Document:

WWW.EXFILE.COM, INC. -- 14508 -- SCHNITZER STEEL INDUSTRIES, INC. -- EXHIBIT 10.5 TO FORM 8-K

     

    EXHIBIT
      10.5

    

    THIRD
      AMENDED SHARED SERVICES AGREEMENT

     

    This
      THIRD AMENDED SHARED SERVICES AGREEMENT (this “Agreement”) is made and entered
      into as of July 26, 2006 by and among Schnitzer Steel Industries, Inc., an
      Oregon corporation (“SSI”), Schnitzer Investment Corp., an Oregon corporation
      (“SIC”), and Island Equipment Company, Inc., a corporation organized under the
      laws of the Territory of Guam (“IECO”).

     

    RECITALS

     

    SSI,
      SIC
      and IECO are parties to that certain Second Amended Shared Services Agreement
      dated September 13, 1993, as amended by that certain Amendment to Second Amended
      Shared Services Agreement dated September 1, 1994 (together, the “Prior
      Agreement”). Pursuant to the Prior Agreement, certain companies controlled by
      the Schnitzer Family, including SSI, SIC and IECO, as well as certain other
      related parties, agreed to share services and costs over a number of management
      and administrative areas. The Prior Agreement has been terminated with respect
      to all parties other than SSI, SIC and IECO. Over the last 11⁄2 years, SSI, SIC
      and IECO have been reducing the sharing of services between the three companies,
      and have now eliminated substantially all sharing of services. In certain
      limited areas, however, the parties expect to continue to share services and
      costs and, accordingly, desire to enter into this Agreement to evidence their
      agreement regarding this limited sharing of services going forward.

     

    NOW,
      THEREFORE, in consideration of the terms and conditions contained herein, SSI,
      SIC and IECO agree to amend, restate and supersede the Prior Agreement in its
      entirety as follows:

     

    1.    Environmental
      Management Services.    SSI
      employees
      who work on environmental matters have under the Prior Agreement been involved
      in managing environmental compliance and remediation at a number of sites on
      behalf of SIC. To maintain continuity and utilize accumulated knowledge and
      experience with respect to these sites, SSI agrees to provide to SIC the
      services of employees in its environmental department (“SSI Environmental
      Employees”) as reasonably requested by SIC and as the time of such employees is
      reasonably available consistent with the duties of such employees as SSI
      employees to continue to handle SIC’s environmental compliance and remediation
      matters consistent with past practice. In exchange, SIC agrees to reimburse
      SSI
      for such services in accordance with this Agreement and to consult with SSI
      Environmental Employees with respect to properties for which SSI has or may
      have
      liability to or shares or may share liability with SIC;
      provided, however, that SIC will not be obligated to so consult with SSI
      Environmental Employees if SIC makes a good faith determination that its and
      SSI’s
      interests are not the same with regard to liability, causation, or similar
      issues.
      If SSI
      Environmental Employees provide services to SIC with respect to properties
      for
      which SSI has or may have liability to or shares or may
      share
      liability with SIC, only one-half of the time spent performing such services
      shall be considered time spent performing services for SIC under this
      Agreement.

     

    2.    Employee
      Benefits Services.    SIC
      employees
      have in the past participated in retirement, health and other employee benefit
      plans and programs sponsored by SSI and 

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    administered
      by employees of SSI (“SSI Benefits Employees”). Effective as of June 30, 2006,
      participation by SIC employees in SSI benefit plans and programs has ceased.
      However, SSI Benefits Employees are expected to continue to provide
      administrative services to SIC in connection with transition issues. In
      exchange, SIC agrees to reimburse SSI for such services in accordance with
      this
      Agreement. In addition, SSI has retained an outside consultant to assist with
      employee education on the recent retirement plan changes for both SSI and SIC,
      and SIC agrees to reimburse SSI for a pro rata portion of the cost of that
      consultant based on the percentage of the total employees participating in
      SSI’s
      401(k) plan as of June 29, 2006 consisting of SIC employees.

     

    3.    Payroll
      Services.    SSI
      employees
      who administer payroll for SSI (“SSI Payroll Employees” and, together with the
      SSI Environmental Employees and the SSI Benefits Employees, “SSI Employees”)
      have under the Prior Agreement administered payroll for SIC and IECO. IECO
      has
      entered into an agreement to sell substantially all of its assets in a
      transaction (the “IECO Sale”) that is expected to close in the near future.
      Because of the pending IECO Sale, IECO has not transitioned its payroll
      administration away from SSI. SSI agrees to provide to IECO the services of
      SSI
      Payroll Employees to continue to handle IECO’s payroll consistent with past
      practice. Upon completion of the IECO Sale, but in any event no later than
      December 31, 2006, all such services shall cease except for necessary year-end
      reporting. Although SIC payroll is no longer administered by SSI Payroll
      Employees, remaining transition issues and year-end reporting may require SSI
      Payroll Employees to perform some services for SIC. In exchange for all such
      services, SIC and IECO agree to reimburse SSI in accordance with this
      Agreement.

