Document:

Exhibit
      10.30.2007

    INDEMNIFICATION
      AGREEMENT

    

    This
      Indemnification Agreement (“Agreement”) is effective as of this 29th day of
      October 2007, by and between Innovative Card Technologies, Inc., a Delaware
      corporation (the “Company”), and Bennet P. Tchaikovsky
      (“Indemnitee”).

     

    WHEREAS,
      the Company and Indemnitee recognize the continued difficulty in obtaining
      liability insurance for its directors, officers, employees, agents and
      fiduciaries, the significant increases in the cost of such insurance and the
      general reductions in the coverage of such insurance;

     

    WHEREAS,
      the Company and Indemnitee further recognize the substantial increase in
      corporate litigation in general, subjecting directors, officers, employees,
      agents and fiduciaries to expensive litigation risks at the same time as the
      availability and coverage of liability insurance has been severely
      limited;

     

    WHEREAS,
      Indemnitee does not regard the current protection available as adequate under
      the present circumstances, and the Indemnitee and other directors, officers,
      employees, agents and fiduciaries of the Company may not be willing to continue
      to serve in such capacities without additional protection; and 

     

    WHEREAS,
      the Company desires to attract and retain the services of highly qualified
      individuals, such as Indemnitee, to serve the Company and, in part, in order
      to
      induce Indemnitee to continue to provide services to the Company, wishes to
      provide for the indemnification and advancing of expenses to Indemnitee to
      the
      maximum extent permitted by law.

     

    NOW,
      THEREFORE, the Company and Indemnitee hereby agree as follows:

     

    1. Indemnification.

     

    (a) Indemnification
      of Expenses.
      The
      Company shall indemnify Indemnitee
      to the fullest extent permitted by law if Indemnitee was or is or becomes a
      party to or witness or other participant in, or is threatened to be made a
      party
      to or witness or other participant in, any pending or filed action, suit,
      proceeding or alternative dispute resolution mechanism, or any hearing, inquiry
      or investigation presided over by a federal or state government agency or body
      that Indemnitee in good faith believes might lead to the institution of any
      such
      action, suit, proceeding or alternative dispute resolution mechanism, whether
      civil, criminal, administrative, investigative or other (hereinafter a “Claim”)
      by reason of (or arising in part out of) any event or occurrence related to
      the
      fact that Indemnitee is or was a director, officer, employee, consultant, agent
      or fiduciary of the Company; or any subsidiary of the Company, or is or was
      serving at the request of the Company as a director, officer, employee, agent
      or
      fiduciary of another corporation, partnership, joint venture, trust or other
      enterprise, or by reason of any action or inaction on the part of Indemnitee
      while serving in such capacity (hereinafter an “Indemnifiable Event”) against
      any and all expenses (including attorneys’ fees and all other costs, expenses
      and obligations incurred in connection with investigating, defending, being
      a
      witness in or participating in (including on appeal), or preparing to defend,
      be
      a witness in or participate in, any such action, suit, proceeding, alternative
      dispute resolution mechanism, hearing, inquiry or investigation), judgments,
      fines, penalties and amounts paid in settlement (if such settlement is approved
      in advance by the Company, which approval shall not be unreasonably withheld)
      of
      such Claim and any federal, state, local or foreign taxes imposed on the
      Indemnitee as a result of the actual or deemed receipt of any payments under
      this Agreement (collectively, hereinafter “Expenses”), including all interest,
      assessments and other charges paid or payable in connection with or in respect
      of such Expenses. Such payment of Expenses shall be made by the Company as
      soon
      as practicable but in any event no later than five (5) business days after
      written demand by Indemnitee therefor is presented to the Company. However,
      Indemnitee acknowledges and agrees that no indemnification of expenses shall
      be
      required with respect to: (a) any settlement by Indemnitee effected without
      the
      Company’s prior written consent, which shall not be unreasonably withheld or
      delayed; (b) Indemnitee’s breach of any of the representations, warranties,
      covenants or agreements made by Indemnitee in any agreement with the Company;
      and (c) any conduct by Indemnitee which constitutes fraud, gross negligence,
      willful misconduct or malfeasance.

    

    
      
        
        

      

      
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    (b) Reviewing
      Party.
      Notwithstanding the foregoing, (i) the obligations
      of the Company under Section 1(a) shall be subject to the condition that the
      Reviewing Party (as described in Section 10(e) hereof) shall not have determined
      (in a written opinion, in any case in which the Independent Legal Counsel
      referred to in Section 1(c) hereof is involved) that Indemnitee would not be
      permitted to be indemnified under applicable law, and (ii) the obligation of
      the
      Company to make an advance payment of Expenses to Indemnitee pursuant to Section
      2(a) (an “Expense Advance”) shall be subject to the condition that, if, when and
      to the extent that the Reviewing Party determines that Indemnitee would not
      be
      permitted to be so indemnified under applicable law, the Company shall be
      entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
      Company) for all such amounts theretofore paid; provided, however, that if
      Indemnitee has commenced or thereafter commences legal proceedings in a court
      of
      competent jurisdiction to secure a determination that Indemnitee should be
      indemnified under applicable law, any determination made by the Reviewing Party
      that Indemnitee would not be permitted to be indemnified under applicable law
      shall not be binding and Indemnitee shall not be required to reimburse the
      Company for any Expense Advance until a final judicial determination is made
      with respect thereto (as to which all rights of appeal therefrom have been
      exhausted or lapsed). Indemnitee’s obligation to reimburse the Company for any
      Expense Advance shall be unsecured and no interest shall be charged thereon.
      If
      there has not been a Change in Control (as defined in Section 10(c) hereof),
      the
      Reviewing Party shall be selected by the Board of Directors, and if there has
      been such a Change in Control (other than a Change in Control which has been
      approved by a majority of the Company’s Board of Directors who were directors
      immediately prior to such Change in Control), the Reviewing Party shall be
      the
      Independent Legal Counsel referred to in Section 1(c) hereof. If there has
      been
      no determination by the Reviewing Party or if the Reviewing Party determines
      that Indemnitee substantively would not be permitted to be indemnified in whole
      or in part under applicable law, Indemnitee shall have the right to commence
      litigation seeking an initial determination by the court or challenging any
      such
      determination by the Reviewing Party or any aspect thereof, including the legal
      or factual bases therefor, and the Company hereby consents to service of process
      and to appear in any such proceeding. Any determination by the Reviewing Party
      otherwise shall be conclusive and binding on the Company and
      Indemnitee.

     

    
      
        
        

      

      
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    (c) Change
      in Control.
      The
      Company agrees that if there is a Change in
      Control of the Company (other than a Change in Control which has been approved
      by a majority of the Company’s Board of Directors who were directors immediately
      prior to such Change in Control) then with respect to all matters thereafter
      arising concerning the rights of Indemnitee to payments of Expenses and Expense
      Advances under this Agreement or any other agreement or under the Company’s
      Certificate of Incorporation or Bylaws as now or hereafter in effect,
      Independent Legal Counsel (as defined in Section 10(d) hereof) shall be selected
      by the Indemnitee and approved by the Company (which approval shall not be
      unreasonably withheld). Such counsel, among other things, shall render its
      written opinion to the Company and Indemnitee as to whether and to what extent
      Indemnitee would have permitted to be indemnified under applicable law and
      the
      Company agrees to abide by such opinion. The Company agrees to pay the
      reasonable fees of the Independent Legal Counsel referred to above and to fully
      indemnify such counsel against any and all expenses (including attorneys’ fees),
      claims, liabilities and damages arising out of or relating to this Agreement
      or
      its engagement pursuant hereto.

    

    (d) Mandatory
      Payment of Expenses.
      Notwithstanding any other provision
      of this Agreement other than Section 9 hereof, to the extent that Indemnitee
      has
      prevailed on the merits or otherwise, including, without limitation, the
      dismissal of an action without prejudice, in defense of any action, suit,
      proceeding, inquiry or investigation referred to in Section (1) (a) hereof
      or in
      the defense of any claim, issue or matter therein, Indemnitee shall be
      indemnified against all Expenses incurred by the Indemnitee in connection
      therewith. 

     

    2. Expenses;
      Indemnification Procedure.

     

    (a) Advancement
      of Expenses.
      The
      Company shall advance all Expenses
      incurred by the Indemnitee. The advances to be made hereunder shall be paid
      by
      the Company to Indemnitee as soon as practicable but in any event no later
      than
      five days after written demand by Indemnitee therefor to the
      Company.

    

    (b) Notice/Cooperation
      by Indemnitee.
      Indemnitee shall, as a condition
      precedent to Indemnitee’s right to be indemnified under this Agreement, give the
      Company notice in writing as soon as practicable of any claim made against
      Indemnitee for which indemnification will or could be sought under this
      Agreement. Notice to the Company shall be directed to the Chief Executive
      Officer of the Company at the address shown on the signature page of this
      Agreement (or such other address as the Company shall designate in writing
      to
      the Indemnitee). In addition, Indemnitee shall give the Company such information
      and cooperation as it may reasonably require and as shall be within Indemnitee’s
      power.

     

    
      
        
        

      

      
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    (c) No
      Presumptions; Burden of Proof.
      For
      purposes of this Agreement,
      the termination of any Claim by judgment, order, settlement (whether with or
      without court approval) or conviction, or upon a plea of nolo
      contendere,
      or its
      equivalent, shall not create of presumption that Indemnitee did not meet any
      particular standard of conduct or have any particular belief or that a court
      has
      determined that indemnification is not permitted by applicable law. In addition,
      neither the failure of the Reviewing Party to have made a determination as
      to
      whether Indemnitee has met any particular standard of conduct or had any
      particular belief, nor an actual determination by the Reviewing Party that
      Indemnitee has not met such standard of conduct or did not have such belief,
      prior to the commencement of legal proceedings by Indemnitee to secure a
      judicial determination that Indemnitee should be indemnified under applicable
      law, shall be a defense to Indemnitee’s claim or create a presumption that
      Indemnitee has not met any particular standard of conduct or did not have any
      particular belief. In connection with any determination by the Reviewing Party
      or otherwise as to whether the Indemnitee is entitled to be indemnified
      hereunder, the burden of proof shall be on the Company to establish that
      Indemnitee is not so entitled.

