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                                                                    EXHIBIT 10.3

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT.

                          COMMON STOCK PURCHASE WARRANT

                  To Purchase 75,000 Shares of Common Stock of

                            DAUGHERTY RESOURCES, INC.

         THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received,
Atlas Equity I, Ltd (the "Holder") is entitled, upon the terms and subject to
the limitations on exercise and the conditions hereinafter set forth, at any
time on or after April 28, 2004 (the "Initial Exercise Date") and on or prior to
the close of business on the third anniversary of the Initial Exercise Date (the
"Termination Date") but not thereafter, to subscribe for and purchase from
Daugherty Resources, Inc., a corporation incorporated in the Province of British
Columbia (the "Company"), up to 75,000 shares (the "Warrant Shares") of Common
Stock, no par value, of the Company (the "Common Stock"). The purchase price of
one share of Common Stock (the "Exercise Price") under this Warrant shall be
$6.25. The Exercise Price and the number of Warrant Shares for which the Warrant
is exercisable shall be subject to adjustment as provided herein. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement (the "Purchase Agreement") dated as
of April 27, 2004 among the Company and the purchasers signatory thereto.

         1.       Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7, this Warrant and all rights
hereunder are transferable, in whole or in part, at the office or agency of the
Company by the Holder in person or by duly authorized attorney, upon surrender
of this Warrant together with the Assignment Form annexed hereto properly
endorsed. The transferee shall sign an investment letter in form and substance
reasonably satisfactory to the Company.

         2.       Authorization of Shares. The Company covenants that all
Warrant Shares issued upon the exercise of the purchase rights represented by
this Warrant will, upon exercise of those purchase rights, be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges in respect thereof, other than taxes in respect of any transfer
occurring contemporaneously with such issuance.

         3.       Exercise of Warrant. (a) Except as provided in Section 4,
exercise of the purchase rights represented by this Warrant may be made at any
time or times on or after the Initial Exercise Date and on or before the
Termination Date by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company) and upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier's check drawn on a United States bank or by means of
a cashless exercise if permitted pursuant to Section 3(d). Upon such exercise,
the Holder shall be entitled to receive a certificate for the number of Warrant
Shares so purchased. Certificates for shares purchased hereunder shall be
delivered to the Holder within five (5) Trading Days (three (3) Trading Days
after the Company reincorporates in Delaware and has a U.S. based transfer
agent) after the date on which this Warrant shall have been

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so exercised. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and the Holder
or any other person so designated to be named therein shall be deemed to have
become a holder of record of the Warrant Shares so purchased for all purposes as
of the date the Warrant has been exercised by payment to the Company of the
Exercise Price and any taxes required to be paid by the Holder pursuant to
Section 5 prior to the issuance of such shares. If the Company fails to deliver
to the Holder a certificate or certificates representing the Warrant Shares
pursuant to this Section 3(a) by the fifth Trading Day (or third Trading Day, as
applicable) after the date of exercise, then the Holder will have the right to
rescind such exercise. In addition to any other rights available to the Holder,
if the Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to an exercise by the fifth Trading Day
(or third Trading Day, as applicable) after the date of exercise, and if after
such fifth Trading Day (or third Trading Day, as applicable) the Holder is
required by its broker to purchase (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such exercise (a
"Buy-In"), then the Company shall (1) pay in cash to the Holder the amount by
which (x) the Holder's total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (A) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise times (B) the price at
which the sell order giving rise to such purchase obligation was executed, and
(2) at the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery
obligations hereunder. For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause(1) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In, together with applicable confirmations
and other evidence reasonably requested by the Company. Nothing herein shall
limit a Holder's right to pursue any other remedies available to it hereunder,
at law or in equity, including a decree of specific performance and other
injunctive relief with respect to the Company's failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

                  (b) If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the remaining Warrant Shares purchasable
hereunder, which new Warrant shall in all other respects be identical with this
Warrant.

                  (c) Notwithstanding anything herein to the contrary, in no
event shall the Holder be permitted to exercise this Warrant for Warrant Shares
to the extent that (1) the number of shares of Common Stock beneficially owned
by such Holder, together with any affiliate thereof (other than Warrant Shares
issuable upon exercise of this Warrant) plus (2) the number of Warrant Shares
issuable upon such exercise of this Warrant, would be equal to or exceed 4.9999%
of the number of shares of Common Stock then issued and outstanding, including
shares issuable upon exercise of this Warrant held by such Holder after
application of this Section 3(c). As used herein, beneficial ownership shall be
determined in accordance with section 13(d) of the Exchange Act and the rules
promulgated thereunder. To the extent that the limitation contained in this
Section 3(c) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder) and of which a portion of
this Warrant is exercisable shall be in the sole discretion of such Holder, and
the submission of a Notice of Exercise shall be deemed to be such Holder's
determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder) and of which portion of this Warrant is
exercisable, in each case subject to such aggregate percentage limitation, and
the Company shall have no obligation to verify or confirm the accuracy of such
determination. Nothing contained herein shall be deemed to restrict the right of
a Holder to exercise this Warrant into Warrant Shares at such time as such
exercise will not violate the provisions of this Section 3(c). The provisions of
this Section 3(c) may be waived by the Holder upon, at the election of the
Holder, not less than 61 days' prior notice to the Company, and the provisions
of this Section 3(c) shall continue to apply until such 61st day (or such later
date, as determined by the Holder, as may be specified in such notice of
waiver). No exercise of this Warrant in violation of this Section 3(c) but
otherwise in accordance with this Warrant shall affect the status of the Warrant
Shares as validly issued, fully-paid and nonassessable.

                  (d) If at any time after one year from the date of issuance of
this Warrant there is no effective Registration Statement registering the resale
of the Warrant Shares by the Holder, this Warrant may also be exercised at such

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time by means of a "cashless exercise" in which the Holder shall be entitled to
receive a certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:

(A) = the VWAP on the Trading Day immediately preceding the date of such
election;

(B) = the Exercise Price of the Warrants, as adjusted; and

(X) = the number of Warrant Shares issuable upon exercise of this Warrant in
accordance with the terms of this Warrant if this Warrant is exercised for cash
rather than by cashless exercise.

         4.       No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment
in respect of such fraction in an amount equal to such fraction multiplied by
the Exercise Price.

         5.       Charges, Taxes and Expenses. Issuance of certificates for
Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, any of which taxes and expenses shall be paid by the Company, and
such certificates shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

         6.       Closing of Books. The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant pursuant to the terms hereof.

         7.       Transfer, Division and Combination. (a) Subject to compliance
with any applicable securities laws and the conditions set forth in Sections 1
and 7(f) and to the provisions of Section 4.1 of the Purchase Agreement, this
Warrant and all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company, together with
a written assignment of this Warrant substantially in the form attached hereto
duly executed by the Holder or its agent or attorney, accompanied by funds
sufficient to pay any transfer taxes payable upon the making of such transfer.
Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees
and in the denomination or denominations specified in such instrument of
assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A
Warrant, if properly assigned, may be exercised by a new holder for the purchase
of Warrant Shares without having a new Warrant issued.

