**Exhibit 10.35**

**EMPLOYMENT AGREEMENT**

**THIS AGREEMENT**(“Agreement”) effective as of the 1st day ofSeptember 2005 

BETWEEN: 

**Sterling MiningCompany**

2201 Government Way, Suite E 

Coeur d’Alene,ID 83814 

(the “Company”) 

-and- 

**James N. Meek**

SeniorVice President and CFO 

9027 Maple Street 

Hayden, ID 83835

(the “Executive”) 

**RECITALS**

WHEREAS, the Company recognizes that the current business environment makes it difficult to attract andretain highly qualified executives unless a certain degree of security can be offered to such individuals against organizational and personnel changes which frequently follow changes in control of a corporation; and 

WHEREAS, the Company desires to assure fair treatment of its executives in the event of a Change in Control (as defined below) and to allow them to makecritical career decisions without undue time pressure and financial uncertainty, thereby increasing their willingness to remain with the Company notwithstanding the outcome of a possible Change in Control transaction; and 

 

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WHEREAS, the Company recognizes that its executives will be involved in evaluating or negotiating anyoffers, proposals or other transactions which could result in Changes in Control of the Company and believes that it is in the best interest of the Company and its stockholders for such executives to be in a position, free from personal financialand employment considerations, to be able to assess objectively and pursue aggressively the interests of the Company’s stockholders in making these evaluations and carrying on such negotiations; and 

WHEREAS, the Board of Directors (the “Board”) of the Company believes it is essential to provide the Executive with compensation arrangementsupon a Change in Control which provide the Executive with individual financial security and which are competitive with those of other corporations, and in order to accomplish these objectives, the Board has caused the Company to enter into thisAgreement. 

WHEREAS the Executive is an Officer of the Company and is employed in the Business (as defined below) operated by the Company;

WHEREAS, the Board of Directors of the Company (the “Board”), has determined that it is in the best interests of the Company andits shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change in Control (as defined herein). The Board believes it is imperative to diminish theinevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change in Control and to encourage the Executive’s full attention and dedication to the current Company and in theevent of any threatened or pending Change in Control, and to provide the Executive with compensation and benefits arrangements upon a Change in Control that ensure that the compensation and benefits expectations of the Executive will be satisfiedand that are competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement. 

**NOW THEREFORE**in consideration of the promises and mutual covenants herein contained, the parties hereto agree as follows: 

**1.**

**Defined Terms**

(a) 

“Cause” shall mean(i) the continued failure by the Executive to perform his material responsibilities and duties toward the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness), (ii) theengaging by the Executive in willful or reckless conduct that is demonstrably injurious to the Company monetarily or otherwise, 

 

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(iii) the conviction of the Executive of, or a plea of nolo contendre to, a felony or a crime of moral turpitude, or (iv) the commission oromission of any act by the Executive that is materially inimical to the best interests of the Company and that constitutes on the part of the Executive common law fraud or malfeasance, misfeasance, or nonfeasance of duty; provided, however, that“cause” shall not include the Executive’s lack of professional qualifications. For purposes of this Agreement, an act, or failure to act, on the Executive’s part shall be considered “willful” or “reckless”only if done, or omitted, by him not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. The Executive’s employment shall not be deemed to have been terminated for “cause”unless the Company shall have (A) given or delivered to the Executive reasonable notice setting forth the reasons for the Company’s intention to terminate the Executive’s employment for “cause,” and (B) provided theExecutive a reasonable opportunity to cure the act or omission that is the basis for the proposed termination for cause, to the extent curable. 

(b) 

“Change in Control” shall mean: 

(i) 

The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either(A) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in theelection of directors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of this Section 1(d), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directlyfrom the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliated Company or (iv) any acquisition by any corporationpursuant to a transaction that complies with Sections 1(b)(iii)(A), 1(b)(iii)(B) and 1(b)(iii)(C); 

(ii) 

Any time at which individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute atleast a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a 

 

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majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, butexcluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation ofproxies or consents by or on behalf of a Person other than the Board; 

(iii) 

Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of itssubsidiaries or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (A) all or substantially all ofthe individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50%of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such BusinessCombination (including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the sameproportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting fromsuch Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50% or more of, respectively, the then-outstandingshares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the BusinessCombination, and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of theaction of the Board providing for such Business Combination; 

(iv) 

A sale or disposition of all or substantially all of the assets of the Company to an unrelated party; or 

 

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(v) 

Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. 

(c)

“Code” shall mean the Internal Revenue Code as of 2005, as amended. 

