Document:

Unassociated Document

EXHIBIT 10.2

INDEMNIFICATION AGREEMENT

 

THIS AGREEMENT is made and entered into as of the 20th day of September , 2004 (“Agreement”), by and among APOLLO GOLD, INC., a Delaware corporation, APOLLO GOLD EXPLORATION, INC., a
 Delaware corporation, FLORIDA CANYON MINING, INC., a Delaware corporation, MINE DEVELOPMENT FINANCE, INC., a Delaware corporation, MONTANA TUNNELS MINING, INC., a Delaware corporation, and STANDARD GOLD MINING, INC., a Delaware corporation (any one or more of which are collectively referred to herein as the “Subsidiaries” and individually as a “Subsidiary”), and ____________ (“Indemnitee”). 

 

RECITALS: 

 

WHEREAS officers and directors of publicly traded corporations and their subsidiaries are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the corporation or business enterprise itself; and 

WHEREAS, highly competent persons have become more reluctant to serve publicly-traded corporations or their subsidiaries as directors or officers or in other capacities unless they are provided with adequate protection through insurance and indemnification against the risks of claims and actions against them arising out of their service to, and activities on behalf of, such corporations; and

 

WHEREAS, the Board of Directors (the “Board”) of APOLLO GOLD CORPORATION, a publicly held Yukon Territory corporation which owns, directly or indirectly, 100% of the capital stock of each of the Subsidiaries (the “Company”), has determined that, to attract and retain qualified individuals, the Company and the Subsidiaries will attempt to maintain on an ongoing basis, at their sole expense, liability insurance to protect persons directly and indirectly serving the Company and/or the Subsidiaries from certain liabilities; and 

WHEREAS, such persons will directly or indirectly serve the Company and/or the Subsidiaries at the specific request of the Company and each of the Subsidiaries; and

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company or any Subsidiary free from undue concern that they will not be so indemnified, and the Company has done so through execution and delivery of an indemnity agreement of even date herewith between Company and Indemnitee under the laws of the Yukon Territory; and 

WHEREAS, it is reasonable, prudent and necessary for the Company to cause the Subsidiaries contractually to obligate themselves to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law as provided in this Agreement so that they will serve or continue to serve the Company or any Subsidiary free from undue concern that they will not be so indemnified; and

 

WHEREAS, this Agreement is a supplement to and in furtherance of the By-laws of the Company and each of the Subsidiaries and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefore, nor to diminish or to abrogate any rights of Indemnitee thereunder; and 

 

WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company or any Subsidiary on the condition that he or she be so indemnified; and

	 
	 	1 	 
	

	 

WHEREAS, the Board has determined that it is in the best interests of the Company and the Subsidiaries to provide such director and officer insurance and contractual indemnification as set forth herein. 

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Subsidiaries and Indemnitee hereby covenant and agree as follows: 

Section 1.    Services by Indemnitee.    Indemnitee agrees to continue to serve as a director or officer of the Company or any Subsidiary. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Subsidiaries shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any Subsidiary) and Indemnitee. This Agreement shall continue in force after Indemnitee has ceased to serve as a director or officer of the Company
or any Subsidiary. 

 

Section 2.    Indemnification—General.    The Subsidiaries shall indemnify, and advance Expenses (as hereinafter defined) to, Indemnitee (a) as provided in this Agreement and (b) to the fullest extent permitted by applicable law in effect on the date hereof and as amended from time to time. The rights of Indemnitee provided under the preceding sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement. 

 

Section 3.    Proceedings Other Than Proceedings by or in the Right of the Company or any Subsidiary.    Indemnitee shall be indemnified under this Section 3 if, by reason of his or her Corporate Status (as hereinafter defined), he or she is, or is threatened to be made, a party to or a participant in any threatened, pending, or completed Proceeding (as hereinafter defined), other than a Proceeding by or in the right of the Company or any Subsidiary. Pursuant to this Section 3, Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his
or her behalf in connection with such Proceeding or any claim, issue or matter therein, if he or she acted in Good Faith (as hereinafter defined) and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company or any Subsidiary and, with respect to any criminal Proceeding, had no reasonable cause to believe his or her conduct was unlawful. 

 

Section 4.    Proceedings by or in the Right of the Company or any Subsidiary.    Indemnitee shall be indemnified under this Section 4 if, by reason of his or her Corporate Status, he or she is, or is threatened to be made, a party to or a participant in any threatened, pending or completed Proceeding brought by or in the right of the Company or any Subsidiary to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with such Proceeding if he or she acted in Good Faith and in a manner he or she reasonab
ly believed to be in or not opposed to the best interests of the Company or any Subsidiary; provided that if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company or any Subsidiary unless and to the extent that the Court of Chancery of the State of Delaware, or the court in which such Proceeding shall have been brought or is pending, shall determine that such indemnification may be made. 

 

Section 5.    Indemnification for Expenses of a Party Who is Wholly or Partly Successful.    Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding (including dismissal without prejudice), he or she shall be indemnified to the maximum extent permitted by law against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise
, as to one or more but less than all claims, issues or matters in such Proceeding, the Subsidiaries shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. 

 

	 
	 	2 	 
	

	 

Section 6.    Indemnification for Expenses of a Witness.    Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he or she shall be indemnified against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith; provided that he or she shall not be paid for time spent as such. 

 

Section 7.    Advancement of Expenses.    Notwithstanding any provision of this Agreement to the contrary, the Subsidiaries shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding in which Indemnitee is involved by reason of Indemnitee’s Corporate Status within 10 days after the receipt by the any Subsidiary of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Indemnitee may forward to any Subsidiary the invoices of Indemnitee’s legal counsel which shall satisfy the above
requirement. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee. Indemnitee hereby undertakes to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 7 shall be unsecured and interest free. 

 

Section 8.    Procedure for Determination of Entitlement to Indemnification. 

 

(a)    To obtain indemnification under this Agreement, Indemnitee shall submit to any Subsidiary a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Subsidiary receiving the request shall, promptly upon receipt of such a request for indemnification, advise the Boards of all Subsidiaries in writing that Indemnitee has requested indemnification. The Indemnitee shall be conclusively presumed to have met the relevant standards of conduct required under applicable law for indemnification pursuant to this Agreement, unless a determination is made that the Indemnitee has not met such s
tandards by (i) the Board of [each?] Subsidiary by a majority vote of a quorum thereof consisting of members who were not parties to such proceeding; (ii) the stockholder(s) of [each?] Subsidiary by a majority vote; or (iii) by an order or decree of any court of competent jurisdiction. 

 

(b)    No Subsidiary shall be required to obtain the consent of Indemnitee to the settlement of any Proceeding such Subsidiary has undertaken to defend if the Company assumes full and sole responsibility for such settlement and the settlement grants Indemnitee a complete and unqualified release in respect of the potential liability. Such Subsidiary shall not be liable for any amount paid by the Indemnitee in settlement of any Proceeding that is not defended by the Subsidiary, unless the Subsidiary has consented to such settlement, which consent shall not be unreasonably withheld. 

