Document:

EXHIBIT
10.1

    

     

    ASSIGNMENT
AGREEMENT

     

    THIS
AGREEMENT dated for reference the 7th day of December, 2009

     

    BETWEEN:

     

    Ironwood Gold Corp., 7047 E.
Greenway Parkway, #250 Scottsdale, AZ  85254

     

    (the
“Assignee”)

     

    AND:

     

    Kingsmere Mining Ltd., 73460
Desert Greens Drive North Palm Desert Cal.
92260

     

    (“Kingsmere”
or the “Assignor”)

     

    WHEREAS:

     

    A.                        
Teck Co, LLC (“Teck”) and Kingsmere entered into an option agreement dated
October 26, 2009, attached hereto as Exhibit “A” (the “Option Agreement”)
wherein Kingsmere has an exclusive option to acquire from Teck an undivided 100%
right, title and interest in and to certain mineral claims known as the Rock
Creek Property, located in Nevada as set out in Schedule “A” of the Option
Agreement (the “Property”); and

     

    B.                         
Kingsmere wishes to assign to the Assignee all of Kingsmere's right, title and
interest in and to the Option Agreement and the Property in accordance with the
terms of this Agreement (the “Assignment”).

     

    NOW
THEREFORE, in consideration of the sum of $10.00 now paid by the Assignee to the
Assignor (the receipt and sufficiency of which are hereby acknowledged by the
Assignor), the Assignor covenant and agree as follows:

     

    THE ASSIGNMENT AND
ACCEPTANCE

     

    1.                          Kingsmere
hereby unconditionally forever assigns and transfers to the Assignee all of
Kingsmere’s right, title and interest in and to the Option Agreement and the
Property and all benefits and advantages to be derived therefrom (the
“Assignment”).

     

    2.                          In
consideration for the Assignment, the Assignee hereby agrees to issue 7,000,000
restricted shares of common stock of the Assignee (the “Consideration Shares”),
to be issued as to 5,950,000 Consideration Shares to the Assignor or as directed
by the Assignor, and 1,050,000 Consideration Shares to Teck Resources Limited
(pursuant to section 11.1 of the Option Agreement and the letter of instruction
from Teck Co. LLC to Ironwood dated _________________, 2009), to be issued
within 30 days of the date of execution of this Agreement upon the delivery of
the necessary documentation from each of Teck and the Assignor to allow for the
issuance of the Consideration Shares pursuant to exemptions from the
registration requirements of the United States Securities Act of 1933, as
amended (the “1933 Act”).

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    - 2 -

     

    3.           In
consideration for the Assignment, the Assignee hereby agrees to pay US$300,000
(the “Cash Consideration”), to be paid as to $255,000 to the Assignor, and
$45,000 to Teck (pursuant to section 11.1 of the Option Agreement), to be paid
upon execution of this Agreement.

     

    4.                      The
Assignee hereby covenants and agrees with the Assignor that the Assignee will
fully and faithfully abide by all terms and conditions of the Option Agreement
and fully and faithfully perform all responsibilities and obligations of the
Assignor under the Option Agreement. This includes agreeing to make all monetary
and royalty payments to Teck and all required payments and property expenditures
as set out in the Option Agreement and to recognize Teck’s earn-in rights to the
Property as provided for in Sections 12 and 13 of the Option
Agreement. 

     

    5.                      The
Assignor hereby covenants and agrees with the Assignee that the Assignor shall
be responsible for the shortfall of any required payments and property
expenditures as set out in the Option Agreement that the Assignee has not
paid.

     

    6.                      The
Assignor represents and warrants to the Assignee, with the knowledge that the
Assignee relies upon same in entering into this Agreement, that:

     

    
      	
              (a)

            	
              the
      mineral claims comprising the Property (as defined therein), the Option
      Agreement and the mineral agreements in respect thereof have been, to the
      best of the Assignors’ knowledge and belief after due inquiry, duly and
      validly located, granted, entered into and recorded, as the case may be,
      pursuant to the laws of the jurisdiction in which the Property is situate
      and are in each case in good standing with respect to all filings, fees,
      rentals, taxes, assessments, work commitments and other obligations and
      conditions on the date hereof and until the dates set opposite the
      respective names;

            

    

     

    
      	
              (b)

            	
              the
      Assignor has all requisite power and capacity, and has duly obtained all
      requisite authorizations and performed all requisite acts, to enter into
      and perform their obligations hereunder, they has duly executed and
      delivered this Agreement and such constitutes a legal, valid and binding
      obligation of them enforceable against them in accordance with the
      Agreement's terms, and the entering into of this Agreement and the
      performance of their obligations hereunder does not and will not result in
      a breach of, default under or conflict with any of the terms and
      provisions of any of their constituting documents, any resolutions of
      their partners, any indenture, agreement or other instrument to which they
      are a party or by which they are bound or the Property may be subject, or
      any statute, order, judgment or other law or ruling of any competent
      authority;

            

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    - 3 -

     

    
      	
              (c)

            	
              there
      are neither any adverse claims or challenges against, or to the ownership
      or title to, any of the mineral claims comprising the Property or to the
      validity or enforceability of any of the mineral agreements in respect
      thereof, nor to the knowledge of the Assignors after due inquiry is there
      any basis therefor, and there are no outstanding agreements, options or
      other rights and interests to acquire or purchase the Property or any
      portion thereof or any interest therein, and no person has any royalty or
      other interest whatsoever in the production from any of the mineral claims
      comprising the Property or
otherwise;

            

    

     

    
      	
              (d)

            	
              the
      Option Agreement is in good standing as at the date hereof and no default
      has occurred therein;

            

    

     

    
      	
              (e)

            	
              the
      Assignor is an "accredited investor" as the term is defined in section
      501(a) of Regulation D under the 1933 Act, by virtue of its respective
      equity owners each being accredited
investors;

            

    

     

    
      	
              (f)

