Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Cool Can Technologies, Inc. - Exhibit 10.5

 THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
  UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE PROPOSED TO BE ISSUED
  IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
  PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. UPON ANY SALE, SUCH SECURITIES
  MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE
  WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER
  THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.
   

 SUBSCRIPTION AGREEMENT  

 COOL CAN TECHNOLOGIES, INC. 

 SUBSCRIPTION AGREEMENT made as of this ____ day of
  _______________ , 200__ between COOL CAN TECHNOLOGIES, INC., a Minnesota
  corporation (the "Company") and the undersigned (the "Subscriber"). 

WHEREAS:

 A.                     The
  Company desires to issue up to $550,000 of 10% Convertible Notes (the “Notes”)
  (the "Offering"). Each Note will be on the terms and conditions and in the form
  attached as Schedule A hereto. 

 B.                     The
  Offering will be completed by the Company pursuant to Regulation S of the United
  States Securities Act of 1933 (the “Act”) and exemptions from
  other applicable securities legislation. 

 NOW, THEREFORE, for and in consideration of the premises
  and the mutual covenants hereinafter set forth, the parties hereto do hereby
  agree as follows: 

 1.                     SUBSCRIPTION
  FOR NOTES  

 1.1                    Subject
  to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes
  for and agrees to purchase from the Company, Convertible Notes in the principal
  amount set forth on the signature page hereof. Upon execution, the subscription
  by the Subscriber will be irrevocable. 

 1.2                    The
  purchase price is payable by the Subscriber contemporaneously with the execution
  and delivery of this Subscription Agreement and will be advanced to the Company
  or its legal counsel. The Subscriber acknowledges that if the funds are advanced
  to the Company’s legal counsel, the legal counsel shall be entitled release
  such funds to the 

 -2- 

Company on confirmation by the Company that it will accept the subscription and without any further authorization from the Subscriber.

 1.3                    Upon
  execution by the Company, the Company agrees to sell such amount of Notes to
  the Subscriber for said purchase price subject to the Company's right to sell
  to the Subscriber such lesser amount of Notes as it may, in its sole discretion,
  deem necessary or desirable. 

 2.                     COMPLIANCE
  WITH SECURITIES LAWS  

 2.1                    Any
  acceptance by the Company of the Subscription is conditional upon compliance
  with all securities laws and other applicable laws of the jurisdiction in which
  the Subscriber is resident. Each Subscriber will deliver to the Company all
  other documentation, agreements, representations and requisite government forms
  required by the lawyers for the Company as required to comply with all securities
  laws and other applicable laws of the jurisdiction of the Subscriber. 

 2.2                    The
  Company will not grant any registration or other qualification rights to any
  Subscriber. 

 2.3                    The
  Subscriber agrees to resell the Notes, any shares into which the Notes are convertible
  (the “Conversion Shares”), any shares issued as payment of interest
  on the Notes (the “Interest Shares”) only in accordance with the provisions
  of 1933 Act and other applicable securities legislation. 

 2.4                   
  The Subscriber acknowledges and agrees that all certificates representing the
  Notes, the Conversion Shares and the Interest Shares will be endorsed with the
  following legend in accordance with Regulation S of the Act: 

  
    
       “THE SECURITIES REPRESENTED BY THIS CERTIFICATE
        HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"),
        AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
        REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE
        ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE
        TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S,
        PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN
        AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS
        INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
        THE ACT.” 

    

  

 2.5                    The
  Subscriber agrees not to engage in hedging transactions with regard to the Notes,
  the Conversion Shares and the Interest Shares unless in compliance with the
  Act. 

-3-

 2.6                    The
  Subscriber and the Company agree that the Company will refuse to register any
  transfer of the Notes, the Conversion Shares and the Interest Shares not made
  in accordance with the applicable securities legislation and the provisions
  of Regulation S of the Act, pursuant to registration under the Act, or pursuant
  to an available exemption from registration.

 3.                      TERMS
  OF CONVERTIBLE NOTES AND WARRANTS

 3.1                    
  The Subscriber agrees to be bound by all terms and conditions of the Notes.

 4.                      REPRESENTATIONS
  AND WARRANTIES BY SUBSCRIBER

 4.1                    The
  Subscriber represents and warrants to the Company and acknowledges that the
  Company is relying upon the Subscriber’s representations and warranties
  in agreeing to sell the Notes to the Subscriber that: 

	(a)	The Subscriber is not a “U.S.
        Person” as defined by Regulation S of the Act and is not acquiring
        the Notes for the account or benefit of a U.S. Person.

       A “U.S. Person” is defined by Regulation
        S of the Act to be any person who is:

	 	 	 
	 	(1)
	any natural person resident
        in the United States;

	 	 	 
	 	(2)
	any partnership or corporation
        organized or incorporated under the laws of the United States;

	 	 	 
	 	(3)
	any estate of which any
        executor or administrator is a U.S. person;

	 	 	 
	 	(4)
	any trust of which any
        trustee is a U.S. person;

	 	 	 
	 	(5)
	any agency or branch
        of a foreign entity located in the United States;

	 	 	 
	 	(6)
	any non-discretionary
        account or similar account (other than an estate or trust) held by a dealer
        or other fiduciary organized, incorporate, or (if an individual) resident
        in the United States; and

	 	 	 
	 	(7)
	any partnership or corporation
        if:

	 	 	 	 
	 	 	1.
	organized or incorporated under the
        laws of any foreign jurisdiction; and

	 	 	 	 
	 	 	2.
	formed by a U.S. person principally
        for the purpose of investing in securities not registered under the Act,
        unless it is organized or incorporated, and owned, by accredited investors
        [as defined

-4-

	  	 	 	in Section 230.501(a) of the Act]
        who are not natural persons, estates or trusts.

	 	 	 	 
	(b)	The Subscriber recognizes
        that the purchase of Notes involves a high degree of risk in that the
        Company is in the development phase of its business and may require substantial
        funds in addition to the proceeds of this private placement in order to
        carry out its business plan;

	 	 
	(c)	An investment in the Company
        is highly speculative and only investors who can afford the loss of their
        entire investment should consider investing in the Company and the Notes;

	 	 	 	 
	(d)	The Subscriber hereby acknowledges
        that this offering of Notes has not been reviewed by the United States
        Securities and Exchange Commission ("SEC") and that the Notes and Warrants
        are being issued by the Company pursuant to an exemption from registration
        provided by Regulation S of the Act;

	 	 	 	 
	(e)	The Subscriber is acquiring
        the Notes as principal for the Subscriber's own benefit;

	 	 	 	 
	(f)	The Subscriber is acquiring
        the Notes subscribed to hereunder as an investment for Subscriber's own
        account, not as a nominee or agent, and not with a view toward the resale
        or distribution of any part thereof, and Subscriber has no present intention
        of selling, granting any participation in, or otherwise distributing the
        same;

	 	 	 	 
	(g)	The Subscriber does not
        have any contract, undertaking, agreement or arrangement with any person
        to sell, transfer or grant participation to such person, or to any third
        person, with respect to any of the Notes sold hereby;

	 	 	 	 
	(h)	The Subscriber has full
        power and authority to enter into this Agreement which constitutes a valid
        and legally binding obligation, enforceable in accordance with its terms;

	 	 	 	 
	(i)	The Subscriber can bear
        the economic risk of this investment, and was not organized for the purpose
        of acquiring the Notes;

	 	 	 	 
	(j)	The Subscriber has satisfied
        himself or herself as to the full observance of the laws of his or her
        jurisdiction in connection with any invitation to subscribe for the Notes
        and/or any use of this Agreement, including (i) the legal requirements
        within his/her jurisdiction for the purchase of the Notes, (ii) any foreign
        exchange restrictions applicable to such purchase, (iii) any governmental
        or other consents that may need to be obtained, and (iv) the income tax
        and other tax consequences, if any, that may be relevant to the purchase,
        holding, redemption, sale, or transfer of the Notes;

-5- 

	(k)	The Subscriber has such
        knowledge and experience in finance, securities, investments, including
        investment in non-registered securities, and other business matters so
        as to be able to protect its interests in connection with this transaction.

	 	 	 
	5.                      REPRESENTATIONS
        BY BRITISH COLUMBIA RESIDENTS

       5.1                    
        If the Subscriber is a resident of the Province of British Columbia and
        the Subscriber is purchasing Shares having an aggregate acquisition cost
        to the Subscriber of less than $97,000 CDN, the Subscriber represents
        and warrants to the Company, and acknowledges that the Company is relying
        on these representations and warranties to, among other things, ensure
        that it is complying with all of the British Columbia Securities Act (the
        “B.C. Act”) and the Securities Rules promulgated under the B.C.
        Act (the “Securities Rules”), that:

	 	 	 
	 	(1)
	The Subscriber is:

	 	 	 
	 	(i)
	a director, senior officer or control
        person of the Company or of an affiliate of the Company;

	 	 	 
	 	(ii)
	a spouse, parent, grandparent, brother,
        sister, child, close personal friend or close business associate of a
        director, senior officer or control person of the Company or of an affiliate
        of the Company;

	 	 	 
	 	(iii)
	a person or company that is wholly-owned
        by any combination of persons described in subparagraphs (i) and (ii);
        or

	 	 	 
	 	(iv)
	an “Accredited Investor” as
        defined by Subsection 1.1 of the Multilateral Instrument 45-103 and as
        outlined in Schedule B attached to this Subscription Agreement, and has
        completed the Accredited Investor Qualification Form attached as Schedule
        C to this Subscription Agreement.