    

    (d) Notice
      to Insurers.
      If, at
      the time of the receipt by the Company of a
      notice
      of a Claim pursuant to Section 2(b) hereof, the Company has liability insurance
      in effect which may cover such Claim, the Company shall give prompt notice
      of
      the commencement of such Claim to the insurers in accordance with the procedures
      set forth in the respective policies. The Company shall thereafter take all
      necessary or desirable action to cause such insurers to pay, on behalf of the
      Indemnitee, all amounts payable as a result of such action, suit, proceeding,
      inquiry or investigation in accordance with the terms of such
      policies.

    

    (e) Selection
      of Counsel.
      In the
      event the Company shall be obligated hereunder
      to pay the Expenses of any Claim, the Company, if appropriate, shall be entitled
      to assume the defense of such Claim with counsel approved by Indemnitee, upon
      the delivery to Indemnitee of written notice of its election so to do. After
      delivery of such notice, approval of such counsel by Indemnitee and the
      retention of such counsel by the Company, the Company will not be liable to
      Indemnitee under this Agreement for any fees of counsel subsequently incurred
      by
      Indemnitee with respect to the same Claim; provided that, (i) Indemnitee shall
      have the right to employ Indemnitee’s counsel in any such Claim at Indemnitee’s
      expense and (ii) if (A) the employment of counsel by Indemnitee has been
      previously authorized by the Company, (B) Indemnitee shall have reasonably
      concluded that there may be a conflict of interest between the Company and
      Indemnitee in the conduct of any such defense, or (C) the Company shall not
      continue to retain such counsel to defend such Claim, then the fees and expenses
      of Indemnitee’s counsel shall be at the expense of the Company.

     

    3. Additional
      Indemnification Rights; Nonexclusivity.

     

    (a) Scope.
      The
      Company hereby agrees to indemnify the Indemnitee to
      the
      fullest extent permitted by law, notwithstanding that such indemnification
      is
      not specifically authorized by the other provisions of this Agreement, the
      Company’s Certificate of Incorporation, the Company’s Bylaws or by statute. In
      the event of any change after the date of this Agreement in any applicable
      law,
      statute or rule which expands the right of a Delaware corporation to indemnify
      a
      member of its Board of Directors or an officer, employee, agent or fiduciary,
      it
      is the intent of the parties hereto that Indemnitee shall enjoy by this
      Agreement the greater benefits afforded by such change. In the event of any
      change in any applicable law, statute or rule which narrows the right of a
      Delaware corporation to indemnify a member of its Board of Directors or an
      officer, employee, agent or fiduciary, such change, to the extent not otherwise
      required by such law, statute or rule to be applied to this Agreement, shall
      have no effect on this Agreement or the parties’ rights and obligations
      hereunder except as set forth in Section 8(a) hereof.

     

    
      
        
        

      

      
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    (b) Nonexclusivity.
      The
      indemnification provided by this Agreement shall
      be
      in addition to any rights to which Indemnitee may be entitled under the
      Company’s Certificate of Incorporation, its Bylaws, any agreement, any vote of
      stockholders or disinterested directors, the General Corporation Law of the
      State of Delaware, or otherwise. The indemnification provided under this
      Agreement shall continue as to Indemnitee for any action taken or not taken
      while serving in an indemnified capacity even though Indemnitee may have ceased
      to serve in such capacity.

    

    4. No
      Duplication of Payments.
      The
      Company shall not be liable under this Agreement
      to make any payment in connection with any Claim made against Indemnitee to
      the
      extent Indemnitee has otherwise actually received payment (under any insurance
      policy, Certificate of Incorporation, Bylaw or otherwise) of the amounts
      otherwise indemnifiable hereunder.

     

    5. Partial
      Indemnification.
      If
      Indemnitee is entitled under any provision of this
      Agreement to indemnification by the Company for some or a portion of Expenses
      incurred in connection with any Claim, but not, however, for all of the total
      amount thereof, the Company shall nevertheless indemnify Indemnitee for the
      portion of such Expenses to which Indemnitee is entitled.

    

    6. Mutual
      Acknowledgement.
      Both
      the Company and Indemnitee acknowledge
      that in certain instances, Federal law or applicable public policy may prohibit
      the Company from indemnifying its directors, officers, employees, agents or
      fiduciaries under this Agreement or otherwise. Indemnitee understands and
      acknowledges that the Company has undertaken or may be required in the future
      to
      undertake with the Securities and Exchange Commission to submit the question
      of
      indemnification to a court in certain circumstances for a determination of
      the
      Company’s right under public policy to indemnify Indemnitee.

    

    7. Liability
      Insurance.
      To the
      extent the Company maintains liability insurance
      applicable to directors, officers, employees, agents or fiduciaries, Indemnitee
      shall be covered by such policies in such a manner as to provide Indemnitee
      the
      same rights and benefits as are accorded to the most favorably insured of the
      Company’s directors, if Indemnitee is a director; or of the Company’s officers,
      if Indemnitee is not a director of the Company but is an officer; or of the
      Company’s key employees, agents or fiduciaries, if Indemnitee is not an officer
      or director but is a key employee, agent or fiduciary.

     

    
      
        
        

      

      
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    8. Exceptions.
      Any
      other provision herein to the contrary notwithstanding, the
      Company shall not be obligated pursuant to the terms of this
      Agreement:

    

    (a) Excluded
      Action or Omissions.
      To
      indemnify Indemnitee for acts, omissions
      or transactions from which Indemnitee may not be relieved of liability under
      applicable law. Moreover, Indemnitee acknowledges and agrees that no
      indemnification of expenses shall be required with respect to: (a) any
      settlement by Indemnitee effected without the Company’s prior written consent,
      which shall not be unreasonably withheld or delayed; (b) Indemnitee’s breach of
      any of the representations, warranties, covenants or agreements made by
      Indemnitee in any agreement with the Company; and (c) any conduct by Indemnitee
      which constitutes fraud, gross negligence, willful misconduct or
      malfeasance.

     

    (b) Claims
      Initiated by Indemnitee.
      To
      indemnify or advance expenses
      to Indemnitee with respect to Claims initiated or brought voluntarily by
      Indemnitee and not by way of defense, except (i) with respect to actions or
      proceedings brought to establish or enforce a right to indemnification under
      this Agreement or any other agreement or insurance policy or under the Company’s
      Certificate of Incorporation or Bylaws now or hereafter in effect relating
      to
      Claims for Indemnifiable Events, (ii) in specific cases if the Board of
      Directors has approved the initiation or bringing of such Claim, or (iii) as
      otherwise as required under Section 145 of the Delaware General Corporation
      Law,
      regardless of whether Indemnitee ultimately is determined to be entitled to
      such
      indemnification, advance expense payment or insurance recovery, as the case
      may
      be.

    

    (c) Lack
      of Good Faith.
      To
      indemnify Indemnitee for any expenses incurred
      by the Indemnitee with respect to any proceeding instituted by Indemnitee to
      enforce or interpret this Agreement, if a court of competent jurisdiction
      determines that each of the material assertions made by the Indemnitee in such
      proceeding was not made in good faith or was frivolous; or

    

    (d) Claims
      Under Section 16(b).
      To
      indemnify Indemnitee for expenses
      and the payment of profits arising from the purchase and sale by Indemnitee
      of
      securities in violation of Section 16(b) of the Securities Exchange Act of
      1934,
      as amended, or any similar successor statute.

    

    9. Period
      of Limitations.
      No
      legal action shall be brought and no cause of action
      shall be asserted by or in the right of the Company against Indemnitee,
      Indemnitee’s estate, spouse, heirs, executors or personal or legal
      representatives after the expiration of two years from the date of accrual
      of
      such cause of action, and any claim or cause of action of the Company shall
      be
      extinguished and deemed released unless asserted by the timely filing of a
      legal
      action within such two-year period; provided,
      however,
      that if
      any shorter period of limitations is otherwise applicable to any such cause
      of
      action, such shorter period shall govern.

    

    
      
        
        

      

      
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    10. Construction
      of Certain Phrases.

     

    (a) For
      purposes of this Agreement, references to the “Company” shall include,
      in addition to the resulting corporation, any constituent corporation (including
      any constituent of a constituent) absorbed in a consolidation or merger which,
      if its separate existence had continued, would have had power and authority
      to
      indemnify its directors, officers, employees, agents or fiduciaries, so that
      if
      Indemnitee is or was a director, officer, employee, agent or fiduciary of such
      constituent corporation, or is or was serving at the request of such constituent
      corporation as a director, officer, employee, agent or fiduciary of another
      corporation, partnership, joint venture, employee benefit plan, trust or other
      enterprise. Indemnitee shall stand in the same position under the provisions
      of
      this Agreement with respect to the resulting or surviving corporation as
      Indemnitee would have with respect to such constituent corporation if its
      separate existence had continued.

     

    (b) For
      purposes of this Agreement, references to “other enterprises” shall
      include employee benefit plans; references to “fines” shall include any excise
      taxes assessed on Indemnitee with respect to an employee benefit plan; and
      references to “serving at the request of the Company” shall include any service
      as a director, officer, employee, agent or fiduciary of the Company which
      imposes duties on, or involves services by, such director, officer, employee,
      agent or fiduciary with respect to an employee benefit plan, its participants
      or
      its beneficiaries; and if Indemnitee acted in good faith and in a manner
      Indemnitee reasonably believed to be in the interest of the participants and
      beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have
      acted in a manner “not opposed to the best interests of the Company” as referred
      to in this Agreement.