            	
              the
      Assignor has the legal capacity and competence to enter into and execute
      this Agreement and to take all actions required pursuant hereto and they
      are duly incorporated and validly subsisting under the laws of its
      jurisdiction of incorporation and all necessary approvals by their
      directors, shareholders and others have been obtained to authorize
      execution and performance of this Agreement on behalf of the
      Assignors;

            

    

     

    
      	
              (g)

            	
              the
      Assignor (i) has adequate net worth and means of providing for their
      current financial needs and possible personal contingencies, (ii) has no
      need for liquidity in this investment, and (iii) is able to bear the
      economic risks of an investment in the Consideration Shares for an
      indefinite period of time, and can afford the complete loss of such
      investment;

            

    

     

    
      	
              (h)

            	
              the
      Assignor is aware that an investment in the Assignee is speculative and
      involves certain risks, including the possible loss of the
      investment;

            

    

     

    
      	
              (i)

            	
              the
      Assignor is receiving the Consideration Shares for their own account for
      investment purposes only and not for the account of any other person and
      not for distribution, assignment or resale to others, and no other person
      has a direct or indirect beneficial interest in such Consideration Shares,
      and the Assignor has not subdivided its respective interest in the
      Consideration Shares with any other
person;

            

    

     

    
      	
              (j)

            	
              the
      Assignor is not an underwriter of, or dealer in, the common shares of the
      Assignee, nor is the Assignor participating, pursuant to a contractual
      agreement or otherwise, in the distribution of the Consideration
      Shares;

            

    

     

    
      	
              (k)

            	
              the
      Assignor is not aware of any advertisement of any of the Consideration
      Shares and are not acquiring the Consideration Shares as a result of any
      form of general solicitation or general advertising including
      advertisements, articles, notices or other communications published in any
      newspaper, magazine or similar media or broadcast over radio or
      television, or any seminar or meeting whose attendees have been invited by
      general solicitation or general advertising;
and

            

    

     

    
      	
              (l)

            	
              no
      person has made to the Assignor any written or oral
      representations:

            

    

     

    
      	
               
      

            	
              (i)

            	
              that
      any person will resell or repurchase any of the Consideration
      Shares;

            

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    - 4 -

     

    
      	
               
      

            	
              (ii)

            	
              that
      any person will refund the purchase price of any of the Consideration
      Shares;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              as
      to the future price or value of any of the Consideration Shares;
      or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              that
      any of the Consideration Shares will be listed and posted for trading on
      any stock exchange or automated dealer quotation system or that
      application has been made to list and post any of the securities of the
      Assignee on any stock exchange or automated dealer quotation
      system.

            

    

     

    
      7.                          The
Assignor acknowledges and agrees that:

    

     

    
      	
              (a)

            	
              the
      Consideration Shares have not been registered under the United States
      Securities Act of 1933, as amended (the “1933 Act”), or under any state
      securities or "blue sky" laws of any state of the United States, and are
      being offered only in a transaction not involving any public offering
      within the meaning of the 1933 Act, and, unless so registered, may not be
      offered or sold in the United States or to U.S. Persons (as defined in
      Regulation S promulgated under the 1933 Act), except pursuant to an
      effective registration statement under the 1933 Act, or pursuant to an
      exemption from, or in a transaction not subject to, the registration
      requirements of the 1933 Act, and in each case only in accordance with
      applicable state securities laws;

            

    

     

    
      	
              (b)

            	
              the
      Assignee will refuse to register any transfer of the Consideration Shares
      not made in accordance with the provisions of Regulation S, pursuant to an
      effective registration statement under the 1933 Act or pursuant to an
      available exemption from, or in a transaction not subject to, the
      registration requirements of the 1933
Act;

            

    

     

    
      	
              (c)

            	
              the
      Assignee has not undertaken, and will have no obligation, to register any
      of the Consideration Shares under the 1933
Act;

            

    

     

    
      	
              (d)

            	
              the
      decision to execute this Agreement and accept the Consideration Shares has
      not been based upon any oral or written representation as to fact or
      otherwise made by or on behalf of the Assignee and such decision is based
      entirely upon a review of information (the "Assignee Information") which
      has been provided by the Assignee to the Assignor.  If the
      Assignee has presented a business plan or any other type of corporate
      profile to the Assignors, the Assignors acknowledge that the business
      plan, the corporate profile and any projections or predictions contained
      in any such documents may not be achieved or be
  achievable;

            

    

     

    
      	
              (e)

            	
              the
      Assignor and their advisor(s) have had a reasonable opportunity to ask
      questions of and receive answers from the Assignee regarding the
      Consideration Shares, and to obtain additional information, to the extent
      possessed or obtainable without unreasonable effort or expense, necessary
      to verify the accuracy of the information contained in the Assignee
      Information, or any business plan, corporate profile or any other document
      provided to the Assignors;

            

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    - 5 -

     

    
      	
              (f)

            	
              the
      books and records of the Assignee were available upon reasonable notice
      for inspection, subject to certain confidentiality restrictions, by the
      Assignors during reasonable business hours at its principal place of
      business and that all documents, records and books pertaining to the
      Consideration Shares have been made available for inspection by the
      Assignors, the Assignors’ attorney(ies) and/or
  advisor(s);

            

    

     

    
      	
              (g)

            	
              the
      Assignee is entitled to rely on the representations and warranties and the
      statements and answers of the Assignors contained in this Agreement, and
      the Assignors will hold harmless the Assignee from any loss or damage it
      may suffer as a result of the Assignors’ failure to correctly complete
      this Agreement;

            

    

     

    
      	
              (h)

            	
              the
      Assignor will indemnify and hold harmless the Assignee and, where
      applicable, its respective directors, officers, employees, agents,
      advisors and shareholders from and against any and all loss, liability,
      claim, damage and expense whatsoever (including, but not limited to, any
      and all fees, costs and expenses whatsoever reasonably incurred in
      investigating, preparing or defending against any claim, lawsuit,
      administrative proceeding or investigation whether commenced or
      threatened) arising out of or based upon any representation or warranty of
      the Assignor contained herein, or in any other document furnished by the
      Assignor to the Assignee in connection herewith, being untrue in any
      material respect or any breach or failure by the Assignor to comply with
      any covenant or agreement made by the Assignor to the Assignee in
      connection therewith;

