Document:

Capital Bank Corp Amendment

    
      
        
          

          

        

        Exhibit
          10.1

         

        AMENDMENT
          OF EMPLOYMENT AGREEMENT

         

        

        THIS
          AMENDMENT OF EMPLOYMENT AGREEMENT (the
          “Amendment”) is made and entered into as of the 25th day of January, 2007 by and
          among CAPITAL
          BANK CORPORATION
          (hereinafter
          “CBC”), CAPITAL
          BANK,
          a
          wholly-owned subsidiary of CBC (herinafter the “Bank”), and B.
          GRANT YARBER
          (hereinafter the “Employee”).

        

        RECITALS

        

        CBC,
          the
          Bank, and Employee are parties to an employment agreement dated April 21,
          2004
          (the “Employment Agreement”) employing the Employee as President and Chief
          Executive Officer of CBC and the Bank;

        

        CBC
          adopted the Capital Bank Defined Benefit Supplemental Executive Retirement
          Plan
          effective May 24, 2005 (hereinafter the “SERP”) to provide the Employee and
          other eligible employees certain supplemental retirement benefits, including
          accelerated vesting and accelerated service credit for SERP purposes upon
          a
“Change in Control” (as defined in the SERP), without regard to whether such
          benefits result in excess parachute payments under Section 280G of the
          Internal
          Revenue Code of 1986, as amended (the “Code”);

        

        CBC,
          the
          Bank, and Employee desire to amend the Employment Agreement to modify the
          cap on
          aggregate benefits provided to Employee in connection with a “Change in Control”
(as defined in the SERP, the Employment Agreement or otherwise in a manner
          that
          triggers the application of Section 280G of the Code), including accelerated
          vesting and service credit under the SERP, to ensure that the Employment
          Agreement allows Employee to receive the full Change in Control benefits
          provided under the SERP and to otherwise conform the terms of the Employment
          Agreement and SERP where appropriate;

        

        CBC,
          the
          Bank, and Employee desire to amend the Employment Agreement to provide
          for the
          payment of certain of Employee’s legal fees in certain circumstances, including
          in the event Employee either is involuntarily terminated by CBC, the Bank
          or
          either of their successors or terminates his employment for Good Reason
          (as
          defined in the Employment Agreement) following a Change in Control (as
          defined
          in the Employment Agreement) and Employee incurs legal expenses in seeking
          to
          enforce or defend his rights under the Employment Agreement; and

        

        CBC,
          the
          Bank, and the Employee further desire to amend the Employment Agreement
          to
          ensure that severance and other benefits provided to Employee comply with
          various new rules imposed under Section 409A of the Code governing nonqualified
          deferred compensation; 

        

        NOW,
          THEREFORE,
          in
          consideration of the mutual promises, terms, covenants and considerations
          set
          forth herein, and the performance of each, the parties hereto, intending
          legally
          to be bound, agree as follows:

        

        
          
            
            

          

          
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        AGREEMENT

        

        The
          Employment Agreement is hereby amended as follows:

        

        1.
           Section
          5(d) (“Limitation on Payments”) is restated in its entirety as follows to
          provide a modified cap or limitation on the amount of benefits that may
          be
          provided to Employee under the Employment Agreement or otherwise if such
          payments constitute “excess parachute payments” as such term is defined under
          Section 280G of the Code:

        

        (d)
          Limitation on Payments.
          Notwithstanding anything set forth in this Employment Agreement to the
          contrary,
          in the event any payment or benefit to the Employee or for his benefit
          paid or
          payable or distributed or distributable pursuant to the terms of this Employment
          Agreement, the Capital Bank Defined Benefit Supplemental Executive Retirement
          Plan (the “SERP”), or otherwise (a “Payment”) would individually or together
          with any other such payment 

        or
          benefit (i) constitute a “parachute payment” within the meaning of Section
          280G of the Internal Revenue Code of 1986, as amended (the “Code”) and
          (ii) but for this sentence, be subject to the excise tax imposed by Section
          4999 of the Code and any related interest or penalties (such excise tax,
          together with any such interest and penalties, are hereinafter collectively
          referred to as the “Excise Tax”), then such Payment shall be reduced (the
“Reduced Amount”) if and to the extent that a reduction in the Payment would
          result in Employee retaining, on an after-tax basis (after taking into
          account
          all applicable federal, state and local employment taxes, income taxes,
          and the
          Excise Tax computed at the highest applicable marginal rate), a larger
          portion
          of such Payment than if the Payment were not so reduced. If a reduction
          in
          payments or benefits (or a cancellation of the acceleration of vesting
          of stock
          options or equity awards and/or cancellation or other adjustment of accelerated
          vesting or service credit for SERP benefits) constituting “parachute payments”
is necessary so that the Payment equals the Reduced Amount, such reduction
          and/or cancellation of acceleration shall occur in the order that generally
          provides the maximum economic benefit to Employee to the extent practicable
          for
          the Bank. The foregoing calculations shall be made at the Bank’s expense by an
          accounting firm selected by the Bank and reasonably acceptable to the Employee
          which is designated as one of the seven (7) largest accounting firms in
          the
          United States (the “Accounting Firm”); provided, however, that the Accounting
          Firm not also be serving as accountant or auditor for the individual, entity
          or
          group effecting the change in ownership or control that gives rise to the
          potential application of the Excise Tax. The Accounting Firm engaged to
          make the
          calculations under this Section 5(d) shall provide its determination (the
          “Determination”), together with detailed supporting documentation, to the Bank
          and Employee as soon as practicable after the date on which Employee’s right to
          a Payment is triggered or such other time as is reasonably requested by
          the Bank
          or Employee. If the Accounting Firm determines that no Excise Tax is payable
          with respect to a Payment, either before or after the application of the
          Reduced
          Amount, it shall furnish the Bank an opinion reasonably acceptable to Employee
          that no Excise Tax will be imposed with respect to such Payment. Within
          ten (10)
          days of the delivery of the Determination to the Bank, the Employee shall
          have
          the right to dispute the Determination (the “Dispute”). Upon the final
          resolution of a Dispute, the Bank shall pay to the Employee any additional
          amount required by such resolution in order to provide the Employee the
          maximum
          benefit possible pursuant to this Section 5(d). If there is no Dispute,
          the
          Determination shall be binding, final, and conclusive upon the Bank and
          Employee. Employee shall remain solely liable for all income taxes, Excise
          Taxes, or other amounts assessed on any Payments under this Section 5(d)
          and
          nothing in this Employment Agreement or otherwise shall be interpreted
          as
          obligating CBC, the Bank, or any successors thereto, to pay (or reimburse
          Employee for) any income taxes, Excise Taxes, or other taxes or amounts
          assessed
          against or incurred by Employee in connection with his receipt of such
          Payments.