 

Section 9.    Presumptions; Reliance and Effect of Certain Proceedings. 

(a)    The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in Good Faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of any Subsidiary or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause
 to believe his or her conduct was unlawful. 

 

	 
	 	3 	 
	

	 

(b)    For purposes of any determination of Good Faith, Indemnitee shall be deemed to have acted in Good Faith if Indemnitee’s action is based on the records or books of account of the Company and/or the Subsidiaries, including financial statements, or on information supplied to Indemnitee by the officers, agents or employees of the Company and/or the Subsidiaries in the course of their duties, or on the advice of legal counsel for the Company and/or the Subsidiaries or on information or records given or reports made to the Company and/or the Subsidiaries by an independent certified public accountant or by an appraiser, financial advisor or other expert or professional selected with reasonable care by the Company and/or the Subsidiaries. The provisions of this Section 9(b) sh
all not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement. 

 

(c)    The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company and/or the Subsidiaries shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. 

 

Section 10.    Remedies of Indemnitee. 

 

(a)    If (i) a determination is made pursuant to Section 8 that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 8(a) within 60 days after receipt by a Subsidiary of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, Section 6, or Section 8(a) within 10 days after receipt by a Subsidiary of a written request therefor, or (v) payment of indemnification pursuant to Section 3 or Section 4 is not made within 10 days after a determination has been made that Indemnitee
 is entitled to indemnification, the Subsidiary shall have waived its right to deny indemnification hereunder.

 

(b)    If a determination shall have been made pursuant to Section 8 that Indemnitee is entitled to indemnification, the Subsidiaries shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statements not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law. 

 

Section 11.    Nonexclusivity; Insurance; Subrogation. 

 

(a)    The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Subsidiaries’ or the Company’s respective Certificates of Incorporation, the Subsidiaries’ or the Company’s respective By-laws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, wh
ether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Subsidiaries’ or the Company’s respective Certificates of Incorporation, By-laws and this Agreement, it is the agreement and intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy. 

 

	 
	 	4 	 
	

	 

(b)    To the extent that the Company or any of the Subsidiaries maintain an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Company, the Subsidiaries, or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise such person serves at the request of the Company or any Subsidiary, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. 

 

(c)    In the event of any payment under this Agreement, the Subsidiaries shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company or any Subsidiary to bring suit to enforce such rights. 

 

(d)    The Subsidiaries shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise theretofore actually received such payment under any insurance policy, contract, agreement or otherwise. 

 

(e)    The Subsidiaries’ obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company or any Subsidiary as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually theretofore received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. 

Section 12.    Duration of Agreement.    This Agreement shall continue until and terminate upon the later of: (i) 10 years after the date that Indemnitee shall have ceased to serve as a director or officer of the Company (or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee served at the request of the Company); or (ii) the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 10 relating thereto. This Agreement sh
all be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. 

 

Section 13.    Severability.    If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (ii) such provision or provisions shall be deemed reformed to the exten
t necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (iii) to the fullest extent possible, the provisions of this Agreement (including without limitation each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. 

 

Section 14.    Exception to Right of Indemnification or Advancement of Expenses.    Notwithstanding any other provision of this Agreement, but subject to Section 10, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, or any claim therein, unless the bringing of such Proceeding or making of such claim shall have been approved by the Board of Directors of the Company and/or the Subsidiaries against whom such claim shall have been brought or made. 

 

	 
	 	 5	 
	

	 

Section 15.    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. 

 

Section 16.    Headings.    The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. 

 

Section 17.    Definitions.    For purposes or this Agreement: 

 

(a)    “Corporate Status” describes the status of a person who is or was a director, officer, employee or agent of the Company or any Subsidiary or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the request of the Company or any Subsidiary. 

 

(b)    “Disinterested Director” means a director of the Company or any Subsidiary who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee. 

 

(c)    “Effective Date” means the date first above written. 

 

(d)    [Intentionally omitted].

 

(e)    “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel and lodging expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. 

 

(f)    “Good Faith” shall mean Indemnitee having acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or any Subsidiary, and, with respect to any criminal Proceeding, having had no reasonable cause to believe Indemnitee’s conduct was unlawful. 

 (g)    “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or a Subsidiary or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a director or officer of the Company or a Subsidiary, by reason of any action taken by him or her or of any inaction on his or her part while acting as director or officer of the Company, or
 by reason of the fact that he or she is or was serving at the request of the Company or a Subsidiary as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, in each case whether or not he or she is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification or advancement of expenses can be provided under this Agreement; except one initiated by a Indemnitee pursuant to Section 10 to enforce his or her rights under this Agreement. 

 

(h)    References to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of” the Company and/or any Subsidiary shall include any service as a director, officer, employee or agent of the Company or any Subsidiary that imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, as participants or beneficiaries; and a person who acted in good faith and in the manner he reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall not be deemed to have acted in manner “not opposed to the
best interests of the Company and/or Subsidiaries” as referred to in this Agreement. 

 

	 
	 	6 	 
	

	 

(i)    “Affiliate” means with respect to any person or entity, any other person or entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such person or entity. 

 

Section 18.    Enforcement. 

(a)    Each Subsidiary expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to continue to serve as a director and/or officer of the Company and the Subsidiaries, and to serve upon any committee of the Board of Directors of the Company and/or the Subsidiaries as requested by such Board, and each Subsidiary acknowledges that Indemnitee is relying upon this Agreement in serving as a director and/or officer of the Company and/or the Subsidiaries and a member of any such committee. 

 

(b)    This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof. 

 

Section 19.    Modification and Waiver.     No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 

 

Section 20.    Notice by Indemnitee.    Indemnitee agrees promptly to notify the Subsidiaries in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter that may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Subsidiaries shall not relieve the Subsidiaries of any obligation any of them may have to the Indemnitee under this Agreement or otherwise, except to the extent the Subsidiary is materially prejudiced by such failure. 

Section 21.    Notices.    All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom the notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 

 

	
(a)    If to Indemnitee, to:

	
 
	
  
	
 

	 
	
 
	
  
	
 

	
(b)    If to any Subsidiary, to:

	
 
	
  
	
 

	
 

	
        4601 DTC Boulevard, Suite 750

	
        Denver, CO 89237-2571

	
        Attention: General Counsel

 

	 
	 	7 	 
	

	 

or to such other address as may have been furnished to Indemnitee by the Subsidiaries or to the Subsidiaries by Indemnitee, as the case may be. 

 

Section 22.    Contribution.    To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Subsidiaries, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relativ
e benefits received by the Subsidiaries and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Subsidiaries (and their respective directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s). 