     

    4.    Performance
      Standard.    SSI
      Employees
      will perform services for SIC and IECO as contemplated by this Agreement with
      the same degree of care, skill and prudence customarily exercised in performing
      services for SSI. SSI will have no liability under this Agreement for damage
      or
      loss of any type suffered by SIC, IECO or any third party as a result of the
      performance of the services provided under this Agreement, and SSI will not
      be
      responsible for general, special, indirect, incidental or consequential damages
      that SIC, IECO or any third party may incur or experience on account of entering
      into or relying on this Agreement. No third party is intended to be a
      third-party beneficiary under this Agreement.

     

    5.    Determination
      of Charges.

     

    5.1    Salary
      Charge.    At
      the end of
      each month, SSI Employees shall compile the number of hours of time spent
      performing services for SIC or IECO (the “Shared Time Hours”). An SSI Employee’s
      hourly rate (the “Hourly Rate”) will equal his or her annual base salary divided
      by 2,080. The SSI Employee’s salary charge to SIC or IECO (the “Salary Charge”)
      will equal the Shared Time Hours for the respective party multiplied by the
      SSI
      Employee’s Hourly Rate.

     

    5.2    Burden
      Charge.    An
      SSI
      Employee’s burden charge to SIC or IECO for each month (the “Burden Charge”)
      will equal thirty percent (30%) of the Salary Charge to such party for the
      month.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    5.3    Auto
      Allowance Charge.    The
      auto
      allowance paid to each SSI Employee (computed on an annual basis) will be
      divided by 2,080, and the resulting quotient will be multiplied by the Shared
      Time Hours for each of SIC and IECO to establish the auto allowance charge
      to
      such party (the “Auto Allowance Charge”). If an SSI Employee is provided with an
      automobile by SSI, the auto allowance for the purpose of the foregoing sentence
      will equal the annual lease value calculated in accordance with the Internal
      Revenue Code and Treasury Department Regulations.

     

    5.4    Space
      Charge.    The
      number of
      square feet of office space occupied by each SSI Employee, if any, multiplied
      by
      the then current annual full-service, square-foot lease rate on the corporate
      headquarters of SSI will be divided by 2,080, and the resulting quotient will
      be
      multiplied by the Shared Time Hours for each of SIC and IECO to establish the
      space charge to such party (the “Space Charge”).

     

    5.5    Actual
      Charge.    The
      sum of
      the Salary Charge, Burden Charge, Auto Allowance Charge and Space Charge of
      each
      SSI Employee with respect to each of SIC and IECO will equal the SSI Employee’s
      actual charge to such party (the “Actual Charge”).

     

    5.6    Billable
      Charges.    An
      SSI
      Employee’s Actual Charge to SIC or IECO multiplied by 1.15, which represents the
      overhead costs and profit margin attributed to the SSI Employee, will equal
      the
      SSI Employee’s billable charge (the “Billable Charge”), and on a monthly basis
      SIC and IECO will each be billed the sum of the Billable Charges of each SSI
      Employee who performed services for it. All Billable Charges shall be due and
      payable within 30 days after invoice.

     

    6.    Term.    The
      initial
      term of this Agreement shall end on December 31, 2007. This Agreement will
      automatically be renewed for additional six-month terms thereafter unless either
      party gives written notice of termination to the other party not less than
      sixty
      days prior to a renewal date.

     

    7.    Miscellaneous.

     

    7.1    Status
      of Parties.    Nothing
      contained in this Agreement will constitute either party as an agent, general
      representative, partner, joint venturer or employee of the other party or any
      subsidiary or associated company of the other party for any purpose, and SSI
      will render services under this Agreement as an independent contractor. No
      party
      will have the power to bind the other party unless and except as, in respect
      of
      any specific matters, it is hereafter expressly authorized to do so in writing
      by such other party.

     

    7.2    Confidentiality.    SSI,
      SIC and
      IECO each agree to maintain the confidentiality of all nonpublic information,
      oral or written, that any other party considers to be secret, sensitive or
      confidential and that is or was acquired in the performance or receipt of
      services under this Agreement, and none of SSI, SIC or IECO, nor any employee
      or
      agent of any of them, will disclose such confidential information to any third
      party without the prior written consent of SSI, SIC or IECO, as applicable,
      or
      as required by law.

     

    7.3    Assignment.    No
      party will
      assign or transfer any of its rights under this Agreement without the prior
      written consent of the other party.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    7.4    Entire
      Agreement.    This
      Agreement supersedes in its entirety the Prior Agreement and represents the
      entire agreement among the parties regarding its subject matter and supersedes
      all prior negotiations and agreements regarding the subject matter. There are
      no
      other understandings, provisions, representations or warranties, express or
      implied, among the parties.

     

    7.5    Amendment.    Any
      and all
      amendments, supplements and modifications to this Agreement will be in writing
      and signed by the parties.

