Document:

EXHIBIT 4.1

                       LIVESTAR ENTERTAINMENT GROUP, INC.
              EMPLOYEE STOCK INCENTIVE PLAN FOR THE YEAR 2004 NO. 3

     1.     General  Provisions.
            -------------------

     1.1     Purpose.  This  Stock  Incentive  Plan  (the "Plan") is intended to
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allow  designated officers and employees (all of whom are sometimes collectively
referred  to  herein  as  the "Employees," or individually as the "Employee") of
Livestar Entertainment Group, Inc., a Nevada corporation (the "Company") and its
Subsidiaries  (as  that  term is defined below) which they may have from time to
time (the Company and such Subsidiaries are referred to herein as the "Company")
to receive certain options (the "Stock Options") to purchase common stock of the
Company, par value $0.0001 per share (the "Common Stock"), and to receive grants
of  the Common Stock subject to certain restrictions (the "Awards").  As used in
this  Plan,  the  term  "Subsidiary"  shall  mean  each  corporation  which is a
"subsidiary  corporation" of the Company within the meaning of Section 424(f) of
the Internal Revenue Code of 1986, as amended (the "Code").  The purpose of this
Plan  is  to  provide  the  Employees,  who  make  significant and extraordinary
contributions  to  the  long-term  growth  and  performance of the Company, with
equity-based  compensation  incentives, and to attract and retain the Employees.

     1.2     Administration.
             --------------

     1.2.1     The Plan shall be administered by the Compensation Committee (the
"Committee")  of,  or  appointed  by, the Board of Directors of the Company (the
"Board").  The  Committee  shall select one of its members as Chairman and shall
act  by  vote  of  a  majority  of a quorum, or by unanimous written consent.  A
majority  of  its  members  shall  constitute  a quorum.  The Committee shall be
governed  by the provisions of the Company's Bylaws and of Nevada law applicable
to  the  Board,  except as otherwise provided herein or determined by the Board.

     1.2.2     The  Committee  shall  have  full  and complete authority, in its
discretion,  but  subject  to the express provisions of this Plan (a) to approve
the Employees nominated by the management of the Company to be granted Awards or
Stock  Options;  (b)  to  determine  the number of Awards or Stock Options to be
granted  to  an  Employee; (c) to determine the time or times at which Awards or
Stock Options shall be granted; to establish the terms and conditions upon which
Awards  or  Stock  Options  may  be  exercised;  (d)  to  remove  or  adjust any
restrictions and conditions upon Awards or Stock Options; (e) to specify, at the
time  of  grant,  provisions  relating to exercisability of Stock Options and to
accelerate  or otherwise modify the exercisability of any Stock Options; and (f)
to  adopt such rules and regulations and to make all other determinations deemed
necessary or desirable for the administration of this Plan.  All interpretations
and  constructions  of  this  Plan  by  the  Committee,  and  all of its actions
hereunder, shall be binding and conclusive on all persons for all purposes.

     1.2.3     The  Company  hereby  agrees  to indemnify and hold harmless each
Committee  member  and each Employee, and the estate and heirs of such Committee
member  or  Employee,  against  all  claims,  liabilities,  expenses, penalties,
damages  or  other  pecuniary losses, including legal fees, which such Committee
member  or  Employee,  his  estate  or  heirs  may  suffer  as  a  result of his
responsibilities,  obligations  or  duties  in connection with this Plan, to the
extent  that  insurance,  if  any, does not cover the payment of such items.  No
member  of  the  Committee  or  the  Board  shall  be  liable  for any action or
determination made in good faith with respect to this Plan or any Award or Stock
Option  granted  pursuant  to  this  Plan.

     1.3     Eligibility  and  Participation.  The Employees eligible under this
             -------------------------------
Plan shall be approved by the Committee from those Employees who, in the opinion
of  the  management  of  the Company, are in positions which enable them to make
significant  contributions  to  the  long-term  performance  and  growth  of the
Company.  In  selecting  the  Employees  to  whom  Award or Stock Options may be
granted,  consideration  shall  be given to factors such as employment position,
duties  and  responsibilities, ability, productivity, length of service, morale,
interest  in  the  Company  and  recommendations  of  supervisors.

     1.4     Shares  Subject  to this Plan.  The maximum number of shares of the
             -----------------------------
Common  Stock  that  may  be  issued  pursuant to this Plan shall be 250,000,000
subject to adjustment pursuant to the provisions of Paragraph 4.1.  If shares of
the Common Stock awarded or issued under this Plan are reacquired by the Company
due  to a forfeiture

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or  for  any  other  reason, such shares shall be cancelled and thereafter shall
again  be  available  for  purposes  of  this  Plan.  If a Stock Option expires,
terminates or is cancelled for any reason without having been exercised in full,
the shares of the Common Stock not purchased thereunder shall again be available
for  purposes  of  this  Plan.

     2.     Provisions  Relating  to  Stock  Options.
            ----------------------------------------

     2.1     Grants  of Stock Options.  The Committee may grant Stock Options in
             ------------------------
such amounts, at such times, and to the Employees nominated by the management of
the  Company  as the Committee, in its discretion, may determine.  Stock Options
granted  under  this  Plan shall constitute "incentive stock options" within the
meaning  of  Section  422  of the Code, if so designated by the Committee on the
date  of  grant.  The  Committee  shall  also have the discretion to grant Stock
Options  which  do  not  constitute  incentive stock options, and any such Stock
Options  shall be designated non-statutory stock options by the Committee on the
date  of  grant.  The  aggregate Fair Market Value (determined as of the time an
incentive  stock  option  is  granted) of the Common Stock with respect to which
incentive  stock  options  are  exercisable  for  the first time by any Employee
during  any  one calendar year (under all plans of the Company and any parent or
subsidiary  of  the  Company)  may not exceed the maximum amount permitted under
Section  422  of the Code (currently, $100,000.00).  Non-statutory stock options
shall  not  be  subject  to  the limitations relating to incentive stock options
contained  in the preceding sentence.  Each Stock Option shall be evidenced by a
written  agreement (the "Option Agreement") in a form approved by the Committee,
which shall be executed on behalf of the Company and by the Employee to whom the
Stock  Option is granted, and which shall be subject to the terms and conditions
of  this  Plan.  In  the  discretion of the Committee, Stock Options may include
provisions  (which  need  not  be  uniform),  authorized by the Committee in its
discretion,  that  accelerate  an  Employee's  rights  to exercise Stock Options
following  a  "Change in Control," upon termination of the Employee's employment
by  the  Company  without  "Cause" or by the Employee for "Good Reason," as such
terms  are  defined in Paragraph 3.1 hereof.  The holder of a Stock Option shall
not  be  entitled  to  the privileges of stock ownership as to any shares of the
Common  Stock  not  actually  issued  to  such  holder.