                  (b) This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 7(a) as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.

                  (c) The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant or Warrants issuable under
this Section 7.

                  (d) The Company agrees to maintain, at its aforesaid office,
books for the registration and the registration of transfer of the Warrants.

                  (e) If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall
not be registered pursuant to an effective registration statement under the
Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (1) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel (in form, substance and scope customary for
opinions of counsel in comparable transactions) to

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the effect that such transfer may be made without registration under the
Securities Act and under applicable state securities or blue sky laws, (2) that
the holder or transferee execute and deliver to the Company an investment letter
in form and substance acceptable to the Company and (3) that the transferee be
an "accredited investor" as defined in Rule 501(a) promulgated under the
Securities Act.

         8.       No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise, if
permitted hereunder), the Warrant Shares so purchased shall be and be deemed to
be issued to such Holder as the record owner of such shares as of the close of
business on the later of the date of such surrender or payment.

         9.       Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

         10.      Saturdays, Sundays, Holidays, etc. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday, Sunday or a legal holiday, then such action
may be taken or such right may be exercised on the next succeeding day not a
Saturday, Sunday or legal holiday.

         11.      Adjustments of Exercise Price and Number of Warrant Shares.
The number and kind of securities purchasable upon the exercise of this Warrant
and the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following. In case the Company shall (1) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (2) subdivide its outstanding shares of
Common Stock into a greater number of shares, (3) combine its outstanding shares
of Common Stock into a smaller number of shares of Common Stock, or (4) issue
any shares of its capital stock in a reclassification of the Common Stock, then
the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which it would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each such adjustment of the kind
and number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the Holder shall thereafter be entitled to purchase the
number of Warrant Shares or other securities resulting from such adjustment at
an Exercise Price per Warrant Share or other security obtained by multiplying
the Exercise Price in effect immediately prior to such adjustment by the number
of Warrant Shares purchasable pursuant hereto immediately prior to such
adjustment and dividing by the number of Warrant Shares or other securities of
the Company that are purchasable pursuant hereto immediately thereafter. An
adjustment made pursuant to this Section 11 shall become effective immediately
after the effective date of such event, retroactive to the record date, if any,
for such event.

         12.      Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive, at
the option of the Holder, upon exercise of this Warrant, the number of shares of
Common Stock of the successor or acquiring corporation or of the Company, if it
is the surviving corporation, and Other Property receivable upon or as a result
of such reorganization, reclassification, merger, consolidation or disposition
of assets by a Holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of

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this Warrant to be performed and observed by the Company and all of its
obligations and liabilities hereunder, subject to such modifications as may be
deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

         13.      Voluntary Adjustment by the Company. The Company may at any
time during the term of this Warrant reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the Board of
Directors of the Company.

         14.      Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or Other Property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.

         15.      Notice of Corporate Action. If at any time:

                  (a) the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right, or

                  (b) there shall be any capital reorganization of the Company,
any reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,

                  (c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (1) at
least 20 days' prior written notice of the record date for such dividend,
distribution or right or for determining rights to vote in respect of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, liquidation or winding up, and (2) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 20 days' prior
written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (A) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(B) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their Warrant Shares
for securities or other property deliverable upon such disposition, dissolution,
liquidation or winding up. Each such written notice shall be sufficiently given
if addressed to Holder at the last address of Holder appearing on the books of
the Company and delivered in accordance with Section 17(d).

         16.      Authorized Shares. (a) The Company covenants that during the
period the Warrant is outstanding, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of the Warrant Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
the Warrant Shares upon the exercise of the purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without violation of
any applicable

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law or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed.

                  (b) Except and to the extent as waived or consented to by the
Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
as set forth in this Warrant against impairment. Without limiting the generality
of the foregoing, the Company will (a) not increase the par value of any Warrant
Shares above the amount payable therefor upon such exercise immediately prior to
such increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

                  (c) Before taking any action which would result in an
adjustment in the number of Warrant Shares for which this Warrant is exercisable
or in the Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

         17.      Miscellaneous.

                  (a) Jurisdiction. This Warrant shall constitute a contract
under the laws of New York, without regard to its conflict of law, principles or
rules.

                  (b) Restrictions. The Holder acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.

                  (c) Non-Waiver and Expenses. No course of dealing or any delay
or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder's rights, powers or
remedies, notwithstanding all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the
Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

                  (d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement.

                  (e) Limitation of Liability. No provision hereof, in the
absence of any affirmative action by Holder to exercise this Warrant or purchase
Warrant Shares, and no enumeration herein of the rights or privileges of Holder,
shall give rise to any liability of Holder for the purchase price of any Common
Stock or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.

                  (f) Remedies. Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.

                  (g) Successors and Assigns. Subject to applicable securities
laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors of the Company and the
successors and permitted assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares.

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                  (h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

                  (i) Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

                  (j) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

                                      * * *

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         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its undersigned authorized officer.

Dated: April 29, 2004

                                       DAUGHERTY RESOURCES, INC.

                                       By: _____________________________________
                                           William S. Daugherty,
                                           President and Chief Executive Officer

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                               NOTICE OF EXERCISE

To: Daugherty Resources, Inc.

         1.       The undersigned hereby elects to purchase ________ Warrant
Shares of Daugherty Resources, Inc. pursuant to the terms of the attached
Warrant (only if exercised in full), and tenders herewith payment of the
exercise price in full, together with all applicable transfer taxes, if any.

         2.       Payment shall take the form of (check applicable box):

                  [ ]   in lawful money of the United States; or

                  [ ]   if permitted under Section 3(d) of the Warrant, the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in Section 3(d) to exercise this Warrant with respect
to the maximum number of Warrant Shares purchasable pursuant to the cashless
exercise procedure set forth in Section 3(d).

         3.       Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

_______________________________

The Warrant Shares shall be delivered to the following:

_______________________________

_______________________________

_______________________________

         (4)      Accredited Investor. The undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

Dated: _______________________

                                       [PURCHASER]

                                       By: _____________________________________
                                           Name:
                                           Title:

<PAGE>

                                 ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to _______________________________________, whose address is
______________________________________.

Dated: ____________________

                                       Holder's Name:      _____________________

                                       Holder's Signature: _____________________

                                       Holder's Address:   _____________________
                                                           _____________________

Signature Guaranteed: ________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.<PAGE>

                                                                    EXHIBIT 10.1

                            CREDIT FACILITY AGREEMENT

CREDIT FACILITY AGREEMENT  dated for reference the 26th day of April, 2004,

AMONG:

         MFC MERCHANT BANK S.A., a bank organized under the laws of Switzerland
         (hereinafter, the "LENDER")

AND:

         EQUIDYNE CORPORATION, a corporation organized under the laws of the
         State of Delaware (hereinafter, the "BORROWER")

NOW THEREFORE THIS AGREEMENT WITNESSES that the parties hereto agree as follows:

                           ARTICLE 1 - INTERPRETATION

         SECTION 1.1. DEFINITIONS. When used in this agreement (including the
recitals and schedules hereto) (this "AGREEMENT") or in any amendment hereto,
the terms listed in Schedule A hereto shall, unless otherwise expressly
provided, have the meanings assigned to them therein.