	 	 	 
	5.2                    
        If the Subscriber is a resident of the Province of British Columbia, the
        Subscriber acknowledges that because this subscription is being made pursuant
        to the exemptions from the prospectus requirements of the B.C. Act and:

	 	 	 
	 	(1)
	the Subscriber is restricted
        from using most of the civil remedies available under the B.C. Act;

	 	 	 
	 	(2)
	the Subscriber may not receive
        information that might otherwise be required to be provided to the Subscriber
        under the B.C. Act if the

-6- 

	  	 	exemptions from the prospectus requirements were
      not being used; and
	 	 	 
	 	(3)	 

      the Company is relieved from certain obligations that
        would otherwise apply under the B.C. Act if the exemptions from the prospectus
        requirements were not being used.

	 	 	 
	5.3                     
        If the Subscriber is a resident of the Province of British Columbia, the
        Shares may not be sold or otherwise disposed of for value in the Province
        of British Columbia, except pursuant to either a prospectus or statutory
        exemption available only in specific and limited circumstances unless
        or until the Company becomes a reporting Issuer in the Province of British
        Columbia, as the case may be, and the common shares are held thereafter
        for the applicable period. Since the Company is not a reporting Issuer
        in British Columbia, the applicable hold period in British Columbia may
        never expire, and if a further statutory exemption may not be relied upon
        and if a discretionary order is not obtained, this could result in a subscriber
        wishing to resell the securities in British Columbia having to hold the
        securities acquired under this offering for an indefinite period of time.

	 
	 
	6.                     
        REPRESENTATIONS BY THE COMPANY

       6.1                   
        The Company represents and warrants to the Subscriber that:

	 	 	 
	 	 	 
	 	(1)
	The Company is a corporation
        duly organized, existing and in good standing under the laws of the State
        of Minnesota and has the corporate power to conduct the business which
        it conducts and proposes to conduct;

	 	 	 
	 	 	 
	 	(2)
	The issuance of the Notes
        and the Warrants comprising the Notes has been duly authorized by all
        required corporate action of the Company;

	 	 	 
	 	 	 
	 	(3)
	Upon the conversion of the
        Convertible Notes or exercise of the Warrants in accordance with their
        terms, the Shares will be duly and validly issued, fully paid and non-assessable
        common shares in the capital of the Company.

	 	 	 
	 
	7.                    
        TERMS OF SUBSCRIPTION

       7.1                  
        Pending acceptance of this subscription by the Company, all funds paid
        hereunder shall be deposited by the Company and immediately available
        to the Company for its corporate purposes. In the event the subscription
        is not accepted, the subscription funds will constitute a non-interest
        bearing demand loan of the Subscriber to the Company.

       7.2                   The
        Subscriber hereby authorizes and directs the Company to deliver the securities
        to be issued to such Subscriber pursuant to this Subscription Agreement
        to the Subscriber’s address indicated herein.

 -7- 

 7.3                   
  The Subscriber acknowledges and agrees that the subscription for the Notes and
  the Company's acceptance of the subscription is not subject to any minimum subscription
  for the Offering. 

 8.                    
    MISCELLANEOUS  

 8.1                   
  Any notice or other communication given hereunder shall be deemed sufficient
  if in writing and sent by registered or certified mail, return receipt requested,
  addressed to the Company, at 311 – 698 Seymour Street, Vancouver, BC, Canada
  V6B 3K6, Attention: Mr. Bruce Leitch, President, and to the Subscriber at his/her
  address indicated on the last page of this Subscription Agreement. Notices shall
  be deemed to have been given on the date of mailing, except notices of change
  of address, which shall be deemed to have been given when received. 

 8.2                   
  Notwithstanding the place where this Subscription Agreement may be executed
  by any of the parties hereto, the parties expressly agree that all the terms
  and provisions hereof shall be construed in accordance with and governed by
  the laws of the State of Nevada. 

 [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 

 -8- 

 8.3                   
  The parties agree to execute and deliver all such further documents, agreements
  and instruments and take such other and further action as may be necessary or
  appropriate to carry out the purposes and intent of this Subscription Agreement.

IN WITNESS WHEREOF, this Subscription Agreement is executed as of the day and year first written above.

	Amount of Notes Subscribed For:	$
	 	 
	 	 
	 	 
	Signature of Subscriber:	 
	 	 
	Name of Subscriber:	 
	 	 
	Address of Subscriber:	 
	 	 
	 	 
	ACCEPTED BY:	 
	 	 
	COOL CAN TECHNOLOGIES, INC.	 
	 	 
	Signature of Authorized Signatory:	 
	 	 
	Name of Authorized Signatory:	 
	 	 
	Position of Authorized Signatory:	 
	 	 
	Date of Acceptance:	 

SCHEDULE A 

	No.	U.S. $

 COOL CAN TECHNOLOGIES, INC.  

(Incorporated under the laws of the State of Minnesota)

 10% CONVERTIBLE NOTE 

  DUE DECEMBER 31, 2005  

 (BEING ONE OF A SERIES OF CONVERTIBLE NOTES
  APPROVED BY RESOLUTION 

  OF THE DIRECTORS OF THE COMPANY DATED DECEMBER 31, 2002, AND SUBJECT TO THE
  TERMS 

  AND CONDITIONS (THE “TERMS”) THEREOF.) 

                     FOR
  VALUE RECEIVED, COOL CAN TECHNOLOGIES, INC. (herein referred to as the “Company”)
  promises to pay to 

 

or any subsequent registered holder hereof (the “Holder”), the principal sum of

 on or prior to December 31, 2005 (the “Maturity Date”),
  and to pay interest on the principal sum outstanding on December 31 of each
  year commencing on December 31, 2002, at the rate of 10% per annum subject to
  adjustment for any part period in accordance with the Terms of this Note. Such
  interest shall be paid in United States currency or common shares in accordance
  with the Terms of this Note, to the person and at the address in whose name
  this Note is registered on the records of the Company regarding registration
  and transfers of the Notes (the “Note Register”) on the business day
  immediately preceding the payment date. The principal of this Note is payable,
  if converted in shares of Common Stock, or if not converted, in such coin or
  currency of the United States of America as at the time of payment is legal
  tender for payment of public and private debts, to the person and at the address
  in whose name this Note is registered on the Note Register on the business day
  immediately preceding the payment date. The forwarding of such payment shall
  constitute a payment hereunder and shall satisfy and discharge the liability
  for principal on this Note to the extent of the sum or Common Shares so paid.

                      THIS
  NOTE is one of a duly authorized issue of Notes of the Company, designated as
  its 10% Convertible Notes due December 31, 2005 (the “Notes”). 

                     THIS
  NOTE is subject to the terms and conditions established by Resolution of the
  Directors of the Company dated December 31, 2002 creating the series of Notes,
  which are incorporated herein by reference, and available for inspection at
  the head office of the Company at 311 – 698 Seymour Street, Vancouver,
  BC, Canada V6B 3K6. 

                     IN
  WITNESS WHEREOF, the Company has caused this instrument to be duly executed
  by an officer thereunto duly authorized. 

COOL CAN TECHNOLOGIES, INC. 
  

   By: _____________________________

           BRUCE LEITCH, President

Page 1 of Schedule A

 TERMS AND CONDITIONS OF 10% CONVERTIBLE NOTES DUE DECEMBER
  31, 2005 APPROVED BY RESOLUTION OF THE BOARD OF DIRECTORS OF COOL CAN TECHNOLOGIES,
  INC. DATED DECEMBER 31, 2002 

 Section 1. Note Denominations. The Notes are initially
  issuable in denominations of at least One Thousand ($1,000 U.S.) and integral
  multiples of $1.00 U.S. in excess thereof. Upon conversion of a portion, but
  less than all, of a Note in accordance with the terms hereof, a new note or
  notes may be issued to the Holder in a denomination equal to the exact amount
  of the unconverted portion of the Note. 

 Section 2. Interest Payments. The Company may, at its
  option, elect to pay interest by the issuance of common shares of the Company,
  the number of common shares to be determined by dividing the amount of the interest
  payment by the number which is 70% of the average market price of the Company’s
  common shares for the 10 trading days immediately prior to the interest payment
  date. The amount of interest payable in respect of any Note for any payment
  period shall be reduced proportionately in the event the Note shall not be outstanding
  for the entire payment period as a result of its issuance after December 31,
  2002, or its conversion prior to the end of any payment period. 

 Section 3. Sale, Transfer or Exchange. The Notes and
  any shares of the Company’s common stock issued upon conversion of the
  Notes or as payment of interest on the Notes (the Note Shares”) will not
  be registered under the Securities Act of 1933, as amended, (the "Act") and
  will be issued to the Holder pursuant to Regulation S of the Act on the representations
  of the Holder in favor of the Company. Neither the Notes nor the Note Shares
  may be sold, transferred, pledged or hypothecated in the absence of an effective
  registration statement under the Act relating to such securities or an opinion
  of counsel reasonably satisfactory to the Company that registration is not required
  under the Act. Each certificate for the Notes and the Note Shares shall contain
  a legend on the face thereof, in form and substance satisfactory to counsel
  for the Company, setting forth the restrictions on transfer contained in these
  terms and conditions. By acceptance of any certificate representing the Notes,
  the Holder acknowledges and agrees that:

	 	(1) 	The Holder will only sell the Notes and the Note
        Shares only in accordance with the provisions of Regulation S of the Act,
        pursuant to registration under the Act, or pursuant to an available exemption
        from registration pursuant to the Act; 

	 	 	 
	 	(2) 	The Company will refuse to register any transfer
        of the Notes and the Note Shares not made in accordance with the provisions
        of Regulation S of the Act, pursuant to registration under the Act, or
        pursuant to an available exemption from registration; 

	 	 	 
	 	(3) 	The Holder will not engage in hedging transactions
        except in accordance with the Act; 

	 	 	 
	 	(4) 	The Holder is not entitled to any registration rights
        with respect to the Notes and the Note Shares. 