 

Section 23.    Governing Law; Submission to Jurisdiction; Appointment of Agent for Service of Process.    This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. 

 

Section 24.    Miscellaneous.    Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. All references in this Agreement to Sections shall be deemed to be references to Sections of this Agreement unless the context indicates otherwise. 

Section 25. Joint and Several Obligations. The obligations of each Subsidiary under this Agreement are joint and several.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 

SUBSIDIARIES:

	
APOLLO GOLD, INC.

 

 

 

By:       ______________________________ 

R. David Russell, President 
	
APOLLO GOLD EXPLORATION, INC.

 

 

 

By:       ______________________________ 

R. David Russell, President 

 

	
FLORIDA CANYON MINING, INC.

 

 

 

By:       ______________________________ 

R. David Russell, President 
	
MINE DEVELOPMENT FINANCE, INC.

 

 

 

By:       ______________________________ 

R. David Russell, President 

	
 

MONTANA TUNNELS MINING, INC.

 

 

 

By:       ______________________________ 

R. David Russell, President 
	
 

STANDARD GOLD MINING, INC.

 

 

 

By:       ______________________________ 

R. David Russell, President 

	 
	 	8 	 
	

	 

INDEMNITEE:

	 	
 

 

 

__________________________________ 

[INDEMNITEE] 

 

 

AUTHORIZATION AND DIRECTION BY SHAREHOLDER 

APOLLO GOLD, INC.

Apollo Gold, Inc., acting as sole shareholder of the other Subsidiaries, hereby authorizes, directs, and consents to the execution, delivery and performance of this Agreement by each of the other Subsidiaries.

	 	
APOLLO GOLD, INC.

 

 

 

By:       ______________________________ 

R. David Russell, President 

AUTHORIZATION AND DIRECTION BY SHAREHOLDER

APOLLO GOLD CORPORATION

The Company, acting as sole shareholder of Apollo Gold, Inc., hereby authorizes, directs, and consents to Apollo Gold, Inc.’s execution, delivery, and performance of this Agreement and the foregoing Authorization and Direction by Shareholder Apollo Gold, Inc.

	 	
APOLLO GOLD CORPORATION

 

 

 

By:       ______________________________ 

R. David Russell, President 

	 
	 	9Exhibit 4.1

THIS  WARRANT  AND THE SHARES OF COMMON  STOCK  ISSUABLE  UPON  EXERCISE OF THIS
WARRANT  HAVE  BEEN  ACQUIRED  FOR  INVESTMENT  PURPOSES  ONLY  AND  MAY  NOT BE
TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933,
AS AMENDED  (THE  "SECURITIES  ACT") SHALL HAVE BECOME  EFFECTIVE  WITH  RESPECT
THERETO  OR (ii)  RECEIPT BY THE  COMPANY  OF AN  OPINION OF COUNSEL  REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE SECURITIES
ACT IS NOT  REQUIRED  IN  CONNECTION  WITH SUCH  PROPOSED  TRANSFER  NOR IS SUCH
TRANSFER IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL
BE ENDORSED  UPON ANY WARRANT  ISSUED IN EXCHANGE FOR THIS WARRANT OR ANY SHARES
OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT.

                        WARRANT TO PURCHASE COMMON STOCK

                                       OF

                         LAWRENCE CONSULTING GROUP, INC.

No. 1

      This is to Certify that ________________________ or assigns ("Holder"), is
entitled to purchase,  subject to the provisions of this Warrant,  from Lawrence
Consulting Group, Inc., a Delaware  Corporation (the "Company")  ________ shares
of fully paid,  validly issued and nonassessable  shares of stock of the Company
("Common  Stock") at a price of $0.12 per share at any time or from time to time
during the period  from  January 16,  2004 until  January  16,  2014  ("Exercise
Period"),  subject to adjustment  as set forth  herein.  The number of shares of
Common  Stock to be received  upon the exercise of this Warrant and the price to
be paid for each  share of  Common  Stock may be  adjusted  from time to time as
hereinafter  set  forth.  The  shares  of  Common  Stock  deliverable  upon such
exercise,  and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant  Shares"  and the  exercise  price of a share of Common  Stock in
effect at any time and as adjusted  from time to time is  hereinafter  sometimes
referred to as the "Exercise Price".

                (a) EXERCISE OF WARRANT; CANCELLATION OF WARRANT

<PAGE>

            (1) This Warrant may be exercised in whole or in part at any time or
from time to time during the Exercise  Period;  provided,  however,  that (i) if
either such day is a day on which banking  institutions in the State of New York
are authorized by law to close,  then on the next succeeding day which shall not
be such a day,  and (ii) in the event of any  merger,  consolidation  or sale of
substantially  all the assets of the Company as an  entirety,  resulting  in any
distribution to the Company's stockholders,  prior to expiration of the Exercise
Period (the "Expiration Date"), the Holder shall have the right to exercise this
Warrant commencing at such time through Expiration Date into the kind and amount
of shares of stock and other securities and property (including cash) receivable
by a holder of the number of shares of Common  Stock  into  which  this  Warrant
might have been  exercisable  immediately  prior  thereto.  This  Warrant may be
exercised by presentation  and surrender  hereof to the Company at its principal
office with the Purchase Form annexed  hereto duly executed and  accompanied  by
payment of the Exercise Price for the number of Warrant Shares specified in such
form. As soon as practicable  after each such exercise of the warrants,  but not
later than seven (7) days following the receipt of good and available funds, the
Company shall issue and deliver to the Holder a certificate or  certificate  for
the Warrant Shares  issuable upon such  exercise,  registered in the name of the
Holder or its designee.  If this Warrant  should be exercised in part only,  the
Company  shall,  upon  surrender of this Warrant for  cancellation,  execute and
deliver a new Warrant  evidencing  the rights of the Holder  thereof to purchase
the balance of the Warrant Shares  purchasable  thereunder.  Upon receipt by the
Company of this  Warrant at its office in proper form for  exercise,  the Holder
shall be deemed  to be the  holder  of  record  of the  shares  of Common  Stock
issuable upon such  exercise,  notwithstanding  that the stock transfer books of
the Company shall then be closed or that  certificates  representing such shares
of Common Stock shall not then be physically delivered to the Holder.