                         ARTICLE 2 - THE CREDIT FACILITY

         SECTION 2.1. CREDIT FACILITY. The Lender shall make available to the
Borrower in accordance with, and subject to the terms and conditions of, this
Agreement, until March 31, 2009 (the "MATURITY DATE"), a revolving credit
facility in the principal amount of up to $20,000,000 (the "COMMITMENT") (the
"CREDIT FACILITY") and made available to the Borrower by way of Advances in
accordance with Section 2.2 hereof. The Maturity Date may be extended for an
additional term of up to six months at the option of the Lender, which option is
exercisable in the Lender's sole discretion.

         SECTION 2.2. THE ADVANCES. On the terms and conditions set forth herein
the Lender, from time to time, on any Banking Day, prior to the Maturity Date,
agrees to make advances to the Borrower ("ADVANCES"). Each Advance shall be in
an aggregate amount of not less than $50,000 and in integral multiples of
$10,000.

         SECTION 2.3. MAKING THE ADVANCES. Each Advance shall be made on three
Banking Days' notice. Each such notice shall be given by a borrowing notice in
form satisfactory to the Lender (the "BORROWING NOTICE") which shall specify
therein (i) the requested date of such Advance; (ii) the aggregate amount of
such Advance; and (iii) the Outstanding Amount having given effect to such
Advance.
<PAGE>
         SECTION 2.4. USE OF PROCEEDS. The Borrower shall use all Advances to
fund: (i) operating and acquisition activities; and (ii) working capital and
general corporate activities.

         SECTION 2.5. UNUSED LINE FEE. The Borrower agrees to pay to the Lender
an unused line fee (the "UNUSED LINE FEE") of three-quarters of one percent
(.75%) per annum on the daily average of the unused amount of the Commitment
during the period commencing on the date of this Agreement and ending on the
Maturity Date. The Unused Line Fee shall be payable monthly, in arrears, on the
first day of each month and shall be calculated commencing May 1, 2004.

                              ARTICLE 3 - REPAYMENT

         SECTION 3.1. PAYMENTS. The Borrower shall pay or repay to the Lender on
the Maturity Date all amounts owing under the Credit Facility and not previously
paid or repaid hereunder, without set-off, counterclaim or deduction, unless, in
the case of set-off, such set-off is specifically acknowledged in writing by the
Lender.

         SECTION 3.2. INTEREST ON ADVANCES. The Borrower shall pay to the Lender
on the first Banking Day of each calendar month (the "INTEREST PAYMENT DATES"),
the first such date falling on May 1, 2004, Interest on the unpaid principal
amount of each Advance made to it from the date of such Advance in U.S. Dollars,
until such principal amount shall be repaid in full, at the Interest Rate.
Interest shall accrue from day to day and shall be compounded monthly in
arrears.

         SECTION 3.3. FEES. Provided the Lender is prepared to make Advances to
the Borrower up to the amount set forth in Section 2.1 hereof, the Borrower
shall pay the Lender on the Closing Date an arrangement fee equal to $400,000
(the "ARRANGEMENT FEE"), whether or not any Advances are made under this
Agreement; provided that the parties hereto may agree in writing to include the
Arrangement Fee as an Outstanding Amount, with Interest to be paid thereon in
accordance with Section 3.2 hereof and to be repaid in accordance with Section
3.1 hereof.

         SECTION 3.4. BORROWER'S RIGHT TO PREPAY THE LOAN. The Borrower may, on
ten Banking Days' prior notice given to the Lender, prepay the outstanding
aggregate principal amount of the Advances made to the Borrower under the Credit
Facility, in whole or in part, together with accrued Interest to the date of
such prepayment on the amount prepaid. Each prepayment shall be in a principal
amount of not less than $50,000 and in integral multiples of $10,000 thereafter.

                              ARTICLE 4 - SECURITY

         SECTION 4.1. SECURITY. As general and continuing security for the
performance of all Obligations of the Borrower under the Credit Facility
Documents, the Borrower shall deliver to the Lender, in form and substance
satisfactory to the Lender:

         (a)      on or prior to the Closing Date, a pledge agreement in the
                  aggregate principal amount of $20,000,000.00, which agreement
                  shall pledge all existing and future pecuniary claims of the
                  Borrower against third parties; and

                                       2
<PAGE>
         (b)      promissory note in the aggregate principal amount of
                  $20,000,000.00 (the "NOTE") duly created by the Borrower in
                  favor of the Lender, which Note shall contain a first fixed
                  and specific charge and security interest on the interest of
                  the Borrower in and to all of its property, assets and
                  undertakings and a floating charge on the interest of the
                  Borrower in and to all of its other property, assets and
                  undertakings not otherwise specifically mortgaged and charged
                  under the Note, including but not limited to, after acquired
                  assets or the proceeds of any and all assets. The Borrower
                  agrees that at any time and from time to time it will take all
                  actions necessary to effect or maintain the security interest
                  created hereby and in the Note.

         SECTION 4.2. CONTINUED PERFECTION AND AGREED RELEASES OF SECURITY.
Borrower shall take such action and execute and deliver to the Lender such
agreements, conveyances, deeds and other documents and instruments as the Lender
shall reasonably request for the purpose of establishing, perfecting, preserving
and protecting the Security, in each case forthwith upon request therefor by the
Lender and in form and substance reasonably satisfactory to the Lender.

                ARTICLE 5 - CONDITIONS PRECEDENT TO THE ADVANCES

         SECTION 5.1. CONDITIONS PRECEDENT TO THE INITIAL ADVANCE. The
obligation of the Lender to make its initial Advance is subject to the
fulfillment of: (i) the conditions precedent set forth in Section 5.2; and (ii)
the following conditions precedent:

         (a)      the Lender shall have received, in a form satisfactory to it:
                  (i) copies certified by a senior officer of the Borrower of
                  its Charter Documents, the resolutions of its board of
                  directors approving the Credit Facility Documents to which it
                  is a party and all documents evidencing any necessary
                  corporate action of the Borrower with respect to the Credit
                  Facility Documents to which it is a party; (ii) a certificate
                  of good standing for the Borrower; and (iii) a favorable
                  opinion of Borrower's counsel as to such matters as the Lender
                  may require;

         (b)      the Credit Facility Documents other than the Guarantee shall
                  have been executed and delivered to the Lender, the Security
                  shall have been created, and all registrations, filings or
                  recordings necessary or desirable to preserve, protect or
                  perfect the enforceability and priority of such Security shall
                  have been completed, all in such form, content and manner as
                  is satisfactory to the Lender;

         (c)      all of the representations and warranties of the Borrower
                  contained in Article 6 hereof shall be true and correct on and
                  as of the Closing Date as though made on and as of such date;
                  and (d) the Lender shall have received such other documents as
                  it may reasonably request.