All certificates representing the Notes and the Note Shares
  will be endorsed with the following legend: 

  
    
       “NEITHER THESE SECURITIES, THE SECURITIES ISSUABLE
        UPON CONVERSION HEREOF OR THE SECURITIES ISSUED AS PAYMENT OF INTEREST
        HEREON HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
        COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR PROVINCE OR UNDER
        THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).
        THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED
        OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OR OTHER APPLICABLE
        SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN
        EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. HEDGING TRANSACTIONS INVOLVING
        THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.”
      

    

  

 In addition, the Holder will comply with all other applicable
  securities legislation in addition to the Act to which the Holder is subject
  in selling or transferring any Notes or Note Shares and the Company may refuse
  to register any sale or transfer not in compliance with such other securities
  legislation. 

 Any Holder of a Note, by acceptance thereof, agrees to the
  representations, warranties and covenants herein. 

 Prior to due presentment to the Company for transfer of a
  Note, the Company and any agent of the Company may treat the person in whose
  name the Note is duly registered on the Company’s Note Register as the
  owner hereof for the purpose of receiving payment as herein provided and for
  all other purposes, whether or not the Note be overdue, and neither the Company
  nor any such agent shall be affected by notice to the contrary. 

 Section 4. Conversion. The Record Holders of a Note
  shall have conversion rights as follows (the ‘Conversion Rights’):

                     (a)
  Right to Convert; Conversion Price. The record Holder of a Note shall
  be entitled, at any time, at the office of the company, to convert all or any
  portion of the Note held by such Holder into that number of fully-paid and non-assessable
  shares of Common Stock as shall be equal to the Principal Amount to be converted
  divided by (the “Conversion Price”) which shall be the lesser of $0.001
  or 50% of the average trading price of the Company’s common stock for the
  10 trading days immediately preceding the date of conversion. 

Page 2 of Schedule A

                   (b)
  Mechanics of Conversion. In order to convert the Notes into full shares
  of Common Stock, the Holder shall deliver a copy of the fully executed notice
  of conversion in the form on the rear of the certificate evidencing the Note
  (‘Notice of Conversion’) to the Company at the office of the Company
  which notice shall specify the amount of the Note to be converted (together
  with a copy of the first page of each Note to be converted) prior to Midnight,
  Pacific time (the ‘Conversion Notice Deadline’) on the date of Conversion
  specified on the Notice of Conversion and (ii) surrender the original Note(s);
  provided, however, that the Company shall not be obligated to issue certificates
  evidencing the shares of Common Stock issuable upon such conversion unless either
  the original Notes are delivered to the Company as provided above, or the Holder
  notifies the Company that such Note(s) have been lost, stolen or destroyed.
  In the case of a dispute as the calculation of the Conversion Price, the Company’s
  calculation shall be deemed conclusive absent manifest error.

                                      
  (i)  Lost or Stolen Notes. Upon receipt by the Company of evidence
  of the loss, theft, destruction or mutilation of a Note, and (in the case of
  loss, theft or destruction) indemnity or security reasonably satisfactory to
  the Company, and upon surrender and cancellation of the Note, if mutilated,
  the Company shall execute and deliver new Note(s) of like tenor and date.

                                      
  (ii) Delivery of Common Stock upon Conversion. The Company shall
  issue and use its best efforts to deliver within a reasonable time after delivery
  to the Company of a Note and Notice of Conversion, or after provision for security
  or indemnification required by (i) above, to such Holder of the Note at the
  address of the Holder on the books of the company, a certificate for the number
  of shares of Common Stock to which the Holder shall be entitled as aforesaid.

                                      
  (iii) No Fractional Shares. No fractional shares of Common Stock
  shall be issued upon conversion of a Note. If any conversion of the Note would
  create a fractional share of Common Stock or a right to acquire a fractional
  share of Common Stock, a cash adjustment will be made for the fractional interest.

                                      
  (iv) Date of Conversion. The date of which conversion occurs (the
  ‘Date of Conversion’) shall be deemed to be the date set forth in
  such Notice of Conversion, provided that the copy of the Notice of Conversion
  is delivered or faxed to the Company before midnight, Pacific time, on the Date
  of Conversion, and (ii) that the original Notes to be converted are surrendered,
  and received by the Company within five business days from the Date of Conversion.
  The person or persons entitled to receive the shares of common Stock issuable
  upon such conversion shall be treated for all purposes as the record holder
  or holders of such shares of Common Stock on such date. If the original Notes
  to be converted are not received by the Transfer Agent or the Company within
  five business days after the Date of Conversion or if the facsimile of the Notice
  of Conversion is not received by the Company or its designated transfer agent
  prior to the Conversion Notice Deadline, the Notice of Conversion, at the Company’s
  option, may be declared null and void.

                   (c)
  Reservation of Stock Issuable Upon Conversion. The Company shall at all
  times reserve and keep available out of its authorized but unissued shares of
  Common Stock, solely for the purpose of effecting the conversion of the Notes,
  such number of its shares of Common Stock as shall from time to time be sufficient
  to effect the conversion of all then outstanding Notes; and if at any time the
  number of authorized but unissued shares of Common Stock shall not be sufficient
  to effect the conversion of all then outstanding Notes, the Company will immediately
  take such corporate action as may be necessary to increase its authorized but
  unissued shares of Common Stock to such number of shares as shall be sufficient
  for such purpose.

                   
  (d)  Adjustment to Conversion Price.

                                      
  (i) Adjustment Due to Stock Split, Stock Dividend, Etc. If
  at any time when the Notes are issued and outstanding, the number of outstanding
  shares of Common Stock is increased by a stock split, stock dividend, or other
  similar event, the Fixed Conversion Price shall be proportionately reduced,
  or if the number of outstanding shares of Common Stock is decreased by a combination
  or reclassification of shares, or other similar event, the Fixed Conversion
  Price share be proportionately increased.

                                      
  (ii) Adjustment Due to Merger, Consolidation, Etc. If at
  any time when the Notes are issued and outstanding, there shall be any merger,
  amalgamation, consolidation, exchange of shares, recapitalization, reorganization,
  or other similar event, as a result of which shares of Common Stock of the Company
  shall be changed into the same or a different number of shares of another class
  or classes of stock or securities of the company or another entity, then the
  Holders of the Notes shall thereafter have the right to receive upon conversion
  of the Notes, upon the basis and upon the terms and conditions specified herein
  and in lieu of the shares of Common Stock immediately theretofore issuable upon
  conversion, such stock and/or securities which the Holder would have been entitled
  to receive in such transaction had the Notes been converted immediately prior
  to such transaction, and in any such case appropriate provisions shall be made
  with respect to the rights and interest of the Holders of the Notes to the end
  that the provisions hereof (including, without limitation, provisions for adjustment
  of the Fixed Conversion Price and of the number of shares issuable upon conversion
  of the Notes shall thereafter be applicable, as nearly as may be practicable
  in relation to any securities thereafter deliverable upon the exercise hereof.

 Section 5. Events of Default and Notices Thereof. The
  term ‘Event of Default’ includes any one of the following; (i) failure
  of the Company to pay interest for 45 days or principal when due; (ii) failure
  of the Company to perform any other covenant herein for 45 days after notice;
  (iii) default by the Company with respect to its obligations to pay principal
  of or interest on certain other indebtedness aggregating more than $1,500,000
  or the acceleration of such indebtedness under the terms of the instruments
  evidencing such indebtedness; and (iv) events of bankruptcy or insolvency of
  the Company or the Subsidiary.

                    
  In case an event of Default (other than an Event of Default resulting from bankruptcy
  or insolvency) shall occur and be continuing for a period of 45 days from the
  date that an Event of Default is deemed to have occurred, the holders of a least
  25% in aggregate principal amount of the Notes then outstanding may by notice
  in the writing to the Company declare all unpaid principal and accrued interest
  on the Notes then outstanding to be due and payable immediately.

 Section 6. Modification and Waiver. Modification and amendment
  of the Notes may be made by the Company with the consent of the

 Page 3 of Schedule A 

 holders of not less than a majority in principal amount of
  the outstanding Notes, provided that no such modification or amendment may,
  without the consent of the holder of each Note affected thereby (i) change the
  stated maturity of the principal of or any installment of interest on any Note,
  (ii) reduce the principal of, or the rate of interest on, any Note, (iii) change
  the currency of payment of principal of or interest on any Note, (iv) reduce
  the above-stated percentage of holders of Notes necessary to modify or amend
  the Notes or (v) modify any of the foregoing provisions or reduce the percentage
  of outstanding Notes necessary to waive any covenant or past default. Holders
  of not less than a majority in principal amount of the outstanding Notes may
  waive any covenant or past defaults. (See ‘Events of Default and Notice
  Thereof’) An amendment to the Notes may not adversely affect the rights
  under the subordination provisions of the holders of any issue of Senior Indebtedness
  without the consent of such holders. 

 Section 7. No Voting Rights. The Notes shall not entitle
  the Holders thereof to any of the rights of a stockholder of the Company, including
  without limitation, the right to vote, to receive dividends and other distributions,
  or to receive any notice of, or to attend meetings of stockholders or any other
  proceedings of the Company. 

 Section 8. Governing Law. The Notes shall be governed
  by and construed in accordance with the laws of the State of Nevada U.S.A. without
  giving effect to the principles of conflicts of laws, except for matters arising
  under the Act or the Securities Exchange Act of 1934, as amended, which matters
  shall be governed by and construed in accordance with such laws or matters relating
  to realization on the security which shall be governed by the laws of the jurisdiction
  under which such security is located. 