     

    7.6    Notices.    All
      notices
      and other communications under this Agreement will be transmitted in writing
      by
      registered or certified mail, return receipt requested, by Express Mail, air
      courier service, facsimile, electronic mail or other express delivery service
      (receipt requested) or by prepaid telegram, addressed to the respective party
      at
      the address given below. Such addresses may be changed by notice from one party
      to the other party.

     

    (a)    If
      to
      SSI:

     

    Schnitzer
      Steel Industries, Inc.

    3200
      NW
      Yeon Avenue

    Portland,
      Oregon 97210

    Attention:
      General Counsel

    Facsimile:
      (503) 471-4417

    E-mail:
      generalcounsel@schn.com

     

    (b)    If
      to
      SIC:

     

    Schnitzer
      Investment Corp.

    1211
      SW
      Fifth Avenue, Suite 2250

    Portland,
      Oregon 97204

    Attention:
      Office Manager

    Facsimile:
      (503) 595-8315

    E-mail:
      dparker@schninv.com

     

    (c)    If
      to
      IECO:

     

    Island
      Equipment Company, Inc.

    1211
      SW
      Fifth Avenue, Suite 2250

    Portland,
      Oregon 97204

    Attention:
      Office Manager

    Facsimile:
      (503) 595-8315

    E-mail:
      dparker@schninv.com

     

    7.7    Choice
      of Law.    This
      Agreement will be governed by, and all disputes arising under this Agreement
      will be resolved in accordance with, the law of the State of
      Oregon.

     

    7.8    Severability.    If
      any
      provision of this Agreement will, to any extent, be invalid or unenforceable,
      the remainder of this Agreement will not be affected thereby and will be valid
      and enforceable to the fullest extent permitted by law.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    7.9    Headings.    The
      section
      headings in this Agreement are for convenience or reference only and will not
      be
      given any effect in the interpretation of this Agreement.

     

    7.10    Counterparts.    This
      Agreement may be executed in counterparts, each of which will be considered
      an
      original, but all of which together will constitute the same
      instrument.

     

     

     

    
      	 	SCHNITZER STEEL INDUSTRIES,
              INC. 
	 	 
	 	By:
              /s/ Richard C. Josephson     
                
	 	Name:
              Richard C. Josephson      
                
	 	Title:
              Secretary                              
               
	 	 
	 	SCHNITZER INVESTMENT CORP 
	 	 
	 	By:
              /s/ Anton
              Pardini                   
                
	 	Name:Anton
              Pardini                    
                
	 	Title:
              President                              
                
	 	 
	 	
              ISLAND
                EQUIPMENT COMPANY, INC. 

            
	 	 
	 	By:
              /s/ Carl
              Rasmussen                  
	 	Name:
              Carl
              Rasmussen                   
	 	Title:
              Vice
              President                        

    

     

     

     

     

    
      
        
        

      

      
        -5-Exhibit 10.1

    
      

      

    

     

    OPTION
      TO PURCHASE AGREEMENT

     

    THIS
      AGREEMENT
      made as
      of the 31st
      day of
      December 2005. 

     

    BETWEEN:
      

     

    ANTHONY
      SAI CHEONG TAI,
      an
      individual, residing at 40-6588 Barnard Drive, Richmond, British Columbia,
      Canada V7C 5R8 

     

    (hereinafter
      referred to as the "Vendor")

     

    PARTIES
      OF THE FIRST PART 

     

    AND:
      

     

    EASTERN
      EXPLORATION COMPANY.,
      a
      company
      duly incorporated under the laws of the State of Delaware, having an office
      at
      40-6588 Barnard Drive, Richmond, British Columbia, Canada V7C 5R8 

     

    (hereinafter
      referred to as "EEC") 

     

    OF
      THE SECOND PART

     

    WHEREAS: 

     

    
      	
              A. 
                    

            	
              Vendor
                is the sole beneficial owner of 100% of the mineral claims Map Staked
                License 11334M located on the Ship Harbour Claim Block, Port Hope
                Simpson
                Area in Eastern Labrador, Newfoundland Canada as described in Schedule
                "A"
                attached hereto and forming part hereof (hereinafter together with
                any
                form of successor or substitute mineral tenure called the "Claim").
                

            
	
               

            
	
              B. 
                    

            	
              The
                parties now wish to enter into an agreement granting to EEC the exclusive
                right and option to acquire an undivided 100% of the right, title
                and
                interest in and to the Claim on the terms and conditions as hereinafter
                set forth. 

            

    

     

    NOW
      THEREFORE THIS AGREEMENT WITNESSES
      that in
      consideration of the premises and the mutual promises, covenants and agreements
      herein contained, the parties hereto agree as follows: 

     

    
      	
              1. 
                    