            

    

     

    
      	
              (i)

            	
              the
      Assignor has been advised to consult its own legal, tax and other advisors
      with respect to the merits and risks of an investment in the Consideration
      Shares and with respect to applicable resale restrictions and it is solely
      responsible (and the Assignee is in any way responsible) for compliance
      with applicable resale
restrictions;

            

    

     

    
      	
              (j)

            	
              the
      Consideration Shares are not listed on any stock exchange or automated
      dealer quotation system and no representation has been made to the
      Assignors that any of the Consideration Shares will become listed on any
      stock exchange or automated dealer quotation
  system;

            

    

     

    
      	
              (k)

            	
              neither
      the SEC nor any other securities commission or similar regulatory
      authority has reviewed or passed on the merits of the Consideration
      Shares;

            

    

     

    
      	
              (l)

            	
              no
      documents in connection with this Agreement have been reviewed by the SEC
      or any state securities administrators;
and

            

    

     

    
      	
              (m)

            	
              there
      is no government or other insurance covering any of the Consideration
      Shares.

            

    

     

    8.                      The
Assignor will at all times hereafter execute and deliver, at the request of the
Assignee, all such further documents, deeds and instruments, and will do and
perform all such acts as may be necessary or desirable to give full effect to
the intent and meaning of this Agreement.  Without limiting the
generality of the foregoing, the Assignor will execute such financing
statements, financing change statements, notices or directions as may be
necessary or advisable to cause all pertinent offices of public record to amend
their records to show the interests of the Assignee in the Option
Agreement.

     

    9.                      Each
of the parties to this Agreement acknowledges that such party has read this
document and fully understands the terms of this Agreement, and acknowledges
that this Agreement has been executed voluntarily after either receiving
independent legal advice, or having been advised to obtain independent legal
advice and having elected not to do so

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 6 -

       

    

    10.                    This
Agreement will enure to the benefit of the Assignee and its successors and
assigns, and will be binding upon the Assignors and their successors and
assigns.

     

    11.                    This
Agreement will be governed by and construed in accordance with the laws in force
in the State of Nevada and the parties submit to the non-exclusive jurisdiction
of the courts of State of Nevada in any proceedings pertaining to the Assignment
or this Agreement.

     

    12.                    This
Agreement may be executed in any number of counterparts with the same effect as
if all parties hereto had all signed the same document.  All
counterparts will be construed together and will constitute one and the same
agreement.

     

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

     

    Ironwood
Gold Corp.

    

    
      
        
          
            
              	
                      Per:

                    	  
      
	
                       
    

                    	
                      Authorized
      Signatory

                    

            

          

        

      

    

     

    Kingsmere
Mining Ltd.

     

    
      
        
          
            
              
                	
                        Per:

                      	  
      
	
                         
    

                      	
                        Authorized
      Signatory

                      

              

            

          

        

      

    

     

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    - 7 -

      

    Exhibit
A

    

    Option
Agreement

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    TECK
CO, LLC

     

    October
26, 2009

     

    Kingsmere
Mining Ltd.

    73460
Desert Greens Drive N., 

    Palm
Desert, California 92260

     

    Attention: Jim MacKenzie,
President

    Dear
Sirs:

     

    Re:
Rock Creek Property, Nevada

     

    Further
to our recent conversations on the above subject, this agreement (the “Agreement”) sets out the
agreement between Teck CO, LLC (“Teck”) and Kingsmere Mining
Ltd. (“Kingsmere”)
whereby Kingsmere is granted an option to acquire an interest in Teck’s
Rock Creek Property located in the State of Nevada (the “Property”, more fully
described in Schedule “A” attached hereto), subject only to certain options for
Teck to earn back various interests and a royalty reserved to Teck with respect
to the Property. The terms and conditions of this transaction are as
follows:

     

    Unless
otherwise noted, all amounts are in United States dollars.

     

    
      	
              1.

            	
              Representations
      and Warranties

            

    

     

    
      	
              1.1

            	
              Teck
      warrants and represents to Kingsmere
that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              it
      is duly organized and validly existing under the laws of
      Colorado;

            

    

     

    
      	
               
      

            	
              (b)

            	
              subject
      to the superior rights of the United States of America, it is the sole
      legal and beneficial owner of a 100% interest in the
    Property;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Property is accurately described in Schedule “A” attached
      hereto;

            

    

     

    
      	
               
      

            	
              (d)

            	
              it
      has not granted or created any mortgages, liens, charges, pledges,
      security interests or other financial encumbrances against the Property,
      and it has not granted any person the right to use the Property, or to any
      royalty or other interest whatsoever in production
    therefrom;

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      Property is free and clear of all liens, charges and encumbrances arising
      from operations on or related to the Property by Teck (except for taxes
      not yet due, other inchoate liens and liens contested in good faith by
      Teck) and Teck has not done any work or entered into any commitments
      whereby the Property has been or may become
  encumbered;

            

    

     

    
      	
               
      

            	
              (f)

            	
              it
      has the exclusive right and necessary lawful authority to explore for
      minerals on the Property;

            

    

     

    
      	
               
      

            	
              (g)

            	
              the
      mining claims and other rights that comprise the Property are in good
      standing with respect to Teck paying
taxes;

            

    

     

    TECK
CO, LLC

    501 N.
Riverpoint Blvd. Suite 300, Spokane, WA 99202  telephone: 509
747-6111  facsimile: 509 459-4400

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 2 -

       

    

    
      	
               
      

            	
              (h)

            	
              it
      is not a party to any underlying agreements, other than certain
      confidentiality agreements with third parties who received data from Teck
      in order to evaluate the Property, with respect to the Property including
      surface owner agreements, water use agreements or other rights or
      interests to the lands covered by the
Property;

            

    

     

    
      	
               
      

            	
              (i)

            	
              Teck
      has not received notice of any suits, actions, prosecutions,
      investigations or proceedings, actual, pending or threatened, against or
      affecting Teck or that relates to or may have an adverse effect on the
      Property or Teck’s ownership or rights to explore and develop the
      Property; and

            

    

     

    
      	
               
      

            	
              (j)

            	
              it
      has the right, power and authority to enter into this Agreement and to
      dispose of the Property free of any consent rights, preferential purchase
      rights or other restrictions held by other parties, and it has obtained
      all necessary third party and internal corporate approvals, consents and
      authorizations to enter into this Agreement and complete the transactions
      contemplated in this Agreement.