 Section 9. Business Day Definition. For purposes hereof,
  the term ‘business day’ shall mean any day on which banks are generally
  open for business in the State of Nevada, USA and excluding any Saturday and
  Sunday. 

 Section 10. Notices. Any notice or other communication
  required or permitted to be given hereunder shall be given as provided herein
  or delivered against receipt if to (i) the Company at 311 – 698 Seymour
  Street, Vancouver, BC, Canada V6B 3K6, fax number 604-688-8621 and (ii) the
  Holder of a Note, to such holder at its last address as shown on the Note Register
  (or to such other address as the party shall have furnished in writing as its
  new address to be entered on the Note Register (which address must include a
  telecopy number) in accordance with the provisions of this Section 12). Any
  notice or other communication needs to be made by facsimile and delivery shall
  be deemed give, except as otherwise required herein, at the time of transmission
  of said facsimile. Any notice given on a day that is not a business day shall
  be effective upon the next business day. 

 Section 11. Waiver of any Breach to be in Writing.
  Any waiver by the Company or the Holder of a Note of a breach of any provision
  of the Note shall not operate as, or be construed to be a waiver of any other
  breach of such provision or of any breach of any other provision of the Note.
  The failure of the Company or the Holder hereof to insist upon strict adherence
  to any term of the Note on one or more occasions shall not be considered a waiver
  or deprive that party of the right thereafter to insist upon strict adherence
  to that term or any other term of the Note. Any waiver must be in writing. 

 Section 12. Unenforceable Provisions. If any provision
  of a Note is invalid, illegal or unenforceable, the balance of the Note shall
  remain in effect, and if any provision is inapplicable to any person or circumstance,
  it shall nevertheless remain applicable to all other persons and circumstances.

Page 4 of Schedule A

SCHEDULE B 

 BRITISH COLUMBIA DEFINITION OF “ACCREDITED INVESTOR”
   

“Accredited Investor” means:

	(a)	a Canadian financial institution, or
        an authorised foreign bank listed in Schedule III of the Bank Act (Canada);

	 	 
	(b)	the Business Development Bank of Canada
        incorporated under the Business Development Bank of Canada Act (Canada);

	 	 
	(c)	an association under the Cooperative
        Credit Associations Act (Canada) located in Canada;

	 	 
	(d)	a subsidiary of any person or company
        referred to in paragraphs (a) to (c), where the person or company owns
        all of the voting securities of the subsidiary, except the voting securities
        required by law to be owned by directors of that subsidiary;

	 	 
	(e)	a person or company registered under
        the securities legislation, or under the securities legislation of another
        jurisdiction of Canada, as an adviser or dealer, other than a limited
        market dealer registered under the Securities Act (Ontario);

	 	 
	(f)	an individual registered or formerly
        registered under the securities legislation, or under the securities legislation
        of another jurisdiction of Canada, as a representative of a person or
        company referred to in paragraph (e);

	 	 
	(g)	the government of Canada or a province,
        or any crown corporation or agency of the government of Canada or a province;

	 	 
	(h)	a municipality, public board or commission
        in Canada;

	 	 
	(i)	any national, federal, state, provincial,
        territorial or municipal government of or in any foreign jurisdiction,
        or any agency of that government;

	 	 
	(j)	a pension fund that is regulated by
        either the Office of the Superintendent of financial Institutions (Canada)
        or a provincial pension commission or similar regulatory authority;

	 	 
	(k)	a registered charity under the Income
        Tax Act (Canada);

	 	 
	(l)	an individual who, either alone or jointly
        with a spouse, beneficially owns, directly or indirectly, financial assets
        having an aggregate realizable value that before taxes, but net of any
        related liabilities, exceeds $1,000,000;

	 	 
	(m)	an individual whose net income before
        taxes exceeded $200,000 in each of the two most recent years or whose
        net income before taxes combined with that of a spouse exceeded $300,000
        in each of the two most recent years and the current year;

Page 1 of Schedule B

 

	(n)	a corporation, limited partnership,
        limited liability partnership, trust or estate, other than a mutual fund
        or non-redeemable investment fund, that had net assets of at least $5,000,000
        as shown on its most recently prepared financial statements;

	 	 
	(o)	a mutual fund or non-redeemable investment
        fund that, in the local jurisdiction, distributes its securities only
        to persons or companies that are accredited investors;

	 	 
	(p)	a mutual fund or non-redeemable investment
        fund that, in the local jurisdiction, distributes its securities under
        a prospectus for which the regulator has issued a receipt;

	 	 
	(q)	an entity organized in a foreign jurisdiction
        that is analogous to any of the entities referred to in paragraphs (a)
        through (e) and paragraph (j) in form and function; or

	 	 
	(r)	a person or company in respect of which
        all of the owners of interests, direct or indirect, legal or beneficial,
        are persons or companies that are accredited investors.

Page 2 of Schedule B

SCHEDULE C 

ACCREDITED INVESTOR QUALIFICATION FORM 

CONFIDENTIAL 

COOL CAN TECHNOLOGIES, INC. 

 Instructions: This questionnaire is being presented
  to each individual who has indicated a preliminary interest in being made an
  offer to purchase securities of Cool Can Technologies, Inc., (the "Company").
  The purpose of this questionnaire is to assist the Company in its attempt to
  determine whether the investor qualifies as an accredited investor in order
  to enable the Company comply with the provincial securities law of the Provinces
  of British Columbia and Alberta. 

 Your answers will at all times be kept strictly confidential.
  However, by signing this questionnaire, you agree that the Company may present
  this questionnaire to such parties, as it deems appropriate if called upon to
  establish the availability under any provincial securities law of an exemption
  from dealer registration or the prospectus requirement. 

 Please state if the answer to any question is "None" or "Not
  Applicable". 

 Disclosure of all dollar amounts are in Canadian dollars for
  the purposes of this questionnaire. Please complete, sign, date, and return
  one copy of this questionnaire to the Company. 

PLEASE PRINT 

 Name: _________________________________________________________________________________________________________

 Residential Address: _____________________________________________________________________________________________

                                                                                                                                   Phone: (           
  )                                                                                                 
  

 Occupation: ____________________________________________________________________________________________________

 Business Address: _______________________________________________________________________________________________

                                                                                                                                   Phone: (           
  )                                                                                                 
  

 What is your citizenship?_______________________________________

 Page 1 of Schedule C 

 

	(1)
   	Have you maintained your principal residence
        in that country/province for the past six months?

       Yes ______ No ______

      

	 	 
	(2)
   	Do you presently intend to maintain your principal
        residence in that country/province?

       Yes ______ No ______

      

	 	 
	(3)
   	Is that country/province presently your country/province
        of principal employment?

       Yes ______ No ______

      

	 	 
	(4)	If you are a resident
        of Canada, in what province are you executing this Subscription Agreement?

       

	 	 
	NOTE: "Yes" answers to most of questions (1)
      through (5) are required to establish that you are a bona fide citizen/resident
      of your country/province. On a separate sheet of paper, please explain any
      "No" answers, which might raise questions about your residency.
	 	 
	(5)	Income
	 	 	 
	 	(a)	Was your annual income for the calendar year ended December
        31, 2002 over $200,000?

       Yes ______ No ______

	 	 	 
	 	(b)
 	Was your annual income for the calendar year ended December
        31, 2001 over $200,000?

       Yes ______ No ______

	 	 	 
	 	(c)	Do you anticipate that your annual income for the year
        ended December 31, 2003 will be over $200,000?

       Yes ______ No ______

	 	 	 
	 	(d)	If your responses to questions 5(a) through 5(c) were "No,"
      please provide your annual income for the calendar years ending 
	 	 	 
	 	 	December 31, 2002 and December 31, 2001.
	 	 	December 31, 2002: $ December 31, 2001: $
	 	 	 
	 	 
	(6)	Spousal Income
	 	 	 
	 	(a)	Was your joint annual income with your spouse for the
        calendar year ended December 31, 2002 over $300,000?

       Yes ______ No ______

Page 2 of Schedule C

 

	 	(b)

          
	Was your joint annual income with your
        spouse for the calendar year ended December 31,2001 over $300,000?

       Yes ______ No ______

	 	 	 
	 	(c)

          
	Do you anticipate that your joint annual
        income with your spouse this year will be over $300,000?

       Yes ______ No ______

	 	 	 
	 	(d)
	If your responses to questions 6(a)
        through 6(c) were "No" please provide your joint annual income with your
        spouse for the calendar years ending December 31, 2002 and December 31,
        2001.

	 	 	 
	 	 	December 31,
        2002: $ 

	 	 	December 31,
        2001: $

	 	 	 
	 	 	 
	(7)	Net Worth

	 	 	 
	 	(a)
	Does your net worth (including home,
        furnishings and automobiles) exceed $1,000,000 at this time? Yes ______
        No ______

	 	 	 
	 	(b)
	If your response to question 7(a) was
        "No," please provide your net worth (including home, furnishings and
        automobiles)

	 	 
	 	 	Net Worth: $

	 	 
	(8)	Net Worth

	 	 	 
	 	(a)
	Does your net worth (excluding home,
        furnishings and automobiles) exceed $1,000,000 at this time? Yes ______
        No ______

	 	 	 
	 	(b)
	
        If your response to question 8(a) was "No," please provide your net
          worth (excluding home, furnishings and automobiles).

        ________________________________________________

      

Page 3 of Schedule C

 

	(9)	What is your date of birth?______________________________________________________________

	 	 
	(10)	Briefly describe educational
        background, relevant institutions attended, dates, degrees:

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	(11)	Briefly describe business
        involvement or employment during the past 10 years or since graduation
        from school, whichever period is shorter. (Specific employers need not
        be named. A sufficient description is needed to assist the Company in
        determining the extent of vocationally related experience in financial
        and business matters).