            	
              INTERPRETATION 

            
	
               

            
	
              1.1 
                    

            	
              In
                this Agreement: 

            
	
               

            
	
               

            	
              (a) 
                    

            	
              "Effective
                Date" means the date that both parties have signed this Agreement;
                

            
	
               

            
	
               

            	
              (b) 
                    

            	
              "Mineral
                Products" means the products derived from operating the Claim as
                a mine;
                

            
	
               

            
	
               

            	
              (c) 
                    

            	
              "Net
                Smelter Returns" means the proceeds received by EEC from any smelter
                or
                other purchaser from the sale of any ores, concentrates or minerals
                produced from the Claim after deducting from such proceeds the following
                charges only to the extent that they are not deducted by the smelter
                or
                other purchaser in computing the proceeds: 

            
	
               

            
	
               

            	
               

            	
              (i) 
                    

            	
              the
                cost of transportation of the ores, concentrates or minerals from
                the
                Claim to such smelter or other purchaser, including related transport;
                

            
	
               

            
	
               

            	
               

            	
              (ii) 
                    

            	
              smelting
                and refining charges including penalties; and 

            
	
               

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    -2-

     

    
      	
               

            	
               

            	
              (iii)

            	
              marketing
                costs. 

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
              (d)

            	
              "Option"
                means the option granted by Vendor to EEC pursuant to Section 3;
                

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
              (e) 

            	
              "Operating
                the Claim as a mine" or "Operation of the Claim as a mine" means
                any or
                all of the mining, milling, smelting, refining or other recovery
                of ores,
                minerals, metals or concentrates or values thereof, derived from
                the
                Claim; 

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
              (f)

            	
              "Dollars
                ($)" means legal currency of Canada.

            

    

    

    
      	
              2. 
                    

            	
              REPRESENTATIONS
                AND WARRANTIES 

            
	
               

            
	
              2.1 
                    

            	
              EEC
                represents and warrants to Vendor that: 

            
	
               

            
	
               

            	
              (a) 
                    

            	
              EEC
                is a body corporate duly incorporated, organized and validly subsisting
                under the laws of its incorporating jurisdiction; 

            
	
               

            
	
               

            	
              (b) 
                    

            	
              EEC
                has full power and authority to carry on its business and to enter
                into
                this Agreement and any agreement or instrument referred to or contemplated
                by this Agreement; 

            
	
               

            
	
               

            	
              (c) 
                    

            	
              neither
                the execution and delivery of this Agreement nor any of the agreements
                referred to herein or contemplated hereby, nor the consummation of
                the
                transactions hereby contemplated will conflict with, result in the
                breach
                of or accelerate the performance required by any agreement to which
                EEC is
                a party; and 

            
	
               

            
	
               

            	
              (d) 
                    

            	
              the
                execution and delivery of this Agreement and the agreements contemplated
                hereby will not violate or result in the breach of laws of any
                jurisdiction applicable or pertaining thereto or of EEC's contenting
                documents. 

            
	
               

            
	
              2.2 
                    

            	
              Vendor
                represents and warrants to EEC: 

            
	
               

            
	
               

            	
              (a) 
                    

            	
              the
                Claim consists of the mineral claims Map Staked License 11334M located
                on
                the Ship Harbour Claim Block, Port Hope Simpson Area in Eastern Labrador,
                Newfoundland Canada which has been duly and validly staked and recorded,
                as accurately described in Schedule "A", is presently in good standing
                under the laws of the jurisdiction in which it is located and, except
                as
                set forth herein, is free and clear of all liens, charges and
                encumbrances; 

            
	
               

            
	
               

            	
              (b) 
                    

            	
              Vendor
                is the sole beneficial owner of a 100% interest in and to the Claim
                and
                has the exclusive right to enter into this Agreement and all necessary
                authority to dispose of an undivided 100% interest in and to the
                Claim in
                accordance with the terms of this Agreement; 

            
	
               

            
	
               

            	
              (c) 
                    

            	
              no
                person, firm or corporation has any proprietary or possessory interest
                in
                the Claim other than Vendor and no person is entitled to any royalty
                or
                other payment in the nature of
                rent or royalty on any minerals, ores, metals or concentrates or
                any other
                such products removed from the Claim; 

            
	
               

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      -3-

    

     

    
      	
               

            	
              (d) 
                    

            	
              neither
                the execution and delivery of this Agreement nor any of the agreements
                referred to herein or contemplated hereby, nor the consummation of
                the
                transactions hereby contemplated will conflict with, result in the
                breach
                of or accelerate the performance required by any agreement to which
                Vendor
                is a party or by which he is bound; 

            
	
               

            
	
               

            	
              (e) 
                    

            	
              the
                execution and delivery of this Agreement and the agreements contemplated
                hereby will not violate or result in the breach of the laws of any
                jurisdiction applicable or pertaining thereto. 

            
	
               

            

    

    

    
      	
              2.3 
                    

            	
              The
                representations and warranties hereinbefore set out are conditions
                on
                which the parties have relied in entering into this Agreement and
                will
                survive the acquisition of any interest in the Claim by EEC and each
                party
                will indemnify and save the other party harmless from all loss, damage,
                costs, actions and suits arising out of or in connection with any
                breach
                or any representation, warranty, covenant, agreement or condition
                made by
                the other party and contained in this Agreement. 