            (2) At any time during the Exercise  Period,  the Holder may, at its
option, exercise this Warrant on a cashless basis by exchanging this Warrant, in
whole or in part (a  "Warrant  Exchange"),  into the  number of  Warrant  Shares
determined in accordance with this Section (a)(2),  by surrendering this Warrant
at the  principal  office of the Company or at the office of its stock  transfer
agent,  accompanied  by a notice  stating  such  Holder's  intent to effect such
exchange, the number of Warrant Shares to be exchanged and the date on which the
Holder requests that such Warrant Exchange occur (the "Notice of Exchange"). The
Warrant  Exchange  shall  take  place on the date  specified  in the  Notice  of
Exchange  or, if later,  the date the  Notice of  Exchange  is  received  by the
Company (the "Exchange  Date").  Certificates  for the shares issuable upon such
Warrant Exchange and, if applicable,  a new warrant of like tenor evidencing the
balance of the shares remaining  subject to this Warrant,  shall be issued as of
the Exchange Date and  delivered to the Holder  within seven (7) days  following
the Exchange Date. In connection with any Warrant  Exchange,  this Warrant shall
represent  the right to subscribe  for and acquire the number of Warrant  Shares
equal to (i) the number of Warrant Shares  specified by the Holder in its Notice
of Exchange (the "Total Number") less (ii) the number of Warrant Shares equal to
the  quotient  obtained by dividing  (A) the product of the Total Number and the
existing  Exercise  Price by (B) the current  market  value of a share of Common
Stock.  Current market value shall have the meaning set forth Section (c) below,
except that for purposes hereof,  the date of exercise,  as used in such Section
(c), shall mean the Exchange Date.

      (b)  RESERVATION  OF SHARES.  The Company  shall at all times  reserve for
issuance  and/or delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery upon exercise of
the Warrants.

      (c)  FRACTIONAL  SHARES.  No  fractional  shares  or  script  representing
fractional  shares  shall be issued  upon the  exercise  of this  Warrant.  With
respect to any  fraction of a share  called for upon any  exercise  hereof,  the
Company  shall  pay to the  Holder  an  amount  in cash  equal to such  fraction
multiplied by the current market value of a share, determined as follows:

                                       2
<PAGE>

            (1) If the Common Stock is listed on a national  securities exchange
            or admitted  to  unlisted  trading  privileges  on such  exchange or
            listed for trading on the Nasdaq National Market, the current market
            value shall be the last  reported  sale price of the Common Stock on
            such  exchange or market on the last  business day prior to the date
            of exercise of this  Warrant or if no such sale is made on such day,
            the average of the closing bid and asked prices for such day on such
            exchange or market; or

            (2) If the Common  Stock is not so listed or  admitted  to  unlisted
            trading privileges, but is traded on the Nasdaq SmallCap Market, the
            current  market  value  shall be the  average of the closing bid and
            asked  prices for such day on such market and if the Common Stock is
            not so traded,  the  current  market  value shall be the mean of the
            last reported bid and asked prices  reported by the NASD  Electronic
            Bulletin  Board on the last  business  day  prior to the date of the
            exercise of this Warrant; or

            (3) If the Common  Stock is not so listed or  admitted  to  unlisted
            trading privileges and bid and asked prices are not so reported, the
            current  market  value shall be an amount,  not less than book value
            thereof as at the end of the most recent  fiscal year of the Company
            ending prior to the date of the exercise of the Warrant,  determined
            in such  reasonable  manner  as may be  prescribed  by the  Board of
            Directors of the Company.

      (d) EXCHANGE,  TRANSFER,  ASSIGNMENT  OR LOSS OF WARRANT.  This Warrant is
exchangeable,  without expense,  at the option of the Holder,  upon presentation
and  surrender  hereof to the  Company  or at the  office of its stock  transfer
agent,  if any, for other  warrants of  different  denominations  entitling  the
holder  thereof to purchase in the aggregate the same number of shares of Common
Stock  purchasable  hereunder.  Upon surrender of this Warrant to the Company at
its principal  office or at the office of its stock transfer agent, if any, with
the Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer  tax,  the Company  shall,  without  charge,  execute and deliver a new
Warrant in the name of the assignee  named in such  instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other warrants which carry the same rights upon presentation  hereof at the
principal office of the Company or at the office of its stock transfer agent, if
any,  together with a written notice  specifying the names and  denominations in
which new  Warrants are to be issued and signed by the Holder  hereof.  The term
"Warrant" as used herein  includes  any Warrants  into which this Warrant may be
divided or exchanged. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft,  destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory  indemnification,  and
upon surrender and cancellation of this Warrant, if mutilated,  the Company will
execute and  deliver a new Warrant of like tenor and date.  Any such new Warrant
executed and delivered shall constitute an additional  contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time enforceable by anyone.

      (e) RIGHTS OF THE  HOLDER.  The Holder  shall not,  by virtue  hereof,  be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those  expressed  in the Warrant and
are not enforceable against the Company except to the extent set forth herein.

                                       3
<PAGE>

      (f)  ANTI-DILUTION  PROVISIONS.  Subject  to the  provisions  of Section l
hereof,  the  Exercise  Price in effect at any time and the  number  and kind of
securities  purchasable  upon the exercise of the  Warrants  shall be subject to
adjustment from time to time upon the happening of certain events as follows:

            (1) In case the Company  shall  hereafter  (i) declare a dividend or
            make a  distribution  on its  outstanding  shares of Common Stock in
            shares of Common Stock, (ii) subdivide or reclassify its outstanding
            shares of Common  Stock into a greater  number of  shares,  or (iii)
            combine or reclassify its outstanding  shares of Common Stock into a
            smaller  number of shares,  the Exercise Price in effect at the time
            of the  record  date for such  dividend  or  distribution  or of the
            effective date of such subdivision,  combination or reclassification
            shall be  adjusted so that it shall  equal the price  determined  by
            multiplying  the Exercise  Price by a fraction,  the  denominator of
            which  shall be the  number of shares  of Common  Stock  outstanding
            after giving effect to such action, and the numerator of which shall
            be the  number of shares of  Common  Stock  outstanding  immediately
            prior to such action.  Such  adjustment  shall be made  successively
            whenever any event listed above shall occur.