(d) 

“Disability,” for purposesof this Agreement, shall mean total disability as defined in any long-term disability plan sponsored by the Company in which the Executive participates, or, if there is no such plan or it does not define such term, then it shall mean the physical ormental incapacity of the Executive that prevents him from substantially performing the duties of the office or position to which he was elected or appointed by the Board for a period of at least 180 days and the incapacity is expected to cause deathor last at least one (1) year. 

(e) 

The “Change in Control Date” shall be any date during the term of this Agreement on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if the Executive’semployment or status as an elected officer with the Company is terminated within six (6) months before the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a thirdparty who has taken steps reasonably calculated or intended to effect a Change in Control or (ii) otherwise arose in connection with or anticipation of a Change in Control, then for all purposes of this Agreement the “Change in ControlDate” shall mean the date immediately before the date of such termination. 

(f) 

“Parent” shall mean any entity that directly or indirectly through one or more other entities owns or controls more than 50 percent of thevoting stock or common stock of the Company. 

(g) 

“Subsidiary” shall mean a company 50 percent or more of the voting stock, common stock or other economic interests of which are owned, directly or indirectly, by the Company. 

(h) 

“Board” shall mean the Boardof Directors of the Company; 

 

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(i) 

“ Business” shall mean the business presently or hereafter carried on by the Company in the area of mineral resource exploration and development; 

(j) 

“Stock Option Plan” shall mean the incentive stock option plan of the Company for directors,officers, employees and other service providers of the Company. 

**2.**

**Employment**

(a) 

The Company shall employ the Executive and the Executive shall serve the Company and its subsidiaries as Senior Vice President and CFO or in such other capacity or capacities as may be determined by the Board fromtime to time. 

(b) 

The Executive representsthat he has the required skills and experience to perform the duties required of him as Senior Vice President and CFO and agrees to be bound by the terms and conditions of this Agreement. 

(c) 

The Executive will be employed on a full-time basis forthe Company and will devote himself exclusively to the Business and will not be employed or engaged in any capacity in any other business which is in competition with the Business of the Company, without the prior written approval of the Company.

(d) 

The Executive acknowledges that incarrying out his duties and responsibilities: 

(i) 

the Executive shall comply with all lawful and reasonable instructions as may be given by the Chief Executive Officer of the Company or the Board; 

(ii) 

the Executive will perform his dutieswith the highest level of integrity and in a manner which shall engender the Company’s complete confidence in the Executive’s relationship with other employees of the Company and with all persons dealt with by the Executive in the courseof employment; and 

 

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(iii) 

the Executive will perform his duties in a diligent, loyal, productive and efficient manner and use his best efforts to advance the Business and goodwill of the Company. 

(e) 

The Executive is employed on a full-time basis for theCompany and he understands that the hours of work involved will vary and be irregular and are those hours required to meet the objectives of the employment. 

**3.**

**Compensation and Benefits**

As compensation for the services to be rendered by the Executive to the Company, the Company agrees to provide the remuneration and benefits set out in this clause 3. 

(a) 

***Base Salary and Discretionary Bonus***

The Executive shall be paid a minimum annual base salary of US $120,000.00 to be reviewed annually by the Board. Said salary shall be subject to all statutory and otherdeductions and shall be paid monthly or bi-monthly, in arrears, by check or deposit, or such other periodic installments as may be from time to time agreed. In addition, the Executive is entitled to receive a discretionary performance bonus in suchamount, if any, as the Board in its sole discretion may determine. If a Change in Control occurs, a bonus will automatically become payable and not be less than 40% of the Executive’s annual salary. The minimum base salary shall becomeeffective September 1, 2005. As soon as the Company has raised the sum of $10,000,000 (ten million), to the treasury in private placements, exercise of stock warrants, exercise of stock options, IPO’s or upon Change in Control in which theExecutive retains his current position, which ever occurs first, the annual salary will increase to US $180,000.00. The Executive shall also be paid, at his choosing a combination of cash and/or in common stock (discounted at 10%): 

 
 (i)the sum of $25,000 within 90 days of the filing of the From 10, 
 
 (ii)the sum of $25,000 within 90 days of an approved listing on the Bulletin Board, 
 
 (iii)the sum of $20,000 within 90 days of applying for a listing on the AMEX and 
 

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 (iv)the sum of $50,000 upon approval for trading on the AMEX. 
(b)

***Grant of Stock Options, Shares, and Bonuses***

TheExecutive shall be eligible to receive stock options granted pursuant to the Stock Option Plan, and, as may be effected for bonuses, on such terms and conditions as the Board in its discretion may determine but at a minimum of 100,000 shares peryear. Upon a Change of Control, any and all Common Shares, options, or other forms of securities issued by the Company and beneficially owned by the Executive (whether granted before or after the date of this Agreement) that are unvested,restricted, or subject to any similar restriction that would otherwise require continued ownership by the Executive beyond the Change of Control Date in order to be vested in the hands of the Executive shall vest automatically without further actionby the Board. 