     2.2     Purchase  Price.  The  purchase  price  (the  "Exercise  Price") of
             ---------------
shares  of  the  Common Stock subject to each Stock Option (the "Option Shares")
shall  not  be less than 85 percent of the Fair Market Value of the Common Stock
on the date of exercise.  For an Employee holding greater than 10 percent of the
total  voting power of all stock of the Company, either Common or Preferred, the
Exercise Price of an incentive stock option shall be at least 110 percent of the
Fair  Market  Value  of the Common Stock on the date of the grant of the option.
As  used  herein,  "Fair  Market  Value"  means the mean between the highest and
lowest  reported sales prices of the Common Stock on the New York Stock Exchange
Composite  Tape  or,  if  not  listed  on  such  exchange, on any other national
securities  exchange  on which the Common Stock is listed or on The Nasdaq Stock
Market,  or,  if  not so listed on any other national securities exchange or The
Nasdaq  Stock  Market,  then  the  average  of the bid price of the Common Stock
during  the  last  five  trading  days  on  the  OTC  Bulletin Board immediately
preceding  the last trading day prior to the date with respect to which the Fair
Market  Value  is  to  be  determined.  If the Common Stock is not then publicly
traded,  then  the Fair Market Value of the Common Stock shall be the book value
of  the  Company  per  share  as  determined  on  the  last  day of March, June,
September, or December in any year closest to the date when the determination is
to  be  made.  For  the  purpose of determining book value hereunder, book value
shall  be  determined  by adding as of the applicable date called for herein the
capital,  surplus,  and  undivided  profits  of  the  Company,  and after having
deducted  any  reserves theretofore established; the sum of these items shall be
divided by the number of shares of the Common Stock outstanding as of said date,
and  the  quotient thus obtained shall represent the book value of each share of
the  Common  Stock  of  the  Company.

     2.3     Option Period.  The Stock Option period (the "Term") shall commence
             -------------
on  the  date of grant of the Stock Option and shall be 10 years or such shorter
period  as is determined by the Committee.  Each Stock Option shall provide that
it  is  exercisable over its term in such periodic installments as the Committee
may  determine,  subject to the provisions of Paragraph 2.4.1.  Section 16(b) of
the  Securities  Exchange  Act  of 1934, as amended (the "Exchange Act") exempts
persons  normally  subject to the reporting requirements of Section 16(a) of the
Exchange  Act  (the  "Section  16  Reporting  Persons")  pursuant to a qualified
employee  stock  option plan from the normal requirement of not selling until at
least six months and one day from the date the Stock Option is granted.

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     2.4     Exercise  of  Options.
             ---------------------

     2.4.1     Each  Stock  Option may be exercised in whole or in part (but not
as  to  fractional  shares) by delivering it for surrender or endorsement to the
Company,  attention  of  the Corporate Secretary, at the principal office of the
Company,  together with payment of the Exercise Price and an executed Notice and
Agreement of Exercise in the form prescribed by Paragraph 2.4.2.  Payment may be
made  (a)  in  cash,  (b)  by  cashier's or certified check, (c) by surrender of
previously owned shares of the Common Stock valued pursuant to Paragraph 2.2 (if
the Committee authorizes payment in stock in its discretion), (d) by withholding
from  the  Option  Shares which would otherwise be issuable upon the exercise of
the Stock Option that number of Option Shares equal to the exercise price of the
Stock  Option,  if  such  withholding  is  authorized  by  the  Committee in its
discretion,  or  (e)  in the discretion of the Committee, by the delivery to the
Company  of the optionee's promissory note secured by the Option Shares, bearing
interest  at  a  rate  sufficient  to  prevent  the imputation of interest under
Sections  483 or 1274 of the Code, and having such other terms and conditions as
may  be  satisfactory  to  the  Committee.  Subject  to  the  provisions of this
Paragraph  2.4  and Paragraph 2.5, the Employee has the right to exercise his or
her  Stock  Options  at the rate of at least 20 percent per year over five years
from  the  date  the  Stock  Option  is  granted.

     2.4.2     Exercise  of  each Stock Option is conditioned upon the agreement
of  the  Employee  to  the  terms  and conditions of this Plan and of such Stock
Option  as  evidenced  by  the Employee's execution and delivery of a Notice and
Agreement  of  Exercise  in  a  form  to  be  determined by the Committee in its
discretion.  Such Notice and Agreement of Exercise shall set forth the agreement
of  the Employee that (a) no Option Shares will be sold or otherwise distributed
in violation of the Securities Act of 1933, as amended (the "Securities Act") or
any  other  applicable  federal  or state securities laws, (b) each Option Share
certificate  may be imprinted with legends reflecting any applicable federal and
state  securities  law  restrictions  and conditions, (c) the Company may comply
with  said securities law restrictions and issue "stop transfer" instructions to
its  Transfer  Agent  and  Registrar without liability, (d) if the Employee is a
Section  16 Reporting Person, the Employee will furnish to the Company a copy of
each  Form  4  or Form 5 filed by said Employee and will timely file all reports
required  under  federal  securities  laws, and (e) the Employee will report all
sales  of  Option  Shares  to the Company in writing on a form prescribed by the
Company.

     2.4.3     No  Stock  Option  shall  be  exercisable  unless  and  until any
applicable  registration  or  qualification  requirements  of  federal and state
securities  laws,  and  all  other  legal requirements, have been fully complied
with.  The  Company will use reasonable efforts to maintain the effectiveness of
a  Registration  Statement  under  the  Securities Act for the issuance of Stock
Options  and  shares  acquired  thereunder,  but there may be times when no such
Registration  Statement  will  be  currently  effective.  The  exercise of Stock
Options  may  be  temporarily  suspended without liability to the Company during
times  when  no  such  Registration  Statement is currently effective, or during
times  when,  in  the  reasonable  opinion  of the Committee, such suspension is
necessary  to  preclude  violation  of  any  requirements  of  applicable law or
regulatory  bodies  having  jurisdiction  over the Company.  If any Stock Option
would expire for any reason except the end of its term during such a suspension,
then  if  exercise  of such Stock Option is duly tendered before its expiration,
such  Stock  Option  shall  be  exercisable  and exercised (unless the attempted
exercise  is  withdrawn)  as  of the first day after the end of such suspension.
The Company shall have no obligation to file any Registration Statement covering
resales  of  Option  Shares.