            
	
               

            
	
              3. 
                    

            	
              OPTION 

            
	
               

            
	
              3.1 
                    

            	
              Vendor
                hereby gives and grants to EEC the sole and exclusive right and option
                to
                acquire an undivided 100% of the right, title and interest of Vendor
                in
                and to the Claim, subject only to Vendor receiving the annual payments
                in
                accordance with the terms of this Agreement for and in consideration
                of
                the following: 

            
	
               

            
	
               

            	
              (a) 
                    

            	
              EEC,
                or its permitted assigns, incurring exploration expenditures on the
                Claims
                of a minimum of $12,500 on or before March 31, 2007;
                and

            
	
               

            
	
               

            	
              (b) 
                    

            	
              EEC,
                or its permitted assigns, incurring exploration expenditures on the
                Claims
                of a further $45,000 (for aggregate minimum exploration expenses
                of
                $57,500) on or before March 31, 2008; and 

            
	
               

            
	
              3.2 
                    

            	
              Upon
                exercise of the Option, EEC agrees to pay Vendor, commencing July
                1, 2008,
                the sum of $35,000 per annum for so long as EEC, or its permitted
                assigns,
                holds any interest in the Claims. Failure to make any such annual
                payment
                shall result in termination of this Agreement in accordance with
                Section
                5.1. 

            
	
               

            
	
              4. 
                    

            	
              RIGHT
                OF ENTRY 

            
	
               

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      -4-

    

     

    
      	
              4.1 
                    

            	
              Until
                such time as the Option has been exercised, EEC, its employees, agents
                and
                independent contractors, will have the sole and exclusive right and
                option
                to: 

            
	
               

            
	
               

            	
              (a) 
                    

            	
              enter
                upon the Claims; 

            
	
               

            
	
               

            	
              (b) 
                    

            	
              have
                exclusive and quiet possession thereof; 

            
	
               

            
	
               

            	
              (c) 
                    

            	
              do
                such prospecting, exploration, development or other mining work thereon
                and thereunder as EEC in its sole discretion may consider advisable;
                and
                

            
	
               

            
	
               

            	
              (d) 
                    

            	
              bring
                and erect upon the Claims such facilities as EEC may consider advisable.
                

            
	
               

            
	
              5. 
                    

            	
              TERMINATION 

            
	
               

            
	
              5.1 
                    

            	
              Subject
                to Section 8, this Agreement and the Option will terminate:
                

            
	
               

            
	
               

            	
              (a) 
                    

            	
              on
                March 31, 2007 at 11:59 P.M., unless on or before that date, EEC
                has
                incurred exploration expenditures of a minimum of $12,500 on the
                Claims;
                

            
	
               

            
	
               

            	
              (b) 
                    

            	
              on
                March 31, 2008 at 11:59 P.M., unless EEC has incurred a further $45,000
                of
                exploration expenditures on the Claims (for an aggregate of $57,500);
                or
                

            
	
               

            
	
               

            	
              (c) 
                    

            	
              at
                11:59 P.M. on July 1 of each and every year, commencing on July 1,
                2008,
                unless EEC or its successor or assign has paid to Vendor the sum
                of
                $35,000 on or before that date. 

            
	
               

            
	
              6. 
                    

            	
              COVENANTS
                OF VENDOR 

            
	
               

            
	
              6.1 
                    

            	
              Vendor
                will: 

            
	
               

            
	
               

            	
              (a) 
                    

            	
              not
                do any act or thing which would or might in any way adversely affect
                the
                rights of EEC hereunder; 

            
	
               

            
	
               

            	
              (b) 
                    

            	
              make
                available to EEC and its representatives all records and files in
                the
                possession of Vendor relating to the Claims and permit EEC and its
                representatives at its own expense to take abstracts therefrom and
                make
                copies thereof; and 

            
	
               

            
	
               

            	
              (c) 
                    

            	
              promptly
                provide EEC with any and all notices and correspondence from government
                agencies in respect of the Claims. 

            
	
               

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      -5-

    

     

    
      	
              7. 
                    

            	
              COVENANTS
                OF EEC 

            
	
               

            
	
              7.1 
                    

            	
              EEC
                will: 

            
	
               

            
	
               

            	
              (a) 
                    

            	
              keep
                the Claims free and clear of all liens, charges and encumbrances
                arising
                from their operations hereunder and in good standing by the doing
                and
                filing of all necessary work and by the doing of all other acts and
                things
                and making all other payments which may be necessary in that regard;
                

            
	
               

            
	
               

            	
              (b) 
                    

            	
              permit
                Vendor, or its representatives duly authorized by it in writing,
                at their
                own risk and expense, access to the Claims at all reasonable times
                and to
                all records prepared by EEC in connection with work done on or with
                respect to the Claims; 

            
	
               

            
	
               

            	
              (c) 
                    

            	
              conduct
                all work on or with respect to the Claims in a careful and miner-like
                manner and in compliance with all applicable Federal, Provincial
                and local
                laws, rules, orders and regulations, and indemnify and save Vendor
                harmless from any and all Claims, suits, actions made or brought
                against
                it as a result of work done by EEC on or with respect to the Claims;
                and
                

            
	
               

            
	
               

            	
              (d) 
                    

            	
              obtain
                and maintain, or cause any contractor engaged hereunder to obtain
                and
                maintain, during any period in which active work is carried out hereunder,
                adequate insurance. 