            

    

     

    
      	
              1.2

            	
              Kingsmere
      warrants and represents to Teck
that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              it
      is duly organized and validly existing under the laws of Nevada;
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              it
      has the right, power and authority to enter into this Agreement, and it
      has obtained all necessary internal corporate approvals, consents and
      authorizations to enter into this Agreement and complete the transactions
      contemplated in this Agreement.

            

    

     

    
      	
              2.

            	
              Covenants

            

    

     

    
      
        
          
            	
                    2.1

                  	
                    Until
      the transfer of the Property to Kingsmere Teck covenants, subject to
      Kingsmere providing Teck documentation and funds, to file assessment work
      and make all necessary payments as requested by
  Kingsmere.

                  

          

        

      

    

     

    
      
        
          	
                  2.2

                	
                  If
      the Property is transferred to Kingsmere, during the term of the T-1
      Option and any T−2 Option, Kingsmere
      covenants, subject to Teck providing Kingsmere documentation and funds, to
      file assessment work and make all necessary payments as requested by
      Teck.

                

        

      

    

     

    
      	
              3.

            	
              Indemnification

            

    

     

    
      
        
          	
                  3.1

                	
                  Subject
      to §3.4, Teck will indemnify, hold harmless and release Kingsmere, its
      officers, directors and employees from and against any and all claims,
      causes of action, liabilities, obligations, losses, damages, penalties,
      fines, settlements, costs or expenses of any nature whatsoever, including
      without limitation reasonable attorneys’ fees and disbursements arising
      from:

                

        

      

    

     

    
      	
               
      

            	
              (a)

            	
              any
      of Teck’s representations or warranties set forth in § 1.1 of this
      Agreement being incorrect or untrue when made or any state of facts
      contrary to any such representation or warranty;
  and

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      breach of Teck’s covenants, duties, obligations or agreements contained in
      this Agreement.

            

    

     

    
      
        
          	
                  3.2

                	
                  Subject to §3.4, Kingsmere will
      indemnify and hold harmless and release Teck, its officers, directors and employees
      from and against any and all claims, causes of action, liabilities,
      obligations, losses, damages, penalties, fines, settlements, costs or
      expenses of any nature whatsoever, including without limitation
      reasonable attorneys’ fees and disbursements, arising
  from:

                

        

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 3 -

       

    

    
      	
               
      

            	
              (i)

            	
              any
      of Kingsmere’s representations or warranties set forth in §1.2 of this
      Agreement being incorrect or untrue when made or any state of facts
      contrary to any such representation or warranty;
  and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      breach of Kingsmere’s covenants, duties, obligations or agreements
      contained in this Agreement.

            

    

     

    
      
        	
                3.3

              	
                Subject
      to §3.4, Kingsmere and Teck will indemnify and save harmless the other and
      its respective directors, officers and employees from and against any
      liability whatsoever for any loss, damage, claim, demand, lien, action or
      suit, charge or expense, including legal fees, on account of injury to or
      the death of any person, damage to or loss of any property, or
      infringement or interference of patent (collectively the“Liabilities”), as
      follows:

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              Kingsmere
      will indemnify Teck as aforesaid for Liabilities which arise directly or
      indirectly from any work done by or for Kingsmere on or in respect of the
      Property during the term of the K-1 Option (as defined in §4.1);
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              Teck
      will indemnify Kingsmere as aforesaid for Liabilities which arise directly
      or indirectly from any work done by or for Teck on or in respect of the
      Property during the term of any T-1 Option or T-2 Option (as defined in §
      12. 1, and § 13.1 respectively).

            

    

     

    
      
        	
                3.4 

              	
                No
      party hereto shall be liable to another party hereto in contract, tort or
      otherwise for special, incidental, punitive or consequential damages,
      including, without limiting the generality of the foregoing, loss of
      profits or revenues.

              

      

    

     

    
      
        	
                3.5

              	
                Except
      for the provisions of this Agreement providing for elections to contribute
      and contributions to programs, Mandatory Programs (as defined in §20.1),
      production programs and operating plans, with which the parties must
      strictly comply, and except as otherwise provided in this Agreement, if
      any party (a“Defaulting Party”) is
      in breach or default of any requirement herein set forth, the other party
      may give Notice to the Defaulting Party specifying the breach or default.
      The Defaulting Party shall not lose any rights under this Agreement unless
      promptly and in any event within 30 days after the giving of Notice (as
      defined in §31.1) of default given by the other party, the Defaulting
      Party has failed promptly to take reasonable steps to cure the breach or
      default by the appropriate performance. Upon any such failure the other
      party shall be entitled to seek any remedy it may have on account of such
      default.

              

      

    

     

    Option
Terms

     

    
      	
              4.

            	
              The
      K-1 Option

            

    

     

    
      
        	
                4.1 

              	
                Subject
      as hereinafter provided, Teck hereby grants to Kingsmere the sole,
      exclusive and irrevocable right and option to earn, subject to the T-1
      Option, T-2 Option and the NSR, an undivided 100% interest in and to
      Teck’s interest in the Property (the“K-1
      Option”).