     2.5     Continuous  Employment.  Except as provided in Paragraph 2.7 below,
             ----------------------
an Employee may not exercise a Stock Option unless from the date of grant to the
date of exercise the Employee remains continuously in the employ of the Company.
For  purposes  of  this Paragraph 2.5, the period of continuous employment of an
Employee with the Company shall be deemed to include (without extending the term
of the Stock Option) any period during which the Employee is on leave of absence
with  the  consent of the Company, provided that such leave of absence shall not
exceed  three  months and that the Employee returns to the employ of the Company
at  the expiration of such leave of absence.  If the Employee fails to return to
the  employ  of  the  Company  at  the  expiration of such leave of absence, the
Employee's employment with the Company shall be deemed terminated as of the date
such  leave of absence commenced.  The continuous employment of an Employee with
the Company shall also be deemed to include any period during which the Employee
is a member of the Armed Forces of the United States, provided that the Employee
returns  to  the  employ of the Company within 90 days (or such longer period as
may be prescribed by law) from the date the Employee first becomes entitled to a
discharge  from  military service.  If an Employee does not return to the employ
of  the  Company  within  90 days (or such longer period as may be prescribed by
law)  from  the  date  the  Employee  first becomes entitled to a discharge from
military  service, the Employee's

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employment  with  the  Company shall be deemed to have terminated as of the date
the  Employee's  military  service  ended.

     2.6     Restrictions  on  Transfer.  Each  Stock  Option granted under this
             --------------------------
Plan shall be transferable only by will or the laws of descent and distribution.
No  interest  of  any  Employee  under this Plan shall be subject to attachment,
execution, garnishment, sequestration, the laws of bankruptcy or any other legal
or  equitable  process.  Each  Stock  Option  granted  under  this Plan shall be
exercisable  during  an  Employee's  lifetime  only  by  the  Employee or by the
Employee's  legal  representative.

     2.7     Termination  of  Employment.
             ---------------------------

     2.7.1     Upon  an  Employee's  Retirement,  Disability  (both  terms being
defined  below)  or  death,  (a)  all Stock Options to the extent then presently
exercisable  shall remain in full force and effect and may be exercised pursuant
to  the  provisions thereof, and (b) unless otherwise provided by the Committee,
all  Stock  Options to the extent not then presently exercisable by the Employee
shall  terminate  as of the date of such termination of employment and shall not
be  exercisable  thereafter.  Unless  employment  is  terminated  for  cause, as
defined  by applicable law, the right to exercise in the event of termination of
employment,  to the extent that the optionee is entitled to exercise on the date
the  employment  terminates  as  follows:

          (i)     At  least  six  months  from  the  date  of  termination  if
termination was caused by death or disability.

          (ii)     At  least 30 days from the date of termination if termination
was caused by other than death or disability.

     2.7.2     Upon  the  termination  of  the employment of an Employee for any
reason other than those specifically set forth in Paragraph 2.7.1, (a) all Stock
Options  to  the  extent then presently exercisable by the Employee shall remain
exercisable  only  for a period of 90 days after the date of such termination of
employment  (except that the 90 day period shall be extended to 12 months if the
Employee  shall die during such 90 day period), and may be exercised pursuant to
the  provisions  thereof,  including  expiration  at  the  end of the fixed term
thereof,  and  (b) unless otherwise provided by the Committee, all Stock Options
to  the extent not then presently exercisable by the Employee shall terminate as
of  the  date  of  such  termination  of employment and shall not be exercisable
thereafter.

     2.7.3     For  purposes  of  this  Plan:

          (a)     "Retirement"  shall  mean  an  Employee's  retirement from the
employ of the Company on or after the date on which the Employee attains the age
of  65  years;  and

          (b)     "Disability"  shall  mean total and permanent incapacity of an
Employee, due to physical impairment or legally established mental incompetence,
to perform the usual duties of the Employee's employment with the Company, which
disability  shall  be determined (i) on medical evidence by a licensed physician
designated  by  the  Committee, or (ii) on evidence that the Employee has become
entitled  to  receive  primary  benefits as a disabled employee under the Social
Security Act in effect on the date of such disability.

     3.     Provisions  Relating  to  Awards.
            --------------------------------

     3.1     Grant  of  Awards.  Subject  to  the  provisions  of this Plan, the
             -----------------
Committee shall have full and complete authority, in its discretion, but subject
to  the  express  provisions  of this Plan, to (1) grant Awards pursuant to this
Plan,  (2)  determine  the  number of shares of the Common Stock subject to each
Award  (the  "Award Shares"), (3) determine the terms and conditions (which need
not be identical) of each Award, including the consideration (if any) to be paid
by the Employee for such Common Stock, which may, in the Committee's discretion,
consist  of  the  delivery  of  the  Employee's  promissory  note  meeting  the
requirements  of  Paragraph 2.4.1, (4) establish and modify performance criteria
for  Awards,  and (5) make all of the determinations necessary or advisable with
respect  to Awards under this Plan.  Each Award under this Plan shall consist of
a  grant  of  shares  of  the  Common  Stock  subject

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to  a restriction period (after which the restrictions shall lapse), which shall
be  a period commencing on the date the Award is granted and ending on such date
as  the  Committee shall determine (the "Restriction Period"). The Committee may
provide  for  the lapse of restrictions in installments, for acceleration of the
lapse  of  restrictions  upon  the  satisfaction  of  such  performance or other
criteria or upon the occurrence of such events as the Committee shall determine,
and for the early expiration of the Restriction Period upon an Employee's death,
Disability  or  Retirement as defined in Paragraph 2.7.3, or, following a Change
of  Control, upon termination of an Employee's employment by the Company without
"Cause" or by the Employee for "Good Reason," as those terms are defined herein.
For  purposes  of  this  Plan:

     "Change  of  Control"  shall be deemed to occur (a) on the date the Company
first  has  actual  knowledge  that any person (as such term is used in Sections
13(d)  and  14(d)(2)  of  the  Exchange Act) has become the beneficial owner (as
defined  in  Rule  13(d)-3  under  the Exchange Act), directly or indirectly, of
securities of the Company representing 40 percent or more of the combined voting
power  of  the  Company's  then  outstanding  securities, or (b) on the date the
stockholders of the Company approve (i) a merger of the Company with or into any
other  corporation  in  which the Company is not the surviving corporation or in
which  the  Company  survives  as  a  subsidiary  of another corporation, (ii) a
consolidation  of  the  Company with any other corporation, or (iii) the sale or
disposition  of  all  or  substantially all of the Company's assets or a plan of
complete  liquidation.

     "Cause,"  when  used  with reference to termination of the employment of an
Employee by the Company for "Cause," shall mean:

               (a)     The  Employee's continuing willful and material breach of
his duties to the Company after he receives a demand from the Chief Executive of
the  Company  specifying  the  manner  in  which he has willfully and materially
breached  such  duties, other than any such failure resulting from Disability of
the Employee or his resignation for "Good Reason," as defined herein; or

               (b)     The  conviction  of  the  Employee  of  a  felony;  or

               (c)     The  Employee's  commission of fraud in the course of his
employment  with  the  Company,  such  as  embezzlement  or  other  material and
intentional  violation  of  law  against  the  Company;  or

               (d)     The  Employee's gross misconduct causing material harm to
the  Company.