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	(12)	Investment experience:

	 	 	 
	 	(a)
	Please indicate the frequency
        of your investment in marketable securities:

       (  ) Often;      ( 
        ) Occasionally;      (  ) Seldom;      ( 
        ) Never.

	 	 	 
	 	(b)
	Please indicate the frequency
        of your investment in unmarketable securities;

	 	 
	 	(  ) Often;      ( 
        ) Occasionally;      (  ) Seldom;      ( 
        ) Never.

	 	 	 
	 	(c)
	Please indicate in the space
        provided below any additional information which you think may be helpful
        in enabling the Company to determine that your knowledge and experience
        in financial and business matters is sufficient to enable you to evaluate
        the merits and risks of this investment.

I hereby certify that I have answered the foregoing to the best of my knowledge
  and that my answers are complete and accurate.

	Signature of Subscriber: 	 	 
	 	 	 
	Name of Subscriber: 	 	 
	 	 	 
	Address of Subscriber:	 	 

Page 4 of Schedule CPage 1 of 11
                                   EXHIBIT 4.1

                                 TRUST AGREEMENT
                       FOR THE BENEFIT OF THE SHAREHOLDERS
                           OF MEGA-C POWER CORPORATION

THIS TRUST AGREEMENT FOR THE BENEFIT OF THE SHAREHOLDERS OF MEGA-C POWER
CORPORATION is entered into effective as of the 31st day of December 2003
between:

       TAMBORIL CIGAR COMPANY, a business corporation organized and existing
       under the laws of Delaware, having its principal executive office at 100
       Caster Avenue, Vaughn, Ontario, Canada (the "Grantor")

                                     AND

       BENJAMIN RUBIN, an Ontario solicitor in good standing whose office
       address is 229 Russell Hill Road, Toronto, Ontario, Canada (the
       "Trustee")

                                 WITNESSES THAT:

       WHEREAS the Grantor wishes to establish a new trust under the name "Trust
for the Benefit of the Shareholders of Mega-C Power Corporation" and the Trustee
is willing to serve as trustee for the new trust pursuant to the terms and
conditions of this Agreement; and

       WHEREAS the Trust created hereby constitutes an essential element of a
business combination between the Grantor and Axion Power Corporation, a Canadian
Federal Corporation, which is more fully described in a Reorganization Agreement
of even date; and

       WHEREAS the parties to this Agreement intend at all times to conduct all
of their activities in strict compliance with requirements of the Securities Act
of 1933, the Securities Act (Ontario) and the letter and the spirit of all rules
and regulations adopted pursuant to such laws; and

       WHEREAS in the event of any conflict or inconsistency between the terms
of this Agreement and the requirements of such applicable laws or any rules and
regulations adopted thereunder, the requirements of such applicable laws, rules
and regulations shall have priority.

       NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual obligations and agreements herein set forth, the parties hereto covenant
and agree as follows:

                           ARTICLE 1 - INTERPRETATION

Section 1.1 Definitions In this Agreement, unless there is something in the
subject matter or context inconsistent therewith, the following terms have the
meanings ascribed to them:

(a)      "Agreement" means this trust agreement made and entered into as of the
         day and year first above written, and any amendments hereto or
         restatements hereof.

(b)      "Applicable Laws" means any statute of the United States or Canada or
         of any State or Province together with any rules or regulations made
         thereunder, and the orders or rulings of any securities commission or
         other statutory authority or agency, in each case applicable to the
         Tamboril Shares.

(c)      "Grantor" means Tamboril Cigar Company and its successors or assigns
         under the terms of this Agreement.

(d)      "Mega-C" means Mega-C Power Corporation, an Ontario corporation.

(e)      "Mega-C Share" means one share of the no par value common stock of
         Mega-C.

(f)      "Mega-C Shareholder" means each person who can establish to the
         reasonable satisfaction of the Trustee that he is a record or
         beneficial owner of Mega-C Shares. For purposes of this definition, a
         person who can establish that he loaned money to a record or beneficial
         owner of Mega-C Shares under the terms of a secured note or other
         instrument that is presently in default shall be deemed to be the
         beneficial owner of the Mega-C Shares pledged as collateral for the
         loan.

(g)      "OSC" means the Ontario Securities Commission.

(h)      "SEC" means the United States Securities and Exchange Commission.

(i)      "Tamboril Shares" means 114,359,736 shares of the $.0001 par value
         common stock of the Grantor that have been issued and delivered to the
         Trustee upon the execution of this Agreement and constitute the entire
         corpus of the Trust.

(j)      "Trustee" means Benjamin Rubin, Esq. and his successors or assigns
         under the terms of this Agreement.

Section 1.2 Article and Section Headings Article and section headings are
included for convenience only and are not a part of this Agreement.

Section 1.3 Gender and Number Words importing the singular shall include the
plural and vice versa, and words importing gender shall include the masculine,
feminine and neuter genders.

                       ARTICLE 2 - ESTABLISHMENT OF TRUST

Section 2.1 Establishment of Trust The Grantor has delivered duly authenticated
stock certificates for 114,800,000 Tamboril Shares to the Trustee for the
express purpose of creating, constituting and settling a Trust for the benefit
of the Mega-C Shareholders. The Grantor warrants that the Tamboril Shares are
duly issued, fully paid and nonassessable shares of the Grantor's capital stock.
The Tamboril Shares shall constitute the entire corpus of the Trust, however the
Grantor reserves the right to augment the corpus of the Trust from time to time.
Except as specifically set forth in Article 11 which specifies the allowable
fees, charges and expenses of the Trustee, the Grantor shall not be obligated to
contribute money, additional Tamboril Shares or any other property to the Trust
at any time.

Section 2.2 Appointment of Trustee The Trustee acknowledges the receipt of stock
certificates for 114,359,736 Tamboril Shares and agrees to act as Trustee for
the benefit of the Mega-C Shareholders subject to the terms and conditions of
this Agreement. The Trustee is not a principal, participant or beneficiary of
the underlying business combination transaction that necessitates the creation
of the Trust. The Trustee shall be obligated only for the performance of such
duties as are specifically set forth in this Agreement and may rely and shall be
protected in acting or refraining from acting on any instrument believed by it
to be genuine and to have been signed or presented by the proper party or
parties, their officers, representatives or agents. The Trustee shall not be
liable for any action taken or omitted by it in good faith and believed by it to
be authorized hereby, nor for action taken or omitted by it in accordance with
the advice of its counsel. Trustee shall be responsible for holding,
distributing, selling and otherwise disposing of the Tamboril Shares pursuant to
the Agreement.

Section 2.3 Principal Office; Situs The principal office and situs of the
administration of this Trust and the Tamboril Shares deposited therein shall be
in Toronto, Ontario, Canada, at the principal executive office of the Trustee or
at such other location as shall be jointly designated by the Trustee.

Section 2.4 Purpose of Trust The purpose of the Trust is to preserve the
potential equitable interests of the Mega-C Shareholders in the lead-acid-carbon
battery technologies that the Grantor intends to develop while insulating the
Grantor from the potential litigation risks associated with the prior business
of Mega-C and the alleged unlawful activities of certain directors, officers and
stockholders of Mega-C.

                            ARTICLE 3 - TERM OF TRUST

Section 3.1 Term The Trust shall be created as of the date of this Agreement and
it shall continue to exist as a separate legal entity until all Tamboril Shares
held by the Trust have been:

(a) Distributed to Mega-C Shareholders in accordance with this Agreement;

(b) Sold by the Trustee in accordance with this Agreement; or

(c) Surrendered to the Grantor in accordance with this Agreement.

When all of the Tamboril Shares have been distributed, sold or surrendered
according to the provisions of this Agreement, the Trust shall terminate
forthwith.

                    ARTICLE 4 - ALLOCATION OF TAMBORIL SHARES

Section 4.1 Beneficial Economic Ownership of Tamboril Shares The number of
Tamboril Shares delivered to the Trustee pursuant to Section 2.1 represents
eight (8) Tamboril Shares for every Mega-C Share presently issued and
outstanding. Accordingly, each Mega-C Shareholder shall initially be the
beneficial economic owner of eight (8) Tamboril Shares for every Mega-C Share
owned by him.

Section 4.2 Reduction for Creditor Claims The number of Tamboril Shares
allocated to the Mega-C Shareholders as a group shall be subject to reduction in
the event that the Trustee receives a timely claim from a bona fide creditor of
Mega-C, and determines in good faith under the totality of the circumstances
that such creditor's claim is entitled to legal priority over the claims of the
Mega-C Shareholders under applicable law. Subject to the conditions precedent
set forth in Section 5.1, the Trustee shall have the unrestricted authority to
sell all or any portion of the Tamboril Shares and use the proceeds from such
sales to pay the full amount of all allowable creditors' claims before the
remaining Tamboril Shares are allocated among the Mega-C Shareholders. In that
event, beneficial economic ownership interest of each Mega-C Shareholder shall
be proportionally reduced.

Section 4.3 Reduction for Other Events The number of Tamboril Shares allocated
to a particular Mega-C Shareholder shall also be subject to reduction if and to
the extent that:

(a)      Any portion of the Mega-C Shares currently held by him are transferred
         to another Mega-C Stockholder pursuant to a final order of the OSC, the
         SEC or any court of competent jurisdiction;

(b)      Any portion of the Mega-C Shares currently held by him are surrendered,
         cancelled or forfeited pursuant to a final order of the OSC, the SEC or
         any court of competent jurisdiction;

(c)      He enters into a written agreement with the Grantor or the Trustee that
         provides that a portion of the Mega-C Shares held by him shall be
         treated as surrendered, cancelled or forfeited for purposes of the
         Trust.