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 4 -

       

    

    
      
        	
                4.2

              	
                If
      Kingsmere exercises the K-1 Option, Teck shall, in addition to the T-1
      Option and T-2 Option, retain a 2.5% net smelter returns royalty
      (the“NSR”)
      on the Property which net smelter returns royalty is defined and to
      be calculated and paid as set out in Schedule “B” and Kingsmere will
      register the NSR against its interest in
title.

              

      

    

     

    
      
        	
                4.3

              	
                In
      order for Kingsmere to exercise the K-1 Option, Kingsmere must incur,
      subject to §4.7 and to events of force
      majeure, an aggregate $3,000,000 in Expenditures (as defined in §5)
      on or before September 30, 2012 as
follows:

              

      

    

     

    
      
        
          
            
              
                	
                        On
      or Before

                      	 	
                        Cumulative
      Expenditures

                      	 
	
                        September
      30, 2010

                      	 	$	500,000	 
	
                        September
      30, 2011

                      	 	$	1,250,000	 
	
                        September
      30, 2012

                      	 	$	3,000,000	 

              

            

          

        

      

    

     

    The first
$100,000 of the Expenditures are a commitment, whereas the balance of the
Expenditures are optional.

     

    
      
        	
                4.4

              	
                Kingsmere
      shall, forthwith upon having incurred an aggregate of $3,000,000 in
      Expenditures under §4.3, provide Teck Notice, which shall include a
      statement in reasonable detail evidencing such Expenditures and a
      technical report on the results obtained from such Expenditures
      (the“K-1
      Expenditure Notice”).

              

      

    

     

    
      
        	
                4.5

              	
                The“Kingsmere Earn-in Date”
      shall be the date, after Kingsmere incurs the Expenditures under
      §4.3, that Kingsmere delivers the K-1 Expenditure Notice. On the Kingsmere
      Earn-in Date, Kingsmere will have exercised the K-1 Option and earned a
      100% interest in the Property subject to the T-1 Option, T-2 Option and
      the NSR.

              

      

    

     

    
      
        	
                4.6

              	
                If
      Kingsmere fails to incur Expenditures of $100,000 on or before September
      30, 2010, Kingsmere will pay Teck, by October 31, 2010, an amount
      equivalent to the shortfall of those Expenditures actually incurred by
      Kingsmere, in cash together with interest from September 30, 2010 at a
      rate, for the period of calculation, as stated by the Bank of America, as
      being the prime rate charged by it on US Dollar demand loans to its most
      creditworthy domestic commercial customers (the“Prime Rate”) plus 4%,
      calculated monthly, until paid; provided that if payment is made by
      October 31, 2010, the interest will be
forgiven.

              

      

    

     

    
      
        	
                4.7

              	
                If
      Kingsmere fails to incur requisite aggregate Expenditures to exercise the
      K-1 Option or to maintain the K-1 Option in good standing Kingsmere may
      pay to Teck within 30 days following the Expenditure due date, the amount
      of the deficiency and the amount of such deficiency shall thereupon be
      deemed to have been Expenditures duly and timely incurred by
      Kingsmere.

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 5 -

       

    

    
      	
              5.

            	
              Expenditures
      Defined

            

    

     

    
      	
              5.1

            	
              The
      term“Expenditures”
      means:

            

    

     

    
      	
               
      

            	
              (a)

            	
              all
      costs, expenses, charges and outlays, direct and indirect, incurred from
      the date of this Agreement

            

    

     

    (i)            by
Kingsmere under the K-1 Option; and

    (ii)           by
Teck under any T-1 Option and any T-2 Option;

     

    on or in
respect of a Property, without limiting generality, all on-site costs, costs for
prospecting, claim staking, the Property tenure payments, any payments to
holders of surface rights, taxes (excluding taxes which are recoverable such as
GST), mapping, surveying, permitting, geochemical surveys, geophysical surveys,
sampling, assaying, trenching, drilling, geochemical analyses, road building,
drill site preparation, compilation, data analysis, drafting, report writing,
metallurgical testing; metallurgical and economic studies; feasibility studies;
reclamation, and all other project expenditures; and

     

    
      
        	
              	
                (b)

              	
                a
      charge of 10% of all Expenditures incurred under §5.1(a) in lieu of any
      fees for administrative services, head office overhead, use of the
      corporate infrastructure, and other general services provided by Kingsmere
      during the K-1 Option period or Teck during the term of any T-1 Option and
      any T-2 Option, including but not limited to costs for officers and their
      expenses, secretarial work, legal, accounting, human resources, taxes,
      payroll, data processing, employee benefit administration, office rents,
      office supplies, and other expenditures made for the benefit of the
      exploration work, which shall not be charged directly in §5.1(a)
      above.

              

      

    

     

    
      
        	
                5.2

              	
                For
      clarity but without limiting the definitions of those terms, there is
      distinction between Expenditures, which are costs, expenses, charges and
      outlays incurred during the periods in which the K-1 Option, T-1 Option
      and T-2 Option are being exercised, and Costs (as defined in § 18. 1),
      which are costs, expenses, charges and outlays incurred during the term
      the Joint Venture (as defined in § 15.1) is
  active.

              

      

    

     

    
      	
              6.