(c) 

***Health (Medical and Vision), Dental,Long Term Disability and Life Insurance***

The Executive shall be entitled to receive and participate in health (medical and vision), dental,long-term disability and life insurance programs as are made available by the Company to other employees holding similar positions of importance to the Company, provided that the Company may modify, suspend, or discontinue any or all of suchbenefits for its employees generally or for any group thereof, without obligation to replace any such modified, discontinued or suspended benefit with any other benefit or to otherwise compensate the Executive in respect thereof. 

 
(d)
***Stock Appreciation Award in the Event of a Change in Control***

In the event of a contemplated Change in Control, the Executive shall become entitled to receive an additional equity stake equal to the equitystake he then holds, contingent upon the occurrence of a Change in Control. Executive’s equity stake shall include all shares, options (vested and unvested), and warrants in Executive’s name or beneficially owned by Executive, and theadditional equity stake shall be provided in kind to the Executive. 

 

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(e)
***Long-term Incentive***

The long-term incentive obligation will require the Company to issue stock options granted pursuant to the Stock Option Plan, 100,000 shares of Company stock per yearwhich will vest at 25% per year on the grant date. 

(f) 

***Signing Bonus***

A signing bonus award of 15,000 shares of restricted common stock will be issued to the Executive within 60 days ofthis agreement. 

**4.**

**Vacation**

The Executive will be entitled to twenty (20) days of vacation for the first five years of employment and twenty-five (25) days afterfive years of employment during each twelve (12) month period plus usual statutory and other public holidays, the timing of such vacation to be mutually agreed upon between the Executive and the Company. In that the spirit of this vacationprovision is that the Executive should take vacation but may, because of the duties required of the Executive, prevent him from taking said vacation, the Executive shall be paid the cash equivalent of any unused vacation entitlement at the end ofeach year. 

**5.**

**Expenses**

The Executive shall be reimbursed by the Company for any business, educational or organizational membership expenses incurred as a result of his workon behalf of the Company. The Company shall reimburse the Executive for such expenses upon presentation of supporting documentation satisfactory to the Company in accordance with the tax principles applicable in the United States for suchreimbursement and the Company’s established reimbursement policies, as those policies may be modified from time to time in the Company’s discretion. Once the Company has raised US $10,000,000 (ten million dollars) after theSeptember 1, 2005 employment agreement date, the Executive will be entitled to receive either a company vehicle or an auto allowance, paid on a monthly basis, equivalent to a monthly lease of a vehicle approved by the Company. 

 

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**6.**

**Terms of the Agreement and Termination**

(a) 

This Agreement shall commence on September 1, 2005 and shall terminate three years hence on September 1, 2008, unless terminated pursuant to the provisions hereof. 

(b) 

The Executive may terminate his employment pursuant tothis Agreement by giving at least two (2) months’ advance notice in writing to the Company. The Company may waive such notice, in whole or in part and if it does so, the Executive’s entitlement to remuneration and benefits pursuant tothis Agreement will cease on the date it waives such notice. 

(c) 

The Executive’s employment shall be terminated upon the death of the Executive whereupon all stock options granted to the Executive shall immediately vest and shall be exercisable by the Executive’s heirs,executors, administrators, or personal representatives in accordance with the terms of the Stock Option Plan. 

 
(d)
The Executive’s employment shall be terminated uponthe Disability of the Executive whereupon all stock options granted to the Executive shall immediately vest and shall be exercisable by the Executive in accordance with the terms of the Stock Option Plan. 

(e) 

In the event of an Effective Change of Control, theExecutive’s employment shall be deemed to have been terminated without cause and the Company shall be obligated to pay the Executive the amount of severance payments calculated in accordance with subparagraph 6(f) hereof in addition to thebenefits of subparagraph 3(b) hereof. 