         SECTION 5.2. CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of
the Lender to make an Advance and the right of the Borrower to deliver a
Borrowing Notice shall be subject to the condition precedent that on the date of
such Advance and after giving effect thereto and to the application of proceeds
therefrom: (i) the representations and warranties of the Borrower

                                       3
<PAGE>
contained in Article 6 hereof are true and correct on the date of the Advance as
if made on and as at such date; (ii) no event has occurred and is continuing, or
would result from such Advance, which constitutes or would, with the giving of
notice or the passage of time, constitute an Event of Default; (iii) such
Advance will not violate any applicable Law; (iv) there have been no amendments
to the Charter Documents or authorizing resolutions of the Borrower, subsequent
to those delivered to the Lender pursuant to Section 5.1(a), which are material
to the ability of the Borrower to enter into this Agreement and any of the other
Credit Facility Documents to which the Borrower is a party and to perform its
obligations hereunder and thereunder; and (v) the Lender shall have received, if
requested, such other certificates and documentation as it may reasonably
request with respect to the foregoing and opinions from Borrower's counsel
updating opinions previously delivered.

                   ARTICLE 6 - REPRESENTATIONS AND WARRANTIES

         SECTION 6.1. REPRESENTATIONS AND WARRANTIES. The Borrower represents
and warrants to the Lender as outlined in Schedule B hereto.

                      ARTICLE 7 - COVENANTS OF THE BORROWER

         SECTION 7.1. AFFIRMATIVE COVENANTS. Until the Obligations are paid and
satisfied in full and this Agreement has been terminated, the Borrower shall
(or, if applicable, shall cause the relevant action to take place):

         (a)      FINANCIAL REPORTING. Deliver to the Lender as soon as
                  available and in any case within 45 days or 90 days after the
                  end of each financial quarter or year, respectively, quarterly
                  and audited annual financial statements of the Borrower,
                  prepared in accordance with generally accepted accounting
                  principles and certified by a senior officer of the Borrower
                  as being true and correct in all material respects;

         (b)      CORPORATE EXISTENCE. Preserve and maintain in full force and
                  effect its corporate existence and all qualifications to carry
                  on the Borrower's business;

         (c)      COMPLIANCE WITH LAWS, ETC. Comply with all applicable Laws,
                  non-compliance with which could have a Material Adverse
                  Effect;

         (d)      PAYMENT OF TAXES AND CLAIMS. Pay and discharge before the same
                  shall become delinquent: (i) all Taxes, assessments and
                  Official Body charges or levies; and (ii) all lawful claims
                  which, if unpaid, might become a Lien upon or in respect of
                  its business or the Borrower's assets or properties;

         (e)      VISITATION, INSPECTION, ETC. Permit the Lender or any
                  representative thereof on reasonable notice to visit and
                  inspect the Borrower's business, to examine the Borrower's
                  records and make copies and take extracts therefrom, and to
                  discuss the Borrower's affairs, finances and accounts with the
                  officers of the Borrower at

                                       4
<PAGE>
                  such reasonable times during normal office hours and as often
                  as may be reasonably requested;

         (f)      NOTICE OF DEFAULT. Promptly notify the Lender in writing of
                  any default or Event of Default or any default, or event,
                  condition or occurrence which with notice or lapse of time, or
                  both, would constitute a default, under any agreement;

         (g)      MAINTAIN TITLE. Maintain and, as soon as reasonably
                  practicable, defend and take, all action necessary or
                  advisable at any time, and from time to time, to maintain,
                  defend, exercise or renew its right, title and interest in and
                  to all of its property and assets;

         (h)      PAY OBLIGATIONS TO LENDER AND PERFORM OTHER COVENANTS. Make
                  full and timely payment of its obligations hereunder and duly
                  comply with the terms and covenants contained in each of the
                  Credit Facility Documents, all at the times and places and in
                  the manner set forth therein, and at all times take all action
                  necessary to maintain the Liens provided for under or pursuant
                  to this Agreement and the Security Documents as valid and
                  perfected first Liens on the property intended to be covered
                  thereby (subject only to Permitted Encumbrances);

         (i)      NOTICES OF OFFICIAL BODY ACTION. Promptly notify the Lender in
                  writing of any notice of any action by any Official Body or
                  any action, suit, proceeding or investigation (or any basis
                  therefor) pending, or to the knowledge of the Borrower
                  threatened, against or affecting the Borrower before any
                  Official Body, where the amount involved exceeds $50,000 or
                  the equivalent amount in another currency;

         (j)      NOTE. Execute and deliver to the Lender the Note contemplated
                  in Section 4. 1 (b) hereof at or prior to the time of Closing;
                  and

         (k)      FURTHER ASSURANCES. At its cost and expense, upon request by
                  the Lender, duly execute and deliver, or cause to be duly
                  executed and delivered, to the Lender, such further
                  instruments and do and cause to be done such other acts as may
                  be necessary or proper in the reasonable opinion of the Lender
                  to carry out more effectually the provisions and purposes of
                  this Agreement and the other Credit Facility Documents.

         SECTION 7.2. NEGATIVE COVENANTS. Until the Obligations are paid and
satisfied in full and this Agreement has been terminated, the Borrower shall not
(or, if applicable, shall not permit the relevant action to take place), unless
the Lender otherwise consents in accordance with the provisions of this
Agreement:

         (a)      LIENS. Create, incur, assume or suffer to exist any Lien on
                  any of its property or assets now owned or hereafter acquired
                  other than the Liens created prior to the entering into of
                  this Agreement or Liens created by the Security and any
                  Permitted Encumbrances;

                                       5
<PAGE>
         (b)      DEBT. Create, incur, assume or suffer to exist, contingently
                  or otherwise, any Debt other than Debt created prior to the
                  entering into of this Agreement or Debt created by this
                  Agreement;

         (c)      CHANGE IN NATURE OF BUSINESS. Make or permit to exist any
                  change, condition, event or occurrence in or with respect to
                  the nature of its business which when taken individually with
                  all other changes, conditions, events or occurrences could
                  reasonably be expected to have a Material Adverse Effect;

         (d)      MERGERS, ETC. Enter into or agree to enter into any
                  transaction or series of related transactions (whether by way
                  of reconstruction, reorganization, consolidation, combination,
                  amalgamation, merger, transfer, sale, lease, modification or
                  otherwise), whereby: (i) all or substantially all of the
                  Borrower's undertaking, property or assets will become the
                  property of any other person or the continuing corporation
                  resulting therefrom; (ii) there would be permitted any change
                  in the direct or indirect Control of the Borrower; or (iii)
                  the corporate structure of the Borrower would be modified,
                  changed, altered or amended in any manner;

         (e)      DISTRIBUTIONS. Prior to payment in full of all Obligations
                  hereunder, make any payment on account of a redemption or a
                  distribution or return of capital (including, without
                  limitation, cash dividends or any repayment of shareholder
                  loans or distributions) to any shareholder or holder of
                  securities;

         (f)      USE OF PROCEEDS. Use the proceeds of any Advance made
                  available to the Borrower hereunder for repayment of any
                  shareholder loans or short-term loans or redemption of any
                  shareholder capital without the prior written consent of the
                  Lender;

         (g)      SUBSIDIARIES. Create any Subsidiaries or transfer and/or
                  assign any assets or operations to any Subsidiaries; and

         (h)      AGREEMENTS WITH RELATED PARTIES. Enter into any agreement or
                  arrangement with any person with whom the Borrower does not
                  deal at arm's-length, including any affiliate thereof.