            (2) In case the Company  shall fix a record date for the issuance of
            rights or warrants to all holders of its Common Stock entitling them
            to subscribe for or purchase  shares of Common Stock (or  securities
            convertible into Common Stock) at a price (the "Subscription Price")
            (or  having a  conversion  price per  share)  less than the  current
            market  price on such record date or less than the  Exercise  Price,
            the  Exercise  Price  shall be adjusted so that the same shall equal
            the lower of (i) the price  determined by  multiplying  the Exercise
            Price in effect  immediately prior to the date of such issuance by a
            fraction,  the  numerator of which shall be the sum of the number of
            shares of Common  Stock  outstanding  on the record  date  mentioned
            below and the number of  additional  shares of Common Stock so which
            the aggregate offering price of the total number of shares of Common
            Stock  so  offered  (or  the  aggregate   conversion  price  of  the
            convertible  securities so offered)  would  purchase at such current
            market price per share of the Common Stock,  and the  denominator of
            which shall be the sum of the number of additional  shares of Common
            Stock  offered  for  subscription  or  purchase  (or into  which the
            convertible  securities so offered are  convertible)  or (ii) in the
            event the Subscription  Price is equal to or higher than the current
            market  price  but is  less  than  the  Exercise  Price,  the  price
            determined by multiplying  the Exercise Price in effect  immediately
            prior to the date of issuance by a fraction,  the numerator of which
            shall be the sum of the number of shares  outstanding  on the record
            date  mention  below and the number of  additional  shares of Common
            Stock  which the  aggregate  offering  price of the total  number of
            shares of Common Stock so offered (or the aggregate conversion price
            of the  convertible  securities  so offered)  would  purchase at the
            Exercise  Price  in  effect  immediately  prior  to the date of such
            issuance,  and the  denominator  of  which  shall  be the sum of the
            number of  shares of Common  Stock  outstanding  on the  record  ate
            mentioned below and the number of additional  shares of Common Stock
            offered for  subscription or purchase (or into which the convertible
            securities so offered are  convertible).  Such  adjustment  shall be
            made  successively  whenever  such rights or warrants are issued and
            shall  become  effective  immediately  after the record date for the
            determination  of  shareholders  entitled to receive  such rights or
            warrants;  and to the  extent  that  shares of Common  Stock are not
            delivered  (or  securities  convertible  into  Common  Stock are not
            delivered)  after the  expiration  of such  rights or  warrants  the
            Exercise Price shall be readjusted to the Exercise Price which would
            then be in effect had the adjustments made upon the issuance of such
            rights or warrants  been made upon the basis of delivery of only the
            number of shares of Common  Stock (or  securities  convertible  into
            Common Stock) actually delivered.

                                       4
<PAGE>

            (3) In case the Company shall hereafter distribute to the holders of
            its Common Stock evidences of its indebtedness or assets  (excluding
            cash  dividends or  distributions  and  dividends  or  distributions
            referred  to in  Subsection  (1)  above or  subscription  rights  or
            warrants (excluding those referred to in Subsection (2) above), then
            in each such case the Exercise Price in effect  thereafter  shall be
            determined by multiplying  the Exercise Price in effect  immediately
            prior  thereto by a fraction,  the  numerator  of which shall be the
            total number of shares of Common Stock outstanding multiplied by the
            current market price per share of Common Stock, less the fair market
            value (as  determined by the  Company's  Board of Directors) of said
            assets or evidences of indebtedness so distributed or of such rights
            or warrants,  and the denominator of which shall be the total number
            of shares of Common  Stock  outstanding  multiplied  by such current
            market price per share of Common  Stock.  Such  adjustment  shall be
            made  successively  whenever  such a  record  date  is  fixed.  Such
            adjustment shall be made whenever any such  distribution is made and
            shall  become  effective  immediately  after the record date for the
            determination of shareholders entitled to receive such distribution.

            (4) In case the Company shall  hereafter  issue shares of its Common
            Stock  (excluding  shares  issued  (i) in  any  of the  transactions
            described in  Subsection  (1) above,  (ii) upon exercise of options,
            warrants,   convertible   securities  and   convertible   debentures
            outstanding as of the date hereof,  or exercise of the Warrants,  or
            (iii) to  shareholders  of any  corporation  which  merges  into the
            Company in  proportion to their stock  holdings of such  corporation
            immediately prior to such merger,  upon such merger,  but only if no
            adjustment is required pursuant to any other specific  subsection of
            this Section (f) with respect to the transaction giving rise to such
            rights) for a  consideration  per share (the "Offering  Price") less
            than the  current  market  price on the date the  Company  fixes the
            offering price of such  additional  shares or less than the Exercise
            Price, the Exercise Price shall be adjusted  immediately  thereafter
            so that it shall equal (i) the price  determined by multiplying  the
            Exercise  Price in effect  immediately  prior thereto by a fraction,
            the  numerator  of which shall be the sum of the number of shares of
            Common Stock  outstanding  immediately prior to the issuance of such
            additional shares and the number of shares of Common Stock which the
            aggregate consideration received for the issuance of such additional
            shares  would  purchase at such  current  market  price per share of
            Common Stock,  and the  denominator  of which shall be the number of
            shares of Common Stock outstanding immediately after the issuance of
            such  additional  shares or (ii) in the event the Offering  Price is
            equal to or higher than the current  market price per share but less
            than the Exercise  Price,  the price  determined by multiplying  the
            Exercise Price in effect  immediately  prior to the date of issuance
            by a fraction,  the numerator of which shall be the number of shares
            of Common  Stock  outstanding  immediately  prior to the issuance of
            such  additional  shares  and the  number of shares of Common  Stock
            which the aggregate  consideration received for the issuance of such
            additional  shares would  purchase at the  Exercise  Price in effect
            immediately prior to the date of such issuance,  and the denominator
            of which shall be the number of shares of Common  Stock  outstanding
            immediately  after the  issuance  of such  additional  shares.  Such
            adjustment shall be made  successively  whenever such an issuance is
            made.

                                       5
<PAGE>

            (5) In  case  the  Company  shall  hereafter  issue  any  securities
            convertible into or exchangeable or exercisable for its Common Stock
            (excluding   securities   issued  in   transactions   described   in
            Subsections  (1) and (3)  above)  for a  consideration  per share of
            Common  Stock (the  "Exercise  Price")  initially  deliverable  upon
            conversion,  exercise or exchange of such securities  (determined as
            provided in Subsection (7) below) less than the current market price
            in effect  immediately  prior to the issuance of such,  or less than
            the Exercise Price, the Exercise Price shall be adjusted immediately
            thereafter  so  that it  shall  equal  the  lower  of (i) the  price
            determined by multiplying  the Exercise Price in effect  immediately
            prior thereto by a fraction, the numerator of which shall be the sum
            of the  number of shares of  Common  Stock  outstanding  immediately
            prior to the issuance of such securities and the number of shares of
            Common  Stock which the  aggregate  consideration  received for such
            securities  (or the aggregate  exercise price in the case of options
            or warrants)  would  purchase at such current market price per share
            of Common Stock,  and the  denominator  of which shall be the sum of
            the number of shares of Common Stock  outstanding  immediately prior
            to such issuance and the maximum number of shares of Common Stock of
            the  Company  deliverable  upon  conversion  or  exercise  of  or in
            exchange for such securities at the initial conversion,  exercise or
            exchange  price or rate or (ii) in the event the  Exchange  Price is
            equal to or higher than the current  market price per share but less
            than the Exercise  Price,  the price  determined by multiplying  the
            Exercise Price in effect  immediately  prior to the date of issuance
            by a fraction, the numerator of which shall be the sum of the number
            of shares  outstanding  immediately  prior to the  issuance  of such
            securities  and the  number  of shares  of  Common  Stock  which the
            aggregate  consideration received for such securities would purchase
            at the  Exercise  Price in effect  immediately  prior to the date of
            such issuance,  and the denominator of which shall be the sum of the
            number of shares of Common Stock  outstanding  immediately  prior to
            the issuance of such  securities and the maximum number of shares of
            Common Stock of the Company  deliverable  upon  conversion  of or in
            exchange for such  securities at the initial  conversion or exchange
            price or rate. Such adjustment shall be made  successively  whenever
            such an issuance is made.