            	
              Termination
      Prior to Exercise of K-1 Option

            

    

     

    
      
        	
                6.1

              	
                Provided
      it has completed the $100,000 in aggregate committed Expenditures under
      §4.3 or made payment to Teck pursuant to §4.6, Kingsmere may, on Notice to
      Teck at any time prior to exercising the K-1 Option, terminate this
      Agreement so long as it is not in default of any of its obligations under
      this Agreement. Further, this Agreement shall terminate if Kingsmere fails
      to make the requisite Expenditures as set forth in §4.3 within the time
      periods for incurring those Expenditures, unless Kingsmere pays the amount
      of any deficiency under §4.7. On termination aforesaid, this Agreement
      shall, subject as provided below, be of no further force or effect and
      Kingsmere shall have no interest in the Property; provided, however, that
      Kingsmere shall satisfy any liabilities which are due or accruing due on
      the date of termination arising from its operations on or in respect of
      the Property and Kingsmere
shall:

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 6 -

       

    

    
      	
               
      

            	
              (a)

            	
              leave the Property in good
      standing with respect to work commitments, the filing of assessment work
      and paying of rental fees and taxes for a period of 60 days from
      the date of termination, free and clear of all liens, charges and
      encumbrances arising from operations hereunder (except for taxes not yet
      due, other inchoate liens and liens contested in good faith by Kingsmere)
      and in good standing with respect to all applicable environmental, safety
      and other statutory rules, regulations and orders arising from or
      applicable to work done on the Property by
  Kingsmere;

            

    

     

    
      	
               
      

            	
              (b)

            	
              complete
      all reclamation sufficient to release any reclamation bonds held by state
      or federal agencies for exploration and development activities within 180
      days of the date of termination;
and

            

    

     

    
      	
               
      

            	
              (c)

            	
              deliver
      to Teck, within 90 days of termination, a comprehensive report on all work
      carried out by Kingsmere on the Property (limited to factual matters
      only), together with all drill cores, assay samples, copies of all maps,
      drill logs, assay results and other factual technical data compiled by
      Kingsmere with respect to the Property which were not previously delivered
      to Teck.

            

    

     

    
      	
              7.

            	
              Technical
      Committee

            

    

     

    
      
        	
                7.1

              	
                The
      parties shall, as soon as practicable, establish a committee
      (the“Technical
      Committee”)
      to serve as a forum through which all parties can be actually
      engaged in the design and implementation of work plans and budgets (“Programs”) for the
      Property and to review Program results from time to time. The Technical
      Committee shall remain constituted until the earlier of the formation of a
      Joint Venture or the termination of the T-1 Option unexercised. The
      Technical Committee’s role is advisory only and is not intended to impede
      or obstruct Program approval or exploration activities. Final approval of
      Programs shall rest with Kingsmere during the K-1 Option period and with
      Teck during the term of any T-1 Option and any T-2 Option period. A party
      shall be entitled to representation on the Technical Committee and may be
      represented by such individuals as that party considers appropriate for
      the subject matter of discussion at the meetings and the nature of the
      Program to be considered. Without limiting generality, the Technical
      Committee shall:

              

      

    

     

    (a)           evaluate
the results of Program work;

     

    (b)           evaluate
and comment upon:

     

    
      	
               
      

            	
              (i)

            	
              the
      scope, budget and timing of proposed Programs including all alternative
      suggestions or proposals of Technical Committee members;
    and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      proposed acquisitions and proposed terms of
  acquisition.

            

    

     

    
      
        	
                7.2

              	
                Meetings
      shall be held on not less than seven days’ Notice from Kingsmere or Teck
      and shall be held not less frequently than annually unless otherwise
      agreed by all parties. If both parties are in attendance in person or by
      conference telephone call, their members may waive in writing the giving
      of Notice for any meeting, or the addition of business items that may not
      have been included in the itemized agenda either before or after the
      meeting.

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 7 -

    

     

    
      	
              8.

            	
              Holding
      of Property

            

    

     

    
      
        	
                8.1

              	
                At
      some point following execution of this Agreement, and no later than 30
      days after Kingsmere delivers the K-1 Expenditure Notice, Teck shall
      transfer its right, title and interest in and to the Property to
      Kingsmere. Upon such transfer Kingsmere shall hold title to the Property
      in trust for the parties, against which Teck may record a memorandum of
      its interest under this Agreement, until the earlier of the termination of
      the T-1 Option unexercised or the formation of the Joint Venture, at which
      time Kingsmere shall then transfer all right, title and interest in and to
      the Property to the Operator and the Operator shall hold the Property
      subject to this Agreement.

              

      

    

     

    
      	
              9.

            	
              Kingsmere’s
      Rights and Obligations

            

    

     

    
      
        	
                9.1

              	
                During
      the currency of the K-1 Option and thereafter until the earlier of the
      delivery of the T-1 Notice or delivery of the Final Expenditure Notice,
      Kingsmere for itself and its employees, agents, contractors,
      representatives and affiliates shall have the right and option, as between
      Kingsmere and Teck, to:

              

      

    

     

    
      
        	
              	
                (a)

              	
                enter
      upon the Property;

              

      

    

     

    
      	
            	
              (b)

            	
              have
      exclusive and quiet possession
thereof;

            

    

     

    
      
        	
              	
                (c)

              	
                have
      the exclusive right to do such prospecting, exploration, development or
      other mining work thereon and thereunder as Kingsmere in its sole
      discretion may consider advisable and including, without limitations, the
      removal of ores, minerals and metals from the Property but only for the
      purpose of testing; and

              

      

    

     

    
      
        	
              	
                (d)

              	
                have
      the exclusive right to bring upon and erect upon the Property such
      facilities and workings (whether fixed or moveable) as Kingsmere may
      consider advisable.

              

      

    

     

    
      
        	
                9.2

              	
                During
      the currency of the K-1 Option and thereafter until the earlier of the
      delivery of the T-1 Notice or delivery of the Final Expenditure Notice,
      Kingsmere shall, prior to November 15th
      of each year beginning in 2010, deliver to Teck a statement showing in
      reasonable detail the Expenditures incurred by Kingsmere during the
      previous 12 month period ending September 30th
      and the aggregate Expenditures incurred to the end of such period. Teck
      shall have 60 days from the time of receipt of such statement to request
      that Kingsmere’s independent external auditors review the accounts and
      provide their audit opinion as to the correctness of the statement, and
      the audit opinion shall be final and determinative of the amount of
      Expenditures incurred for the audited period; provided that, if such audit
      opinion discloses a deficiency in the amount of Expenditures required to
      be incurred to maintain the K-1 Option in good standing, Kingsmere may,
      unless Teck, in its sole discretion, waives the deficiency or permits
      Kingsmere to cure the same on the next Program, pay to Teck the amount of
      such deficiency within 15 days following receipt of Notice of such audited
      results, whereupon such amount shall be deemed to have been Expenditures
      incurred during the audited period. Kingsmere will bear the cost of the
      audit opinion if Kingsmere’s statement overstated Expenditures by greater
      than 5% or if Kingsmere does not pay the amount of the deficiency as
      contemplated above, else the cost of the audit opinion shall be borne by
      Teck. If Teck does not, within the above 60 day period, request that
      Kingsmere’s independent external auditors provide their audit opinion then
      such statement shall be deemed to be correct and unimpeachable
      thereafter.