SECTION 7.3. RIGHTS. As part of the Lender's compensation for the services to be
performed by it under this Agreement, the Lender may at any time and from time
to time during the term of the Agreement convert the Commitment or any portion
thereof of the Credit Facility to shares of common stock of the Borrower (the
"CONVERTIBLE SHARES").

         The rate of exchange for purposes of calculating the number of shares
of Convertible Shares to be exchanged for the Commitment or a portion thereof
should be as follows:

                                       6
<PAGE>
                      amount of Commitment to be converted

                                        /

         the 10 day average of the closing price of the Borrower's stock

         Notwithstanding anything herein to the contrary, the Lender may convert
the Commitment or any portion thereof by exercising the conversion of
outstanding amounts on the Credit Facility or by advancing such amounts to the
Borrower and then exercising such conversion rights. In the event that the
Borrower terminates this Credit Facility, the Lender shall have 60 days from the
date of termination to exercise these conversion rights. Notwithstanding
anything herein to the contrary, the Lender shall not be entitled to exercise
rights that will cause the Lender to own or control greater than 19.99% of the
voting control of the Borrower until such time as the Borrower has received
shareholder approval to do so. The Borrower shall use its best efforts to secure
the approval of this measure from it shareholders within 90 days of the Closing
Date. Failure to secure such an approval shall be an Event of Default hereunder.

                          ARTICLE 8 - EVENTS OF DEFAULT

         SECTION 8.1. EVENTS OF DEFAULT. An event of default ("EVENT OF
DEFAULT") shall have occurred and be continuing in respect of the Borrower if:

         (a)      FAILURE TO MAKE PAYMENTS. The Borrower shall fail to pay any
                  principal, Interest, fees or other amounts hereunder when the
                  same becomes due and payable and in the case of Interest, fees
                  and other amounts, the failure shall remain unremedied for a
                  period of three (3) Banking Days following notice from the
                  Lender to the Borrower;

         (b)      REPRESENTATIONS AND WARRANTIES INCORRECT. Any representation
                  or warranty made by the Borrower or the Guarantor herein or in
                  any other Credit Facility Document or any representation,
                  warranty or certification made by the Borrower or the
                  Guarantor (or any of their officers) in any certificate or
                  other writing delivered in connection with any of the Credit
                  Facility Documents, or any representation or warranty deemed
                  to be made by the Borrower or the Guarantor provided herein or
                  therein, shall prove to have been incorrect in any material
                  respect when made or deemed to be made;

         (c)      FAILURE TO PERFORM NEGATIVE COVENANTS. The Borrower shall fail
                  to observe any of the negative covenants or financial
                  covenants contained in the Credit Facility Documents
                  including, without limitation, in Section 7.2;

         (d)      FAILURE TO PERFORM OTHER COVENANTS. The Borrower shall fail to
                  perform or observe any other term, covenant or agreement
                  contained in any of the Credit Facility Documents and such
                  failure shall remain unremedied for 15 days;

         (e)      FAILURE TO PAY DEBTS TO THIRD PARTIES. The Borrower shall fail
                  to pay the principal of or premium or interest on any Debt
                  which is outstanding in an aggregate principal amount in
                  excess of $50,000 (or the equivalent amount in any

                                       7
<PAGE>
                  other currency) when the same becomes due and payable and such
                  failure shall remain unremedied for a period of five Banking
                  Days;

         (f)      EVENT OF BANKRUPTCY. The Borrower shall commit or permit to
                  exist any Event of Bankruptcy in respect of the Borrower;

         (g)      JUDGMENTS. Any judgment or order for the payment of money in
                  excess of $50,000 (or the equivalent amount in any other
                  currency) in respect of the Borrower shall be rendered against
                  the Borrower and enforcement proceedings shall have been
                  commenced by any creditor upon such judgment or order and not
                  stayed within 10 days;

         (h)      UNENFORCEABILITY. This Agreement or any Credit Facility
                  Document shall, at any time after execution and delivery, and
                  for any reason (other than in accordance with the respective
                  terms), cease to be in full force and effect or shall be
                  declared to be null and void, or the validity or
                  enforceability of any thereof shall be contested by the
                  Borrower or any other party thereto, or the Borrower or any
                  other such party shall deny that it has any further liability
                  or obligation thereunder;

         (i)      CHALLENGE TO SECURITY. Any of the Security shall at any time
                  after the execution and delivery of the relevant Security
                  Document and for any reason cease to constitute a valid and
                  subsisting Lien (subject only to Permitted Encumbrances) in
                  respect of the assets and properties referred to therein or
                  cease to rank in priority or in the matter contemplated herein
                  other than by reason of the act or omission of the Lender;

         (j)      MATERIAL ADVERSE EFFECT. There occurs any change, condition,
                  event or occurrence which, when considered individually or
                  together with all other changes, conditions, events or
                  occurrences could reasonably be expected to have a Material
                  Adverse Effect; and

         (K)      CHANGE OF CONTROL OR THREATENED CHANGE OF CONTROL OF THE BOARD
                  OF DIRECTORS OF THE BORROWER. There occurs the change of
                  control or threatened change of control in the total voting
                  power of the Board of Directors of the Borrower such that the
                  current Board does not continue in at least 51% of the voting
                  power of the entire Board. For purposes of this section
                  "change of control or threatened change of control" shall
                  include but not be limited to a proxy contest or take out bid
                  relating to the removal or dilution of the current Board of
                  Directors of the Borrower below such voting power.

         (L)      FAILURE TO SECURE SHAREHOLDER APPROVAL. The failure of the
                  Borrower to secure the approval of the shareholders to permit
                  the conversion of this Credit Facility into the Conversion
                  Shares.

                                       8
<PAGE>
                             ARTICLE 9 - TERMINATION

         SECTION 9.1. TERMINATION BY LENDER IN CASE OF DEFAULT. If an Event of
Default occurs, the Lender may, by notice to the Borrower, at Lenders entire
discretion, either (a) require the Borrower immediately to repay all amounts
owed under the Credit Facility and not previously paid or repaid hereunder,
including, but not limited to the Unused Line Fee according to Section 2.5.,
whereupon they shall become immediately due and payable; or (b) place the Credit
Facility on demand, whereupon the Loan together with accrued interest and all
other sums payable under this Agreement shall become repayable immediately on
demand made by the Lender. Delay in exercising or non-exercise of any such right
is not a waiver of that right. At any time, Lender shall maintain its rights
under Section 7.3.