                                       6
<PAGE>

            (6)  Whenever  the  Exercise  Price  payable  upon  exercise of each
            Warrant is adjusted  pursuant to Subsections  (1), (2), (3), (4) and
            (5) above,  the number of Shares  purchasable  upon exercise of this
            Warrant shall  simultaneously  be adjusted by multiplying the number
            of Shares  initially  issuable  upon exercise of this Warrant by the
            Exercise Price in effect on the date hereof and dividing the product
            so obtained by the Exercise Price, as adjusted.

            (7)  For  purposes  of  any  computation  respecting   consideration
            received  pursuant to Subsections  (4) and (5) above,  the following
            shall apply:

            (A) in the case of the  issuance of shares of Common Stock for cash,
            the consideration shall be the amount of such cash, provided that in
            no case shall any deduction be made for any  commissions,  discounts
            or other expenses  incurred by the Company for any  underwriting  of
            the issue or otherwise in connection therewith;

            (B) in the case of the  issuance  of shares  of  Common  Stock for a
            consideration in whole or in part other than cash, the consideration
            other than cash shall be deemed to be the fair market value  thereof
            as determined in good faith by the Board of Directors of the Company
            (irrespective   of  the   accounting   treatment   thereof),   whose
            determination shall be conclusive; and

            (C) in the case of the issuance of  securities  convertible  into or
            exchangeable for shares of Common Stock, the aggregate consideration
            received therefor shall be deemed to be the  consideration  received
            by the  Company  for  the  issuance  of  such  securities  plus  the
            additional  minimum  consideration,  if any,  to be  received by the
            Company upon the conversion or exchange  thereof (the  consideration
            in each case to be  determined  in the same  manner as  provided  in
            clauses (A) and (B) of this Subsection (7)).

            (8) For the purpose of any computation  under  Subsections (1), (3),
            (4) and (5)  above,  the  current  market  price per share of Common
            Stock at any date  shall be  determined  in the  manner set forth in
            Section (c).

            (9) No  adjustment  in the Exercise  Price shall be required  unless
            such  adjustment  would  require an increase or decrease of at least
            one tenth of one cent  ($0.001)  in such price;  provided,  however,
            that any adjustments  which by reason of this Subsection (9) are not
            required to be made shall be carried  forward and taken into account
            in any  subsequent  adjustment  required to be made  hereunder.  All
            calculations  under this  Section  (f) shall be made to the  nearest
            tenth of a cent or to the nearest  one-hundredth  of a share, as the
            case  may  be.   Anything  in  this  Section  (f)  to  the  contrary
            notwithstanding,  the Company  shall be  entitled,  but shall not be
            required, to make such changes in the Exercise Price, in addition to
            those  required by this Section (f), as it shall  determine,  in its
            sole  discretion,  to be  advisable  in order that any  dividend  or
            distribution  in  shares  of  Common  Stock,  or  any   subdivision,
            reclassification  or combination of Common Stock,  hereafter made by
            the Company shall not result in any Federal  Income tax liability to
            the holders of Common Stock or  securities  convertible  into Common
            Stock (including Warrants).

                                       7
<PAGE>

            (10) Whenever the Exercise  Price is adjusted,  as herein  provided,
            the  Company  shall  promptly  but no later  than 10 days  after any
            request for such an adjustment by the Holder, cause a notice setting
            forth the  adjusted  Exercise  Price and  adjusted  number of Shares
            issuable  upon   exercise  of  each  Warrant,   and,  if  requested,
            information   describing  the  transactions   giving  rise  to  such
            adjustments,  to be mailed to the  Holders at their  last  addresses
            appearing in the Warrant Register,  and shall cause a certified copy
            thereof to be mailed to its transfer  agent, if any. The Company may
            retain a firm of independent  certified public accountants  selected
            by the  Board  of  Directors  (who  may be the  regular  accountants
            employed by the  Company) to make any  computation  required by this
            Section  (f),  and a  certificate  signed  by  such  firm  shall  be
            conclusive evidence of the correctness of such adjustment.

            (11) In the  event  that at any time,  as a result of an  adjustment
            made  pursuant to Subsection  (1) above,  the Holder of this Warrant
            thereafter  shall  become  entitled  to  receive  any  shares of the
            Company,  other than  Common  Stock,  thereafter  the number of such
            other shares so  receivable  upon  exercise of this Warrant shall be
            subject to adjustment  from time to time in a manner and on terms as
            nearly  equivalent as practicable to the provisions  with respect to
            the Common Stock  contained  in  Subsections  (1) to (8),  inclusive
            above.

            (12)  Irrespective  of any  adjustments in the Exercise Price or the
            number or kind of shares  purchasable upon exercise of this Warrant,
            Warrants  theretofore  or thereafter  issued may continue to express
            the same  price and  number  and kind of shares as are stated in the
            similar Warrants initially issuable pursuant to this Agreement.

      (g) OFFICER'S  CERTIFICATE.  Whenever the Exercise Price shall be adjusted
as  required by the  provisions  of the  foregoing  Section,  the Company  shall
forthwith file in the custody of its Secretary or an Assistant  Secretary at its
principal  office  and with its  stock  transfer  agent,  if any,  an  officer's
certificate  showing the adjusted  Exercise Price determined as herein provided,
setting  forth  in  reasonable  detail  the  facts  requiring  such  adjustment,
including a statement of the number of  additional  shares of Common  Stock,  if
any,  and such other facts as shall be  necessary to show the reason for and the
manner of computing such adjustment.  Each such officer's  certificate  shall be
made  available  at all  reasonable  times for  inspection  by the holder or any
holder of a Warrant  executed  and  delivered  pursuant  to Section  (a) and the
Company shall,  forthwith after each such  adjustment,  mail a copy by certified
mail of such certificate to the Holder or any such holder.

                                       8
<PAGE>

      (h)  NOTICES  TO  WARRANT  HOLDERS.  So  long  as this  Warrant  shall  be
outstanding,  (i) if the Company shall pay any dividend or make any distribution
upon the  Common  Stock or (ii) if the  Company  shall  offer to the  holders of
Common Stock for  subscription or purchase by them any share of any class or any
other   rights  or  (iii)  if  any  capital   reorganization   of  the  Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation,  sale, lease or transfer of all or
substantially  all  of  the  property  and  assets  of the  Company  to  another
corporation, or voluntary or involuntary dissolution,  liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified  mail to the Holder,  at least  fifteen days prior the
date  specified in (x) or (y) below,  as the case may be, a notice  containing a
brief  description  of the  proposed  action and stating the date on which (x) a
record is to be taken for the purpose of such dividend,  distribution or rights,
or (y) such reclassification, reorganization, consolidation, merger, conveyance,
lease, dissolution,  liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or other  securities
shall receive cash or other  property  deliverable  upon such  reclassification,
reorganization,  consolidation,  merger, conveyance, dissolution, liquidation or
winding up.