        

         

        
          
            
            

          

          
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        2. A
          new
          Section 5(e) as follows is added to provide for the payment or reimbursement,
          if
          necessary, of certain legal fees and expenses incurred by Employee in seeking
          to
          enforce or defend his rights under the Employment Agreement following a
          Change
          in Control as such term is defined in Section 5(a) of the Employment
          Agreement:

        

        (e)
          Payment of Legal Fees.
          The Bank
          is aware that after a “Change in Control” as such term is defined in Section
          5(a) of this Employment Agreement, management could cause or attempt to
          cause
          Bank to refuse to comply with its obligations under this Employment Agreement,
          or could institute or cause or attempt to cause Bank to institute litigation
          seeking to have this Employment Agreement declared unenforceable, or could
          take
          or attempt to take other action to deny Employee the benefits intended
          under
          this Employment Agreement. In these circumstances, the purpose of this
          Employment Agreement would be frustrated. It is the Bank’s intention that the
          Employee not be required to incur the expenses associated with the enforcement
          or defense of his rights under this Employment Agreement, whether by litigation
          or other legal action, because the cost and expense thereof would substantially
          detract from the benefits intended to be granted to the Employee hereunder.
          It
          is Bank’s intention that the Employee not be forced to negotiate settlement of
          his rights under this Employment Agreement under threat of incurring expenses.
          Accordingly, if after a Change in Control occurs it appears to the Employee
          that
          (a) Bank has failed to comply with any of its obligations under this
          Employment Agreement or a dispute arises between Employee and Bank as to
          the
          terms of this Agreement, or (b) Bank or any other person has taken or
          threatened to take any action to declare this Employment Agreement void
          or
          unenforceable, or instituted any litigation or other action designed to
          deny,
          diminish, or to recover from the Employee the benefits intended to be provided
          to the Employee hereunder, Bank authorizes the Employee to retain counsel
          of his
          choice, at Bank’s expense pursuant to the limitations set forth in this Section
          5(e), to represent the Employee in connection with the enforcement or defense
          of
          his rights under this Employment Agreement, including without limitation
          the
          initiation or defense of any claim, demand, litigation or other legal action,
          whether by or against Bank or any director, officer, stockholder, or other
          person affiliated with Bank, in any jurisdiction. Notwithstanding any existing
          or previous attorney-client relationship between Bank and any counsel chosen
          by
          the Employee under this Section 5(e), Bank irrevocably consents to the
          Employee
          entering into an attorney-client relationship with that counsel, and Bank
          and
          the Employee agree that a confidential relationship shall exist between
          the
          Employee and that counsel. Bank agrees to promptly pay or reimburse the
          Employee
          for, as the case may be, all attorneys’ fees and related costs and expenses
          incurred by the Employee in connection with the enforcement or defense
          of his
          rights under this Employment Agreement as described above, up to a maximum
          aggregate amount of $125,000, whether suit be brought or not and whether
          or not
          incurred in trial, bankruptcy, or appellate proceedings; provided, however,
          that
          Employee obtains either a written settlement or a final judgment of a court
          of
          competent jurisdiction substantially in his favor or the matter is otherwise
          resolved substantially in his favor. The fees and expenses of counsel selected
          from time to time by the Employee as provided in this Section 5(e) shall
          be paid
          directly to counsel or reimbursed to the Employee by Bank within thirty
          (30)
          days following presentation by the Employee of a statement or statements
          prepared by such counsel in accordance with such counsel’s customary billing
          practices, Bank’s obligation to pay the Employee’s legal fees provided by this
          Section 5(e) operates separately from, and in addition to, any legal fee
          reimbursement obligation Bank may have with the Employee under any separate
          severance or other agreement. Anything in this Section 5(e) to the contrary
          notwithstanding, however, Bank shall not be required to pay or reimburse
          Employee’s legal expenses if doing so would violate Section 18(k) of the Federal
          Deposit Insurance Act (12 U.S.C. § 1828(k)) and Part 359 of the Federal Deposit
          Insurance Corporation (12 C.F.R. § 359.0 et
          seq.).
          

         

        
          
            
            

          

          
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        3. A
          new
          Section 14 of the Employment Agreement as follows is added to ensure that
          certain benefits provided under the Employment Agreement comply, to the
          extent
          applicable, with the new deferred compensation laws and regulations under
          Code
          Section 409A:

        