    

    (c) For
      purposes of this Agreement a “Change in Control” shall be deemed
      to
      have occurred if (i) any “person” (as such term is used in Sections 13(d) and
      14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee
      or other fiduciary holding securities under an employee benefit plan of the
      Company or a corporation owned directly or indirectly by the stockholders of
      the
      Company in substantially the same proportions as their ownership of stock of
      the
      Company, (A) who is or becomes the beneficial owner, directly or indirectly,
      of
      securities of the Company representing 10% or more of the combined voting power
      of the Company’s then outstanding Voting Securities, increases his beneficial
      ownership of such securities by 5% or more over the percentage so owned by
      such
      person, or (B) becomes the “beneficial owner” (as defined in Rule 13d-3 under
      said Act), directly or indirectly, of securities of the Company representing
      more than 20% of the total voting power represented by the Company’s then
      outstanding Voting Securities, (ii) during any period of two consecutive years,
      the individuals who at the beginning of such period constitute the Board of
      Directors of the Company and any new director whose election by the Board of
      Directors or nomination for election by the Company’s stockholders was approved
      by a vote of at least two-thirds of the directors then still in office who
      either were directors at the beginning of the period or whose election or
      nomination for election was previously so approved, cease for any reason to
      constitute a majority thereof, or (iii) the stockholders of the Company approve
      a merger or consolidation of the Company with any other corporation other than
      a
      merger or consolidation which would result in the Voting Securities of the
      Company outstanding immediately prior thereto continuing to represent (either
      by
      remaining outstanding or by being converted into Voting Securities of the
      surviving entity) at least 80% of the total voting power represented by the
      Voting Securities of the Company or such surviving entity outstanding
      immediately after such merger or consolidation, or the stockholders of the
      Company approve a plan of complete liquidation of the Company or an agreement
      for the sale or disposition by the Company of (in one transaction or a series
      of
      transactions) all of substantially all of the Company’s assets.

     

    
      
        
        

      

      
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    (d) For
      purposes of this Agreement, “Independent Legal Counsel” shall
      mean an attorney or firm of attorneys, selected in accordance with the
      provisions of Section 1(c) hereof, who shall not have otherwise performed
      services for the Company or Indemnitee within the last three years (other than
      with respect to matters concerning the rights of Indemnitee under this
      Agreement, or of other indemnitees under similar indemnity
      agreements.)

     

    (e) For
      purposes of this Agreement, a “Reviewing Party” shall mean any
      appropriate person or body consisting of a member or members of the Company’s
      Board of Directors or any other person or body appointed by the Board of
      Directors who is not a party to the particular Claim for which Indemnitee is
      seeking indemnification, or Independent Legal Counsel.

    

    (f) For
      purposes of this Agreement, “Voting Securities” shall mean any
      securities of the Company that vote generally in the election of
      directors.

    

    11. Counterparts.
      This
      Agreement may be executed in one or more counterparts,
      each of which shall constitute an original.

    

    12. Binding
      Effect; Successors and Assigns.
      This
      Agreement shall be binding upon
      and
      inure to the benefit of and be enforceable by the parties hereto and their
      respective successors, assigns, including any direct or indirect successor
      by
      purchase, merger, consolidation or otherwise to all or substantially all of
      the
      business and/or assets of the Company, spouses, heirs, and personal and legal
      representatives. The Company shall require and cause any successor (whether
      direct or indirect by purchase, merger, consolidation or otherwise) to all,
      substantially all, or a substantial part, of the business and/or assets of
      the
      Company, by written agreement in form and substance satisfactory to Indemnitee,
      expressly to assume and agree to perform this Agreement in the same manner
      and
      to the same extent that the Company would be required to perform if no such
      succession had taken place. This Agreement shall continue in effect regardless
      of whether Indemnitee continues to serve as a director or officer of the Company
      or of any other enterprise at the Company’s request.

    

    13. Attorneys’
      Fees.
      In any
      claim or action between the Parties involving this Agreement,
      the prevailing party shall be entitled to recover from the other party, in
      addition to damages, injunctive or other relief, if any, all costs and expenses
      (whether or not allowable as “cost” items by law) reasonably incurred at, before
      and after trial or on appeal, or in any bankruptcy proceeding, including without
      limitation, attorneys’ fees, witness fees (expert or otherwise), deposition
      costs, copying charges and other expenses. 

     

    
      
        
        

      

      
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    14. Notice.
      All
      notices, requests, demands and other communication under this
      Agreement shall be in writing and shall be deemed duly given (i) if delivered
      by
      hand and signed for by the party addressed, on the date of such delivery, or
      (ii) if mailed by domestic certified or registered mail with postage prepaid,
      on
      the third business day after the date postmarked. Addresses for notice to either
      party are as shown on the signature page of this Agreement, or as subsequently
      modified by written notice.

    

    15. Consent
      to Jurisdiction.
      The
      Company and Indemnitee each hereby irrevocably
      consent to the jurisdiction of the courts of the State of California for all
      purposes in connection with any action or proceeding which arises out of or
      relates to this Agreement.

    

    16. Severability.
      The
      provisions of this Agreement shall be severable in the event
      that any of the provisions hereof (including any provision within a single
      section, paragraph or sentence) are held by a court of competent jurisdiction
      to
      be invalid, void or otherwise unenforceable, and the remaining provisions shall
      remain enforceable to the fullest extent permitted by law. Furthermore, to
      the
      fullest extent possible, the provisions of this Agreement (including, without
      limitations, each portion of this Agreement containing any provision held to
      be
      invalid, void or otherwise unenforceable that is not itself invalid, void or
      unenforceable) shall be construed so as to give effect to the intent manifested
      by the provision held invalid, illegal or unenforceable.

    

    17. Choice
      of Law.
      This
      Agreement shall be governed by and its provisions construed
      and enforced in accordance with the laws of the State of California, as applied
      to contracts between California residents, entered into and to be performed
      entirely within the State of California, without regard to the conflict of
      laws
      principles thereof.

     

    18. Amendment
      and Termination.
      No
      amendment, modification, termination Or
      cancellation of this Agreement shall be effective unless it is in writing signed
      by both 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.

    

    19. Integration
      and Entire Agreement.
      This
      Agreement sets forth the entire understanding
      between the parties hereto and supercedes and merges all previous written and
      oral negotiations, commitments, understandings and agreements relating to the
      subject matter hereof between the parties hereto.

     

    20. No
      Construction as Employment Agreement.
      Nothing
      contained in this Agreement
      shall be construed as giving Indemnitee any right to be retained in the employ
      of the Company or any of its subsidiaries.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

    

    INNOVATIVE
      CARD TECHNOLOGIES, INC.

    

    
      	
              By:

            	
              /s/
                Steve Delcarson

            
	 	
               Steve
                Delcarson, CEO

            

    

     

    
      	
              AGREED
                TO AND ACCEPTED

            
	 
	
              INDEMNITEE:

            
	 
	
              /s/
                Bennet P. Tchaikovsky

            
	
              (signature)

            
	
               

            
	
              Bennet
                P. Tchaikovsky

            

    

    

    
      
        
        

      

      
        10UNLESS
      PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
      TRADE THE SECURITY BEFORE MARCH 1, 2008.

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
      1933,
      AS AMENDED (THE ''SECURITIES ACT''), AND ACCORDINGLY, MAY NOT BE OFFERED OR
      SOLD
      EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
      HOLDER (1) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY
      EVIDENCED HEREBY, EXCEPT (A) TO THE ISSUER; (B) TO PERSONS OTHER THAN U.S.
      PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE
      SECURITIES ACT; (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
      RULE
      144 ADOPTED UNDER THE SECURITIES ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE
      SECURITIES ACT (IF AVAILABLE); OR (D) PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT, AND (2) AGREES THAT IT WILL, PRIOR TO ANY
      TRANSFER OF THIS SECURITY PURSUANT TO SUBPARAGRAPH (B) OR (C) ABOVE, FURNISH
      TO
      THE ISSUER OR ISSUER'S COUNSEL SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
      INFORMATION AS MAY BE REQUIRED BY THE ISSUER TO CONFIRM THAT SUCH TRANSFER
      IS
      BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
      THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
      ''UNITED STATES'' AND ''U.S. PERSON'' HAVE THE MEANING GIVEN TO THEM BY
      REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE, THE HOLDER HEREOF WILL
      NOT,
      DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
      SECURITY, EXCEPT AS PERMITTED BY THE SECURITIES ACT.

     

    THE
      OPTIONS REPRESENTED BY THIS COMPENSATION OPTION CERTIFICATE HAVE NOT BEEN AND
      WILL NOT BE REGISTERED UNDER THE SECURITIES ACT. THE SECURITIES TO BE ISSUED
      UPON EXERCISE OF SUCH OPTIONS WILL NOT BE INITIALLY REGISTERED AND MAY OR MAY
      NOT LATER BECOME REGISTERED FOR RESALE UNDER THE SECURITIES ACT. NEITHER ANY
      OPTION REPRESENTED BY THIS COMPENSATION OPTION CERTIFICATE NOR ANY SECURITIES
      ISSUED UPON EXERCISE OF SUCH OPTION MAY BE EXERCISED BY OR ON BEHALF OF ANY
      U.S.
      PERSON, AS SUCH TERM IS DEFINED IN REGULATION S PROMULGATED PURSUANT TO THE
      SECURITIES ACT, UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION
      FROM
      SUCH REGISTRATION IS AVAILABLE.