 
(f)
The Executive’s employment may be terminated withoutcause by majority vote of the Board. In the event that the Executive’s employment is so terminated, or is deemed to have been terminated pursuant to subparagraph 6 (e) herein, without cause, any stock options granted but not vested shallbe deemed to have immediately vested and the Company shall pay to the Executive 36 months salary, in compensation for the Executive’s loss of employment, together with a payment equal to 100% of the greater of any target 

 

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bonus or bonus actually earned for each year in such 24 month period and any other compensation which the Executive is entitled to receive. Substantiallysimilar health related benefits as provided by the company will also continue for a period of 24 months. The Executive shall not have the duty to mitigate damages. For the purpose of calculating such payments, all Federal and State taxes and Federalexcise taxes (parachute taxes) shall be grossed-up such that the Executive receives the amount specified after all taxes have been paid. 

(g) 

The Company may terminate the Executive’s employment without notice or payment in lieu thereof, for cause. 

**7.**

**Notices**

(a) 

Any notice required or permitted to be given to theExecutive shall be sufficiently given if delivered to the Executive personally or if mailed by registered mail to the Executive’s address disclosed on the face page hereof (or such address as the Executive may later provide in writing to theChief Executive Officer or Secretary of the Company). 

(b) 

Any notice required or permitted to be given to the Company shall be sufficiently given if delivered to the Chief Executive Officer or Secretary of the Company personally or if mailed by registered mail to theCompany’s head office at its address disclosed on the face page hereof. 

(c) 

Any notice given by mail shall be deemed to have been given forty-eight hours after the time it is posted. 

**8.**

**Entire Agreement**

This Agreement terminates, replaces and supersedes all prior agreements, oral or written, between the parties hereto. This Agreement contains the final and entireunderstanding and agreement between the parties hereto with respect to the subject matter hereof, and they shall not be bound by any terms, conditions, statements, covenants, representations, or warranties, oral or written, not herein contained withrespect to the subject matter hereof. 

 

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**9.**

**Headings**

The headings in this Agreement are for convenience of reference only, and under no circumstances should they be construedas being a substantive part of this Agreement nor shall they limit or otherwise affect the meaning hereof. 

**10.**

**Warranty**

The parties represent and warrantthat there are no restrictions, agreements or limitations on their rights or ability to enter into and perform the terms of this Agreement. 

**11.**

**Severability**

In the eventthat any provision of this Agreement is found to be void, invalid, illegal or unenforceable by a court of competent jurisdiction, such finding will not affect any other provision of this Agreement. If any provision of this Agreement is so broad asto be unenforceable, such provision shall be interpreted to be only so broad as is enforceable. 

**12.**

**Modification**

Any modification of thisAgreement must be in writing and signed by both the Executive and the Company or it shall have no effect and shall be void. 

**13.**

**Waiver**

The wavier by either party of anybreach or violation of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach or violation. 

 

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**14.**

**Assignment of Rights**

The rights which accrue to the Company under this Agreement shall pass to its successors or assigns. Therights of the Executive under this Agreement are not assignable or transferable in any manner. 

**15.**

**Independent Legal Advice**

The Executiveacknowledges that he has read and understands this Agreement, and acknowledges that he has had the opportunity to obtain independent legal advice with respect to it. 

**16.**

**Time of Essence**

Time shall be of the essence of this Agreement. 

**17.**

**Governing Law**

The Agreement shall be governedby and construed in accordance with the laws of the State of Idaho. Any dispute between the Company and Executive shall be brought exclusively in the State or Federal Courts located in Idaho State. In the event of such dispute, the prevailing partyshall be entitled to recover its reasonable attorney’s fees and costs. 

**18.**

**Indemnification**

The Executive, including theheirs, executors, administrators, or estate of such person, shall be indemnified by the Company to the full extent permitted by the Idaho Business Corporations Act against any liability, judgment, fine, amount paid in settlement, costs and expenses,including attorney fees, incurred as a result of any claim arising in connection with such person’s conduct in his capacity, or in connection with his status as an officer in performance of his duties for the Company. The indemnificationprovided by this provision shall not be exclusive of any other rights to which he may be entitled under any other By-laws or agreement, vote of disinterested Directors, or otherwise, and shall not limit in any way any right that the Company may haveto make different or further indemnification with respect to the same or different person or classes of persons. 

 

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**IN WITNESS WHEREOF**the parties have duly executed this Agreement effective as of the date first written above.

**STERLING MINING COMPANY**

 
 By: 
/s/ James N. Meek
  
/s/ Ray DeMotte
James N. Meek  Ray DeMotte  President & CEO
 

/s/ Kevin G. Shiell
Kevin G. Shiell
/s/ Carol Stephan
Carol Stephan
/s/ Dave Waisman
Dave Waisman
ATTEST: 

 

/s/ Mike Mooney
Mike Mooney, Secretary
 

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