        14.
          Compliance with Internal Revenue Code Section 409A.
          Bank and
          Employee intend that their exercise of authority or discretion under this
          Employment Agreement shall comply with Code Section 409A. If when the Employee’s
          employment terminates, the Employee is a “specified employee,” as defined in
          Code Section 409A(a)(2)(B)(i) and, as a result, the postponement of any
          payments
          under this Employment Agreement or otherwise is necessary to avoid additional
          tax or interest to the Employee because of Code Section 409A, then despite
          any
          provision of this Employment Agreement or other plan or agreement to the
          contrary, the Employee will not be entitled to the payments until the earliest
          of: (a) the date that is at least six months after the Employee’s
          separation from service (within the meaning of Code Section 409A) for reasons
          other than the Employee’s death, (b) the date of the Employee’s death, or
          (c) any earlier date that does not result in additional tax or interest to
          the Employee under Code Section 409A. As promptly as possible after the
          end of
          the period during which payments are delayed under this provision (the
“Delay
          Period”), the entire amount of the delayed payments shall be paid to the
          Employee in a single lump sum with any remaining payments to commence in
          accordance with the terms of this Employment Agreement or other applicable
          plan
          or agreement. Notwithstanding the foregoing, to the extent that the Delay
          Period
          applies to the provision of any ongoing or substitute welfare benefits
          to
          Employee, Bank and Employee shall mutually cooperate to restructure such
          arrangement, to the extent practicable, so that no disruption in benefits
          occurs, the original intent and economic benefit of the arrangement is
          preserved, and Bank is not subjected to additional costs or expenses (e.g.,
          if
          no delay would be required if Employee paid the premiums for such welfare
          benefits, Employee shall pay such premiums during the Delay Period and
          Bank
          shall reimburse Employee for such amounts immediately following expiration
          of
          the Delay Period). If any provision of this Employment Agreement does not
          satisfy the requirements of Code Section 409A, such provision shall nevertheless
          be applied in a manner consistent with those requirements. If any provision
          of
          this Employment Agreement would subject the Employee to additional tax
          or
          interest under Code Section 409A, Bank shall, after consulting with the
          Employee, reform the provision to comply with Code Section 409A. In reforming
          any such provision, Bank shall maintain, to the maximum extent practicable,
          the
          original intent and economic benefit of the applicable provision without
          subjecting Employee to additional tax or interest; provided, however, Bank
          shall
          not be obligated to incur any additional costs or expenses as a result
          of
          reforming any provision. References in this Employment Agreement to Code
          Section
          409A include rules, regulations, and guidance of general application issued
          by
          the Department of the Treasury under Code Section 409A. 

        

        4. Except
          as
          amended by this Amendment, the Employment Agreement shall remain in full
          force
          and effect without modification or revision.

        

        

        [Signature
          Page Follows]

        

        

        
          
            
            

          

          
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        [Signature
          Page to Amendment of Employment Agreement]

        

        IN
          WITNESS WHEREOF, the
          parties hereto have caused this Amendment to be duly executed as of the
          date
          first written above.

         

        
          
            	 	
                    CAPITAL
                      BANK CORPORATION

                  
	 	 
	 	
                    By: /s/ O.
                      A. Keller, III 

                  
	 	
                    O.
                      A. Keller, III

                  
	 	
                    Chairman

                  
	 	 
	 	 
	 	 
	 	
                    CAPITAL
                      BANK

                  
	 	 
	 	
                    By:  /s/ O.
                      A. Keller, III 

                  
	 	
                    O.A.
                      Keller, III

                  
	 	
                    Chairman

                  
	 	 
	 	 
	 	 
	 	
                    EMPLOYEE

                  
	 	 
	 	
                    By:  /s/ B.
                      Grant Yarber 

                  
	 	
                    B.
                      Grant Yarber

                  
	 	 

          

          

         

        
          
            
            

          

          
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                                  Exhibit 10.1

                             RMMI AUSTRALIA PTY LTD

                                       and

                            EAGLE BAY RESOURCES N.L.

                                       and

                               AUDAX RESOURCES LTD

--------------------------------------------------------------------------------

                                CARR BOYD FARMIN
                                       and
                        JOINT VENTURE HEADS OF AGREEMENT

--------------------------------------------------------------------------------

                                  DECEMBER 2006

--------------------------------------------------------------------------------

<PAGE>

CARR BOYD FARMIN AND JOINT VENTURE HEADS OF AGREEMENT

THIS AGREEMENT is dated 6th December 2006

BETWEEN:

RMMI AUSTRALIA PTY LTD (ACN 122 077 105)
Level 25, 500 Collins Street, Melbourne Vic 3000 ("RMMI")

AND

EAGLE BAY RESOURCES N.L. (ACN 051 212 429) of
Level 1, 14 Outram St, West Perth WA 6005 ("EBR")

AND

AUDAX RESOURCES LTD (ACN 009 058 646)
125 Edward St, East Perth WA 6000 ("ADX")

RECITALS:

A.   ADX is the beneficial owner and is, or is entitled to be, the registered
     holder of a 100% interest in the Tenements.

B.   RMMI and EBR wish to earn interests in the Tenements and the parties have
     agreed that RMMI and EBR may earn such interest on the terms and conditions
     set out in this Agreement.

AGREED as follows

   1.    INTERPRETATION

       1.1    In this Agreement unless the context otherwise requires:

              "ASX" means Australian Stock Exchange Limited;

              "Bankable Feasibility Study" means a positive Feasibility Study
              for which project financing can be made available from a financial
              position;

              "Commencement Date" means 30 September 2006;

              "Decision to Mine" means a decision by the Manager to recommend to
              the Participants that they undertake mining following a positive
              Feasibility Study, and being a decision communicated by the
              Manager by notice to the other Participant;

              "Earning Period" means the period commencing on the Commencement
              Date and ending as provided in clause 3.3;

              "Expert" means an independent expert appointed by the
              Participants, or, in the absence of agreement, by the President of
              AusIMM;

              "Farmin Interest" means all of RMMI and EBR's rights and interests
              pursuant to this Agreement to earn a beneficial interest in the
              Tenements;

<PAGE>
              "Feasibility Study" means, in relation to any proposed mining
              operations, a study of all aspects of the proposed mining
              operations which;

              (a)    from appropriate sampling programmes provide estimates of
                     the tonnes of proved and probable reserves of ore and the
                     grades thereof;

              (b)    contains estimates of both capital costs and operating
                     costs likely to be incurred in establishing and conducting
                     mining operations, including costs to be incurred in mine
                     development, pre-production, crushing, treatment and
                     environmental management;

              (c)    analyses how to proceed with mining operations to
                     economically and commercially extract minerals;

              (d)    includes reference to relevant marketing and financial
                     aspects;

              (e)    states whether or not establishment of the proposed mining
                     operations is commercially viable for a Participant;

              (f)    in the case of mine operations using a standalone
                     processing plant, is of such detail and scope as would be
                     acceptable to a bank or other financial institution for the
                     purpose of providing financing for the establishment and
                     carrying out of the proposed mining operations;

              (g)    includes a schedule of relevant approvals necessary before
                     production may commence; and

              (h)    includes all Joint Venture Operations for the purpose of
                     producing such a study.