     

    COMPENSATION
      OPTION TO PURCHASE COMMON SHARES OF

     

    APOLLO
      GOLD CORPORATION

     

    
      	
              Compensation
                Option Certificate No.: CO-2007/01

            	
              No.
                of Common Shares under Option:
                372,727

            

    

     

    For
      value
      received, Apollo Gold Corporation (the "Corporation")
      hereby
      grants to Haywood Securities Inc., Suite 2000-400 Burrard Street, Vancouver,
      BC
      V6C 3A6 Canada (the "Holder"),
      the
      right and option, subject to the terms and conditions set forth in this
      compensation option certificate (the "Compensation
      Option Certificate"),
      to
      purchase from the Corporation, up to 372,727 common shares of the Corporation
      (the "Common
      Shares")
      at an
      exercise price of $0.55 per Common Share (the "Exercise
      Price")
      at any
      time and from time to time up to 4:00 p.m. (Toronto time) on April 30,
      2009 (the
      "Expiry
      Time"),
      upon
      and subject to the terms and conditions set forth herein.

     

    1. Definitions

     

    In
      this
      Compensation Option Certificate, unless there is something in the subject matter
      or context inconsistent therewith, the following terms shall have the following
      meanings respectively:

     

    
      	 	
              (a)

            	
              "AMEX"
                means the American Stock Exchange;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b)

            	
              "Business
                Day"
                means any day other than a Saturday, Sunday, statutory or civic holiday
                or
                a day on which the principal banking institutions are closed in the
                City
                of Toronto, Ontario or the State of
                Colorado;

            

    

     

    
      	 	
              (c)

            	
              "Current
                Market Price"
                of the Common Shares at any date means the price per Common Share
                equal to
                the weighted average price at which the Common Shares have traded
                on the
                TSX or, if the Common Shares are not then listed on the TSX, on such
                other
                Canadian stock exchange on which the Common Shares trade as may be
                selected by the directors of the Corporation for such purpose or,
                if the
                Common Shares are not then listed on any Canadian stock exchange,
                in the
                over-the-counter market, during the period of any twenty consecutive
                trading days ending not more than five (5) Business Days before such
                date;
                provided that the weighted average price shall be determined by dividing
                the aggregate sale price of all Common Shares sold on the said exchange
                or
                market, as the case may be, during the said twenty consecutive trading
                days by the total number of Common Shares so sold; and provided further
                that if the Common Shares are not then listed on any Canadian stock
                exchange or traded in the over-the counter market, then the Current
                Market
                Price shall be determined by such firm of independent chartered
                accountants as may be selected by the directors of the
                Corporation;

            

    

     

    
      	 	
              (d)

            	
              "Equity
                Shares"
                means the Common Shares and any shares of any other class or series
                of the
                Corporation which may from time to time be authorized for issue if
                by
                their terms such shares confer on the holders thereof the right to
                participate in the distribution of assets upon the voluntary or
                involuntary liquidation, dissolution or winding up of the Corporation
                beyond a fixed sum or a fixed sum plus accrued
                dividends;

            

    

     

    
      	 	
              (e)

            	
              "Holder"
                means the registered holder of this Compensation Option Certificate
                or any
                additional Compensation Option Certificates issued by the Corporation
                pursuant to the terms hereof;

            

    

     

    
      	 	
              (f)

            	
              "Options"
                means the compensation options to purchase Common Shares, having
                the
                attributes and issued pursuant to the terms and provisions set out
                hereunder;

            

    

     

    
      	 	
              (g)

            	
              "person"
                is to be interpreted broadly and includes an individual, corporation,
                partnership, unincorporated syndicate, unincorporated organization,
                trust,
                trustee, executor, administrator or other legal representative or
                any
                group or combination thereof;

            

    

     

    
      	 	
              (h)

            	
              "Subscription
                Form"
                means the form of subscription annexed hereto as Schedule "A";
                

            

    

     

    
      	 	
              (i)

            	
              "Trading
                Day"
                means any day on which the Common Shares are listed and posted for
                trading
                on the TSX and such exchange is open for business or, if not listed
                and
                posted for trading on such exchange, on such stock exchange or quotation
                system on which the Common Shares are then listed and posted (or
                quoted)
                for trading and which is open for business, and, in each case, no
                cease
                trading or similar order is in effect with respect to the Common
                Shares;
                and

            

    

     

    
      	 	
              (j)

            	
              "TSX"
                means the Toronto Stock Exchange.

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    2. Expiry
      Time

     

    After
      the
      Expiry Time, all rights under this Compensation Option Certificate and any
      outstanding Options evidenced hereby, in respect of which the right of
      subscription and purchase herein provided for shall not have been exercised,
      shall wholly cease and terminate and this Compensation Option Certificate and
      the Options evidenced hereby shall be void and of no value or
      effect.

     

    3. Exercise
      Procedure

     

    
      	 	
              (a)

            	
              The
                Holder may exercise its right of purchase hereunder in whole or in
                part at
                any time at or prior to the Expiry Time by surrendering or delivering
                to
                the Corporation prior to the Expiry Time at its principal office
                in
                Colorado: (i) this Compensation Option Certificate together with
                the
                Subscription Form duly completed and executed by the Holder or its
                legal
                representative or attorney, duly appointed by an instrument in writing
                in
                form and manner satisfactory to the Corporation; and (ii) cash or
                a
                certified cheque, money order or bank draft payable to or to the
                order of
                the Corporation in an amount equal to the Exercise Price multiplied
                by the
                number of Common Shares for which subscription is being
                made.

            

    

     

    
      	 	
              (b)

            	
              Any
                Compensation Option Certificate, Subscription Form and cash, certified
                cheque, money order or bank draft referred to in the foregoing subsection
                3(a) shall be deemed to be surrendered only upon delivery thereof
                to the
                Corporation at its principal office in the manner provided in Section
                29
                hereof.

            

    

     

    4. Entitlement
      to Certificates

     

    Upon
      delivery and payment as provided for in Section 3 above, the Corporation shall
      cause to be issued to the Holder the Common Shares subscribed for and the Holder
      shall become a shareholder of the Corporation in respect of such Common Shares
      purchased with effect from the date of such delivery and payment and shall
      be
      entitled to delivery of a certificate or certificates evidencing such Common
      Shares. The Corporation shall cause such certificate or certificates to be
      issued and delivered to the Holder at the address or addresses specified in
      the
      Subscription Form as soon as practicable, but in any event, not later than
      seven
      (7) Business Days following such delivery and payment.

     

    5. Assignment
      or Transfer of Compensation Options

     

    The
      Options evidenced hereby may be assigned or transferred by the Holder or
      exercised by or for the benefit of any person other than the Holder. The Options
      evidenced hereby may not be exercised in the United States or by or on behalf
      of
      a U.S. Person or person in the United States. "United States" and "U.S. Person"
      are as defined in Regulation S under the United States Securities Act of 1933,
      as amended.

     

    6. Partial
      Exercise and Exchanges

     

    The
      Holder may subscribe for and purchase a number of Common Shares which is less
      than the number it is entitled to purchase pursuant to this Compensation Option
      Certificate. In the event of any such subscription and purchase prior to the
      Expiry Time, the Holder shall also be entitled to receive, without charge,
      a new
      Compensation Option Certificate in respect of the balance of the Options to
      purchase Common Shares to which it continues to be entitled pursuant to this
      Compensation Option Certificate.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    This
      Compensation Option Certificate is also exchangeable, without charge, from
      time
      to time, upon surrender hereof by the Holder to the Corporation, for a new
      Compensation Option Certificate or certificates of like tenor representing
      in
      the aggregate the same number of Options under the Compensation Option
      Certificate so surrendered.

     

    7. No
      Fractional Common Shares 

     

    Notwithstanding
      any adjustment provided for in Section 11 hereof, the Corporation shall not
      be
      required upon the exercise of any Options to issue fractional Common Shares
      in
      satisfaction of its obligations hereunder and the Holder understands and agrees
      that it will not be entitled to any cash payment or other form of compensation
      in respect of a fractional Common Share that might otherwise have been
      issued.

     

    8. Not
      a Shareholder

     

    Nothing
      in this Compensation Option Certificate or in the holding of the Options
      evidenced hereby shall be construed as conferring upon the Holder any right
      or
      interest whatsoever as a shareholder of the Corporation.

     

    9. No
      Obligation to Purchase

     

    Nothing
      herein contained or done pursuant hereto shall obligate the Holder to purchase
      or pay for, or the Corporation to issue, any Common Shares except those Common
      Shares in respect of which the Holder shall have exercised its right to purchase
      in the manner provided hereunder.

     

    10. Covenants

     

    
      	 	
              (a)

            	
              The
                Corporation covenants that: (i) so long as any Options evidenced
                hereby
                remain outstanding, it shall reserve and there shall remain unissued
                out
                of its authorized capital a sufficient number of Common Shares to
                satisfy
                the right of purchase provided for herein; and (ii) all Common Shares
                which shall be issued upon the exercise of the right to purchase
                provided
                for herein, upon payment of the Exercise Price therefor, shall be
                issued
                as fully paid and non-assessable and free from all taxes, liens and
                charges with respect to the issue thereof, other than which may arise
                by
                virtue of the Holder's personal
                circumstances.

            

    

     

    
      	 	
              (b)

            	
              While
                any Options evidenced hereby remain outstanding, the Corporation
                shall
                comply with the securities legislation applicable to it in order
                that the
                Corporation continue as a reporting issuer, or analogous entity,
                not in
                default of any requirements of such
                legislation.