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 8 -

    

     

    
      
        	
                9.3

              	
                During
      the currency of the K-1 Option and thereafter until the earlier of
      delivery of the T−1 Notice by Teck and the
      expiry of the time for Teck to deliver the T-1 Notice, Kingsmere shall
      assume all obligations and liabilities associated with the Property, and
      in connection therewith Kingsmere
shall:

              

      

    

     

    
      
        	
              	
                (a)

              	
                keep
      the Property free and clear of all liens, charges and encumbrances arising
      from its operations hereunder (except liens for taxes not yet due, other
      inchoate liens and liens contested in good faith by Kingsmere) and shall
      proceed with all diligence to contest and discharge any such lien that is
      filed and shall keep the Property in good standing by doing all necessary
      exploration work and all other acts and things which may be necessary in
      that regard and, while Teck holds title to the Property, providing Teck
      documentation and funds in advance of any due dates in order for Teck to
      file such work and make all necessary payments to maintain tenure to the
      Property in good standing;

              

      

    

     

    
      
        	
              	
                (b)

              	
                permit
      Teck, or its representatives duly authorized by it in writing, at its own
      risk and expense, access to the Property at all reasonable times and
      access to all factual records in the possession of Kingsmere, its
      representatives and agents in connection with work done on or with respect
      to the Property;

              

      

    

     

    
      
        	
              	
                (c)

              	
                furnish
      Teck with annual reports by November 15th
       of
      each year during the conduct of the work carried out by Kingsmere on or
      with respect to the Property and results obtained, together with regular
      (no less than quarterly) technical progress updates on the status of
      exploration in both printed and digital formats; provided that it will
      report any material results immediately and provided further that it will
      promptly provide Teck with more frequent reports upon Teck’s
      request;

              

      

    

     

    
      
        	
              	
                (d)

              	
                conduct
      all work on or with respect to the Property in a manner consistent with
      good exploration, engineering and mining practices and in compliance with
      all applicable laws, rules, permits, orders and
    regulations;

              

      

    

     

    
      
        	
              	
                (e)

              	
                provide
      worker's compensation coverage for its
  personnel;

              

      

    

    
       

      
        	
              	
                (f)

              	
                arrange
      and pay for with an insurer and in a form acceptable to Teck, acting
      reasonably:

              

      

    

     

    
      
        	
              	
                (i)

              	
                comprehensive
      general insurance with coverage of at least $5.0 million
      dollars;

              

      

    

     

    
      
        	
              	
                (ii)

              	
                automobile
      liability insurance, having a limit of not less than $2.0 million
      inclusive for any one occurrence, and insuring against claims for bodily
      injury, including death, and for Property damage arising out of the use of
      Kingsmere's owned, leased and non-owned vehicles for the performance of
      any activities under this
Agreement;

              

      

    

     

    
      
        	
              	
                (iii) 

              	
                 if
      helicopter or fixed wing aircraft are used in performance of the work
      contemplated by this Agreement, policies pertaining to aircraft liability
      (having a limit of not less than $1.0 million per seat inclusive for any
      one accident or occurrence; and insuring against claims for personal
      injury including death) and hull coverage should be
    included;

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 9 -

    

     

    
      	
            	
              (iv)

            	
              the
      policy of insurance under §9.3(f)(i) shall include clauses
      that:

            

    

     

    
      
        	
              	
                A.

              	
                define
      “additional insureds” as Teck and its affiliates and their directors,
      officers, employees and agents with respect to the activities of
      Kingsmere, their agents, contractors, licensees and invitees on or in
      respect of the Property;

              

      

    

     

    
      
        	
              	
                B.

              	
                contain
      a waiver of subrogation in favor of as Teck and its affiliates and their
      directors, employees, agents, contractors, licensees and invitees;
      and

              

      

    

     

    
      
        	
              	
                C.

              	
                confirm
      that the insurer shall provide Teck with at least 30 days Notice of
      variation, cancellation or termination of the
  coverage;

              

      

    

     

    
      
        	
              	
                (v)

              	
                promptly
      furnish a Certificate of Insurance, to Teck, c/o Teck Resources Limited’s
      Vice President, Risk & Security at the address as stated in §31.1, as
      proof of insurance in accordance with §9.3(f)(i);
  and

              

      

    

     

    
      
        	
              	
                (vi)

              	
                pay
      the full deductible amounts if there is a claim against any policy of
      insurance to be provided by Kingsmere under
  §9.3(f);

              

      

    

     

    
      
        	
              	
                (g)

              	
                not
      bring contaminants onto the Property except as required by standard
      industry practice in connection with the work being done on the Property
      and then to handle any such contaminants in a safe and proper
      manner;

              

      

    

     

    
      
        	
              	
                (h)

              	
                at
      all times retain any and all liabilities arising from the handling,
      treatment, storage, transportation or disposal of environmental or similar
      contaminants on or near the Property by Kingsmere or by any of Kingsmere’s
      contractors or agents;

              

      

    

     

    
      
        
          	
                	
                  (i)

                	
                  at
      its sole cost and expense, remove or take remedial action with regard to
      any materials released by Kingsmere or its contractors and agents, into
      the environment at, on or near the Property for which any removal or
      remedial action is required pursuant to any law, regulation, order or
      governmental action, whether enacted, made or declared in force before or
      after the date hereof, provided
that:

                

        

      

    

     

    
      	
               
      

            	
              (i)