              "Joint Venture" means the joint venture constituted under clause
               2.1 of this Agreement;

              "Joint Venture Expenditure" means all Outgoings and the costs of
              all Joint Venture Operations including (without limitation) all
              costs, expenses and liabilities incurred in connection with the
              exploration, development and mining of the Tenements for minerals,
              accounted for in accordance with accounting principles accepted in
              Australia;

              "Joint Venture Interest" means in relation to a Participant:

              (a)    its interest (from time to time) as tenant in common in the
                     Joint Venture Property and in all other rights conferred by
                     this Agreement; and

              (b)    its right to take in kind a share of minerals derived from
                     the Tenements

              subject to the liabilities and obligations attaching to the
              foregoing and imposed by this Agreement;

              "Joint Venture Operations" means all activities as are necessary
              or desirable in order to implement and give full effect to the
              provisions and purposes of this Agreement;

              "Joint Venture Property" means all property of whatsoever kind
              held, developed, acquired or created by or on behalf of the
              Participants for the purpose of the Joint Venture including
              (without limitations):

              (a) the Tenements;

              (b) Mining information; and

              (c) minerals, concentrate and ore prior to their being taken in
                  kind by the Participants;

<PAGE>
              "Manager" means the Participant appointed to conduct Joint Venture
              Operations pursuant to clause 6.1 but reference to the Manager do
              not include references to that Participant in any other capacity;

              "Mining Act" means the Mining Act 1978 (W.A.) as amended;

              "Mining Information" means all technical and other information
              including (without limitation) geological, geochemical and
              geophysical reports, surveys, mosaics, aerial photographs,
              samples, drill core, drill logs, drill pulp, assay results, maps
              and plans relating to the Tenements or to Joint Venture
              Operations, whether in physical, written or electronic form;

              "Operating Committee" means the Operating Committee formed under
               clause 7.1 of this Agreement;

              "Outgoings" means all rents, rates, survey fees and other fees and
              charges under the Mining Act or otherwise in connection with the
              Tenements;

              "Participants" means RMMI, EBR and ADX and or their permitted
              successors and assigns holding a joint venture interest;

              "Related Body Corporate" means with respect to any Participant a
              related body corporate of that Participant within the meaning of
              the Corporations Act;

              "Tenement Area" means the land over which the relevant tenements
               have been granted.

              "Tenements" means the tenements referred to in the Schedule and
              any other tenements acquired pursuant to clause 24, together with
              any extensions, renewals, consolidations, replacements or
              amendments to those tenements and all rights associated with those
              tenements including the right to treat mineral bearing material
              located in the tenements.

       1.2    In this Agreement, unless the context requires otherwise:

              (a)    reference to a recital, clause, schedule, annexure or
                     exhibit is to a recital, clause, schedule, annexure or
                     exhibit of or to this Agreement;

              (b)    a reference to this Agreement or another instrument
                     includes any variation or replacement of any of them;

              (c)    a reference to any statute shall include any amendment,
                     replacement or re-enactment thereof for the time being in
                     force and any by-laws, statutory instruments, rules,
                     regulations, notices, orders, directions, consents or
                     permissions made there under and any conditions attaching
                     thereto;

              (d)    the singular includes the plural and vice versa;

              (e)    a reference to any gender includes all genders;

              (f)    a reference to a person includes a reference to the
                     person's executors, administrators, substitutes, successors
                     and permitted assigns;

              (g)    a covenant, representation or warranty in favour of two or
                     more persons is for the benefit of them jointly and
                     severally;

              (h)    a covenant, representation or warranty on the part of two
                     or more persons binds them jointly and severally; and

              (i)    a reference to currency is to the currency of Australia.

       2.     JOINT VENTURE

<PAGE>
              2.1    The Participants hereby associate in an unincorporated
                     joint venture for the purpose of exploring and, if
                     warranted, developing and mining the Tenements.

              2.2    The Joint Venture shall commence on the Commencement Date
                     and on that date the Joint Venture Interests of the
                     Participants are:

                                          RMMI         0%
                                          EBR          0%
                                          ADX          100%

              2.3    Nothing in this Agreement shall make a Participant a
                     partner of any other Participant nor, except as expressly
                     provided in this Agreement, constitute any Participant the
                     agent or representative of any other Participant or to
                     create any fiduciary relationship between them.

              2.4    No Participant shall have any authority to act on behalf of
                     any other Participant, except as expressly provided in this
                     Agreement. Where a Participant acts on behalf of another
                     without authority, such Participant shall indemnify the
                     other from any losses, claims, damages and liabilities
                     arising out of any such act.

              2.5    Each Participant has the right to take in kind and
                     separately dispose of, in proportion to its Joint Venture
                     Interest, all minerals produced by the Joint Venture.

              2.6    The liabilities of the Participants to each other and to
                     third parties shall be several in proportion to their
                     respective Joint Venture Interests from time to time and
                     shall not be either joint or joint and several. Each
                     Participant hereby indemnifies the other against any claim
                     or liability incurred by the other in excess of the other's
                     Joint Venture Interest.

       3.     EARNING PERIOD

              3.1    RMMI and ADX  acknowledge  that EBR has paid $5,000 by way
                     of  exploration  expenditure by EBR
                     on the Tenements.

              3.2    RMMI may contribute $1 million to Joint Venture Expenditure
                     during the Earning Period, including at least $100,000 in
                     the first six months of this agreement.

              3.3    Subject to clause 3.5, the earning Period will end when
                     RMMI has contributed $1 million to Joint Venture
                     Expenditure (including the payment in clause 3.1) and gives
                     notice of this to ADX, or on 30 September 2010, whichever
                     comes first.

              3.4    RMMI must contribute at least $48,000 to Joint Venture
                     Expenditure (including the payment in clause 3.1), for each
                     permit year it enters.

              3.5    If RMMI fails to spend the sum of $1 million on Joint
                     Venture Expenditure during the Earning Period then it and
                     EBR shall be deemed to have withdrawn from the Joint
                     Venture unless EBR agrees to meet RMMI's outstanding
                     commitments pursuant to clause 13 unless this period has
                     been extended by Force Majeure or by mutual agreement
                     between the Participants.