      (i)   RECLASSIFICATION,   REORGANIZATION   OR  MERGER.   In  case  of  any
reclassification,  capital  reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another  corporation (other than a merger with a subsidiary
in which  merger the Company is the  continuing  corporation  and which does not
result  in any  reclassification,  capital  reorganization  or other  change  of
outstanding  shares of Common Stock of the class  issuable upon exercise of this
Warrant) or in case of any sale,  lease or conveyance to another  corporation of
the property of the Company as an entirety,  the Company  shall,  as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right  thereafter by  exercising  this Warrant at any time
prior to the  expiration  of the  Warrant,  to  purchase  the kind and amount of
shares  of  stock  and  other  securities  and  property  receivable  upon  such
reclassification,   capital  reorganization  and  other  change,  consolidation,
merger,  sale or  conveyance by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant  immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance. Any
such provision shall include  provision for adjustments which shall be as nearly
equivalent  as may  be  practicable  to the  adjustments  provided  for in  this
Warrant.  The foregoing  provisions of this Section (i) shall similarly apply to
successive  reclassifications,  capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the  event  that  in  connection  with  any  such  capital   reorganization   or
reclassification,  consolidation,  merger, sale or conveyance, additional shares
of Common  Stock  shall be  issued  in  exchange,  conversion,  substitution  or
payment,  in whole or in part,  for a security of the Company  other than Common
Stock,  any such issue shall be treated as an issue of Common  Stock  covered by
the provisions of Subsection (1) of Section (f) hereof.

      (j) REGISTRATION RIGHTS.

                                       9
<PAGE>

            (1) The Company  hereby  agrees with the holders of the Warrants and
            the  Warrant  Shares  or  their   transferees   (collectively,   the
            "Holders") that upon notice by Holders  beneficially owning at least
            50% of the Warrants and Warrant Shares,  it will, at any time during
            the five year  period  commencing  six months  after the Company has
            completed an initial public offering or is otherwise publicly traded
            (the  Registration  Period"),  within  three  weeks  of such  notice
            prepare and file with the Securities and Exchange Commission ("SEC")
            a  registration  statement  under  the  Securities  Act of 1933,  as
            amended (the "Act")  covering  the resale of the Warrant  Shares and
            use its best efforts to cause such registration  statement to become
            effective as soon as  practicable  thereafter.  If the Company shall
            determine to proceed during the Registration  Period with the actual
            preparation and filing of a registration  statement under the Act in
            connection with the proposed offer and sale of any of its securities
            by it or any of its  security  holders  (other  than a  registration
            statement on Form S-4, S-8 or other limited purpose form),  then the
            Company will give written notice of its  determination to all record
            holders of the Warrants and Warrant Shares. Upon the written request
            from any Holder, the Company will, except as herein provided,  cause
            all  such  Warrant  Shares  to  be  included  in  such  registration
            statement,  all to the extent  requisite to permit the sale or other
            disposition  by the  prospective  seller or sellers  of the  Warrant
            Shares to be so registered;  provided,  further, that nothing herein
            shall prevent the Company from, at any time,  abandoning or delaying
            any registration.  If any registration pursuant to this Section j(1)
            shall be  underwritten  in whole or in part, the Company may require
            that the Warrant  Shares  requested  for inclusion by the Holders be
            included in the underwriting on the same terms and conditions as the
            securities otherwise being sold through the underwriters.

            (2) The Company will,  until such time as the Warrant  Shares may be
            sold under Rule 144 without volume limitation:

            (A)  prepare  and  file  with  the  SEC  such   amendments  to  such
            registration  statement and supplements to the prospectus  contained
            therein  as may be  necessary  to keep such  registration  statement
            effective;

            (B) furnish to the Holders participating in such registration and to
            the  underwriters of the securities being registered such reasonable
            number  of  copies  of  the  registration   statement,   preliminary
            prospectus,  final  prospectus  and  such  other  documents  as such
            underwriters  may  reasonably  request  in order to  facilitate  the
            public offering of such securities;

            (C) use its best  efforts  to  register  or qualify  the  securities
            covered by such  registration  statement under such state securities
            or blue sky laws of such jurisdictions as the Holders may reasonably
            request in writing  within  twenty (20) days  following the original
            filing of such registration statement, except that the Company shall
            not for any  purpose be  required  to  execute a general  consent to
            service  of  process  or to  qualify  to do  business  as a  foreign
            corporation  in any  jurisdiction  wherein it is not so qualified or
            subject itself to taxation in any such jurisdiction;

            (D) notify  the  Holders,  promptly  after it shall  receive  notice
            thereof,  of the time when such  registration  statement  has become
            effective or a supplement to any  prospectus  forming a part of such
            registration statement has been filed;

                                       10
<PAGE>

            (E) notify the  Holders  promptly  of any request by the SEC for the
            amending  or  supplementing  of  such   registration   statement  or
            prospectus or for additional information;

            (F) prepare and file with the SEC,  promptly upon the request of any
            Holders,   any  amendments  or  supplements  to  such   registration
            statement or  prospectus  which,  in the opinion of counsel for such
            Holders (and  concurred in by counsel for the Company),  is required
            under the Act or the rules and regulations  thereunder in connection
            with the distribution of Common Stock by such Holders;

            (G) prepare and promptly file with the SEC and promptly  notify such
            Holders  of the  filing  of such  amendment  or  supplement  to such
            registration  statement or prospectus as may be necessary to correct
            any  statements  or  omissions  if,  at the time  when a  prospectus
            relating to such  securities  is required to be delivered  under the
            Act,  any event shall have  occurred as the result of which any such
            prospectus  or any other  prospectus as then in effect would include
            an untrue statement of a material fact or omit to state any material
            fact necessary to make the statements  therein,  in the light of the
            circumstances in which they were made, not misleading; and

            (H) advise the Holders,  promptly  after it shall receive  notice or
            obtain knowledge  thereof,  of the issuance of any stop order by the
            SEC suspending the effectiveness of such  registration  statement or
            the initiation or threatening of any proceeding for that purpose and
            promptly  use its best  efforts to prevent the  issuance of any stop
            order or to  obtain  its  withdrawal  if such stop  order  should be
            issued.

      The  Company may  require  each  Holder of Warrant  Shares as to which any
registration  is being  effected  to furnish  to the  Company  such  information
regarding the  distribution  of such Warrant Shares as the Company may from time
to time reasonably request in writing.

