

    
      	 	 	 
	 	APOLLO
              GOLD CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ R.
              David
              Russell
	 	
              
Authorized
              Signing Officer
	 	 
	 	I have the authority to bind the
              corporation.

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      

        SCHEDULE
          "A"

         

        MINING
          CLAIMS

         

        PIN
          65366-0129(LT) 

        Parcel
          23874 SEC (Mining Rights Only), The Mines, Minerals and Mining Rights of
          Part of
          Lot 7, Concession 1, Beatty except Part 1 on Plan 6R-3881, C98447 and C98448,
          Black River - Matheson, District of Cochrane.

        PIN
          65380-0556(LT) 

        Parcel
          23876 SEC (Mining Rights Only), The Mines, Minerals and Mining Rights of
          the
          North half of Lot 6, Concession 6, Township of Hislop and Part of the North
          Part
          of Broken Lot 7, Concession 6, Township of Hislop, lying East of the Lake
          and
          Creek and North of a line drawn East ast’y across said lot from a point in the
          West boundary thereof distant 41 chains, 64 links North from the South
          West
          angle of the lot, containing by admeasurement 100.5 Acres more or less,
          excepting that part described as follows: starting at the NE angle of the
          above
          Lot thence Wly along the N boundary of said Lot 891 Ft; thence S Ast’y 33 Ft to
          the POC; thence S Ast’y 330 Ft; thence W Ast’y 264 Ft; thence N Ast’y 330 Ft;
          thence E Ast’y 264 Ft to the POC; containing by admeasurement 2 acres, more or
          less, Black River-Matheson, District of Cochrane.

        PIN
          65380-0557(LT) 

        Parcel
          2582 SEC, The North half of Lot 6, Concession 6, Hislop, except C679085,
          C506571
          and MRO as in C436459, Black River-Matheson, District of Cochrane.

        PIN
          65380-0555(LT) 

        Parcel
          15466 SEC, Part of the north part of Broken Lot 7, Concession 6, Township
          of
          Hislop, lying East of the Lake and Creek and North of a line drawn East
          ast’y
          across said lot from a point in the west boundary thereof distant 41 chains,
          64
          links North from Southwest angle of the lot, containing an admeasurement
          100 1⁄2
Acres, more or less, excepting that part described as follows: starting
          at the
          NE angle of the above Lot; thence Wly along the N boundary of said Lt 891
          Ft;
          thence S Ast’y 33 Ft to the POC; thence S Ast-y 330 Ft; thence W Ast’y 264 Ft;
          thence N Ast’y 330 Ft; thence E Ast’y 264 Ft to the POC; containing by
          admeasurement two (2) acres, more or less, except C69085 & C506571 and MRO
          as in C436459; Black River-Matheson, District of Cochrane.

        PIN
          65366-0127(LT) 

        Parcel
          14572 SEC, Part of Lot 6, Concession 1, Township of Beatty, as in Instrument
          No.
          C130522, except Expropriation C69085, subject to C341846, Black River-Matheson,
          District of Cochrane.

        PIN
          65380-0552(LT) 

        Parcel
          7745 SEC, The North Half of Lot 8, Concession 6, Township of Hislop, except
          surface rights C69085, Black River-Matheson, District of Cochrane.

        PIN
          65380-0534(LT) 

        Parcel
          388 SEC, Part of broken Lot 7, Concession 6, Township of Hislop, as in
          Instrument No. TP6616, except Part 1, Plan 6R3065, Black River-Matheson,
          District of Cochrane.

        PIN
          65380-0532 

        Parcel
          6413 SEC, The South West Quarter of Lot 6, Concession 6, Township of Hislop,
          Black River-Matheson, District of Cochrane.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        PIN
          65380-0553(LT) 

        Parcel
          4707 SEC, Part of the North part of Lot 7, Concession 6, Township of Hislop,
          lying west of a lake and creek on said lot, and lying north of line drawn
          east
          astronomically across said lot from a point in the west limit thereof distant
          41
          chains 64 links north from the south west angle of the lot, containing
          46 acres
          more or less, Black River-Matheson, District of Cochrane.

        PIN
          65380-0559 (LT)

        Parcel
          3393 SEC, Part of the North half of Lot 4 Concession 6, Hislop, except
          Part 1,
          plan 6R7375 & SRO C69085, Black River- Matheson, District of
          Cochrane.

        PIN
          65380-0558 (LT) 

        Parcel
          11511 SEC, Part of the Northeast 1⁄4 of Lot 5, Concession 6, Hislop as in
          Instrument No. CP5862, Black River- Matheson, District of Cochrane.

        PIN
          65366-0126(LT)

         

        Parcel
          24577 SEC, South 1⁄2 of Lot 5, Concession 1, Beatty, excepting therefrom the lands
          required for highway purposes described as follows; premising that the
          bearings
          hereinafter mentioned are astronomical and are referred to the meridian
          through
          the centre of the Township of Carr in longitude 80 degrees 28 minutes west,
          commencing at the SE angle of said Lt; Thence N 00 degrees 07 minutes 30
          seconds
          west along the E boundary of said Lot 33 Ft, thence S 89 degrees 49 minutes
          30
          seconds west 2656.49 Ft to a point in the W boundary of said Lt,; thence
          S 00
          degrees 07 minutes E along the said W boundary 33 Ft to the SW angle of
          said Lt;
          thence N 89 degrees 49 minutes 30 seconds E along the S boundary of said
          Lt
          2656.49 Ft to the POC, containing 2.012 acres, more or less; SRO N 1⁄2 of Lt 5 Con
          1 being; Mining Claim L13391 Beatty; Mining Claim L15799 Beatty; Mining
          Claim
          L22257 Beatty; Mining Claim L22258 Beatty; SRO W1/2 Lt 4 Con 1 Beatty being;
          Mining Claim L11397 Beatty; Mining Claim L16477 Beatty, Mining Claim L22527
          Beatty; Mining Claim L22915 Beatty SRO; Pt Lt 4 Con 2 Beatty being the
          SW1/4 of
          S1/2; Mining Claim L13510 Beatty SRO; Pt Lt 5 Con 2 Beatty being the S1/2
          of
          S1/2; Mining Claim L13508 Beatty, Mining Claim L13509 Beatty; Black
          River-Matheson, District of Cochrane.

         

        UNPATENTED
          MINING CLAIMS

        L1048333
          Hislop Township

        L1048334
          Hislop Township

        L1048335
          Hislop Township

        L1113087
          Hislop Township

         

        L1115059
          Beatty Township

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