              3.6    Upon contributing $1 million to Joint Venture Expenditure
                     during the Earning Period and giving notice thereof to ADX,
                     RMMI and EBR shall be deemed to have earned a 70% Joint
                     Venture Interest so that the Joint Venture Interests of the
                     Participants shall then be:

                                          RMMI         51%
                                          EBR          19%
                                          ADX          30%

<PAGE>

              3.7    If ADX is not satisfied that RMMI has made an earning
                     contribution asserted by it under this clause 3 it must
                     give notice to RMMI within 21 days of receiving a notice
                     from RMMI under clause 3.3. If the Participants are unable
                     to resolve any dispute arising under this clause either
                     party may require the matter to be referred to an auditor.
                     RMMI may extend the Initial Earning Period of the Further
                     Earning Period (as the case may be) for such period as may
                     be agreed between the Participants or determined by the
                     auditor to be reasonable so as to complete its earning
                     obligations where it is agreed or determined RMMI has not
                     made a sufficient contribution.

<PAGE>

       4.     ADX ELECTION UPON EBR EARNING ITS 70% INTEREST

              4.1    Upon RMMI giving written notice to ADX that it has earned
                     its 70% Joint Venture Interest pursuant to clause 3.7, ADX
                     may elect, by notice in writing to RMMI within 30 days,
                     that it will:

                     (a)    contribute its 30% share of Joint Venture
                            Expenditure; or

                     (b)    dilute in accordance with the formula set out in
                            clause 10. The sole right and responsibility with
                            respect to the dilution percentage is to be at the
                            cost of and for the benefit of EBR who shall meet
                            the additional expenditure with respect to this
                            dilution.

       5.     ELECTION UPON EBR COMPLETING A BANKABLE FEASIBILITY STUDY

              5.1    Upon completion by RMMI and/or EBR of a Bankable
                     Feasibility Study (BFS) RMMI and/or EBR must give ADX a
                     written copy of the Bankable Feasibility Study and ADX must
                     within 30 days of receipt of the Bankable Feasibility Study
                     elect to pay its then participating interest or withdraw
                     from the Joint Venture.

              5.2    All parties must offer their respective Joint Venture
                     Interests as security for project financing of development
                     and production.

       6.     MANAGER

              6.1    RMMI shall be the Manager while it is the sole contributor
                     to Joint Venture Expenditure and shall be entitled to
                     remain the Manager (subject to clause 6.2) while it holds a
                     Joint Venture Interest of 51% or greater.

              6.2    The Manager:

                     (a)    may resign on 30 days' notice to the Participants;
                            or

                     (b)    may be removed by resolution of the Operating
                            Committee or if it commits gross negligence or
                            wilful default; and

                     upon retirement or removal of the Manager, the Participants
                     shall appoint a Manager by agreement between them, or,
                     failing this, by resolution of the Operating Committee.

              6.3    While RMMI remains the sole contributor to Joint Venture
                     Expenditure it shall (as Manager) have the sole
                     responsibility for determining and carrying out programmes
                     and budgets. Notwithstanding the foregoing, RMMI shall
                     provide copies of proposed programmes to ADX and shall
                     allow EBR and ADX the opportunity to comment upon such
                     proposed programmes but RMMI shall not be bound to act on
                     such comments.

              6.4    After RMMI ceases to be the sole contributor to Joint
                     Venture Expenditure the Manager shall prepare programmes
                     and budgets for consideration by the Operating Committee.
                     Programmes and budgets shall be prepared for periods each
                     of 6 months duration commencing on 1 September and 1 March.

              6.5 After RMMI ceases to be the sole contributor to Joint Venture
                  Expenditure the Manager:

                     (a)    shall carry out the Joint Venture activities in
                            accordance with programmes and budgets approved by
                            the Operating Committee;

                     (b)    may not exceed an approved budget by more than 15%
                            without the prior consent of the Operating
                            Committee, except in relation to emergency
                            expenditure;

<PAGE>

                     (c)    shall be responsible for all day to day operations
                            of the Joint Venture which shall include managing
                            and supervising all approved programmes and budgets;

                     (d)    shall carry out Joint Venture activities in
                            accordance with good mining industry practice, with
                            reasonable care, skill and diligence and in
                            accordance with all applicable laws and regulations;

                     (e)    shall promptly carry out the instructions and
                            directions of the Operating Committee; and

                     (f)    shall maintain complete and accurate books, records
                            and accounts of all transactions relating to the
                            Joint Venture which shall be open for inspection and
                            audit by the Participants.

              6.6    The Manager shall furnish concise reports to the
                     Participants, on a quarterly basis, which shall contain all
                     relevant technical and financial information concerning the
                     joint venture. The cost of providing such reports shall be
                     Joint Venture Expenditure.

              6.7    All statutory reports concerning the Tenements released by
                     the Manager shall be provided to the Participants and the
                     costs of providing such reports shall be Joint Venture
                     Expenditure.

              6.8    The Manager shall, on receiving reasonable notice from any
                     of the Participants, provide that Participant with copies
                     of any relevant project data, provided that any such report
                     or relevant project data is provided at the cost of the
                     Participant requesting it.

              6.9    The Manager shall not be liable to any Participant for any
                     losses sustained or liability incurred by the Joint Venture
                     and each Participant shall be liable to indemnify the
                     Manager in proportion to their respective Joint Venture
                     Interests in respect of the same except where any such loss
                     or liability arises as a direct result of the Manager's
                     wilful misconduct or gross negligence.

              6.10   Each Participant appoints the Manager and each of its
                     directors from time to time (severally) its lawful attorney
                     to sign all forms and documents and do everything necessary
                     to maintain the Tenements in good standing and in full
                     force, and to comply with the provisions of the Mining Act.

       7.     OPERATING COMMITTEE

              7.1    As soon as practicable after the completion of the Earning
                     Period, the Participants shall form and then maintain a
                     committee which shall meet not less than once in each
                     calendar quarter unless otherwise agreed.

              7.2    Each of the Participants shall be entitled to appoint a
                     representative as a member of the Operating Committee and
                     to remove any person so appointed and to appoint another
                     person in their place. Any appointment or removal is to be
                     effected by notice in writing to the other Participants.