            

    

     

    
      	 	
              (c)

            	
              The
                Corporation shall, at its expense, expeditiously use its commercially
                reasonable best efforts to obtain the listing on the TSX and the
                AMEX of
                the Common Shares issuable upon the exercise of the right to purchase
                provided for herein. The Corporation shall, at its expense, include
                the
                registration of the resale of the Common Shares underlying the Options
                in
                its registration statement (the "Registration
                Statement")
                filed in connection with the flow-through shares issued on the date
                of
                this Compensation Option Certificate, and, subject to the terms and
                conditions of the registration rights agreement, each dated October
                31,
                2007 (the "Registration
                Rights Agreement"),
                between the Corporation and the subscriber counterparty thereto,
                shall use
                its commercially reasonable efforts to register the resale of the
                Common
                Shares underlying the Options in the United States as soon as possible
                so
                that the legend referred to in Section 27 (d) may be removed. The
                Corporation and the Holder agree to be bound by the terms of the
                Registration Rights Agreement as if they were original parties thereto,
                and the Holder agrees to complete and execute the Notice and Questionnaire
                prior to the Corporation including the Common Shares in the Registration
                Statement. 

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (d)

            	
              The
                Corporation shall use its commercially reasonable best efforts to
                do or
                cause to be done all things necessary to preserve and maintain its
                corporate existence.

            

    

     

    11. Adjustment
      to Exercise Price

     

    The
      rights of the Holder, including the number of Common Shares issuable upon the
      exercise of each Option represented hereby, will be adjusted from time to time
      upon the occurrence of the events and in the manner provided in, and in
      accordance with the provisions of, this Section. 

     

    The
      Exercise Price in effect at any time is subject to adjustment from time to
      time
      in the events and in the manner provided as follows:

     

    
      	
            	(1)	
              If
                and whenever at any time after the date hereof the
                Corporation:

            

    

     

    
      	 	
              (a)

            	
              issues
                Common Shares or securities exchangeable for or convertible into
                Common
                Shares to all or substantially all the holders of the Common Shares
                as a
                stock dividend; 

            

    

     

    
      	 	
              (b)

            	
              makes
                a distribution on its outstanding Common Shares payable in Common
                Shares
                or securities exchangeable for or convertible into Common Shares;
                

            

    

     

    
      	 	
              (c)

            	
              subdivides
                its outstanding Common Shares into a greater number of shares;
                or

            

    

     

    
      	 	
              (d)

            	
              consolidates
                its outstanding Common Shares into a small number of
                shares;

            

    

     

    (any
      of
      such events being called a "Common
      Share Reorganization"),
      then
      the Exercise Price will be adjusted effective immediately after the effective
      date or record date for the happening of a Common Share Reorganization, as
      the
      case may be, at which the holders of Common Shares are determined for the
      purpose of the Common Share Reorganization by multiplying the Exercise Price
      in
      effect immediately prior to such effective date or record date by a fraction,
      the numerator of which is the number of Common Shares outstanding on such
      effective date or record date before giving effect to such Common Share
      Reorganization and the denominator of which is the number of Common Shares
      outstanding immediately after giving effect to such Common Share Reorganization
      (including, in the case where securities exchangeable for or convertible into
      Common Shares are distributed, the number of Common Shares that would have
      been
      outstanding had all such securities been exchanged for or converted into Common
      Shares on such effective date or record date).

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (2)

            	
              If
                and whenever, at any time after the date hereof, the Corporation
                fixes a
                record date for the issue of rights, options or warrants to the holders
                of
                all or substantially all of its outstanding Common Shares under which
                such
                holders are entitled to subscribe for or purchase Common Shares or
                securities exchangeable for or convertible into Common Shares,
                where:

            

    

     

    
      	 	
              (a)

            	
              the
                right to subscribe for or purchase Common Shares or the right to
                exchange
                securities for or convert securities into Common Shares, expires
                not more
                than 45 days after the date of such issue (the period from the record
                date
                to the date of expiry being herein in this Section 11(2) called the
                "Rights
                Period");
                and

            

    

     

    
      	 	
              (b)

            	
              the
                cost per Common Share during the Rights Period (inclusive of any
                cost of
                acquisition of securities exchangeable for or convertible into Common
                Shares in addition to any direct cost of Common Shares) (in this
                Section
                11(2) called the "Per
                Share Cost")
                is less than 95% of the Current Market Price of the Common Shares
                on the
                record date;

            

    

     

    (any
      of
      such events being called a "Rights
      Offering"),
      then
      the Exercise Price will be adjusted effective immediately after the end of
      the
      Rights Period to a price determined by multiplying the Exercise Price in effect
      immediately prior to the end of the Rights Period by a fraction:

     

    
      	 	
              (i)

            	
              the
                numerator of which is the aggregate
                of:

            

    

     

    
      	 	
              A.

            	
              the
                number of Common Shares outstanding as of the record date for the
                Rights
                Offering; and

            

    

     

    
      	 	
              B.

            	
              a
                number determined by dividing the product of the Per Share Cost
                and:

            

    

     

    
      	 	
              (I)

            	
              where
                the event giving rise to the application of this subsection 11(2)
                was the
                issue of rights, options or warrants to the holders of Common Shares
                under
                which such holders are entitled to subscribe for or purchase additional
                Common Shares, the number of Common Shares so subscribed for or purchased
                during the Rights Period; or

            

    

     

    
      	 	
              (II)

            	
              where
                the event giving rise to the application of this subsection 11(2)
                was the
                issue of rights, options or warrants to the holders of Common Shares
                under
                which such holders are entitled to subscribe for or purchase securities
                exchangeable for or convertible into Common Shares, the number of
                Common
                Shares for which those securities so subscribed for or purchased
                during
                the Rights Period could have been exchanged or into which they could
                have
                been converted during the Rights
                Period,

            

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    by
      the
      Current Market Price of the Common Shares as of the record date for the Rights
      Offering; and

     

    
      	 	
              (ii)

            	
              the
                denominator of which is:

            

    

     

    
      	 	
              A.

            	
              in
                the case described in subparagraph 11(2)(i)(B)(I), the number of
                Common
                Shares outstanding; or

            

    

     

    
      	 	
              B.

            	
              in
                the case described in subparagraph 11(2)(i)(B)(II), the number of
                Common
                Shares that would be outstanding if all the Common Shares described
                in
                subparagraph 11(2)(i)(B)(II) had been
                issued,

            

    

     

    as
      at the
      end of the Rights Period.

     

    Any
      Common Shares owned by or held for the account of the Corporation or any
      subsidiary or affiliate (as such terms are defined in the Securities
      Act
      (Ontario)) of the Corporation will be deemed not to be outstanding for the
      purpose of any such computations.

     

    If
      by the
      terms of the rights, options or warrants referred to in this Section 11(2),
      there is more than one purchase, conversion or exchange price per Common Share,
      the aggregate price of the total number of additional Common Shares offered
      for
      subscription or purchase, or the aggregate conversion or exchange price of
      the
      convertible securities so offered, will be calculated for purposes of the
      adjustment on the basis of:

     

    
      	 	
              (i)

            	
              the
                lowest purchase, conversion or exchange price per Common Share, as
                the
                case may be, if such price is applicable to all Common Shares which
                are
                subject to the rights, options or warrants;
                and

            

    

     

    
      	 	
              (ii)

            	
              the
                average purchase, conversion or exchange price per Common Share,
                as the
                case may be, if the applicable price is determined by reference to
                that
                number of Common Shares acquired.

            

    

     

    To
      the
      extent that any adjustment in the Exercise Price occurs pursuant to this Section
      11(2) as a result of the fixing by the Corporation of a record date for the
      distribution of rights, options or warrants referred to in this Section 11(2),
      the Exercise Price will be readjusted immediately after the expiration of any
      relevant exchange, conversion or exercise right to the Exercise Price which
      would then be in effect based upon the number of Common Shares actually issued
      and remaining issuable after such expiration and will be further readjusted
      in
      such manner upon expiration of any further such right.

     

    If
      the
      Holder has exercised this Compensation Option Certificate in accordance herewith
      during the period beginning after the record date for a Rights Offering and
      ending on the last day of the Rights Period thereunder, the Holder will, in
      addition to the Common Shares to
      which
      it is otherwise entitled upon such exercise, be entitled to that number of
      additional Common Shares equal
      to
      the difference, if any, between (x) the result obtained when the Exercise Price
      in effect immediately prior to the end of such Rights Offering pursuant to
      this
      subsection is multiplied by the number of Common Shares received
      upon the exercise of the Options represented by this Compensation Option
      Certificate during such period, and the resulting product is divided by the
      Exercise Price as adjusted for such Rights Offering pursuant to this subsection
      provided that the provisions of Section 7 will be applicable to any fractional
      interest in a Common Share to
      which
      such Holder might otherwise be entitled and (y) the number of Common Shares
      received upon the exercise of the Options represented by this Compensation
      Option Certificate during such period. Such additional Common Shares
will
      be
      deemed to have been issued to the Holder immediately following the end of the
      Rights Period and
      a
      certificate for such additional Common Shares will
      be
      delivered to such Holder within ten (10) Business Days following the end of
      the
      Rights Period.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (3)

            	
              If
                and whenever at any time after the date hereof, the Corporation fixes
                a
                record date for the issue or the distribution to the holders of all
                or
                substantially all its Common Shares
                of:

            

    

     

    
      	 	
              (i)

            	
              shares
                of the Corporation of any class other than Common
                Shares;

            

    

     

    
      	 	
              (ii)

            	
              rights,
                options or warrants to acquire shares or securities exchangeable
                for or
                convertible into shares or property or other assets of the Corporation
                (other than a right to subscribe for or purchase Common Shares or
                a right
                to exchange securities for or convert securities into Common Shares
                which
                expires not more than 45 days after the date of such issue and the
                cost
                per Common Share during such period (inclusive of any cost of acquisition
                of securities exchangeable for or convertible into Common Shares
                in
                addition to any direct cost of Common Shares) is at least 95% of
                the
                Current Market Price of the Common Shares on the record
                date);

            

    

     

    
      	 	
              (iii)

            	
              evidence
                of indebtedness; or

            

    

     

    
      	 	
              (iv)

            	
              any
                property or other assets,

            

    

     

    and
      if
      such issuance or distribution does not constitute a Common Share Reorganization
      or a Rights Offering (any of such non-excluded events being called a
      "Special
      Distribution"),
      the
      Exercise Price will be adjusted effective immediately after such record date
      to
      a price determined by multiplying the Exercise Price in effect on such record
      date by a fraction:

     

    
      	
            	(i)	
              the
                numerator of which is:

            

    

     

    
      	 	
              A.