         SECTION 9.2. TERMINATION BY THE BORROWER. The Borrower may at anytime
terminate the Loan Facility, by giving three (3) month prior notice to the
Lender and by subsequently repaying all amounts owed under the Credit Facility
and not previously paid or repaid hereunder, including, but not limited to the
Unused Line Fee according to Section 2.5., to the Lender according to Section
3.4. above. During the termination period, Lender shall maintain its rights
under Section 7.3.

         SECTION 9.3. FEES. The termination for any reason and at any time shall
not influence Borrowers duty to pay the fees due under the present Agreement,
including, but not limited to the Arrangement Fee according to Section 3.3. and
the Unused Line Fee according to Section 2.5 until the Maturity Date. All fees
shall become due and payable immediately upon notification of the termination.

                           ARTICLE 10 - MISCELLANEOUS

         SECTION 10.1. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices, requests, demands, directions and communications by one
party to the other shall be sent by hand delivery or registered mail, and shall
be effective when hand delivered or when delivered by the relevant postal
service, as the case may be. All such notices shall be addressed to the
President of the notified party at its address given on the signature page of
this Agreement, or in accordance with any unrevoked written direction from such
party to the other party in accordance with this Section 9.1.

         SECTION 10.2. REIMBURSEMENT FOR CERTAIN EXPENSES AND CHARGES. (1) The
Borrower shall pay or cause to be paid and shall indemnify and save the Lender
harmless against liability for the payment of all reasonable out-of-pocket
expenses, including without limitation counsel or compliance review fees and
expenses and disbursements incurred by the Lender in connection with, among
other things, the preparation or review of documentation pursuant to this
Agreement, on-site inspections by the Lender or the enforcement or preservation
of rights under this Agreement or the other Credit Facility Documents or any
agreement or instrument contemplated hereby or thereby, including such expenses
as may be incurred by the Lender in the collection of the Obligations or any
litigation, proceeding or dispute in any way relating to

                                       9
<PAGE>
the Obligations or the Credit Facility Documents or in connection with
remittances, bank charges, wire charges or the customary charges by the Lender
for banking services.

         (2) The parties hereto may agree in writing to include any expenses as
an Outstanding Amount, with Interest to be paid thereon in accordance with
Section 3.2 hereof and to be repaid in accordance with Section 3.1 hereof.

         SECTION 10.3. NO WAIVER; REMEDIES. No failure on the part of the Lender
or the Borrower to exercise, and no delay in exercising, any right under any of
the Credit Facility Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right under any of the Credit Facility
Documents preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by Law.

         SECTION 10.4. TAXES, COSTS, ETC. All payments by the Borrower under
this Agreement and the other Credit Facility Documents, including but not
limited to those contemplated in Section 9.2 hereof, shall be made free and
clear of, and without deduction or withholding for, Taxes unless such Taxes are
required by Law to be deducted or withheld. If the Borrower shall be required by
Law to deduct or withhold any Taxes from or in respect of any sum payable under
this Agreement or the other Credit Facility Documents: (i) the sum payable shall
be increased as may be necessary so that after making all required deductions or
withholdings applicable to additional amounts paid under this Section 9.4, the
Lender receives an amount equal to the sum it would have received if no
deduction or withholding had been made; (ii) the Borrower shall make such
deductions or withholdings; and (iii) the Borrower shall pay the full amount
deducted or withheld to the relevant taxation authority or other authority in
accordance with applicable Law.

         SECTION 10.5. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, the Lender shall have the right, to the
fullest extent permitted by Law, to set off and apply any and all deposits at
any time held and other indebtedness at any time owing by the Lender to or for
the credit or the account of the Borrower, against any and all of the
obligations of the Borrower now or hereafter existing under any of the Credit
Facility Documents.

         SECTION 10.6. JUDGMENT CURRENCY. If, for the purposes of obtaining
judgment in any court, it is necessary to convert a sum due hereunder to the
Lender from U.S. Dollars (the "ORIGINAL CURRENCY") into the Judgment Currency,
the parties hereto agree that the rate of exchange used shall be that at which
in accordance with normal banking procedures the Lender could purchase the
Original Currency with the Judgment Currency on the Banking Day preceding that
on which final judgment is paid or satisfied.

         SECTION 10.7. GOVERNING LAW. The Credit Facility Documents shall be
governed by, and construed in accordance with, the laws of Switzerland and shall
be treated in all respects as Swiss contracts without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.

         SECTION 10.8. CONSENT TO JURISDICTION. (1) Each of the parties hereby
irrevocably attorns to the non-exclusive jurisdiction of the Courts of Zurich
(Switzerland) in any action or

                                       10
<PAGE>
proceeding arising out of or relating to this Agreement, or any other Credit
Facility Document. The Borrower agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law; and (2) nothing in
this Section 9.8 shall affect the right of the Lender to serve legal process in
any other manner permitted by Law or affect the right of the Lender to bring any
action or proceeding against the Borrower or its property in the courts of other
jurisdictions.

         SECTION 10.9. ENGLISH VERSION. The parties hereby represent, warrant,
acknowledge and agree that: (i) they have agreed that this Agreement be drawn up
in the English language; and (ii) the English version of this Agreement shall
govern for all purposes.

         SECTION 10.10. SUCCESSORS AND ASSIGNS. The Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lender, which consent may be arbitrarily withheld.

         SECTION 10.11. SEVERABILITY. If one or more provisions of this
Agreement and/or a Security Document be or become invalid, or unenforceable in
whole or in part in any jurisdiction, the validity of the remaining provisions
of this Agreement and/or a Security Document shall not be affected. The parties
hereto undertake to replace any such invalid provision without delay with a
valid provision which as nearly as possible duplicates the economic intent of
the invalid provision.

         SECTION 10.12. COUNTERPARTS. This Agreement may be executed in
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed an original and all of which, taken together,
shall constitute one and the same instrument.

         SECTION 10.13. SYNDICATION/PARTICIPATION. The Lender may sell,
transfer, assign, participate, syndicate or negotiate to one or more third
parties, in whole or in part, the Commitment and its rights under this Credit
Facility Agreement all without the prior consent of the Borrower.

                            [SIGNATURE PAGE FOLLOWS]

                                       11
<PAGE>
         IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                 THE LENDER

                                 MFC MERCHANT BANK S.A.