            (3)  All  fees,  costs  and  expenses  of  and  incidental  to  such
            registration,  inclusion and public offering in connection therewith
            shall be borne by the Company,  provided,  however, that the Holders
            shall  bear their pro rata share of the  underwriting  discount  and
            commissions  and  transfer  taxes.  The fees,  costs and expenses of
            registration  to be borne by the  Company as  provided  above  shall
            include,  without  limitation,  all registration,  filing,  and NASD
            fees,  printing  expenses,  fees and  disbursements  of counsel  and
            accountants  for the Company,  and all legal fees and  disbursements
            and other  expenses of complying  with state  securities or blue sky
            laws of any  jurisdictions in which the securities to be offered are
            to be registered and qualified (except as provided above).  Fees and
            disbursements  of counsel  and  accountants  for the Holders and any
            other expenses incurred by the Holders not expressly  included above
            shall be borne by the Holders.

                                       11
<PAGE>

            (4) The Company  will  indemnify  and hold  harmless  each Holder of
            Warrant  Shares  which  are  included  in a  registration  statement
            pursuant to the provisions of Section  (j)(1) hereof,  its directors
            and officers,  and any  underwriter (as defined in the Act) for such
            Holder and each person,  if any,  who  controls  such Holder or such
            underwriter  within the meaning of the Act,  from and  against,  and
            will reimburse such Holder and each such underwriter and controlling
            person with respect to, any and all loss,  damage,  liability,  cost
            and  expense  to  which  such  Holder  or any  such  underwriter  or
            controlling  person may become  subject  under the Act or otherwise,
            insofar as such losses, damages, liabilities,  costs or expenses are
            caused by any untrue  statement or alleged  untrue  statement of any
            material  fact  contained  in  such  registration   statement,   any
            prospectus contained therein or any amendment or supplement thereto,
            or arise out of or are based upon the  omission or alleged  omission
            to state therein a material  fact  required to be stated  therein or
            necessary  to  make  the  statements   therein,   in  light  of  the
            circumstances  in which they were made,  not  misleading;  provided,
            however, that the Company will not be liable in any such case to the
            extent  that any such  loss,  damage,  liability,  cost or  expenses
            arises out of or is based upon an untrue statement or alleged untrue
            statement or omission or alleged omission so made in conformity with
            information  furnished  by such  Holder,  such  underwriter  or such
            controlling   person  in  writing   specifically   for  use  in  the
            preparation thereof.

            (5)  Each  Holder  of  Warrant  Shares  included  in a  registration
            pursuant to the  provisions of Section  (j)(1) hereof will indemnify
            and hold  harmless the Company,  its  directors  and  officers,  any
            controlling  person and any underwriter  from and against,  and will
            reimburse the Company,  its directors and officers,  any controlling
            person  and any  underwriter  with  respect  to,  any and all  loss,
            damage,  liability,  cost or  expense  to which the  Company  or any
            controlling  person and/or any  underwriter may become subject under
            the Act or otherwise, insofar as such losses, damages,  liabilities,
            costs or  expenses  are  caused by any untrue  statement  or alleged
            untrue statement of any material fact contained in such registration
            statement,  any  prospectus  contained  therein or any  amendment or
            supplement  thereto,  or arise out of or are based upon the omission
            or alleged  omission to state therein a material fact required to be
            stated therein or necessary to make the statements therein, in light
            of the  circumstances  in which they were made, not  misleading,  in
            each case to the extent,  but only to the  extent,  that such untrue
            statement  or  alleged  untrue  statement  or  omission  or  alleged
            omission was so made in reliance upon and in strict  conformity with
            written  information  furnished  by  or on  behalf  of  such  Holder
            specifically for use in the preparation thereof.

                                       12
<PAGE>

            (6) Promptly after receipt by an  indemnified  party pursuant to the
            provisions of Sections  (j)(4) or (5) of notice of the  commencement
            of  any  action  involving  the  subject  matter  of  the  foregoing
            indemnity provisions such indemnified party will, if a claim thereof
            is to be  made  against  the  indemnifying  party  pursuant  to  the
            provisions  of said  Sections  (j)(4) or (5),  promptly  notify  the
            indemnifying party of the commencement  thereof; but the omission to
            so  notify  the  indemnifying  party  will not  relieve  it from any
            liability which it may have to any indemnified  party otherwise than
            hereunder.  In case such action is brought  against any  indemnified
            party and it notifies  the  indemnifying  party of the  commencement
            thereof,  the indemnifying party shall have the right to participate
            in,  and,  to the extent  that it may wish,  jointly  with any other
            indemnifying  party  similarly  notified,   to  assume  the  defense
            thereof,  with  counsel  satisfactory  to  such  indemnified  party,
            provided,  however,  if counsel for the indemnifying party concludes
            that a single  counsel  cannot  under  applicable  legal and ethical
            considerations,  represent  both  the  indemnifying  party  and  the
            indemnified  party, the indemnified  party or parties have the right
            to select  separate  counsel to  participate  in the defense of such
            action on behalf of such indemnified party or parties.  After notice
            from  the  indemnifying  party  to  such  indemnified  party  of its
            election so to assume the defense thereof,  the  indemnifying  party
            will  not be  liable  to  such  indemnified  party  pursuant  to the
            provisions  of said  Sections  (j)(4)  or (5) for any legal or other
            expense   subsequently   incurred  by  such  indemnified   party  in
            connection with the defense  thereof other than reasonable  costs of
            investigation,  unless (i) the indemnified party shall have employed
            counsel in accordance with the provisions of the preceding sentence,
            (ii)  the  indemnifying   party  shall  not  have  employed  counsel
            satisfactory to the  indemnified  party to represent the indemnified
            party within a reasonable time after the notice of the  commencement
            of the action or (iii) the  indemnifying  party has  authorized  the
            employment  of counsel for the  indemnified  party at the expense of
            the indemnifying party.

                                     LAWRENCE CONSULTING GROUP, INC.

                                     By:  ___________________________________
                                          Dov Perlysky
                                          President

Dated: January 16, 2004

                                       13
<PAGE>

                                  PURCHASE FORM

                                                                Dated

            The  undersigned  hereby  irrevocably  elects to exercise the within
Warrant  to the extent of  purchasing  shares of Common  Stock and hereby  makes
payment of in payment of the actual exercise price thereof.

                     INSTRUCTIONS FOR REGISTRATION OF STOCK

Name
    ------------------------------------------------------------

(Please typewrite or print in block letters)

Address
        --------------------------------------------------------

Signature
         -------------------------------------------------------

                                 ASSIGNMENT FORM

     FOR VALUE RECEIVED,                hereby sells, assigns and transfers unto
                        ---------------

Name
    ------------------------------------------------------------

(Please typewrite or print in block letters)

Address
       ---------------------------------------------------------

the right to purchase Common Stock  represented by this Warrant to the extent of
shares  as to which  such  right is  exercisable  and  does  hereby  irrevocably
constitute  and  appoint  Attorney,  to  transfer  the same on the  books of the
Company with full power of substitution in the premises.

Date
     ---------------------------------

Signature
         --------------------------

                                       14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]