              7.3    The Operating Committee may review and give directions to
                     the Manager as to Joint Venture Operations and shall
                     consider and approve (subject to modification or otherwise)
                     the nature and content of programmes and budgets relating
                     to Joint Venture Operations as proposed by the Manager.

              7.4    The voting power of each Participant's representative at
                     meetings of the Operating Committee shall be one vote for
                     each percentage point of that Participant's Joint Venture
                     Interest as at the date of the meeting.

              7.5    In the event of a deadlock in voting on matters requiring
                     majority vote:

<PAGE>
                     (a)    the Participants (through their respective senior
                            management) shall meet and in good faith attempt to
                            resolve the deadlock;

                     (b)    while the deadlock continues, operations shall
                            continue at the same rate as previously; and

                     (c)    after a 3 month period, the decision of whichever
                            Participant is the Manager shall prevail.

              7.6    All matters for decision before the Operating Committee
                     shall require a majority vote by one or more of the
                     Participants except for passage of any decision regarding
                     the ceasing of mining operations that are providing a
                     positive return on investment for all Participants, which
                     shall require a 75% majority vote of one or more of the
                     Participants.

              7.7    A  decision  by the  Operating  Committee  will not be
                     effective  to amend  the terms of this Agreement.

       8.     MAINTENANCE OF TENEMENTS

              8.1    During the Earning Period, RMMI shall pay all Outgoings and
                     maintain the Tenements in good standing (including ensuring
                     that all Mining act reporting requirements are observed).

<PAGE>

       9.     CASH CALLS

              9.1    After the Earning Period:

                     (a)    the Manager shall within 30 days after the end of
                            each month, issue to each Participant a cash call
                            for its share of Joint Venture Expenditure paid or
                            incurred during the preceding month;

                     (b)    the Manager may, not more than 30 days prior to the
                            commencement of any month issue cash calls for
                            estimated costs which the Manager anticipates will
                            be incurred during that month;

                     (c)    all cash calls must be paid within 14 days of
                            receipt; and

                     (d)    all Participants shall be liable to contribute to
                            Joint Venture Expenditure in proportion to their
                            Joint Venture Interests from time to time.

              9.2    A Participant that does not pay a cash call by the due date
                     shall pay interest thereon at a rate equal to 3% above the
                     Westpac Banking Corporation Indicator Lending Rate from
                     time to time.

              9.3    The Manager  shall be entitled to recover  moneys owing by
                     a defaulting  party in any court of
                     competent jurisdiction

              9.4    If a Participant defaults in the payment of a cash call
                     properly issued to it and if default continues for more
                     that 30 days, the other Participants may elect to dilute
                     the Joint Venture Interest of the defaulting Participant,
                     in which case the defaulting Participant's Joint Venture
                     Interest shall be diluted at the rate of 150% of the rate
                     prescribed in clause 10.2

       10.    DILUTION

              10.1   The following shall apply in relation to voluntary dilution
                     by a Participant, which dilution may only occur prior to a
                     Decision to Mine:

                     (a)    within 21 days after approval by the Operating
                            Committee of a programme and budget, any Participant
                            may elect not to contribute to the programme or
                            budget. If a Participant makes such an election, the
                            other Participant may amend the approved programmed
                            and budget to take account of the non-contribution;

                     (b)    the Participant that elected not to contribute
                            ("Diluting Participant") shall have its Joint
                            Venture Interest diluted in accordance with the
                            dilution formula set out in clause 10.2;

                     (c)    notwithstanding anything in this clause, voluntary
                            dilution is not permitted in respect of any
                            programme and budget which is necessary to maintain
                            the Tenements.

<PAGE>

              10.2   The Joint Venture Interest of a Diluting Participant shall
                     be diluted and recalculated from time to time in accordance
                     with the following formula:

                                New Joint Venture Interest =          A x 100
                                                                      -------
                                                                          B
                         Where:

                         A      =      the  total  amount  of  Joint  Venture
                                       Expenditure  contributed  by  the
                                       Diluting   Participant  at  the  date
                                       of  calculation  plus  the  deemed
                                       contribution of the Diluting Participant;

                         B      =      the total amount of Joint Venture
                                       Expenditure contributed by the
                                       Participants at the date of
                                       calculation, plus the deemed
                                       contributions of both Participants.

                         For the purposes of the formula, where RMMI and EBR
                         has earned an aggregate 70% Joint Venture Interest
                         the deemed contribution of ADX shall be $300,000 and
                         for EBR it shall be $190,000 and for RMMI it shall
                         be $510,000.

              10.3   Other  than in the  circumstances  set in  clause  4.1 (b),
                     the  diluted  interest  shall be distributed to the
                     Non-Participants pro rata.

       11.    CONFIDENTIALITY

              11.1   Unless otherwise agreed by the Participants or required by
                     law or the listing Rules of the ASX, all information
                     obtained in relation to the Joint Venture and which is not
                     in the public domain shall be kept confidential and shall
                     not be disclosed by the Participants.

              11.2   If required by any Participant, the Manager must give to
                     the Participants all information the Participant requires
                     to comply with the Listing Rules of the ASX and the
                     Participants agree that such information may be given to
                     the ASX for release to the market if necessary for the
                     Participants to comply with the Listing Rules, provided
                     that all Participants have been given a reasonable period
                     of time, bearing in mind the circumstances, to comment on
                     the draft announcement to ASX.

       12.    WARRANTIES

              12.1   ADX represents and warrants to RMMI and EBR and that:

                     (a)    it is the sole registered holder and beneficial
                            owner of the Tenements and has good right and title
                            to assign an interest therein free from any
                            mortgages, claims, caveats, pledges, liens, charges
                            or other encumbrances;

                     (b)    other than any native title claims, of which ADX is
                            not aware, there is no litigation nor are there any
                            proceedings of any nature concerning the Tenements
                            pending or threatened;

                     (c)    the Tenements have been duly and properly applied
                            for in terms of the Mining Act and all Outgoings due
                            as at the Commencement Date have been paid;

                     (d)    the Tenements are in all respects valid, effective
                            and in good standing and not liable to forfeiture or
                            surrender and, where necessary, appropriate
                            exemptions from the expenditure conditions attaching
                            to the Tenements have been applied for or obtained;

                     (e)    it has entered into no other existing agreement
                            regarding the Tenements and, except for EBR, no
                            other party holds any rights to explore, prospect or
                            mine on any part of the Tenements; and

<PAGE>
                     (f)    to the best of its knowledge and belief all matters
                            relating to the Tenements which would reasonably be
                            regarded as material and proper for disclosure to an
                            intending purchaser thereof have been disclosed to
                            EBR.