            
	
               

            
	
              8. 
                    

            	
              EXERCISE
                OF OPTION 

            
	
               

            
	
              8.1 
                    

            	
              Once
                EEC has incurred the exploration expenditures, and made the payments
                set
                out in Section 3.1, EEC will, subject to the right of Vendor to receive
                the obligation of EEC to make the annual payments set out in Section
                3.2,
                own an undivided 100% of Vendor's right, title, and interest in and
                to the
                Claims. 

            
	
               

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      -6-

    

     

    
      	
               

            
	
              9. 
                    

            	
              OBLIGATIONS
                OF EEC AFTER TERMINATION 

            
	
               

            
	
              9.1 
                    

            	
              In
                the event of the termination of the Option, EEC will: 

            
	
               

            
	
               

            	
              (a) 
                    

            	
              leave
                the Claims in good standing for a minimum of one (1) year under all
                applicable legislation, free and clear of all liens, charges and
                encumbrances arising from this Agreement or their operations hereunder
                and
                in a safe and orderly condition; 

            
	
               

            
	
               

            	
              (b) 
                    

            	
              deliver
                to Vendor within 60 days of its written request a comprehensive report
                on
                all work carried out by EEC on the Claims (limited to factual matter
                only)
                together with copies of all maps, drill logs, assay results and other
                technical data compiled by EEC with respect to the Claims;
                

            
	
               

            
	
               

            	
              (c) 
                    

            	
              have
                the right, and obligation on demand made by Vendor, to remove from
                the
                Claims within six (6) months of the effective date of termination
                all
                facilities erected, installed or brought upon the Claims by or at
                the
                instance of EEC provided that at the option of Vendor, any or all
                of
                facilities not so removed will become the property of Vendor; and
                

            
	
               

            
	
               

            	
              (d) 
                    

            	
              deliver
                to Vendor a duly executed transfer in registrable form of an undivided
                100% right, title and interest in and to the Claims in favor of Vendor,
                or
                its nominee. 

            
	
               

            
	
              10. 
                    

            	
              TRANSFER
                OF TITLE 

            
	
               

            
	
              10.1 
                    

            	
              Upon
                the request of EEC, Vendor will deliver to EEC a duly executed transfer
                in
                registrable form of an undivided 100% of Vendor's right, title and
                interest in and to the Claims in favor of EEC which EEC will be entitled
                to register against title to the Claims provided that transfer of
                legal
                title to the Claims as set forth in this Subsection 10.1 is for
                administrative convenience only and beneficial ownership of an undivided
                100% interest in the Claims will pass to EEC only in accordance with
                the
                terms and conditions of this Agreement. 

            
	
               

            
	
              11. 
                    

            	
              REGISTRATION
                OF AGREEMENT 

            
	
               

            
	
              12.1 
                    

            	
              Notwithstanding
                Section 10 of this Agreement, EEC or Vendor will have the right at
                any
                time to register this Agreement or a Memorandum thereof against title
                to
                the Claims. 

            
	
               

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      -7-

    
      	
              12. 
                    

            	
              DISPOSITION
                OF CLAIMS 

            
	
               

            
	
              12.1 
                    

            	
              EEC
                may at any time sell, transfer or otherwise dispose of all or any
                portion
                of its interest in and to the Claims and this Agreement provided
                that, at
                any time, EEC has first obtained the consent in writing of Vendor,
                such
                consent not to be unreasonably withheld and further provided that,
                at any
                time during the currency of this Agreement, any purchaser, grantee
                or
                transferee of any such interest will have first delivered to Vendor
                its
                agreement related to this Agreement and to the Claims, containing:
                

            
	
               

            
	
               

            	
              (a) 
                    

            	
              a
                covenant with Vendor by such transferee to perform all the obligations
                of
                EEC to be performed under this Agreement in respect of the interest
                to be
                acquired by it from EEC, and 

            
	
               

            
	
               

            	
              (b) 
                    

            	
              a
                provision subjecting any further sale, transfer or other disposition
                of
                such interest in the Claims and this Agreement or any portion thereof
                to
                the restrictions contained in this Subsection 12.1. 

            
	
               

            
	
              12.2 
                    

            	
              The
                provisions or Subsection 13.1 of this Agreement will not prevent
                either
                party from entering into an amalgamation or corporate reorganization
                which
                will have the effect in law of the amalgamated or surviving company
                possessing all the property, rights and interests and being subject
                to all
                the debts, liabilities and obligations of each amalgamating or predecessor
                company. 