                                 Per: /s/ Peter Hediger
                                      ----------------------------------
                                            Authorized Signing Officer

                                 Per: /s/ Michael Haettenschwiler
                                      ----------------------------------
                                            Authorized Signing Officer

                                 THE BORROWER

                                 EQUIDYNE CORPORATION

                                 Per: /s/ Lewis Cheung, President
                                      ----------------------------------
                                            Authorized Signing Officer

                                 Per: /s/ Lewis Cheung, Secretary
                                      ----------------------------------
                                            Authorized Signing Officer
<PAGE>
                                   SCHEDULE A

                                   DEFINITIONS

"BANKING DAY" shall mean any day other than a Saturday, Sunday, public holiday
under the laws of the State of New York or other day on which banking
institutions are authorized or obligated to close in New York, New York.

"BBA LIBOR" means the one month London Inter-Bank Offered Rate fixed daily by
the BBA;

"CHARTER DOCUMENTS" means constating documents and by-laws, and all amendments
thereto;

"CLOSING DATE" means two Banking Days following satisfaction by the Borrower or
waiver by the Lender of all conditions to Advance set out in the Credit
Documents or such other date as may be agreed upon by the parties;

"CONSENT" means any permit, license, approval, consent, order, right,
certificate, judgment, writ, injunction, award, determination, direction,
decree, authorization, franchise, privilege, grant, waiver, exemption and other
concession or by-law, rule or regulation;

"CONTROL" over a person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
person, whether through the ownership of voting securities or other equity
interest, representation on its board of directors or body performing similar
functions, by contract or otherwise. The terms "CONTROLLING" and "CONTROLLED"
will have corollary meanings;

"CREDIT FACILITY DOCUMENTS" means this Agreement, the Security Documents and the
Information Documents and all other documents to be executed and delivered to
the Lender or by the Borrower or the Guarantor thereunder;

"DEBT" of any person means: (i) all indebtedness of such person for and in
respect of borrowed money, including obligations with respect to bankers'
acceptances, letters of credit and letters of guarantee; (ii) all indebtedness
of such person for the deferred purchase price of property or services
represented by a note or other evidence of indebtedness or other security; (iii)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such person (even
though the rights or remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property); (iv)
all obligations under leases which, in accordance with GAAP (or accounting
principles generally accepted in the jurisdiction of incorporation or
organization of such person), are recorded as capital leases in respect of which
such person is liable as lessee; (v) the aggregate amount at which any shares in
the capital of such person which are redeemable or retractable at the option of
the holder thereof may be retracted or redeemed; and (vi) all Debt Guaranteed by
such person; provided that obligations related to any grant or subsidy which is
to be reimbursed on a revenue or profit success basis are not considered Debt
under this definition;

                                      A-1
<PAGE>
"DEBT GUARANTEED" by any person means the maximum amount which may be
outstanding at any time of all Debt of the kind referred to in (1) through (v)
or the definition of Debt which is directly or indirectly guaranteed by such
person or such person agreed (contingently or otherwise) to purchase or
otherwise acquire, or in respect of which such person is otherwise assured a
creditor against loss by means of an indemnity, security or bond;

"DOLLAR" or "$" means the currency of the United States of America.

"EVENT OF BANKRUPTCY" means, in respect of any person, that such person shall
generally not pay its Debts as such Debts become due, or shall admit in writing
its inability to pay its Debts generally as they become due, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any such person seeking to adjudicate it a bankrupt or
insolvent or seeking liquidation, winding-up, a reorganization, arrangement,
adjustment, protection, relief or a composition of it or its Debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or for the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against such
person (but not instituted by such person), either such proceeding shall remain
undismissed or unstayed for a period of 30 days or any of the actions sought in
such proceeding (including, without limitation, the entry of an order for relief
against such person or for the appointment of a receiver, trustee, custodian or
other similar official for such person or for any substantial part of its
property) shall occur; or such person shall take any action to authorize any of
the actions set forth above;

"INFORMATION DOCUMENTS" means, collectively, at any time and in any form,
information provided by the Borrower or on behalf of the Borrower, or by the
Guarantor or on behalf of the Guarantor, to the Lender in writing in respect of
the Borrower's business or the Guarantor's business, including, without
limitation, all certificates, the financial statements of the Borrower or the
Guarantor and all materials reasonably requested by the Lender for the purpose,
inter alia, of providing such information to prospective assignees, all as from
time to time amended, supplemented or replaced;

"INTEREST" means the interest accrued on Advances outstanding from time to time
at the Interest Rate compounded monthly not in advance, and payable, in arrears,
on the Interest Payment Dates;

"INTEREST PERIODS" means, collectively, periods of one month, each subsequent
period commencing upon the expiry of the prior period, and "INTEREST PERIOD"
means any one such period. Interest shall be calculated on the basis of a year
of 360 days and the actual number of days (including the first day but excluding
the last day) occurring in the period for which such Interest is payable;

"INTEREST RATE" means, at any time, Libor plus 3.5% per annum. With each
successive Interest Period the Libor shall be reset on the second Banking Day
prior to the commencement of the Interest Period and there shall be a
corresponding change in the rate of interest payable under this Agreement
without the necessity of prior notice thereof to the Borrower or any other
person;
<PAGE>
"JUDGMENT CURRENCY" means the currency in which a court of competent
jurisdiction may render judgment in connection with any litigation relating to
the repayment of any amounts under this Agreement; "Law" means any law
(including common law and equity), constitution, statute, order, treaty,
regulation, rule, ordinance, order, injunction, writ, judgment, determination,
decree or award of any Official Body;

"LIBOR" means BBA Libor or, if no such published rate is then available, the
rate of interest calculated by the Lender, as being the arithmetic average
(rounded up, if necessary, to the nearest full multiple. of 1/16 of one percent)
at which, in accordance with its normal practice, it would be prepared to offer
to leading banks in the London interbank market for delivery on the first day of
the particular Interest Period and for a period equal to such Interest Period
based on the number of days comprised therein, deposits in U.S. Dollars of
amounts comparable to the Principal Sum or the balance outstanding thereof
during such Interest Period, at or prior to 11:00 a.m. London, England, local
time on the second Banking Day prior to an Advance and thereafter on the second
Banking Day prior to the commencement of each subsequent Interest Period;

"LIEN" means any mortgage, pledge, lien, hypothecation, security interest or
other encumbrance or charge (whether fixed, floating or otherwise) or title
retention, any right of set-off (arising otherwise than by operation of Law) and
any deposit of monies under any agreement or arrangement whereby such monies may
be withdrawn only upon the fulfillment of any condition as to the discharge of
any other indebtedness or other obligation to any creditor, or any right of or
arrangement of any kind with any creditor to have its claim satisfied prior to
other creditors with or from the proceeds of any properties, assets or revenues
of any kind now owned or later acquired;

"MATERIAL ADVERSE EFFECT" means: (i) a material adverse effect on the property
or assets of the Borrower and its Subsidiaries taken as a whole; (ii) a material
adverse effect on the condition or prospects, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole; (iii) a material adverse effect
on the ability of the Borrower to perform and comply with this Agreement or to
pay or perform any of the Obligations; (iv) a material adverse effect on the
priority, effectiveness or enforceability of the Security; or (v) a material
adverse effect on the condition or prospects, financial or otherwise, of the
Borrower;