Section 4.4 Reallocation Among Mega-C Shareholders The number of Tamboril Shares
allocated to a particular Mega-C Shareholder shall be increased if and to the
extent that any Mega-C Shares are transferred to him in the manner described in
Section 4.3(a). Except as set forth in this Section, no transfers of Mega-C
Shares other than transfers arising upon death, by operation of law or pursuant
to a qualified domestic relations order, shall be recognized by or binding on
the Trustee.

Section 4.5 Surrender of Tamboril Shares by Trustee In the event that the number
of Mega-C Shares allocable to a particular Mega-C Shareholder are reduced as a
direct result of an event specified in Sections 4.3(a) and (b), the Trustee
shall forthwith surrender and return to the Grantor eight (8) Tamboril Shares
for every Mega-C share that is surrendered, cancelled, forfeited or returned to
Mega-C, or treated as having been surrendered for purposes of the Trust.

Section 4.6 Final Determination of Beneficial Ownership When the conditions
precedent to distribution or sale specified in Section 5.1 have been fully
satisfied and the Trustee has made all of the adjustments required or permitted
by Article 4, the Trustee shall make a final determination respecting the number
of Mega-C Shares held by each Mega-C Shareholder and the number of Tamboril
Shares that are properly attributable to each Mega-C Share. The Trustee shall
not, however, be required to make a determination with respect to any Mega-C
Shareholder who is a party to a pending lawsuit, arbitration proceeding or
regulatory enforcement action that could increase or decrease the number of
Mega-C Shares held by him.

                   ARTICLE 5 - CONDITIONS PRECEDENT TO DISTRIBUTION OR SALE

Section 5.1 Conditions Precedent to Distribution or Sale With the exception of
transactions involving the surrender of Tamboril Shares to the Grantor pursuant
to Section 4.5, the Trustee shall not distribute, sell, dispose of or otherwise
deal with the Tamboril Shares until:

(a)      The trustee has confirmed that there are no pending lawsuits,
         arbitration proceedings or regulatory enforcement actions that would
         materially alter the respective ownership interests of a substantial
         number of Mega-C Shareholders;

(b)      The Trustee has confirmed that the Grantor has successfully completed
         preliminary beta testing of its E3Cell battery and made a decision to
         proceed with the second-stage commercial beta testing of its proposed
         products; and

(c)      The trustee has confirmed that the Grantor has properly registered the
         Tamboril Shares under the Securities Act of 1933, the Securities Act
         (Ontario) and the provisions of any other applicable laws for the
         purpose of allowing the Trustee to lawfully distribute or sell the
         Tamboril Shares in accordance with the terms of this Agreement.

For purposes of this Section, the Trustee shall be entitled to rely conclusively
on a certificate signed by a duly authorized executive officer of the Grantor
that the requirements of subsections (a), (b) and (c) above have been met. In
the absence of such a certificate, the Trustee shall be entitled to rely on its
own inquiries and investigations in determining whether each of the foregoing
requirements has been met. In connection with any such investigations, the
Trustee shall be entitled to rely conclusively on representations made in
reports and other documents that the Grantor files with the SEC and OSC.

Section 5.2 Notice of Pending Registration Within five (5) days after the filing
of a registration statement of the type specified in Section 5.1(c), the Grantor
shall notify the Trustee that the filings have been made and advise the Trustee
of the date when the Grantor expects to receive an order of effectiveness with
respect to such registration statement.

Section 5.3 Demand Registration Right If it appears to the Trustee that the
requirements of Sections 5.1(a) and (b) have been satisfied, but the Grantor has
failed to file the registration statements specified in Section 5.1(c), then the
Trustee shall have the right to demand that the Grantor promptly file the
required registration statements and exercise reasonable diligence to insure
that those registration statements become effective at the earliest practicable
date. If the Trustee makes such a demand and the Grantor fails or refuses to
file the required registration statements within 30 days, the Trustee shall be
entitled to institute an arbitration proceeding against the Grantor for the
purpose of compelling the Grantor to honor its' registration obligations.

               ARTICLE 6 - COMMUNICATION WITH MEGA-C SHAREHOLDERS

Section 6.1 Grantor to Develop Claim Procedures Within 30 days after the date of
this Agreement the Grantor shall deliver to the Trustee reasonably detailed
written instructions describing the claim procedures the Mega-C Shareholders
will be required to follow and the information and documentation the Mega-C
Shareholders will be required to provide in order to establish their eligibility
to receive distributions from the Trust. It is anticipated that the claim
procedures will require the Mega-C Shareholders to:

(a)      Provide reasonable personal information including the Mega-C
         Shareholder's name, mailing address, telephone number and taxpayer
         identification number;

(b)      Provide copies of all stock certificates, subscription agreements, loan
         agreements, assignments, letters and other documents that support the
         Mega-C Shareholder's ownership claim;

(c)  Provide   reasonably  a  detailed   description   of  the   transaction  or
     transactions  that resulted in the issuance or transfer of Mega-C Shares to
     the Mega-C Shareholder;  including the date of the transaction, the type of
     transaction,  a  description  of the  consideration  given  by  the  Mega-C
     Shareholder  in  connection  with the  transaction,  and,  in the case of a
     Mega-C  Shareholder  who has received  Mega-C Shares in  connection  with a
     resale, gift or other transaction that did not involve a direct issuance of
     Mega-C  Shares  by  Mega-C  for full and fair  value in the form of  money,
     property or services actually  rendered and fairly valued,  the identity of
     the other party or parties to the transaction;

(d)      Provide such other and further information and documentation as may be
         requested by the Trustee in the exercise of its reasonable discretion;
         and

(e)      Agree that as a condition of participation in the Trust the Mega-C
         Shareholder will forever settle and release any and all legal,
         equitable or other claims that he has against Mega-C, the Grantor, any
         property of the Grantor or any of the Grantor's officers, directors and
         agents that in any way arise from or relate to the prior operations of
         Mega-C or the activities of any director, officer or shareholder of
         Mega-C.

Section 6.2 Preparation of Disclosure Statement Within 60 days after the date of
this Agreement, the Trustee, in consultation with the Grantor, shall prepare a
written disclosure statement that will be delivered to Mega-C stockholders for
the purpose of advising them of the existence and principal terms of the Trust.
The disclosure statement shall provide such reasonably detailed information on
the Trust terms and claim procedures, as the Trustee, in consultation with the
Grantor, considers necessary, desirable, convenient or advisable under the
circumstances.

Section 6.3 Timetable for Submission of Claims In connection with the
preparation of the disclosure statement, the Trustee shall establish a
reasonable timetable for the submission of claims by Mega-C Shareholders. In
general, the timetable shall provide an initial claim period of not less than 90
days during which Mega-C Shareholders will be permitted submit their claims to
the Trustee; provide for reasonable extensions of the initial claim period with
respect to any Mega-C Shareholders that the Trustee is unable to locate or
contact in the exercise of reasonable diligence; and provide a reasonable
termination date after which new claims from Mega-C Shareholders will be barred.

Section 6.4 Permissible Claim Processing Fees In connection with the preparation
of the disclosure statement, the Trustee shall establish a reasonable fee
schedule for the work associated with the receipt, review, processing,
clarification and classification of claims submitted by Mega-C Shareholders. The
Trustee's fee schedule may include both fixed fee and sliding scale elements,
provided that the maximum fee charged to any Mega-C Shareholder may not exceed a
base fee of $75 for the first 2,500 Mega-C shares owned, plus a sliding scale
fee of $.01 for each additional Mega-C Share owned up to a maximum of $2,500 per
Mega-C Shareholder. The disclosure statement may require that the Trustee's
claim processing be paid by the Mega-C Shareholders in connection with their
initial claim submissions.

Section 6.5 Regulatory Review of Disclosure Statement Before the disclosure
statement is mailed to Mega-C stockholders, the Trustee, in consultation with
the Grantor, shall submit copies of the proposed disclosure statement and all
supporting document to the SEC and the OSC for the purpose of soliciting any
comments or suggestions that such agencies care to make with respect to the
Trust, the disclosure statement, the claim procedures or the timetable for
submission of claims. In the event that the SEC or the OSC make any comments or
suggestions with respect to any of the foregoing matters, the Trustee shall
retain special counsel, at the sole cost and expense of the Grantor, for the
express purpose of negotiating such reasonable modifications, amendments and
changes as may be necessary to satisfy the requirements of applicable law and
incorporate any comments or suggestions that the SEC and the OSC care to make
with respect to any of the foregoing.

Section 6.6 Distribution of Disclosure Statement Within 5 days after the
preparation of the definitive disclosure statement, the Trustee shall mail
copies of the definitive disclosure statement to each known Mega-C stockholder.
At all times after the preparation of the definitive disclosure statement, the
Trustee shall maintain an adequate supply of copies of the definitive disclosure
statement on hand and it shall, upon the written or oral request, provide a copy
of the disclosure statement to any Mega-C Shareholder, any creditor of Mega-C or
any other person who has or claims to have a recognizable claim against or
interest in the Trust or the Tamboril Shares held by the Trust.

Section 6.7 Processing of Claims The Trustee shall establish such reasonable
systems and procedures as it deems necessary, desirable and expedient for the
receipt, review, processing, clarification and classification of claims
submitted by Mega-C Shareholders and other parties who have or claim to have a
recognizable claim against or interest in the Trust or the Tamboril Shares held
by the Trust. When all such information has been provided by a Mega-C
Shareholder and the Trustee has made a classification decision pursuant to the
provisions of Section 7 of this Agreement, the Trustee shall promptly notify the
Mega-C Shareholder that his claim has been accepted or rejected and advise the
Mega-C Shareholder of his rights under this Agreement, including his right to
request a review of any classification decision made by the Trustee.