            
	
               

            

    

    

    
      	
              13.
                

            	
              ABANDONMENT
                OF PROPERTY 

            
	
               

            	
               

            
	
              13.l
                

            	
              EEC
                shall have the unfettered right at any time after the exercise of
                the
                Option to abandon all or any part of its interest in the Claims by
                delivering a notice in writing of their intention to do so to Vendor,
                such
                notice to list the part or parts of the Claims to be abandoned, and
                if
                within 30 days of receipt of such notice Vendor delivers to EEC a
                notice
                ("Reacquisition Notice") stating its intention to reacquire all or
                part or
                parts of the Claims, EEC will deliver to Vendor duly executed recordable
                transfers of its interest in such part or parts of the Claims as
                Vendor
                has set forth in the Reacquisition Notice, such part or parts to
                be in
                good standing for at least one year beyond the date of delivery of
                such
                transfers and to be free and clear of all liens, charges, and encumbrances
                arising from the operations of EEC or its agents or subcontractors
                hereunder. 

            
	
               

            	 
	
              14. 
                    

            	
              CONFIDENTIAL
                NATURE OF INFORMATION 

            
	
               

            
	
              15.1 
                    

            	
              The
                parties agree that all information obtained from the work carried
                out
                hereunder and under the operation of this Agreement will be the exclusive
                property of the parties and will not be used other than for the activities
                contemplated hereunder except as required by law or by the rules
                and
                regulations of any regulatory authority having jurisdiction, or with
                the
                written consent of both parties, such consent not to be unreasonably
                withheld. Notwithstanding the foregoing, it is understood and agreed
                that
                a party will not be liable to the other party for the fraudulent
                or
                negligent disclosure of information by any of its employees, servants
                or
                agents, provided that such party has taken reasonable steps to ensure
                the
                preservation of the confidential nature of such information.
                

            
	
               

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      -8-

    

    

    
      	
              16. 
                    

            	
              FURTHER
                ASSURANCES 

            
	
               

            
	
              16.1 
                    

            	
              The
                parties hereto agree that they and each of them will execute all
                documents
                and do all acts and things within their respective powers to carry
                out and
                implement the provisions or intent of this Agreement. 

            
	
               

            
	
              17. 
                    

            	
              NOTICE 

            
	
               

            
	
              17.1 
                    

            	
              Any
                notice, direction or other instrument required or permitted to be
                given
                under this Agreement will be in writing and will be given by the
                delivery
                or the same or by mailing the same by prepaid registered or certified
                mail
                in each case addressed as follows: 

            
	
               

            
	
               

            	
              (a) 
                    

            	
              if
                to Vendor 

            
	
               

            	
               

            	
              40-6588
                Barnard Drive, Richmond, British Columbia, Canada V7C 5R8
                

            
	
               

            	
               

            	 
	
               

            	
               

            	
              Attention:
                Anthony Sai Cheong Tai

            
	
               

            	
               

            	
               

            
	
               

            	
              (b) 
                    

            	
              if
                to Eastern
                Exploration Company 

            
	
               

            	
               

            	
              40-6588
                Barnard Drive, Richmond, British Columbia, Canada V7C
                5R8

            
	
               

            	
               

            	 
	
               

            	
               

            	 
	
               

            

    

    

    
      	
              l7.2
                

            	
              Any
                notice, direction or other instrument aforesaid will, if delivered,
                be
                deemed to have been given and received on the day it was delivered,
                and if
                mailed, be deemed to have been given and received on the fifth business
                day following the day of mailing, except in the event of disruption
                of the
                postal services in which event notice will be deemed to be received
                only
                when actually received. 

            
	
               

            	 
	
              17.3 
                    

            	
              Any
                party may at any time give to the other notice in writing of any
                change of
                address of the party giving such notice and from and after the giving
                of
                such notice, the address or addresses therein specified will be deemed
                to
                be the address of such party for the purpose of giving notice hereunder.
                

            
	
               

            
	
              18. 
                    

            	
              HEADINGS 

            
	
               

            
	
              18.1 
                    

            	
              The
                headings to the respective sections herein will not be deemed part
                of this
                Agreement but will be regarded as having been used for convenience
                only.
                

            
	
               

            
	
              19. 
                    

            	
              DEFAULT 

            
	
               

            
	
              19.1 
                    

            	
              If
                any party (a "Defaulting Party") is in default of any requirement
                herein
                set forth other than the provisions of Section 5 for which notice
                of
                default need not be given, the party affected by such default will
                give
                written notice to the defaulting Party specifying the default and
                the
                Defaulting Party will not lose any rights under this Agreement, unless
                within 30 days after the giving of notice of default by the affected
                party
                the Defaulting Party has cured the default by the appropriate performance
                and if the Defaulting Party fails within such period to cure any
                such
                

            
	
               

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      -9-

    

     

    
      	
               

            	
              default,
                the affected party will be entitled to seek any remedy it may have
                on
                account of such default. 