"OBLIGATIONS" means all obligations, liabilities and indebtedness of the
Borrower to the Lender with respect to the principal of and Interest on Advances
and the payment or performance of all other obligations, liabilities and
indebtedness of the Borrower to the Lender under this Agreement or arising under
and pursuant to any one or more of the Credit Facility Documents or with respect
to the Advances and all fees, costs, expenses and indemnity obligations
thereunder;

"OFFICIAL BODY" means any government or political subdivision or any agency
(including, without limitation, any licensing or regulatory agency), body,
office, authority, bureau, central bank, monetary authority, commission,
department or instrumentality thereof, or any court, board, tribunal, grand jury
or arbitrator, commission or instrumentality thereof, whether foreign or
domestic and, when used in the context of a particular person having
jurisdiction over such person;

                                      A-3
<PAGE>
"OUTSTANDING AMOUNT" means, in respect of the Credit Facility, on any day, an
amount calculated and expressed in U.S. Dollars equal to the aggregate principal
amount of all Advances made by the Lender under the Credit Facility;

"PERMITTED ENCUMBRANCES" means, in respect of the Borrower, from time to time,
any Lien not intentionally created by the Borrower and covering an asset which
the Lender determines (acting reasonably) not to be required for or integral to
the operation of the business of the Borrower or the effectiveness or value of
the Security, and in respect of which Lien either (i) the same is discharged or
(ii) the Borrower provides the Lender such substituted security as the Lender
-shall consider satisfactory, in either (i) or (ii) above within 15 days of
written notice from the Lender to the Borrower;

"SECURITY DOCUMENTS" means the documents referred to in Section 4.1 of this
Agreement and the agreements, instruments and documents delivered from time to
time to the Lender by the Borrower, the Guarantor or any other person, for the
purpose of establishing, perfecting, preserving and protecting the Security; and

"SECURITY DOCUMENT" means any one of them as the context prescribes or requires;

"SUBSIDIARY" means, at any time, as to any person, any corporation, partnership
or other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at such time directly or indirectly owned by
such a person; and "Taxes" means any and all present or future taxes (including,
without limitation, all stamp, documentary, excise or property taxes), levies,
imposts, deductions, charges or withholdings and liabilities with respect
thereto.

                                       A-4
<PAGE>
                                   SCHEDULE B

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

(A)      ORGANIZATION AND CORPORATE POWER. The Borrower has been duly
         incorporated and organized and is validly subsisting and in good
         standing under the laws of its jurisdiction and has full corporate
         right, power and authority to enter into and perform its obligations
         under each of the Credit Facility Documents to which it is or shall be
         a party and has full corporate right, power and authority to own and
         operate its properties and to carry on its business;

(b)      CONFLICT WITH OTHER INSTRUMENTS. The execution and delivery by the
         Borrower of each of the Credit Facility Documents and the performance
         by the Borrower of its obligations thereunder, including, without
         limitation, the performance of the terms of the Security Documents, do
         not and will not: (i) conflict with or result in a breach of any of the
         terms, conditions or provisions of: (A) the Charter Documents of the
         Borrower; (B) any Law applicable to or binding on the Borrower; or (C)
         any contractual restriction binding on or affecting the borrower or its
         properties the breach of which would have a Material Adverse Effect; or
         (ii) result in, or require or permit: (A) the imposition of any Lien on
         or with respect to the properties now owned or hereafter acquired by
         the Borrower; or (B) the acceleration of the maturity of any Debt of
         the Borrower, under any contractual provision binding on or affecting
         the Borrower;

(c)      CONSENTS, OFFICIAL BODY APPROVALS. The execution and delivery of each
         of the Credit Facility Documents and the performance by the Borrower of
         its obligations thereunder have been duly authorized by all necessary
         action on the part of the Borrower, and no Consent under any applicable
         Law and no registration, qualification, designation, declaration or
         filing with any Official Body having jurisdiction over the Borrower is
         or was necessary therefor. The Borrower possesses all Consents, in full
         force and effect, under any applicable Law which are necessary in
         connection with the operation of its business, the non-possession of
         which could reasonably be expected to have a Material Adverse Effect;

(d)      EXECUTION OF BINDING OBLIGATION. The Agreement has been duly executed
         and delivered by the Borrower, and the Agreement constitutes, and the
         remaining Credit Facility Documents when duly executed by the Borrower
         pursuant to the Agreement and delivered for value will constitute,
         legal, valid and binding obligations of the Borrower, enforceable
         against it in accordance with their respective terms;

(e)      NO LITIGATION. There are no actions, suits or proceedings pending or,
         to the knowledge of the Borrower, after due inquiry, threatened against
         or affecting the Borrower (nor, to the knowledge of the Borrower, after
         due inquiry, any basis therefor) before any Official Body having
         jurisdiction over the Borrower which purport to or do challenge the
         validity or propriety of the transactions contemplated by the Credit
         Facility Documents or the documents, instruments or agreements executed
         and delivered in connection therewith or

                                      B-1
<PAGE>
         related thereto, which if adversely determined could reasonably be
         expected to have a Material Adverse Effect;

(f)      NO DEFAULTS. The Borrower is not in breach of or in default under, in
         any respect: (i) its Charter Documents; (ii) any applicable Law; (iii)
         any contract or agreement binding on or affecting it or its property or
         assets (including, without limitation, the Credit Facility Documents);
         (iv) any material indenture, mortgage, deed of trust; or (v) any writ,
         judgment, determination or award binding on it or affecting it where
         such breach or defect could, in the case of (ii), (iii), (iv) or (v)
         above, have a Material Adverse Effect;

(g)      INFORMATION DOCUMENTS. The information contained in the Information
         Documents is true and accurate in all material respects and does not
         contain any untrue statement of a material fact. The Information
         Documents do not omit to state any fact necessary in order to make any
         of the information contained in the Information Documents not
         misleading in all material respects;

(h)      MATERIAL CHANGES. No changes occurred or are continuing in respect of
         the financial condition of the Borrower from that set out in the most
         recently delivered financial statements of the Borrower which could
         have a Material Adverse Effect; and no Law, regulation, rule or policy,
         or any change therein, has been enacted or proposed prior to the
         Closing Date which may have a Material Adverse Effect;

(i)      TITLE TO ASSETS. The Borrower has good and marketable title to all of
         its properties and assets, and the Security will constitute a first
         charge on the legal and beneficial interests of the Borrower in and to
         all such properties and assets, subject only to such Liens as are
         described in Section 7.2(a) of the Agreement and the Permitted
         Encumbrances;

(j)      ABSENCE OF CHANGES. Since the date of the most recently delivered
         financial statements of the Borrower, the Borrower has carried on its
         business, operations and affairs only in the ordinary -and normal
         course consistent with past practice; and

                                      B-2

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