            	
              the
                product of the number of Common Shares outstanding on such record
                date and
                the Current Market Price of the Common Shares on such record date;
                less

            

    

     

    
      	 	
              B.

            	
              the
                aggregate fair market value (as determined by action by the auditors
                of
                the Corporation) to the holders of the Common Shares of such securities
                or
                property or other assets so issued or distributed in the Special
                Distribution; and

            

    

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              the
                denominator of which is the number of Common Shares outstanding on
                such
                record date multiplied by the Current Market Price of the Common
                Shares on
                such record date.

            

    

     

    Any
      Common Shares owned by or held for the account of the Corporation or any
      subsidiary or affiliate (as such terms are defined in the Securities
      Act
      (Ontario)) of the Corporation will be deemed not to be outstanding for the
      purpose of any such computation.

     

    
      	 	
              (4)

            	
              If
                and whenever at any time after the date hereof there is a Common
                Share
                Reorganization, a Rights Offering, a Special Distribution, a
                reclassification of the Common Shares outstanding at any time or
                change of
                the Common Shares into other shares or into other securities (other
                than a
                Common Share Reorganization), or a consolidation, amalgamation or
                merger
                of the Corporation with or into any other corporation or other entity
                (other than a consolidation, amalgamation or merger which does not
                result
                in any reclassification of the outstanding Common Shares or a change
                of
                the Common Shares into other shares), or a transfer of the undertaking
                or
                assets of the Corporation as an entirety or substantially as an entirety
                to another corporation or other entity (any of such events being
                called a
                "Capital
                Reorganization"),
                the Holder, upon exercising the Options represented by this Compensation
                Option Certificate after the effective date of such Capital
                Reorganization, will be entitled to receive in lieu of the number
                of
                Common Shares to
                which such Holder was theretofore entitled upon such exercise, the
                aggregate number of Common Shares, other securities or other property
                which such Holder would have been entitled to receive as a result
                of such
                Capital Reorganization if, on the effective date thereof, the Holder
                had
                been the registered holder of the number of Common Shares to which
                such
                Holder was therefore entitled upon exercise of the Options represented
                by
                this Compensation Option Certificate. If determined appropriate by
                action
                of the directors of the Corporation, appropriate adjustments will
                be made
                as a result of any such Capital Reorganization in the application
                of the
                provisions set forth in this Section 11(4) with respect to the rights
                and
                interests thereafter of the Holder to the end that the provisions
                set
                forth in this Section 11(4) will thereafter correspondingly be made
                applicable as nearly as may reasonably be in relation to any shares,
                other
                securities or other property thereafter deliverable upon the exercise
                hereof. Any such adjustment must be made by and set forth in an amendment
                to this Compensation Option Certificate approved by action by the
                directors of the Corporation and will for all purposes be conclusively
                deemed to be an appropriate
                adjustment.

            

    

     

    
      	 	
              (5)

            	
              If
                at any time after the date hereof and prior to the Expiry Time any
                adjustment in the Exercise Price shall occur as a result
                of:

            

    

     

    
      	 	
              (a)

            	
              an
                event referred to in subsection
                11(1);

            

    

     

    
      	 	
              (b)

            	
              the
                fixing by the Corporation of a record date for an event referred
                to in
                subsection 11(2); or

            

    

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (c)

            	
              the
                fixing by the Corporation of a record date for an event referred
                to in
                subsection 11(3) if such event constitutes the issue or distribution
                to
                the holders of all or substantially all of its outstanding Common
                Shares
                of: (A) Equity Shares, or (B) securities exchangeable for or convertible
                into Equity Shares at an exchange or conversion price per Equity
                Share
                less than 95% of the Current Market Price on such record date, or
                (C)
                rights, options or warrants to acquire Equity Shares at an exercise,
                exchange or conversion price per Equity Share less than 95% of the
                Current
                Market Price on such record date,

            

    

     

    then
      the
      number of Common
      Shares
      purchasable upon the subsequent exercise of the Options represented by this
      Compensation Option Certificate shall be simultaneously adjusted by multiplying
      the number of Common
      Shares
      purchasable upon the exercise of the Options represented by this Compensation
      Option Certificate immediately prior to such adjustment by a fraction which
      shall be the reciprocal of the fraction employed in the adjustment of the
      Exercise Price. To the extent any adjustment in subscription rights occurs
      pursuant to this subsection 11(5) as a result of a distribution of exchangeable
      or convertible securities other than Equity Shares referred to in subsection
      11(1) or as a result of the fixing by the Corporation of a record date for
      the
      distribution of rights, options or warrants referred to in
      subsection 11(2), the number of Common
      Shares purchasable
      upon exercise of the Options represented by this Compensation Option Certificate
      shall be readjusted immediately after the expiration of any relevant exchange,
      conversion or exercise right to the number of Common Shares actually issued
      and
      remaining issuable immediately after such expiration and shall be further
      readjusted in such manner upon expiration of any further such right. To the
      extent that any adjustment in subscription rights occurs pursuant to this
      subsection 11(5) as a result of the fixing by the Corporation of a record date
      for the distribution of exchangeable or convertible securities other than Equity
      Shares or rights, options or warrants referred to in subsection 11(3), the
      number of Common
      Shares purchasable
      upon exercise of the Options represented by this Compensation Option Certificate
      shall be readjusted immediately after the expiration of any relevant exchange,
      conversion or exercise right to the number which would be purchasable pursuant
      to this subsection 11(5) if the fair market value of such securities or such
      rights, options or warrants had been determined for purposes of the adjustment
      pursuant to this subsection 11(5) on the basis of the number of Equity Shares
      issued and remaining issuable immediately after such expiration and shall be
      further readjusted in such manner upon expiration of any further such
      right.

     

    
      	
            	(6)	
              If
                at any time any adjustment or readjustment in the Exercise Price
                shall
                occur pursuant to the provisions of this Section 11, then the number
                of
                Common Shares purchasable upon the subsequent exercise of the Options
                shall be simultaneously adjusted or readjusted, as the case may be,
                by
                multiplying the number of Common Shares purchasable upon the exercise
                of
                the Options immediately prior to such adjustment or readjustment
                by a
                fraction which shall be the reciprocal of the fraction used in the
                adjustment or readjustment of the Exercise
                Price.

            

    

     

    12. Rules
      Regarding Calculation of Adjustments

     

    The
      following rules and procedures shall be applicable to adjustments made pursuant
      to Section 11 herein:

     

    
      	 	
              (1)

            	
              The
                adjustments provided for in Section 11 are cumulative and will, in
                the
                case of adjustments to the Exercise Price, be computed to the nearest
                one-tenth of one cent and will be made successively whenever an event
                referred to therein occurs, subject to the following subsections
                of this
                Section 12.

            

    

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (2)

            	
              No
                adjustment in the Exercise Price is required to be made unless such
                adjustment would result in a change of at least 1% in the prevailing
                Exercise Price; provided, however, that any adjustment which, except
                for
                the provisions of this subsection, would otherwise have been required
                to
                be made, will be carried forward and taken into account in any subsequent
                adjustments.

            

    

     

    
      	 	
              (3)

            	
              No
                adjustment in the Exercise Price will be made in respect of any event
                described in Section 11, other than the events referred to in clauses
                11(1)(c) and (d), if the Holder is entitled to participate in such
                event
                on the same terms, mutatis
                mutandis,
                as if the Holder had exercised the Options evidenced hereby prior
                to or on
                the effective date or record date of such event. Any participation
                by a
                Holder pursuant to this Section 12(3) is subject to the prior approval
                of
                the TSX (or such other stock exchange or quotation system on which
                the
                Common Shares are then listed and posted (or quoted) for trading,
                as
                applicable).

            

    

     

    
      	 	
              (4)

            	
              No
                adjustment in the Exercise Price will be made under Section 11 in
                respect
                of the issue from time to time of Common Shares issuable from time
                to time
                as dividends paid in the ordinary course to holders of Common Shares
                who
                exercise an option or election to receive substantially equivalent
                dividends in Common Shares in lieu of receiving a cash dividend and
                any
                such issue will be deemed not to be a Common Share
                Reorganization.

            

    

     

    
      	 	
              (5)

            	
              If
                at any time a dispute arises with respect to adjustments provided
                for in
                Section 11, such dispute will be conclusively determined by the auditors
                of the Corporation or if they are unable or unwilling to act, by
                such
                other firm of independent chartered accountants as may be selected
                by the
                directors of the Corporation and approved by the Holder, acting
                reasonably, and any such determination, absent manifest error, will
                be
                binding upon the Corporation, the Holder and shareholders of the
                Corporation. The Corporation will provide such auditors or accountants
                with access to all necessary records of the
                Corporation.