       13.    ASSIGNMENT

              13.1   Subject to clause 13.4, RMMI and EBR may assign all or any
                     of its Joint Venture Interest or its Farmin Interest to any
                     Body Corporate without each other Participant's consent but
                     subject to the assignee company agreeing to assign the
                     Joint Venture Interest back to the assignor in the event
                     that it ceases to for fill its obligations to EBR.

              13.2   Subject to clause 13.1, no Participant ("Assigning
                     Participant") may assign all or any of its Joint Venture
                     Interest and in the case of RMMI or EBR its Farmin Interest
                     unless the Assigning Participant first offers to assign
                     such interest to the other Participants ("Non-Assigning
                     Participants") pro rata upon the same terms and conditions
                     (as determined by clause 13.3) as the proposed terms and
                     conditions of the assignment to the third party and such
                     offer has not been accepted by the Non-Assigning
                     Participants within 30 days after the making of the offer.

              13.3   For the purposes of clause 13.2, the identity of the
                     proposed third party assignee, the proposed purchase price
                     and other terms and conditions upon which the Assigning
                     Participant is prepared to sell or dispose of all or part
                     of its Joint Venture Interest shall be furnished to the
                     Non-Assigning Participants at the time of delivery of the
                     offer and the proposed consideration must be in cash and or
                     joint venture expenditure or if not in cash or joint
                     venture expenditure, be of a value to be agreed between the
                     Participants. If the Participants cannot agree upon such
                     value the matter shall be determined by an Expert whose
                     decision shall be final.

              13.4   Where an assignment is made to a Related Body Corporate or
                     a third party, such assignment shall have no force or
                     effect whatsoever until such time as the Related Body
                     Corporate or the third party has entered into a covenant
                     with the other Participants binding it to observe and
                     perform all the terms and conditions of this Agreement.

              13.5   No Participant shall assign, encumber, part with possession
                     of, grant any power of attorney over or in any other
                     directly or indirectly deal with its Joint Venture Interest
                     or any part thereof (or any right to earn a Joint Venture
                     Interest) save as expressly permitted by the terms of this
                     Agreement.

              13.6   A Participant may create or permit the creation of an
                     encumbrance over the whole or part of its Joint Venture
                     Interest but only if it complies with each of the following
                     requirements:

                     (a)    the encumbrance is a mortgage, charge or other
                            recognised form of security;

                     (b)    the encumbrance is to secure moneys borrowed for the
                            purpose of meeting its obligations under this
                            Agreement; and

                     (c)    the person taking the encumbrance executes a
                            chargee's priority deed in a form reasonably
                            acceptable to the other Participant, agreeing that
                            the rights of that person under the encumbrance are
                            subject to the provisions of this Agreement.

       14.    WITHDRAWAL

              14.1   Subject to clauses 3.4 and 8.1, any Participant may
                     withdraw from the Joint Venture by giving 12 months' notice
                     in writing to the other Participants. Where a budget has
                     been approved and is relevant to a period remaining of less
                     than 12 months, then notice may be given with such lesser
                     time notice period.

<PAGE>
              14.2   Upon a withdrawal or deemed withdrawal from the Joint
                     Venture, then, unless otherwise provided in this Agreement,
                     the withdrawing Participant shall thereupon assign to the
                     other Participants pro rata all its Joint Venture Interest
                     for nil consideration.

              14.3   Any withdrawal pursuant to this clause 14 shall be without
                     prejudice to any rights or obligations of the Participants
                     arising prior to the withdrawal.

       15.    HOLDING AND TRANSFER OF JOINT VENTURE PROPERTY

              15.1   The Joint Venture Property shall be held by the Participant
                     or Participants for the time being having legal title
                     thereto upon trust for the Participants as tenants in
                     common in undivided shares in accordance with their
                     respective Joint Venture Interests.

              15.2   Any Participant having a beneficial interest in Joint
                     Venture Property may at any time and at its expense require
                     a transfer from the other Participants, of the legal title
                     to that beneficial interest.

              15.3   The transfer of any interest in the Tenements pursuant to
                     this Agreement is subject to any necessary consent or
                     approval under the Mining Act or under any other law or
                     regulation and the Participants shall use all reasonable
                     efforts to promptly obtain all necessary consents and
                     approvals.

       16.    CAVEATS

              16.1   Any Participant shall be entitled to lodge such caveats
                     pursuant to the Mining Act as it thinks fit to protect its
                     beneficial interest in the Tenements from time to time.

       17.    FURTHER ASSURANCES

              17.1   The Participants shall sign all such documents, forms and
                     notices and do all such things as may be reasonably
                     necessary to give effect to the terms of this Agreement.

       18.    NOTICES

              18.1 A notice approval, consent or other communication in
                   connection with this Agreement:

                     (a)    must be in writing;

                     (b)    must be marked for the attention of the person
                            specified in clause 18.2 or, if a Participant
                            notifies another person, then to that person; and

                     (c)    must be left at the address of the addressee, or
                            sent by prepaid ordinary post (airmail if posted to
                            or from a place outside Australia) to the address of
                            the addressee or sent by facsimile to the facsimile
                            number of the addressee which is specified in clause
                            18.2 or, if the addressee notifies another address
                            or facsimile number, then to that address of
                            facsimile number.