            
	
               

            	
               

            
	
              20. 
                    

            	
              PAYMENT 

            
	
               

            
	
              20.1 
                    

            	
              All
                references to monies hereunder will be in Canadian funds except where
                otherwise designated. All payments to be made to any party hereunder
                will
                be mailed or delivered to such party at its address for notice purposes
                as
                provided herein, or for the account of such party at such bank or
                banks in
                Canada as such party may designate from time to time by written notice.
                Said bank or banks will be deemed the agent of the designating party
                for
                the purpose of receiving and collecting such payment. 

            
	
               

            
	
              21. 
                    

            	
              ENUREMENT 

            
	
               

            
	
              21.1 
                    

            	
              Subject
                to Section 13, this Agreement will ensure to the benefit of and be
                binding
                upon the parties hereto and their respective successors and permitted
                assigns. 

            
	
               

            
	
              22. 
                    

            	
              TERMS 

            
	
               

            
	
              22.1 
                    

            	
              The
                terms and provisions of this Agreement shall be interpreted in accordance
                with the laws of British Columbia. 

            
	
               

            
	
              23. 
                    

            	
              FORCE
                MAJEURE 

            
	
               

            
	
              23.1 
                    

            	
              No
                party will be liable for its failure to perform any of its obligations
                under this Agreement due to a cause beyond its control (except those
                caused by its own lack of funds) including, but not limited to acts
                of
                God, fire, flood, explosion, strikes, lockouts or other industrial
                disturbances, laws, rules and regulations or orders of any duly
                constituted governmental authority or non- availability of materials
                or
                transportation (each an "Intervening Event"). 

            
	
               

            
	
              23.2 
                    

            	
              All
                time limits imposed by this Agreement, other than those imposed by
                Section
                5, will be extended by a period equivalent to the period of delay
                resulting from an Intervening Event described in Subsection 23.1.
                

            
	
               

            
	
              23.3 
                    

            	
              A
                party relying on the provisions of Subsection 23.1 will take all
                reasonable steps to eliminate an Intervening Event and, if possible,
                will
                perform its obligations under this Agreement as far as practical,
                but
                nothing herein will require such party to settle or adjust any labor
                dispute or to question or to test the validity of any law, rule,
                regulation or order of any duly constituted governmental authority
                or to
                complete its obligations under this Agreement if an Intervening Event
                renders completion impossible. 

            
	
               

            
	
              24. 
                    

            	
              ENTIRE
                AGREEMENT 

            
	
               

            
	
              24.1 
                    

            	
              This
                Agreement constitutes the entire agreement between the parties and
                replaces and supersedes all prior agreements, memoranda, correspondence,
                communications, negotiations and 

            
	
               

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      -10-

    

    
      	
               

            	
              representations,
                whether verbal or written, express or implied, statutory or otherwise
                between the parties with respect to the subject matter herein.
                

            
	
               

            	
               

            
	
              25. 
                    

            	
              TIME
                OF ESSENCE 

            
	
               

            
	
              25.1 
                    

            	
              Time
                will be of the essence in this Agreement. 

            
	
               

            
	
              26. 
                    

            	
              ENFORCEMENT
                OF AGREEMENT 

            
	
               

            
	
              26.1 
                    

            	
              The
                covenants, promises, terms and conditions contained herein will be
                binding
                upon the parties jointly and severally and may be enforced by each
                as
                against each other inter se. 

            

    

     

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

     

     

    ANTHONY
      SAI CHEONG TAI

     

    
      	
               
                

            	
              
                
                  

                
By: 

            
	 	
               

            
	
               
                

            	
              
                
                  

                
Signature of Witness  

            
	 	
               

            
	
               
                

            	
              
                
                  

                
Printed Name of Witness  

            
	
               

            
	
               

            
	
              EASTERN
                EXPLORATION COMPANY

            
	
               

            	
               

            
	
               

            	
               

            
	
              Per: 
                

            	
            
	
               
                

            	
              
                
                  

                
by its Authorized Signatory: Anthony Sai Cheong Tai, President 
                

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    

     

    This
      is
SCHEDULE
      "A"
      to an
      Agreement made as of the 31st
      day of
      December, 2005 between
      VENDOR
      and
      EASTERN
      EXPLORATION COMPANY.

     

    Map
      Staked License 011334M located on the Ship Harbour Claim Block, Port Hope
      Simpson Area in Eastern Labrador, Newfoundland Canada. Beginning at the
      Northeast corner of the herein described parcel of land, and said corner having
      UTM coordinates of 5 832 500 N, 584 000 E; of Zone 21; thence South 500 meters,
      thence East 500 meters, thence South 1,000 meters, thence West 2,000 meters,
      thence North 1,500 meters, thence East 1,500 meters to the point of beginning.
      All bearings are referenced to the UTM grid, Zone 21. NAD27.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]