     "Good  Reason"  shall  mean  any  one  or  more of the following, occurring
following  or in connection with a Change of Control and within 90 days prior to
the  Employee's resignation, unless the Employee shall have consented thereto in
writing:

               (a)     The  assignment  to  the  Employee of duties inconsistent
with his executive status prior to the Change of Control or a substantive change
in  the  officer  or officers to whom he reports from the officer or officers to
whom he reported immediately prior to the Change of Control; or

               (b)     The  elimination  or  reassignment  of  a majority of the
duties and responsibilities that were assigned to the Employee immediately prior
to  the  Change  of  Control;  or

               (c)     A  reduction by the Company in the Employee's annual base
salary as in effect immediately prior to the Change of Control; or

               (d)     The  Company  requiring the Employee to be based anywhere
outside  a  35-mile radius from his place of employment immediately prior to the
Change  of  Control,  except for required travel on the Company's business to an
extent  substantially consistent with the Employee's business travel obligations
immediately prior to the Change of Control; or

               (e)     The  failure  of  the  Company  to  grant  the Employee a
performance  bonus  reasonably  equivalent  to the same percentage of salary the
Employee  normally  received  prior  to  the Change of Control, given comparable
performance  by  the  Company  and  the  Employee;  or

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               (f)     The  failure  of  the  Company  to  obtain a satisfactory
Assumption  Agreement  (as  defined  in  Paragraph  4.13  of  this  Plan) from a
successor,  or  the  failure  of  such  successor  to  perform  such  Assumption
Agreement.

     3.2     Incentive  Agreements.  Each Award granted under this Plan shall be
             ---------------------
evidenced  by  a written agreement (an "Incentive Agreement") in a form approved
by  the Committee and executed by the Company and the Employee to whom the Award
is  granted.  Each  Incentive  Agreement  shall  be  subject  to  the  terms and
conditions of this Plan and other such terms and conditions as the Committee may
specify.

     3.3     Amendment,  Modification and Waiver of Restrictions.  The Committee
             ---------------------------------------------------
may  modify  or  amend  any  Award  under this Plan or waive any restrictions or
conditions  applicable  to  the Award; provided, however, that the Committee may
not  undertake  any  such  modifications,  amendments  or  waivers if the effect
thereof  materially increases the benefits to any Employee, or adversely affects
the  rights  of  any  Employee  without  his  consent.

     3.4     Terms and Conditions of Awards.  Upon receipt of an Award of shares
             ------------------------------
of  the  Common  Stock  under  this Plan, even during the Restriction Period, an
Employee  shall  be  the  holder  of record of the shares and shall have all the
rights  of  a  stockholder with respect to such shares, subject to the terms and
conditions  of  this  Plan  and  the  Award.

     3.4.1     Except  as otherwise provided in this Paragraph 3.4, no shares of
the  Common  Stock  received  pursuant  to  this  Plan shall be sold, exchanged,
transferred,  pledged,  hypothecated  or  otherwise  disposed  of  during  the
Restriction Period applicable to such shares.  Any purported disposition of such
Common Stock in violation of this Paragraph 3.4 shall be null and void.

     3.4.2     If  an Employee's employment with the Company terminates prior to
the expiration of the Restriction Period for an Award, subject to any provisions
of  the Award with respect to the Employee's death, Disability or Retirement, or
Change  of Control, all shares of the Common Stock subject to the Award shall be
immediately  forfeited  by  the  Employee and reacquired by the Company, and the
Employee  shall  have  no  further  rights  with  respect  to the Award.  In the
discretion  of  the Committee, an Incentive Agreement may provide that, upon the
forfeiture  by  an  Employee  of  Award  Shares,  the Company shall repay to the
Employee the consideration (if any) which the Employee paid for the Award Shares
on  the  grant  of  the Award.  In the discretion of the Committee, an Incentive
Agreement  may also provide that such repayment shall include an interest factor
on  such  consideration  from  the date of the grant of the Award to the date of
such  repayment.

     3.4.3     The  Committee  may require under such terms and conditions as it
deems  appropriate  or  desirable that (a) the certificates for the Common Stock
delivered  under  this Plan are to be held in custody by the Company or a person
or  institution  designated by the Company until the Restriction Period expires,
(b)  such  certificates shall bear a legend referring to the restrictions on the
Common Stock pursuant to this Plan, and (c) the Employee shall have delivered to
the  Company  a  stock  power  endorsed  in  blank relating to the Common Stock.

     4.     Miscellaneous  Provisions.
            -------------------------

     4.1     Adjustments  Upon  Change  in  Capitalization.
             ---------------------------------------------

     4.1.1     The  number and class of shares subject to each outstanding Stock
Option, the Exercise Price thereof (but not the total price), the maximum number
of  Stock  Options  that  may  be granted under this Plan, the minimum number of
shares  as  to  which  a  Stock Option may be exercised at any one time, and the
number  and  class  of  shares  subject  to  each  outstanding  Award,  shall be
proportionately  adjusted in the event of any increase or decrease in the number
of  the  issued  shares  of  the  Common  Stock which results from a split-up or
consolidation  of  shares,  payment of a stock dividend or dividends exceeding a
total of five percent for which the record dates occur in any one fiscal year, a
recapitalization  (other than the conversion of convertible securities according
to  their  terms),  a combination of shares or other like capital adjustment, so
that  (a)  upon  exercise  of  the  Stock Option, the Employee shall receive the
number  and  class  of  shares the Employee would have received had the Employee
been  the holder of the number of shares of the Common Stock for which the Stock
Option  is  being exercised upon the date of such change or increase or decrease
in  the  number  of  issued  shares  of  the  Company,  and  (b)  upon the lapse

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of  restrictions  of the Award Shares, the Employee shall receive the number and
class  of  shares  the  Employee  would have received if the restrictions on the
Award  Shares  had  lapsed on the date of such change or increase or decrease in
the  number  of  issued  shares  of  the  Company.

     4.1.2     Upon  a  reorganization,  merger  or consolidation of the Company
with  one  or  more  corporations  as  a  result of which the Company is not the
surviving  corporation  or  in  which  the  Company  survives  as a wholly-owned
subsidiary of another corporation, or upon a sale of all or substantially all of
the  property  of  the  Company  to  another  corporation,  or  any  dividend or
distribution  to  stockholders  of more than 10 percent of the Company's assets,
adequate  adjustment  or  other provisions shall be made by the Company or other
party  to  such transaction so that there shall remain and/or be substituted for
the  Option  Shares and Award Shares provided for herein, the shares, securities
or assets which would have been issuable or payable in respect of or in exchange
for  such  Option Shares and Award Shares then remaining, as if the Employee had
been  the  owner  of  such  shares as of the applicable date.  Any securities so
substituted shall be subject to similar successive adjustments.