            

    

     

    
      	 	
              (6)

            	
              In
                case the Corporation, after the date of issue of this Compensation
                Option
                Certificate, takes any action affecting the Common Shares, other
                than an
                action described in Section 11, which in the opinion of the directors
                of
                the Corporation would materially affect the rights of the Holder,
                the
                Exercise Price will be adjusted in such manner, if any, and at such
                time,
                by action by the directors of the Corporation but subject in all
                cases to
                any necessary regulatory approval, including approval of the TSX.
                Failure
                of the taking of action by the directors of the Corporation so as
                to
                provide for an adjustment on or prior to the effective date of any
                action
                by the Corporation affecting the Common Shares will be conclusive
                evidence
                that the board of directors of the Corporation has determined that
                it is
                equitable to make no adjustment in the
                circumstances.

            

    

     

    
      	 	
              (7)

            	
              If
                the Corporation sets a record date to determine the holders of the
                Common
                Shares for the purpose of entitling them to receive any dividend
                or
                distribution or sets a record date to take any other action and,
                thereafter and before the distribution to such shareholders of any
                such
                dividend or distribution or the taking of any other action, decides
                not to
                implement its plan or pay or deliver such dividend or distribution
                or take
                such other action, then no adjustment in the Exercise Price will
                be
                required by reason of the setting of such record
                date.

            

    

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (8)

            	
              In
                the absence of a resolution of the directors of the Corporation fixing
                a
                record date for a Special Distribution or Rights Offering, the Corporation
                will be deemed to have fixed as the record date therefor the date
                on which
                the Special Distribution or Rights Offering is
                effected.

            

    

     

    
      	 	
              (9)

            	
              As
                a condition precedent to the taking of any action which would require
                any
                adjustment to the Options evidenced hereby, including the Exercise
                Price,
                the Corporation must take any corporate action which may be necessary
                in
                order that the Corporation shall have unissued and reserved in its
                authorized capital and may validly and legally issue as fully paid
                and
                non-assessable all of the shares or other securities which the Holder
                is
                entitled to receive on the full exercise thereof in accordance with
                the
                provisions hereof.

            

    

     

    
      	 	
              (10)

            	
              The
                Corporation will from time to time, within 10 Business Days after
                the
                occurrence of any event which requires an adjustment or readjustment
                as
                provided in Section 11, give notice to the Holder specifying the
                event
                requiring such adjustment or readjustment and the results thereof,
                including the resulting Exercise
                Price.

            

    

     

    
      	 	
              (11)

            	
              Any
                adjustment to the Exercise Price under the terms of this Compensation
                Option Certificate shall be subject to the prior approval of the
                TSX and
                such other stock exchange or quotation system on which the Common
                Shares
                are then listed and posted (or quoted) for trading, as
                applicable.

            

    

     

    13. Consolidation
      and Amalgamation

     

    
      	 	
              (1)

            	
              The
                Corporation shall not enter into any transaction whereby all or
                substantially all of its undertaking, property and assets would become
                the
                property of any other corporation or entity (herein called a "successor
                corporation")
                whether by way of reorganization, reconstruction, consolidation,
                amalgamation, merger, transfer, sale, disposition or otherwise, unless
                prior to or contemporaneously with the consummation of such transaction
                the Corporation and the successor corporation shall have executed
                such
                instruments and done such things as, in the opinion of counsel to
                the
                Corporation, are necessary or advisable to establish that upon the
                consummation of such transaction:

            

    

     

    
      	 	
              (i)

            	
              the
                successor corporation will have assumed all the covenants and obligations
                of the Corporation under this Compensation Option Certificate;
                and

            

    

     

    
      	 	
              (ii)

            	
              this
                Compensation Option Certificate will be a valid and binding obligation
                of
                the successor corporation entitling the Holder, as against the successor
                corporation, to all the rights of the Holder under this Compensation
                Warrant Certificate.

            

    

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (2)

            	
              Whenever
                the conditions of subsection 13(1) shall have been duly observed
                and
                performed, the successor corporation shall possess and from time
                to time
                may exercise each and every right and power of the Corporation under
                this
                Compensation Option Certificate in the name of the Corporation or
                otherwise and any act or proceeding by any provision hereof required
                to be
                done or performed by any director or officer of the Corporation may
                be
                done and performed with like force and effect by the like directors
                or
                officers of the successor
                corporation.

            

    

     

    14. Representations
      and Warranties

     

    The
      Corporation hereby represents and warrants with and to the Holder that the
      Corporation is duly authorized and has the corporate and lawful power and
      authority to create and issue the Options evidenced hereby and the Common Shares
      issuable upon the exercise hereof, and to perform its obligations hereunder
      and
      that this Compensation Option Certificate represents a valid, legal and binding
      obligation of the Corporation enforceable in accordance with its terms subject
      to bankruptcy, insolvency and other laws of general application affecting the
      rights of creditors and equitable remedies being in the discretion of the
      court.

     

    15. Acquisition
      of the Securites

     

    The
      Holder hereby represents, warrants and certifies to the Corporation that the
      securities represented by this Compensation Option Certificate, and the Common
      Shares issuable upon exercise thereof, are being acquired solely for its own
      account and not as a nominee for any other party and not with a view toward
      the
      resale or distribution thereof and that it will not offer, sell or otherwise
      dispose of the Compensation Option Certificate or the Common Shares issuable
      upon exercise thereof except under circumstances which will not result in a
      violation of any applicable securities laws in Canada, the United States and
      other applicable securities laws or the rules of the TSX or AMEX. In addition,
      the Holder hereby represents, warrants and certifies to the Corporation that
      the
      Holder: (i) at the time of receipt of this Compensation Option Certificate
      is
      not in the United States; (ii) is not a U.S. Person and is not receiving this
      Compensation Option Certificate for the account or benefit of a U.S. Person;
      (iii) did not execute or deliver this Option Compensation Certificate while
      within the United States; (iv) has in all other respects complied with the
      terms
      of Regulation S of the United States Securities Act of 1933, as amended (the
      "U.S.
      Securities Act")
      or any
      successor rule or regulation of the United States Securities and Exchange
      Commission as presently in effect.

     

    16. If
      Share Transfer Books Closed

     

    The
      Corporation shall not be required to deliver certificates for Common Shares
      while the share transfer books of the Corporation are properly closed prior
      to
      any meeting of shareholders, for the payment of dividends or for any other
      purpose and in the event of the surrender of any Compensation Option Certificate
      in accordance with the provisions hereof and the making of any subscription
      and
      payment for Common Shares called for thereby during any such period, delivery
      of
      certificates for Common Shares may be postponed for not more than five (5)
      Business Days after the date of the re-opening of said share transfer books.
      Any
      such postponement of delivery of certificates shall be without prejudice to
      the
      right of the Holder, if the Holder has surrendered the same and made payment
      during such period, to receive certificates for the Common Shares called for
      after the share transfer books have been re-opened.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    17. Stolen,
      Lost, Mutilated or Destroyed Certificate

     

    If
      this
      Compensation Option Certificate is stolen, lost, mutilated or destroyed, the
      Corporation shall, on such terms as it shall in its discretion impose, issue
      and
      countersign a new Compensation Option Certificate of like denomination, tenor
      and date as the certificate so stolen, lost, mutilated or
      destroyed.

     

    18. Governing
      Law

     

    This
      Compensation Option Certificate shall be governed by and construed in accordance
      with the laws of the Province of Ontario and the federal laws of Canada
      applicable therein, regardless of the laws that might otherwise govern under
      applicable principles of conflicts of laws thereof, except to the extent
      mandatorily governed by the law of another jurisdiction. Each of the Holder
      and
      the Corporation: (i) irrevocably consents to the exclusive jurisdiction and
      venue of the Courts of Ontario in connection with any matter or dispute based
      upon or arising out of this Compensation Option Certificate or the matters
      contemplated herein; (ii) agrees that process may be served upon them in any
      manner authorized by the laws of the Province of Ontario for such persons;
      and
      (iii) waives and covenants not to assert or plead any objection which they
      might
      otherwise have to such jurisdiction, venue and such process.

     

    19. Severability

     

    If
      any
      one or more of the provisions or parts thereof contained in this Compensation
      Option Certificate should be or become invalid, illegal or unenforceable in
      any
      respect in any jurisdiction, the remaining provisions or parts thereof contained
      herein shall be and shall be conclusively deemed to be, as to such jurisdiction,
      severable therefrom and:

     

    
      	 	
              (a)

            	
              the
                validity, legality or enforceability of such remaining provisions
                or parts
                thereof shall not in any way be affected or impaired by the severance
                of
                the provisions or parts thereof severed;
                and

            

    

     

    
      	 	
              (b)

            	
              the
                invalidity, illegality or unenforceability of any provision or part
                thereof contained in this Compensation Option Certificate in any
                jurisdiction shall not affect or impair such provision or part thereof
                or
                any other provisions of this Compensation Option Certificate in any
                other
                jurisdiction.

            

    

     

    20. Headings

     

    The
      headings of the sections, subsections, clauses and subclauses of this
      Compensation Option Certificate have been inserted for convenience and reference
      only and do not define, limit, alter or enlarge the meaning of any provision
      of
      this Compensation Option Certificate.

     

    21. Compensation
      Options Rank Pari Passu

     

    All
      Options shall rank pari
      passu,
      whatever may be the actual date of issue of the same.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    22. Numbering
      of Articles, etc.

     

    Unless
      otherwise stated, a reference herein to a numbered or lettered section,
      subsection, clause, subclause or schedule refers to the section, subsection,
      clause, subclause or schedule bearing that number or letter in this Compensation
      Option Certificate.

     

    23. Number
      and Gender

     

    Whenever
      used in this Compensation Option Certificate, words importing the singular
      number only shall include the plural and vice
      versa
      and
      words importing gender shall include all genders.

     

    24. Day
      Not a Business Day

     

    In
      the
      event that any day on or before which any action is required to be taken
      hereunder is not a Business Day then such action shall be required to be taken
      on or before the requisite time on the next day that is a Business
      Day.