              19.2 The address and facsimile number of, and specified person
                   for, each Participant is:

                     (a) RMMI

                            Attention:      Managing Director
                            Address:        25th Floor, 500 Collins St
                                            Melbourne  Vic   3000
                            Facsimile:      (03) 8610 4799

                     (b) EBR

<PAGE>
                            Attention:      Managing Director
                            Address:        1st Floor, 14 Outram St
                                            West Perth  WA  6872
                            Facsimile:      (08) 9481 3330

                     (b) ADX

                            Attention:      Managing Director
                            Address:        125 Edward St
                                            East Perth  WA  6872
                            Facsimile:      (08) 9328 2869

              18.3   A notice, approval, consent or other communication takes
                     effect from the time it is received unless a later time is
                     specified in it. A posted letter or facsimile is taken to
                     be received:

                     (a)    in the case of a posted letter, on the third
                            (seventh, if posted to or from a place outside
                            Australia) Business Day after posting; and

                     (b)    in the case of facsimile, on production, by the
                            machine from which the facsimile was sent, of a
                            transmission report which indicates that the
                            facsimile was sent in its entirety and in an error
                            free form to the facsimile number of the recipient
                            notified for the purpose of this clause.

       19.    NO PARTITION

              19.1   Unless otherwise agreed between the Participants, no
                     Participant and no person claiming through a Participant
                     shall during the life of the Joint Venture seek partition,
                     whether by any court or otherwise howsoever of any Joint
                     Venture Property.

       20.    FORCE MAJEURE

              20.1   In this Agreement, Force Majeure means:

                     (a)    declared or undeclared war, revolution, act of
                            public enemies riots or civil commotions;

                     (b)    strike, lockout, stoppage or restraint of labour or
                            other industrial disputes;

                     (c)    fire or explosion, Act of God, flood, storm or
                            washaway, in each case which could not have been
                            reasonably foreseen or with due diligence avoided;

                     (d)    act or restraint of any Government, Governmental
                            agency or authority, including expropriation,
                            prohibition, intervention, direction, embargo, or
                            regulation so that the ability of a party to perform
                            its obligations is substantially adversely affected;
                            and

                     (e)    any other cause which by the exercise of reasonable
                            foresight or due diligence the party is unable to
                            prevent or overcome.

              20.2   A party shall be excused from the performance of an
                     obligation under this Agreement, other than an obligation
                     to pay money, to the extent and for so long as the failure
                     is caused by Force Majeure. For the purposes of this clause
                     20 the words "excused from performance of an obligation"
                     shall be taken to include the obligations which EBR may
                     satisfy so as to earn interests during the Earning Period
                     such that the Initial Earning Period and the Further
                     Earning Period shall be extended in the event of Force
                     Majeure and EBR giving notice pursuant to clause 20.3.

              20.3   A party claiming to be excused from performance of an
                     obligation shall:

<PAGE>
                     (a)    within 48 hours give notice to the other party of
                            the event of Force Majeure relied on; and

                     (b)    use its best endeavours to resume compliance with
                            the obligation as soon as reasonably possible but no
                            party shall be obliged to settle an industrial
                            dispute on terms not acceptable to it.

              20.4   If a party is excused from performance of an obligation by
                     reason of Force Majeure, then the time for performance by
                     each party of its obligations under this Agreement shall be
                     extended by such time as is reasonable in the
                     circumstances.

       21.    FORMAL JOINT VENTURE AGREEMENT

              21.1   If requested by any Participant at any time after EBR has
                     earned a Joint Venture Interest, the Manager shall prepare
                     a formal joint venture agreement setting out the
                     arrangements and commitments herein contained together with
                     such provisions as are normally found in joint venture
                     agreements and are not inconsistent with this Agreement
                     will be negotiated in good faith between the Participants
                     but until such a formal agreement is executed the
                     Participants shall be bound by the provisions of this
                     Agreement. If the Participants fail to reach agreement on
                     any matter, either Participant may require the matter to be
                     referred to an Expert whose decision shall be final and
                     binding.

       22.    COSTS

              24.1   Each Participant shall be responsible for its own legal
                     costs in connection with the preparation of this Agreement.

       23.    GST

              23.1   Definitions

                     For the purposes of this clause 23:

                     "Consideration" has the same meaning as in the GST Act but
                     does not include the GST amount payable;

                     "GST" means a tax, import or duty on goods or services or
                     other things introduced by the Commonwealth of Australia or
                     any State of Australia or any similar tax;

                     "GST Act" means a New Tax System (Goods and Services Tax)
                      Act 1999; and

                     "Supply" has the same meaning as in section 9.10 of the GST
                      Act.

              23.2   GST Component

                     Any Supply pursuant to or arising out of this Agreement and
                     the Joint Venture shall be upon the basis that the
                     Consideration for that Supply is increased by the amount of
                     GST payable.

              23.3   GST Obligation

                     The Participants and the Manager shall duly comply with all
                     GST obligations.

              23.4   GST Joint Venture

                     The Participants will in good faith consider taking action
                     to register the Joint Venture as a "GST Joint Venture".

<page>
       24.    AREA OF INTEREST

              24.1   The Participants acknowledge that any mineral tenement
                     acquired by any party to this agreement within 50km of
                     EL31/491 are to be included in this Joint Venture
                     Agreement.

              24.2   Audax agrees that it shall allow RMMI and EBR first right
                     of refusal to enter into individual joint ventures with
                     Audax in any tenement it acquires within Western Australia
                     during the currency of this Joint Venture.

       25.    GOVERNING LAW

              25.1   This Agreement shall be governed by and construed in
                     accordance with the laws of the State of Western Australia
                     and the Participants agree to submit to the non-exclusive
                     jurisdiction of the courts of that State.

       Executed by the Participants as an Agreement.

       EXECUTED for and on behalf of                                 )
       RMMI AUSTRALIA PTY LTD                                        )

       /s/ M.A. Muzzin
       ------------------------------
       Director

       M.A. MUZZIN

       Print name

<PAGE>

       EXECUTED by EAGLE BAY RESOURCES N.L.                          )

       /s/ A. Rechner
       ------------------------------
       Director

       A. RECHNER

       Print name

       EXECUTED for and on behalf of                                 )
       AUDAX RESOURCES LTD                                           )

       /s/ Gary Roper
       ------------------------------
       Director

       GARY ROPER

       Print name

                                                         SCHEDULE

       Tenements and Minimum Government Expenditures
       EL 31/491 ($20,000); and
       EL 31/492 ($28,000)

       (together called "Carr Boyd")

<PAGE>

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