     4.2     Withholding Taxes.  The Company shall have the right at the time of
             -----------------
exercise  of  any  Stock  Option,  the  grant  of  an  Award,  or  the  lapse of
restrictions on Award Shares, to make adequate provision for any federal, state,
local  or  foreign  taxes  which it believes are or may be required by law to be
withheld  with  respect  to  such  exercise (the "Tax Liability"), to ensure the
payment  of  any such Tax Liability.  The Company may provide for the payment of
any  Tax Liability by any of the following means or a combination of such means,
as  determined  by  the  Committee  in  its  sole and absolute discretion in the
particular  case  (1)  by requiring the Employee to tender a cash payment to the
Company,  (2) by withholding from the Employee's salary, (3) by withholding from
the  Option  Shares which would otherwise be issuable upon exercise of the Stock
Option,  or  from  the  Award  Shares  on  their  grant  or  date  of  lapse  of
restrictions,  that  number of Option Shares or Award Shares having an aggregate
Fair  Market  Value (determined in the manner prescribed by Paragraph 2.2) as of
the  date  the  withholding tax obligation arises in an amount which is equal to
the  Employee's  Tax  Liability or (4) by any other method deemed appropriate by
the  Committee.  Satisfaction  of  the  Tax  Liability of a Section 16 Reporting
Person  may  be made by the method of payment specified in clause (3) above only
if  the  following  two  conditions  are  satisfied:

               (a)     The  withholding of Option Shares or Award Shares and the
exercise  of  the  related  Stock  Option  occur at least six months and one day
following the date of grant of such Stock Option or Award; and

               (b)     The  withholding of Option Shares or Award Shares is made
either (i) pursuant to an irrevocable election (the "Withholding Election") made
by  the  Employee  at  least six months in advance of the withholding of Options
Shares  or  Award  Shares,  or  (ii)  on  a  day within a 10-day "window period"
beginning  on  the  third  business  day  following  the  date of release of the
Company's quarterly or annual summary statement of sales and earnings.

     Anything herein to the contrary notwithstanding, a Withholding Election may
be  disapproved  by  the  Committee  at  any  time.

     4.3     Relationship  to  Other  Employee Benefit Plans.  Stock Options and
             -----------------------------------------------
Awards  granted hereunder shall not be deemed to be salary or other compensation
to  any  Employee  for  purposes  of  any pension, thrift, profit-sharing, stock
purchase  or any other employee benefit plan now maintained or hereafter adopted
by  the  Company.

     4.4     Amendments and Termination.  The Board of Directors may at any time
             --------------------------
suspend,  amend  or  terminate  this  Plan.  No amendment, except as provided in
Paragraph  3.3,  or  modification of this Plan may be adopted, except subject to
stockholder  approval, which would (1) materially increase the benefits accruing
to  the  Employees  under  this  Plan,  (2)  materially  increase  the number of
securities  which may be issued under this Plan (except for adjustments pursuant
to  Paragraph  4.1  hereof),  or  (3)  materially  modify the requirements as to
eligibility  for  participation  in  this  Plan.

     4.5     Successors  in  Interest.  The  provisions  of  this  Plan  and the
             ------------------------
actions of the Committee shall be binding upon all heirs, successors and assigns
of  the  Company  and  of  the  Employees.

                                        7
<PAGE>
     4.6     Other  Documents.  All documents prepared, executed or delivered in
             ----------------
connection  with this Plan (including, without limitation, Option Agreements and
Incentive  Agreements)  shall  be,  in  substance  and  form, as established and
modified  by  the Committee; provided, however, that all such documents shall be
subject in every respect to the provisions of this Plan, and in the event of any
conflict between the terms of any such document and this Plan, the provisions of
this  Plan  shall  prevail.

     4.7     Fairness  of  the  Repurchase Price.  In the event that the Company
             -----------------------------------
repurchases  securities  upon  termination  of employment pursuant to this Plan,
either:  (a)  the  price  will  not  be  less  than the fair market value of the
securities  to  be repurchased on the date of termination of employment, and the
right to repurchase will be exercised for cash or cancellation of purchase money
indebtedness  for the securities within 90 days of termination of the employment
(or  in the case of securities issued upon exercise of options after the date of
termination,  within  90  days  after  the  date of the exercise), and the right
terminates  when the Company's securities become publicly traded, or (b) Company
will  repurchase  securities  at  the original purchase price, provided that the
right  to  repurchase  at  the  original purchase price lapses at the rate of at
least  20  percent  of the securities per year over five years from the date the
option  is  granted  (without  respect  to  the date the option was exercised or
became  exercisable)  and  the right to repurchase must be exercised for cash or
cancellation of purchase money indebtedness for the securities within 90 days of
termination  of  employment  (or  in  case of securities issued upon exercise of
options  after  the  date  of  termination, within 90 days after the date of the
exercise).

     4.8     No  Obligation  to  Continue  Employment.  This Plan and the grants
             ----------------------------------------
which  might be made hereunder shall not impose any obligation on the Company to
continue  to  employ  any  Employee.  Moreover, no provision of this Plan or any
document executed or delivered pursuant to this Plan shall be deemed modified in
any  way  by any employment contract between an Employee (or other employee) and
the  Company.

     4.9     Misconduct  of an Employee.  Notwithstanding any other provision of
             --------------------------
this  Plan,  if  an  Employee  commits fraud or dishonesty toward the Company or
wrongfully  uses  or  discloses  any  trade  secret,  confidential data or other
information  proprietary to the Company, or intentionally takes any other action
which  results  in material harm to the Company, as determined by the Committee,
in  its  sole and absolute discretion, the Employee shall forfeit all rights and
benefits  under  this  Plan.

     4.10     Term  of  Plan.  No  Stock  Option  shall be exercisable, or Award
              --------------
granted,  unless  and until the Directors of the Company have approved this Plan
and  all  other  legal requirements have been met.  This Plan was adopted by the
Board  effective  May  6, 2004.  No Stock Options or Awards may be granted under
this  Plan  after  May  6,  2014.

     4.11     Governing  Law.  This  Plan and all actions taken thereunder shall
              --------------
be  governed  by,  and  construed  in  accordance with, the laws of the State of
Nevada.

     4.12     Assumption  Agreements.  The  Company will require each successor,
              ----------------------
(direct  or  indirect, whether by purchase, merger, consolidation or otherwise),
to  all  or substantially all of the business or assets of the Company, prior to
the  consummation  of  each such transaction, to assume and agree to perform the
terms  and  provisions  remaining  to  be  performed  by  the Company under each
Incentive  Agreement  and  Stock  Option  and  to  preserve  the benefits to the
Employees  thereunder.  Such  assumption  and  agreement shall be set forth in a
written  agreement  in  form  and  substance  satisfactory  to the Committee (an
"Assumption  Agreement"),  and  shall  include  such adjustments, if any, in the
application  of the provisions of the Incentive Agreements and Stock Options and
such  additional provisions, if any, as the Committee shall require and approve,
in  order  to  preserve  such  benefits  to the Employees.  Without limiting the
generality  of  the foregoing, the Committee may require an Assumption Agreement
to include satisfactory undertakings by a successor:

               (a)     To  provide  liquidity to the Employees at the end of the
Restriction  Period  applicable  to  the Common Stock awarded to them under this
Plan, or on the exercise of Stock Options;

               (b)     If  the  succession  occurs  before the expiration of any
period  specified  in  the  Incentive Agreements for satisfaction of performance
criteria  applicable  to  the  Common  Stock awarded thereunder, to refrain from
interfering  with  the Company's ability to satisfy such performance criteria or
to  agree  to  modify  such  performance criteria and/or waive any criteria that
cannot be satisfied as a result of the succession;

                                        8
<PAGE>
               (c)     To  require  any  future  successor  to  enter  into  an
Assumption  Agreement;  and

               (d)     To  take or refrain from taking such other actions as the
Committee may require and approve, in its discretion.