                ARTICLE 7 - CLASSIFICATION OF MEGA-C SHAREHOLDERS

Section 7.1 Classification of Mega-C Shareholders Prior to any distribution,
sale or other disposition of Tamboril Shares and based solely on the information
provided by Mega-C Shareholders pursuant to the requirements of Section 6.7, the
Trustee shall classify each Mega-C Shareholder into one of the following
classes:

(a)               A Mega-C Shareholder who is able to demonstrate to the
                  reasonable satisfaction of the Trustee that the Mega-C shares
                  held by him were purchased at an average price of more than $1
                  per share, which was paid in money, property or services
                  actually performed and reasonably valued, shall be classified
                  as a Category-I Mega-C Stockholder;

(b)               A Mega-C Shareholder who cannot demonstrate to the reasonable
                  satisfaction of the Trustee that the Mega-C shares held by him
                  were purchased at an average price of more than $1 per share,
                  which was paid in money, property or services actually
                  performed and reasonably valued, shall be classified as a
                  Category-II Mega-C Stockholder; and

(c)               A Mega-C Shareholder who has allegedly violated any applicable
                  laws relating to the offer, sale or trading of securities
                  shall be classified as a Category-III Mega-C Stockholder
                  unless:

(i)               He can demonstrate to the reasonable satisfaction of the
                  Trustee that there has been an unambiguous judicial or
                  administrative determination that the activity attributed to
                  him did not occur or was not illegal; or

            (ii)  He enters into a written agreement with the Trustee that
                  specifically provides that a portion of the Mega-C Shares held
                  by him shall be treated as having been surrendered for
                  purposes of the Trust

         When a Category-III Mega-C Stockholder has satisfied the requirements
         of either of the foregoing paragraphs, he shall promptly be
         reclassified as a Category-II Mega-C Shareholder with respect to all
         Mega-C Shares that are deemed to be issued, outstanding and
         attributable to him. Category-III Mega-C Shareholders shall not under
         any circumstances be reclassified as Category I Mega-C Shareholders.

Section 7.2 Officers and Directors of Grantor Notwithstanding the general
classification structure set forth in Section 7.1, for the purpose of avoiding
potential transaction reporting and "short-swing profit" issues under the
Securities Exchange Act of 1934, any officer, director or holder of more than
10% of the issued and outstanding stock of the Grantor who is also a Mega-C
stockholder shall be presumptively classified as Category-I Mega-C Shareholders
with respect to all shares held by him.

Section 7.3 Small Beneficiaries To facilitate the effective administration of
the Trust, the Trustee shall adopt and implement reasonable procedures that will
permit the reclassification of Category-II Mega-C Shareholders as Category-I
Mega-C Shareholders; but only if the procedures so adopted are limited to Mega-C
Shareholders who are owners of 2,500 or fewer Mega-C Shares; and in connection
with each reclassification the Trustee receives such written representations,
warranties and other assurances as the Trustee may in the exercise of its
reasonable discretion deem appropriate under the circumstances.

Section 7.4 Review of Classification Decisions Any Mega-C Shareholder that
disagrees with the Trustee's decision to classify him as a Category-II or
Category-III Mega-C Shareholder shall be entitled to request a review of the
Trustee's classification decision by a review panel of not less than three (3)
disinterested persons who have been selected by Trustee in consultation with the
Grantor's board of directors. Any Mega-C Shareholder who requests a review of
the Trustee's decision, however, may be required to pay a fee of up to $500 per
review panel member in connection with the requested review. In connection with
any such review, the review panel shall have the power to consider any
additional evidence or countervailing arguments that a complaining Mega-C
Shareholder cares to submit. The review panel shall issue a written decision
with respect to each review within 60 days of the date of the original request.
All decisions of the review panel shall be final and binding on the Mega-C
Stockholder, the Trust and the Trustee.

                ARTICLE 8 - DISTRIBUTIONS TO MEGA-C SHAREHOLDERS

Section 8.1 In-kind Distributions to Category-I Mega C Shareholders When all of
the conditions precedent set forth in Section 5.1 have been satisfied, the
Trustee shall promptly make an in-kind distribution of all Tamboril Shares that
it holds for the benefit of Category-I Mega-C Shareholders. In connection with
each in-kind distribution, the Trustee shall deliver a stock certificate for
Tamboril Shares that has been registered in the name of the Category-I Mega-C
Shareholder, together with a copy of the definitive prospectus included in the
registration statements specified in Section 5.1(c). When the Trustee has
delivered stock certificates and copies of the prospectus to all Category-I
Mega-C Shareholders, all rights and privileges of the Category-I Mega-C
Shareholders shall terminate forthwith.

Section 8.2 Resale of Tamboril Shares for Category-II Mega-C Shareholders The
Trustee shall not distribute Tamboril Shares to Category-II Mega-C Shareholders.
Instead all Tamboril Shares that the Trustee holds for the benefit of
Category-II Mega-C Shareholders shall be deposited in one or more brokerage
accounts established by the Trustee in the exercise of its reasonable
discretion. In connection with the deposit of Tamboril Shares in such brokerage
accounts, the Trustee shall deliver written instructions respecting the sale of
the deposited Tamboril Shares in open market or negotiated block transactions.
Such instructions shall, when delivered, describe a reasonable plan for the
complete liquidation of all deposited Tamboril Shares within a period of not
more than twenty-four (24) months from the date of deposit. When all of the
Tamboril Shares held in the Trustee's brokerage accounts have been sold and the
Trustee has distributed the sales proceeds in accordance with this Agreement,
all rights and privileges of the Category-II Mega-C Shareholders shall terminate
forthwith.

Section 8.3 Restrictions on Trustee's Resale Transactions All resale
transactions effected by the Trustee for the benefit of the Category-II Mega-C
Shareholders shall be based on written instructions provided by the Trustee,
provided that the Trustee shall have the power, in its sole discretion, to
modify or amend its instructions from time to time in light of prevailing market
conditions. All resale transactions effected by the Trustee shall be made with
due regard for market conditions and the best interests of the Category-II
Mega-C Shareholders as a group.

Section 8.4 Trustee's Fees for Resale of Tamboril Shares In connection with the
services provided by the Trustee in connection with the resale of Tamboril
Shares for the benefit of the Category-II Mega-C Shareholders, the Trustee may
charge an administrative fee of up to 2% of the net sales proceeds (after
brokerage commissions and other direct expenses) to compensate the Trustee for
the work involved in planning and effecting resale transactions, collecting and
accounting for sale proceeds, allocating the sale proceeds among the Category-II
Mega-C Shareholders and distributing the sale proceeds to the persons entitled
thereto. All such fees shall be separately stated on the Trustee's periodic
distribution reports to the Category-II Mega-C Shareholders and withheld from
the amounts that would otherwise be payable to the Category-II Mega-C
Shareholders.

Section 8.5 Cash Distributions to Category II Mega-C Shareholders From time to
time, but not less often than once per calendar quarter, the Trustee shall
distribute all cash proceeds derived from the sale of Tamboril Shares to the
Category-II Mega-C Shareholders who are entitled thereto. All distributions to
the Category-II Mega-C Shareholders shall be made in proportion to their
respective interests in the Tamboril Shares then on deposit in the Trustee's
brokerage accounts..

Section 8.6 No Distributions to Category-III Mega-C Shareholders The Trustee
shall not distribute Tamboril Shares or make cash distributions from the sale of
Tamboril Shares to any Category-III Mega-C Shareholder. Instead all Tamboril
Shares that are held in Trust for the benefit of Category-III Mega-C
Shareholders shall be retained by the Trustee pending the execution of an
agreement of the type specified in Section 7.1(c)(ii) of this Agreement. The
following special provisions shall apply to all Tamboril Shares that are held
for the benefit of Category-III Mega-C Shareholders who have not entered into a
Section 7.1(c)(ii) agreement before the effective date of the registration
statements specified in Section 5.1(c).

(a)      If the Trustee holds Tamboril Shares for the benefit of a Category-III
         Mega-C Shareholder who enters into a Section 7.1(c)(ii) agreement after
         the effective date of the Grantors' registration statements but prior
         to the expiration of 12 months from the effective date of such
         registration statements, the Trustee shall forthwith deposit all
         remaining Tamboril Shares held for the benefit of the Mega-C
         Shareholder in the Trustee's brokerage account and thereafter treat the
         Mega-C Shareholder as a Category-II Mega-C Shareholder.

(b)      No Category-III Mega-C Shareholder shall derive an economic benefit
         from his failure or refusal to enter into a Section 7.1(c)(ii)
         agreement before the effective date of the Grantors' registration
         statements. In the event that the average price received by the Trustee
         with respect to sales of Tamboril Shares on behalf of a Category-III
         Mega-C Shareholder exceeds the average price received by the Trustee
         with respect to all sales of Tamboril Shares on behalf of Category-II
         Mega-C Shareholders, then any excess proceeds shall forthwith be
         donated to the American Red Cross in the name of the Category-III
         Mega-C Shareholder.

(c)      If the Trustee holds Tamboril Shares for the benefit of a Category-III
         Mega-C Shareholder who fails or refuses to enter into a Section
         7.1(c)(ii) agreement within 12 months of the effective date of the
         Grantor's registration statements, the Trustee shall forthwith
         contribute all Tamboril Shares held for the benefit of that Mega-C
         Shareholder to the American Red Cross in the name of the Category-III
         Mega-C Shareholder.