     

    25. TSX
      and AMEX Approvals

     

    Notwithstanding
      anything to the contrary in this Compensation Option Certificate, no supplement
      or amendment to the terms of this Compensation Option Certificate may be made
      without the prior written approval of the TSX and such other stock exchange
      or
      quotation system on which the Common Shares are then listed and posted (or
      quoted) for trading, as applicable.

     

    26. Binding
      Effect

     

    This
      Compensation Option Certificate and all of its provisions shall enure to the
      benefit of the Holder and its successors and shall be binding upon the
      Corporation and its successors.

     

    27. Legends

     

    
      	
              (a)

            	
              The
                Holder acknowledges that any certificate representing Common Shares
                issued
                upon the exercise of this Compensation Option Certificate prior to
                the
                date which is four months and one day after the date hereof will
                bear the
                following legend:

            

    

     

    "UNLESS
      PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
      TRADE THE SECURITY BEFORE MARCH 1, 2008."

     

    provided
      that at any time subsequent to the date which is four months and one day after
      the date hereof any certificate representing such Common Shares may be exchanged
      for a certificate bearing no such legends. The Corporation hereby covenants
      and
      agrees that it will use the best efforts thereof to deliver or to cause to
      be
      delivered a certificate or certificates representing such Common Shares bearing
      no such legends within three Business Days after receipt of the legended
      certificate.

     

    
      	
              (b)

            	
              The
                Holder acknowledges that the certificates representing the Common
                Shares
                and all certificates issued in exchange or substitution thereof,
                will bear
                a legend in substantially the following form as long as the legend
                referred to in subsection 27(a) remains on such
                certificate:

            

    

     

    
      	 	
              "THE
                SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO
                STOCK
                EXCHANGE; HOWEVER, THE SAID SECURITIES CAN NOT BE TRADED THROUGH
                THE
                FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE,
                AND
                CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT
                "GOOD
                DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK
                EXCHANGE."

            

    

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)

            	
              The
                Holder further acknowledges that any certificate representing Common
                Shares issued upon the exercise of this Compensation Option Certificate
                and all certificates issued in exchange or substitution thereof will
                bear
                the following legend:

            

    

     

    
      	 	
              "UNTIL
                THE SEPARATION TIME (AS DEFINED IN THE RIGHTS AGREEMENT REFERRED
                TO
                BELOW), THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF
                TO
                CERTAIN RIGHTS AS SET FORTH IN A SHAREHOLDER RIGHTS PLAN AGREEMENT,
                DATED
                AS OF THE 17TH DAY OF JANUARY, 2007 (THE "RIGHTS AGREEMENT"), BETWEEN
                THE
                CORPORATION AND CIBC MELLON TRUST COMPANY, AS RIGHTS AGENT, THE TERMS
                OF
                WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH
                MAY
                BE INSPECTED DURING NORMAL BUSINESS HOURS AT THE PRINCIPAL EXECUTIVE
                OFFICES OF THE CORPORATION. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH
                IN
                THE RIGHTS AGREEMENT, SUCH RIGHTS MAY BE TERMINATED, MAY EXPIRE,
                MAY
                BECOME VOID (IF, IN CERTAIN CASES, THEY ARE "BENEFICIALLY OWNED"
                BY AN
                "ACQUIRING PERSON", AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT,
                WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR ANY SUBSEQUENT
                HOLDER) OR MAY BE EVIDENCED BY SEPARATE CERTIFICATES AND MAY NO LONGER
                BE
                EVIDENCED BY THIS CERTIFICATE. THE CORPORATION WILL MAIL OR ARRANGE
                FOR
                THE MAILING OF A COPY OF THE RIGHTS AGREEMENT TO THE HOLDER OF THIS
                CERTIFICATE WITHOUT CHARGE AS SOON AS IS PRACTICABLE AFTER THE RECEIPT
                OF
                A WRITTEN REQUEST THEREFOR.

            

    

     

    
      	
              (d)

            	
              In
                addition, the Holder acknowledges that any certificate representing
                Common
                Shares issued upon the exercise of this Compensation Option Certificate
                will bear the following legend:

            

    

     

    
      	 	
              "THIS
                SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
                ACT OF
                1933, AS AMENDED (THE ''SECURITIES ACT''), AND ACCORDINGLY, MAY NOT
                BE
                OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
                ITS
                ACQUISITION HEREOF, THE HOLDER (1) AGREES THAT IT WILL NOT RESELL
                OR
                OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY, EXCEPT (A) TO THE
                ISSUER; (B) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED
                STATES
                IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT
                TO
                THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER
                THE
                SECURITIES ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE SECURITIES
                ACT (IF
                AVAILABLE); OR (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
                UNDER
                THE SECURITIES ACT, AND (2) AGREES THAT IT WILL, PRIOR TO ANY TRANSFER
                OF
                THIS SECURITY PURSUANT TO SUBPARAGRAPH (B) OR (C) ABOVE, FURNISH
                TO THE
                ISSUER OR ISSUER'S COUNSEL SUCH CERTIFICATIONS, LEGAL OPINIONS OR
                OTHER
                INFORMATION AS MAY BE REQUIRED BY THE ISSUER TO CONFIRM THAT SUCH
                TRANSFER
                IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
                NOT
                SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
                AS USED
                HEREIN, THE TERMS ''UNITED STATES'' AND ''U.S. PERSON'' HAVE THE
                MEANING
                GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE,
                THE
                HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING
                TRANSACTION WITH REGARD TO THIS SECURITY, EXCEPT AS PERMITTED BY
                THE
                SECURITIES ACT."

            

    

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    28. Currency

     

    All
      references herein to monetary amounts are references to lawful money of Canada,
      unless otherwise specified herein.

     

    29. Notice

     

    Any
      notice, document or other communication required or permitted by this
      Compensation Option Certificate to be given by the Holder or the Corporation
      shall be in writing and is sufficiently given if delivered personally, or if
      delivered or if transmitted by any form of recorded telecommunication tested
      prior to transmission, to such person addressed as follows:

     

    
      	 	
              (a)

            	
              if
                to the Holder:

            

    

     

    to
      the
      address on the face page hereof

     

    
      	 	
              (b)

            	
              if
                to the Corporation:

            

    

     

    Apollo
      Gold Corporation

    5655
      S.
      Yosemite Street, Suite 200

    Greenwood
      Village, Colorado, 80111-3220

     

    Attention: Chief
      Financial Officer

     

    Telephone
      No.: (720)
      886-9656

     

    Facsimile
      No.: (720)
      482-0957

     

    Notice
      so
      delivered shall be deemed to have been given on the Business Day that it is
      received. Notices transmitted by a form of recorded telecommunication shall
      be
      deemed given on the day of transmission. The Holder or the Corporation may
      from
      time to time notify the other in the manner provided herein of any change of
      address or facsimile number which thereafter, until changed by like notice,
      shall be the address or facsimile number of such person for all purposes
      hereof.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    30. Time
      of Essence

     

    Time
      shall be of the essence hereof.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the
      Corporation has caused this Compensation Option Certificate to be signed by
      its
      duly authorized officer this
      31st
      day of
October,
      2007.

    
      	 	 	 
	 	
              APOLLO
                GOLD CORPORATION

            
	 
 	 
 	 
 
	
            	Per:   
              	/s/
              Melvyn Williams
	 	
              

              Authorized
                Signatory

            

    

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    SCHEDULE
      "A"

     

    SUBSCRIPTION
      FORM

     

    
      	TO:	
              APOLLO
                GOLD CORPORATION

            

    

    5655
      S.
      Yosemite Street, Suite 200

    Greenwood
      Village, Colorado, 80111-3220

     

    The
      undersigned holder of the within Compensation Option Certificate hereby
      irrevocably subscribes for ___________________________ Common Shares of APOLLO
      GOLD CORPORATION (the "Corporation")
      pursuant to the within Compensation Option Certificate at the Exercise Price
      per
      Common Shares specified in the said Compensation Option Certificate and encloses
      herewith cash or a certified cheque, money order or bank draft payable to or
      to
      the order of the Corporation in the aggregate amount of $_____________ in
      payment of the subscription price therefor. As used herein, the terms
      "Common
      Share"
      and
      "Common
      Shares"
      shall
      have the meanings ascribed thereto in the Compensation Option Certificate to
      which this subscription form is attached.

     

    The
      undersigned hereby represents, warrants and certifies to the Corporation that
      the undersigned holder: (i) at the time of exercise of this Compensation Option
      Certificate is not in the United States; (ii) is not a U.S. Person and is not
      exercising this Compensation Option Certificate for the account or benefit
      of a
      U.S. Person; (iii) did not execute or deliver this subscription form while
      within the United States; (iv) has in all other respects complied with the
      terms
      of Regulation S of the United States Securities Act of 1933, as amended (the
      "U.S.
      Securities Act")
      or any
      successor rule or regulation of the United States Securities and Exchange
      Commission as presently in effect.

     

    DATED
      this
      __________ day of _____________________, ___________.

     

    The
      undersigned hereby directs that the said Common Shares be issued and registered
      as follows:

     

    
      
        	
                Name:

              	 	 
	
                Address:

              	 	 
	 	 	 
	 	 	 
	
                Signature:

              	 	 

      

    

     

    o Please
      check box
      if the certificates evidencing the Common Shares are to be delivered at the
      office where this Compensation Option Certificate is surrendered, failing which
      the certificate(s) evidencing the Common Shares will be mailed to the subscriber
      at the address set out  above.
      

     

    If
      any
      Options represented by this certificate are not being exercised, a new
      Compensation Option Certificate will be issued and delivered to the holder
      with
      the certificates evidencing the Common Shares.

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