     4.13     Compliance  with  Rule  16b-3.  Transactions  under  this Plan are
              -----------------------------
intended  to  comply  with  all  applicable conditions of Rule 16b-3 promulgated
under the Exchange Act.  To the extent that any provision of this Plan or action
by  the  Committee  fails to so comply, it shall be deemed null and void, to the
extent  permitted  by  law  and  deemed  advisable  by  the  Committee.

     4.14     Information to Shareholders.  The Company shall furnish to each of
              ---------------------------
its stockholders financial statements of the Company at least annually.

     IN  WITNESS  WHEREOF,  this  Plan  has been executed effective as of May 6,
2004.

                                     LIVESTAR ENTERTAINMENT GROUP, INC.

                                      By  /s/  Raymond Hawkins
                                        ----------------------------------------
                                        Raymond Hawkins, Chief Executive Officer

                                        9
<PAGE>EXHIBIT 4.4
                                     WARRANT
                                     -------

THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND NO
INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE
TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING
SAID SECURITIES, (B) THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE
HOLDER OF THE SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION OR (C) THE COMPANY OTHERWISE SATISFIES
ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.

<TABLE>
<CAPTION>
<S>                                                <C>
                                                   WARRANT TO PURCHASE
No. W-[ 100 ]                                      0.01 PAR VALUE COMMON
Issued:  March 16, 2004                            STOCK
</TABLE>

                            Western Goldfields, Inc.

                                     Warrant
                                     -------

     THIS IS TO CERTIFY that, for cash consideration of $100 and other value
received, and subject to these terms and conditions, Hospah Coal Company, a
Delaware corporation, or such other person or entity to which or whom this
Warrant is transferred (the "Holder"), is entitled to exercise this Warrant to
                             ------
purchase 5,596,370 fully paid and nonassessable shares of Western Goldfields,
Inc., an Idaho corporation (the "Company"), $0.01 par value per share common
                                 -------
stock (the "Warrant Stock"), at a price per share of $1.00 (the "Exercise
            -------------                                        --------
Price") (such number of shares, type of security and the Exercise Price being
-----
subject to adjustment as provided below).

1.   Method of Exercise.  This Warrant may be exercised by the Holder, at any
     ------------------
time during the period (the "Exercise Period") that (a) commences on the date
                             ---------------
that is the earlier of (i) the date that is 815 days following the date of this
Warrant; (ii) the effective date of any Reorganization (defined below); and
(iii) the second anniversary of the date of which the registration of this
Warrant, the shares of Warrant Stock issuable upon exercise of this Warrant, and
the shares of Warrant Stock issued by the Company to Holder prior to and on the
date of this Warrant, pursuant to a registration statement filed by the Company
pursuant to the Registration Agreement dated as of the date of this Warrant
between the Company and Holder, becomes effective, and (b) ends on the fifth
anniversary of such date or such earlier date as the Holder shall notify the
Company in writing.  During the Exercise Period the Holder may exercise this
Warrant in whole or in part, by delivering to the Company at 961 Matley Lane,
Suite 120, Reno, Nevada 89502 (or such other office or agency of the Company as
it may designate by notice in

<PAGE>
writing to the Holder at the address of the Holder appearing on the books of the
Company) (x) this Warrant certificate, (y)  a certified or cashier's check
payable to the Company, or canceled indebtedness of the Company to the Holder,
in the amount of the Exercise Price multiplied by the number of shares for which
this Warrant is being exercised (the "Purchase Price"), and (z) the Notice of
                                      --------------
Cash Exercise attached as Exhibit A duly completed and executed by the Holder.
                          ---------
Upon exercise, the Holder shall be entitled to receive from the Company a stock
certificate in proper form representing the number of shares of Warrant Stock
purchased.

2.   Delivery of Stock Certificates; No Fractional Shares
     ----------------------------------------------------

     (a)  Within 3 business days after the payment of the Purchase Price
following the exercise of this Warrant (in whole or in part), the Company at its
expense shall issue in the name of and deliver to the Holder (i) a certificate
or certificates for the number of fully paid and nonassessable shares of Warrant
Stock to which the Holder shall be entitled upon such exercise, and (ii) a new
Warrant of like tenor to purchase up to that number of shares of Warrant Stock,
if any, as to which this Warrant has not been exercised if this Warrant has not
expired.  The Holder shall for all purposes be deemed to have become the holder
of record of such shares of Warrant Stock on the date this Warrant was exercised
(the date the Holder has fully complied with the requirements of Section 1),
irrespective of the date of delivery of the certificate or certificates
representing the Warrant Stock; provided that, if the date such exercise is made
is a date when the stock transfer books of the Company are closed, such person
shall be deemed to have become the holder of record of such shares of Warrant
Stock at the close of business on the next succeeding date on which the stock
transfer books are open.

     (b)  No fractional shares shall be issued upon the exercise of this
Warrant.  In lieu of fractional shares, the Company shall pay the Holder a sum
in cash equal to the fair market value of the fractional shares (as determined
by the Company's Board of Directors) on the date of exercise such fraction
multiplied by the Exercise Price.

3.   Covenants as to Warrant Stock.  The Company covenants that at all times
     -----------------------------
during the Exercise Period there shall be reserved for issuance and delivery
upon exercise of this Warrant such number of shares of Warrant Stock as is
necessary for exercise in full of this Warrant.  All shares of Warrant Stock
issued pursuant to the exercise of this Warrant will, upon their issuance, be
validly issued and outstanding, fully paid and nonassessable, free and clear of
all liens and other encumbrances or restrictions on sale and free and clear of
all preemptive rights, except restrictions arising (a) under federal and state
securities laws, (b) not by or through the Company, or (c) by agreement between
the Company and the Holder or its successors.