                        ARTICLE 9 - POWERS OF THE TRUSTEE

Section 9.1 Trustee's General Powers In the administration of the Trust, the
Trustee shall have the following powers, all of which shall be exercised in the
fiduciary capacity, primarily in the interest of the Mega-C Shareholders:

(a)      To hold the Tamboril Shares so long as it deems proper;

(b)      To make in-kind distributions of the Tamboril Shares to Category-I
         Mega-C Shareholders;

(c)      To sell Tamboril Shares for the benefit of Category-II Mega-C
         Shareholders at such times, in such manner and with due regard for
         prevailing market conditions as in its discretion and judgment may be
         deemed for the best interest of the Category-II Mega-C Shareholders as
         a group;

(d)      To distribute all cash proceeds from the sale of Tamboril Shares to the
         Category-II Mega-C Shareholders in proportion to their respective
         interests in the Trust;

(e)      To vote all Tamboril Shares held by the Trust, or deposited in
         brokerage accounts established by the Trustee, in proportion to the
         votes actually cast at any meeting of the Grantor's stockholders by
         persons who are not officers, directors or holders of more than ten
         percent (10%) of the voting securities of the Grantor on the date of
         the stockholders meeting;

(f)      To compromise, settle, arbitrate, or defend any claim or demand in
         favor of or against the Trust;

(g)      During the period beginning on the date of this Agreement and ending on
         the effective date of the registration statements specified in Section
         5.1(c), to incur and pay at the sole cost of the Grantor the
         reasonable, ordinary and necessary expenses of trust administration,
         including (but not by way of limitation) reasonable attorneys' fees,
         accountants' fees, investment counsel fees, and the like;

(h)      During the period beginning on the effective date of the registration
         statements specified in Section 5.1(c) and ending on the final
         distribution of all Trust assets, to incur and pay at the sole cost and
         risk of the Mega-C Shareholders the reasonable, ordinary and necessary
         expenses of trust administration, including (but not by way of
         limitation) reasonable attorneys' fees, accountants' fees, investment
         counsel fees, and the like;

(i)      To act through an agent or attorney-in-fact, by and under power of
         attorney duly executed by the Trustee, in carrying out any of the
         authorized powers and duties;

(j)  The Trustee may freely act under all or any of the powers  granted to it by
     this  Agreement  in all  matters  concerning  the  Trust,  after  forming a
     judgment based upon all the circumstances of any particular situation as to
     the wisest and best  course to pursue in the  interest of the Trust and the
     Mega-C  Shareholders,  without the  necessity of  obtaining  the consent or
     permission of the Grantor,  any Mega-C  Stockholder,  any other  interested
     person,  or the consent or approval of any court. The powers granted to the
     Trustee may be exercised in whole or in part,  from time to time, and shall
     be deemed  to be  supplementary  to and not in  derogation  of the  general
     powers of  trustees  under  applicable  law,  and shall  include all powers
     necessary to carry them into effect.

Section 9.2 Limitations on Trustee's Powers Notwithstanding any provision of
this Agreement to the contrary, no powers enumerated or accorded to trustees
generally pursuant to applicable law shall be construed to enable the Grantor,
or the Trustee or either of them, or any other person, to sell, purchase,
exchange, or otherwise deal with or dispose of all or any parts of the corpus of
the Trust for less than an adequate consideration in money or monies worth, or
to enable the Grantor to borrow all or any part of the corpus of the Trust,
directly or indirectly.

Section 9.3 Trustee's Authority and Third Parties No person purchasing any of
Tamboril Shares, or in any manner dealing with the Trust or the Trustee, shall
be required to inquire into the authority of the Trustee to enter into any
transaction, or to account for the application of any money paid to the Trustee.

Section 9.4 Accounting by the Trustee The Trustee shall, within 45 days after
the end of each calendar quarter (beginning with the quarter in which the
Grantor receives an order of effectiveness with respecting the registration
statements specified in Section 5.1(c)) render an unaudited quarterly accounting
to the Category-II Mega-C Shareholders, and the written approval thereof by the
Grantor shall be final, binding, and conclusive upon all Category-II Mega-C
Shareholders. In addition to the unaudited quarterly accounting, the Trustee
shall within 90 days after the end of each fiscal year (beginning with the year
in which the Grantor receives an order of effectiveness with respecting the
registration statements specified in Section 5.1(c)) render an audited annual
report to the Category-II Mega-C Shareholders, and the opinion of the
independent auditor included in such report shall be final, binding, and
conclusive upon all Category-II Mega-C Shareholders.

Section 9.5 Resignation of Trustee The Trustee may resign at any time by giving
written notice of its resignation to the Grantor at least ten (10) days prior to
the effective date of such resignation, and upon the effective date of such
resignation, the Tamboril Shares then deposited in the Trust shall be delivered
to a successor Trustee who has been selected and appointed in accordance with
Section 9.6, whereupon all the Trustee's obligations hereunder shall cease and
terminate. The Trustee's sole responsibility until such termination shall be to
maintain the Tamboril Shares in safe custody and to deliver the same to a
successor Trustee who has been selected and appointed in accordance with Section
9.6.

Section 9.6 Appointment of Successor Trustee The Trustee shall have the power,
in consultation with the Grantor's board of directors, to appoint a successor
Trustee. If the Trustee shall resign without having appointed a successor
Trustee, the Grantor's board of directors shall have the power to petition a
court of competent jurisdiction for a summary order confirming the appointment
of a successor trustee selected by the Grantor's board of directors and approved
by the court in the exercise of its reasonable discretion.

Section 9.7 Bond and Exculpation of Trustee The Trustee shall not be required to
give any bond or other security. The Trustee shall not be liable for any mistake
or error of judgment in the administration of the Trust, except for willful
misconduct or gross negligence. So long it continues to exercise its powers in
good faith and perform its duties in a fiduciary capacity primarily in the
interests of the Mega-C Shareholders, the Trustee shall have no liability for
loss arising from any cause beyond its control, including, but not limited to,
the following: (a) the act, failure or neglect of any agent or correspondent
selected by the Trustee; (b) any delay, error, omission or default connected
with the remittance of funds; (c) any delay, error, omission or default of any
mail, telegraph, cable or wireless agency or operator; (d) the acts or edicts of
any government or governmental agency or other group or entity exercising
governmental powers.

Section 9.8 Indemnification of Trustee by Grantor The Grantor agrees to
indemnify, defend and hold the Trustee harmless from and against any and all
loss, damage, tax, liability and expense that may be incurred by the Trustee
arising out of or in connection with its acceptance or appointments as Trustee
under this Agreement, including costs and expenses of defending itself against
any claim or liability in connection with its performance hereunder.

Section 9.9 Arbitration of Disputes Among the Parties Should any controversy
arise between the Grantor, the Trustee or any Mega-C Shareholder with respect to
this Agreement or a Mega-C Shareholder's right to receive Tamboril Shares or the
cash proceeds from the sale of Tamboril Shares, Trustee shall have the right to
consult counsel and/or to refer such controversy to binding arbitration. Should
such actions be necessary, or should Trustee become involved in arbitration in
any manner whatsoever on account of this Agreement, the party whose actions
necessitated the arbitration shall be obligated to pay the reasonable attorney's
fees incurred by Trustee, and any other disbursements, expenses, losses, costs
and damages in connection with and resulting from such actions.

                             ARTICLE 10 - AMENDMENTS

Subject to the consent of the Trustee which will not be unreasonably withheld,
this Agreement may be amended at any time and from time to time for the purpose
of modifying the terms, conditions and provisions of this Agreement or
incorporating additional terms, conditions and provisions that are not
inconsistent with the intent of the parties and requested by the Grantor, the
Trustee, the Ontario Securities Commission or the United States Securities and
Exchange Commission. Notwithstanding the generality of the foregoing, no
amendment of this Agreement shall be made to the extent that compliance
therewith would, in any manner, reduce, diminish or qualify the rights,
privileges and preferences of the Category-I or Category-II Mega-C Shareholders
or the Trustee.

                           ARTICLE 11 - TRUSTEE'S FEES

The Grantor agrees to pay to the Trustee its fees for certain services rendered
pursuant to the provisions of this Agreement and will reimburse the Trustee
certain reasonable operating expenses, including attorney's fees incurred in
connection with the performance of such services. A fee schedule for the
services to be provided by the Trustee and paid for by the Grantor is attached
hereto as Exhibit A and incorporated herein by this reference. The Trustee's
fees specified in the attached fee schedule are in addition to the fees that the
Trustee and others are specifically permitted to charge directly to Mega-C
Shareholders under Section 6.4, Section 7.4 and Section 8.4 of this Agreement.
Notwithstanding any other provision of this Agreement, activities that require
excessive administrator time or out-of-pocket expenses shall be deemed
extraordinary expenses of the Grantor for which related costs, transaction
charges, and additional fees will be billed at Trustee's standard charges for
such items.

                           ARTICLE 12 - IRREVOCABILITY

The Trust shall be irrevocable, and the Grantor expressly waives all rights and
powers, whether alone or in conjunction with others, and regardless of when or
from what source it may have acquired such rights or powers, to revoke, or
terminate the Trust. By execution of this instrument the Grantor relinquishes
absolutely and forever all of its right and power to control the distribution,
sale or other disposition of the Tamboril Shares, and all its right and power,
whether alone or in conjunction with others, to designate the persons who shall
be entitled to share in any future distributions from the Trust.

IN WITNESS WHEREOF the Grantor and the Trustee have executed this Agreement in
the City of Toronto, Province of Ontario, Canada on the day and year above first
written.

TAMBORIL CIGAR COMPANY

                           /s/                   /s/
--------------------------------------  -----------------------------------
Kirk Tierney, president and director         John L. Petersen, chief financial
                                             officer and director

BENJAMIN RUBIN, TRUSTEE

           /s/

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