4.   Adjustments; Termination of Warrant Upon Certain Events.
     -------------------------------------------------------

     4.1  Effect of Reorganization.  Upon a merger, consolidation, acquisition
          ------------------------
of all or substantially all of the property or stock, liquidation or other
reorganization of the Company (collectively, a "Reorganization") during the
                                                --------------
Exercise Period, as a result of which the share holders of the Company receive
cash, stock or other property in exchange for their shares of Warrant Stock,
lawful provision shall be made so that the Holder shall thereafter be entitled
to receive, upon exercise of this Warrant, the number of shares of securities of
the successor corporation resulting from such Reorganization (and cash and other
property), to which a holder

                                        2
<PAGE>
of the Warrant Stock issuable upon exercise of this Warrant would have been
entitled in such Reorganization if this Warrant had been exercised immediately
prior to such Reorganization.  If the per share consideration payable to the
Holder hereof for shares in connection with any such transaction is in a form
other than cash or marketable securities, then the value of such consideration
shall be determined in good faith by the Company's Board of Directors.  In all
such events, appropriate adjustment (as determined in good faith by the
Company's Board of Directors) shall be made in the application of the provisions
of this Warrant with respect to the rights and interest of the Holder after the
Reorganization to the end that the provisions of this Warrant (including
adjustments of the Exercise Price and the number and type of securities
purchasable pursuant to the terms of this Warrant) shall be applicable after
that event, as near as reasonably may be, in relation to any shares deliverable
after that event upon the exercise of this Warrant.

     4.2  Adjustments for Stock Splits, Dividends, Reclassification, etc.  If
          --------------------------------------------------------------
the Company shall issue any shares of the same class as the Warrant Stock as a
stock dividend or subdivide the number of outstanding shares of such class into
a greater number of shares, then, in either such case, the Exercise Price in
effect before such dividend or subdivision shall be proportionately reduced and
the number of shares of Warrant Stock at that time issuable pursuant to the
exercise of this Warrant shall be proportionately increased; and, conversely, if
the Company shall contract the number of outstanding shares of the same class as
the Warrant Stock by combining such shares into a smaller number of shares, then
the Exercise Price in effect before such combination shall be proportionately
increased and the number of shares of Warrant Stock at that time issuable
pursuant to the exercise or conversion of this Warrant shall be proportionately
decreased.  If the Company at any time while this Warrant, or any portion
thereof, remains outstanding and unexpired shall, by reclassification of
securities or otherwise, change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities which
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Exercise Price therefor shall be
appropriately adjusted all subject to further adjustments as provided in Section
4.  Each adjustment in the number of shares of Warrant Stock issuable shall be
to the nearest whole share.

     4.3  Adjustment to Exercise Price for Dilutive Issues.  Subject to the
          ------------------------------------------------
exclusions contained in Section 4.6 below, in case the Company shall at any time
or from time to time prior to or during the Exercise Period issue any shares of
Warrant Stock (other than shares issued as a stock dividend or stock split as
provided in Section 4.2) for a consideration per share that is less than the
Exercise Price, then on the date of such issue the Exercise Price shall be
reduced to a price (calculated to the nearest cent) equal to the quotient of (a)
the sum of (i) the per-share consideration received by the Company in such issue
plus (ii) the product of the number of fully diluted shares of equity securities
of the Company outstanding immediately prior to the issuance times the Exercise
Price, divided by (b) the number of fully diluted shares of equity securities of
       ------- --
the Company outstanding immediately after the issuance.  Subject to the
exclusions contained in the case of the issuance of options to purchase or
rights to subscribe for Warrant Stock, securities by their terms convertible
into or exchangeable for Warrant Stock, or options to purchase or

                                        3
<PAGE>
rights to subscribe for such convertible or exchangeable securities, the
following provisions shall apply:

          (a)  the aggregate maximum number of shares of Warrant Stock
deliverable upon exercise of such options to purchase or rights to subscribe for
Warrant Stock shall be deemed to have been issued at the time such options or
rights were issued for a consideration equal to the consideration received by
this corporation upon the issuance of such options or rights plus the minimum
purchase price provided in such options or rights for the Warrant Stock covered
thereby, but no further adjustment to the Exercise Price shall be made for the
actual issuance of Warrant Stock upon the exercise of such options or rights in
accordance with their terms;

          (b)  the aggregate maximum number of shares of Warrant Stock
deliverable upon conversion of or in exchange for any such convertible or
exchangeable securities or upon the exercise of options to purchase or rights to
subscribe for such convertible or exchangeable securities and subsequent
conversion or exchange thereof shall be deemed to have been issued at the time
such securities were issued or such options or rights were issued for a
consideration equal to the consideration received by this corporation for any
such securities and related options or rights, plus the additional
consideration, if any, to be received by this corporation upon the conversion or
exchange of such securities or the exercise of any related options or rights,
but no further adjustment to the Exercise Price shall be made for the actual
issuance of Warrant Stock upon the conversion or exchange of such securities in
accordance with their terms;

          (c)  if such options, rights or convertible or exchangeable securities
by their terms provide, with the passage of time or otherwise, for any increase
in the consideration payable to this corporation, or decrease in the number of
shares of Warrant Stock issuable, upon the exercise, conversion or exchange
thereof, the Exercise Price computed upon the original issue thereof, and any
subsequent adjustments based thereon, shall, upon such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease with
respect to such options, rights and securities not already exercised, converted
or exchanged prior to such increase or decrease becoming effective, but no
further adjustment to the Warrant Price shall be made for the actual issuance of
Warrant Stock upon the exercise of any such options or rights or the conversion
or exchange of such securities in accordance with their terms; and

          (d)  upon the expiration of any such options or rights, the
termination of any such rights to convert or exchange or the expiration of any
options or rights related to such convertible or exchangeable securities, the
Exercise Price shall promptly be readjusted to such Exercise Price as would have
been obtained had the adjustment which was made upon the issuance of such
options, rights or securities or options or rights related to such securities
been made upon the basis of the issuance of only the number of shares of Warrant
Stock actually issued upon the exercise of such options or rights, upon the
conversion or exchange of such securities or upon the exercise of the options or
rights related to such securities.

     4.4  Calculation of Consideration.  In the case of an issue of additional
          ----------------------------
shares of Warrant Stock for cash, the consideration received by the Company
shall be deemed to be the net cash proceeds received for such shares.  In the
case of an issue of additional shares of Warrant Stock for noncash
consideration, the Company's Board of Directors shall determine the value of

                                        4
<PAGE>
such consideration and such determination, unless shown by the Holder to have
been made other than in good faith, shall be conclusive.

     4.5  Certificate as to Adjustments.  In the case of any adjustment in the
          -----------------------------
Exercise Price or number and type of securities issuable upon exercise of this
Warrant, the Company will promptly give written notice to the Holder in the form
of a certificate, certified and confirmed by an officer of the Company, setting
forth the adjustment in reasonable detail.

     4.6  Exclusions.  Anything  herein  to  the  contrary  notwithstanding, the
          ----------
Company  shall  not  be required to make any adjustment of the Exercise Price in
the case of (a) the issuance or sale of options, or the shares of stock issuable
upon  exercise  of  such  options,  to  purchase  shares of the Warrant Stock to
directors,  officers,  employees or consultants of the Company pursuant to stock
options  or  stock purchase plans or agreements in existence on the date hereof,
whether  "qualified"  for tax purposes or not, pursuant to plans or arrangements
approved  by  the  Board  of Directors or stockholders of the Company or (b) the
issuance  of  Warrant  Stock  pursuant  to  warrants  outstanding as of the date
hereof.  The  issuances  or sales described in the preceding clauses (a) and (b)
shall  be  ignored  for  purposes  of calculating any adjustment to the Exercise
Price.

     4.7  Nominal  Adjustment.  The  Company  shall  not  be required to make an
          -------------------
adjustment  in  the Exercise Price under this Warrant if such adjustment is less
that  $0.01.  However,  the  Company  shall  be required to carry forward on its
books  all  adjustments  that  would have been made but for this Section 4.7 and
shall take such adjustment into account when making subsequent adjustments under
this  Article  4.  All  calculations  under  this Article 4 shall be made to the
nearest  cent.

5.   Securities Laws Restrictions; Legend on Warrant Stock
     -----------------------------------------------------

     (a)  This Warrant and the securities issuable upon exercise have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
                                                              --------------
or applicable state securities laws, and no interest may be sold, distributed,
assigned, offered, pledged or otherwise transferred unless (i) there is an
effective registration statement under such Act and applicable state securities
laws covering any such transaction involving said securities, (ii) the Company
receives an opinion of legal counsel for the holder of the securities
satisfactory to the Company stating that such transaction is exempt from
registration, or (iii) the Company otherwise satisfies itself that such
transaction is exempt from registration.  Notwithstanding the foregoing, the
Company will not require the Holder to provide a legal opinion for transfers of
this Warrant or the securities issuable upon exercise hereof if such transfer is
made in full compliance with Rule 144 of the Securities Act.

     (b)  A legend setting forth or referring to the above restrictions shall be
placed on this Warrant, any replacement and any certificate representing the
Warrant Stock, and a stop transfer order shall be placed on the books of the
Company and with any transfer agent until such securities may be legally sold or
otherwise transferred.

6.   Exchange of Warrant; Lost or Damaged Warrant Certificate.  This Warrant is
     --------------------------------------------------------
exchangeable upon its surrender by the Holder at the office of the Company.
Upon receipt by

                                        5
<PAGE>
the Company of satisfactory evidence of the loss, theft, destruction or damage
of this Warrant and either (in the case of loss, theft or destruction) delivery
of an indemnity agreement reasonably satisfactory in form and substance to the
Company or (in the case of damage) the surrender of this Warrant for
cancellation, the Company will execute and deliver to the Holder, without
charge, a new Warrant of like denomination.

7.   Notices of Record Date, etc.
     ---------------------------

     In the event of:

     (a)  any taking by the Company of a record of the holders of Warrant Stock
for the purpose of determining the holders who are entitled to receive any
dividend or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right;

     (b)  any Reorganization of the Company, or any reclassification or
recapitalization of the capital stock of the Company;

     (c)  any voluntary or involuntary dissolution, liquidation or winding-up of
the Company;

     (d)  any proposed issue or grant by the Company to the holders of Warrant
Stock of any shares of stock of any class or any other securities, or any right
or warrant to subscribe for, purchase or otherwise acquire any shares of stock
of any class or any other securities; or

     (e)  any other event as to which the Company is required to give notice to
any holders of Warrant Stock,

then and in each such event the Company will mail to the Holder a notice
specifying (i) the date on which any such record is to be taken, (ii) the date
on which any such Reorganization, reclassification, recapitalization,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as to which the holders of record of Warrant Stock or securities
into which the Warrant Stock is convertible shall be entitled to exchange their
shares for securities or other property deliverable on such Reorganization,
reclassification, recapitalization, dissolution, liquidation or winding-up,
(iii) the amount and character of any stock or other securities, or rights or
warrants, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made, and (iv) in reasonable detail, the facts, including
the proposed date, concerning any other such event.  Such notice shall be
delivered to the Holder at least ten days prior to the date on which a record
date shall be selected, and in the case of any such Reorganization,
reclassification, recapitalization, dissolution, liquidation or winding-up, at
least thirty days' prior written notice of the date where the same shall take
place.

8.   Miscellaneous.
     -------------

     8.1  Holder as Owner.  The Company may deem and treat the holder of record
          ---------------
of this Warrant as the absolute owner for all purposes regardless of any notice
to the contrary.

                                        6
<PAGE>
     8.2  No Shareholder Rights.  This Warrant shall not entitle the Holder to
          ---------------------
any voting rights or any other rights as a shareholder of the Company or to any
other rights except the rights stated herein; and no dividend or interest shall
be payable or shall accrue in respect of this Warrant or the Warrant Stock,
until this Warrant is exercised.

     8.3  Notices.  Unless otherwise provided, any notice under this Warrant
          -------
shall be given in writing and shall be deemed effectively given (a) upon
personal delivery to the party to be notified, (b) upon confirmation of receipt
by fax by the party to be notified, (c) one business day after deposit with a
reputable overnight courier, prepaid for overnight delivery and addressed as set
forth in (d), or (d) three days after deposit with the United States Post
Office, postage prepaid, registered or certified with return receipt requested
and addressed to the party to be notified at the address indicated below, or at
such other address as such party may designate by twenty days' advance written
notice to the other party given in the foregoing manner.

          If to the Holder:

               To the address last furnished
               in writing to the Company by
               the Holder

          If to the Company:
               Western Goldfields, Inc.
               961 Matley Lane
               Suite 120
               Reno, Nevada 89502
               (775)337-9433
               (775)337-9441

     8.4  Amendments and Waivers.  Any term of this Warrant may be amended and
          ----------------------
the observance of any term may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Company and the Holder.  Any amendment or waiver effected in
accordance with this Section 8.4 shall be binding on each future Holder and the
Company.

     8.5  Governing Law; Jurisdiction; Venue.  This Warrant shall be governed by
          ----------------------------------
and construed under the laws of the State of Nevada without regard to principles
of conflict of laws.  The parties irrevocably consent to the exclusive
jurisdiction and venue of the state and federal courts located in the City of
Reno and County of Washoe, Nevada, in connection with any action relating to
this Warrant.

     8.6  Successors and Assigns.  The terms and conditions of this Warrant
          ----------------------
shall inure to the benefit of and be binding on the respective successors and
assigns of the parties.

                            [SIGNATURE PAGE FOLLOWS.]

                                        7
<PAGE>
     IN  WITNESS  WHEREOF,  the Company has executed this Warrant as of the date
first  written  above.

                                        Western Goldfields, Inc.

                                        By:  Mark C. Shonnard
                                             --------------------------
                                        Name:   Mark C. Shonnard
                                        Title:  Chief Financial Officer

<PAGE>

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