            	
              no
      such removal or remedial action shall be taken except after reasonable
      advance Notice has been given to Teck;
and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      such removal or remedial action shall be undertaken in a manner so as to
      minimize any impact to the
Property;

            

    

     

    so that
at the time this Agreement terminates or Teck elects to exercise its T-1 Option,
the Property and Kingsmere’s work on the Property are compliant with all laws,
including without limitation, environmental laws;

     

    
      
        	
              	
                (j)

              	
                not
      abandon any portion of the Property, except as required by law, without
      the approval of Teck, and if the size of the Property must be reduced in
      accordance with mining laws, to consult with Teck prior to the
      reduction;

              

      

    

     

    
      
        	
              	
                (k)

              	
                not,
      without the written consent of Teck, not to be unreasonably withheld,
      commence a work program for the preparation of a Feasibility Study (as
      defined in §21.2) on the Property;
and

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 10 -

       

    

    
      
        	
              	
                (l)

              	
                not,
      without the written consent of Teck, place the Property into commercial
      production or commence development of the Property as a
    mine.

              

      

    

     

    
      	
              10.

            	
              Continued
      Funding by Kingsmere and Final Expenditure
  Notice

            

    

     

    
      
        	
                10.1

              	
                After
      the Kingsmere Earn-in Date, Kingsmere may continue to incur Expenditures
      on the Property and upon Kingsmere expending a minimum aggregate of
      $6,000,000 in Expenditures on the Property, Kingsmere shall forthwith
      provide Teck Notice (the“Final Expenditure Notice”) of
      such Expenditures which shall include a report setting out the nature of
      such Expenditures, a complete summary of the results of its work on the
      Property and a copy of all technical data not previously delivered to
      Teck.

              

      

    

     

    
      	
              11.

            	
              Forward
      Sale of Property

            

    

     

    
      
        	
                11.1

              	
                In
      addition to Teck’s rights under § 12 and § 13, if at any time prior to the
      delivery of the Final Expenditure Notice, should Kingsmere transfer, sell,
      assign or option its interest or rights under this Agreement or the
      Property to a third party, Kingsmere shall contemporaneous to the closing
      of such transaction pay Teck 15% of the proceeds (including, but not
      limited to, cash, securities, or other assets but excluding the value of
      any work commitment) from such
transaction.

              

      

    

     

    
      	
              12.

            	
              The
      T-1 Option

            

    

     

    
      
        	
                12.1

              	
                Teck reserves from
      the K-1 Option unto itself the right and option (the“T-1
      Option”) to earn back from Kingsmere a 51% interest in the Property
      under the terms set out in this §
      12.

              

      

    

     

    
      
        	
                12.2

              	
                Teck
      may elect, at any time from the date of this Agreement and up to the
      60th
       day
      after the Final Expenditure Notice, to invoke the T-1 Option, as
      contemplated in §12.1, by delivering Notice to Kingsmere (the “T-1 Notice”) that it is
      invoking its T-1 Option.

              

      

    

     

    
      
        	
                12.3

              	
                If
      Teck delivers the T-1 Notice prior to the receipt of the K-1 Expenditure
      Notice, Kingsmere shall be deemed to have exercised the K-1 Option and
      earned a 100% interest in the Property subject only to the T-1 Option, T-2
      Option and NSR.

              

      

    

     

    
      
        	
                12.4

              	
                Teck
      may exercise the T-1 Option by incurring and sole funding aggregate
      optional Expenditures equal to 1.5 times the Expenditures incurred by
      Kingsmere prior to the T-1 Notice (the“T-1 Requirement”) to a
      maximum Expenditure of $9,000,000 (being 1.5 times the $6,000,000 required
      for Kingsmere to deliver the Final Expenditure Notice), which Expenditures
      must be incurred by Teck, subject to events of force
      majeure, within a time period equal to the period of time in months
      from the date of this Agreement to the delivery of the T-1 Notice, rounded
      up to the next closest month (the “T-1
    Term”).

              

      

    

     

    
      
        	
                12.5

              	
                Subject
      to earlier termination hereunder, Teck shall have exercised the T-1 Option
      on the date (the“T-1 Exercise Date”)
      that it has completed the T-1 Requirement in accordance with §12.4
      or §12.6 and delivered Notice thereof to Kingsmere, which Notice shall
      include a statement in reasonable detail evidencing its Expenditures and a
      technical report on the results obtained from those Expenditures. On the
      T-1 Exercise Date, the Property shall be owned by Teck as to a 51 %
      interest and Kingsmere as to a 49% interest and, if Teck hasn’t
      concurrently delivered the T-2 Notice, a Joint Venture shall be deemed to
      be formed under § 15.1(a). On the T-1 Exercise Date the NSR retained by
      Teck under §4.2 shall be
extinguished.

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 11 -

    

     

    
      
        	
                12.6

              	
                If
      Teck fails to incur the requisite aggregate Expenditures to maintain the
      T-1 Option as contemplated in §12.4, and wishes to exercise the T-1
      Option, Teck may pay in cash to Kingsmere, within 30 days after the
      Expenditures’ due date, the amount of the deficiency and any amount so
      paid shall be deemed to have been Expenditures duly and timely incurred by
      Teck.

              

      

    

     

    
      
        	
                12.7

              	
                The
      T-1 Option will expire if Teck does not deliver the T-1 Notice within the
      time permitted in § 12.2 and will terminate
if:

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              Teck
      fails to incur the requisite Expenditures as contemplated in § 12.4 and
      fails to make a cash payment in lieu of the deficiency pursuant to § 12.6;
      or

            

    

     

    
      	
               
      

            	
              (b)

            	
              Teck
      elects to terminate the T-1 Option which it may do at any time by giving
      Notice to Kingsmere;

            

    

     

    whereupon
Kingsmere will hold the Property as to 100% subject only to the NSR.

     

    
      	
              13.

            	
              The T-2
      Option

            

    

    
       

      
        	
                13.1

              	
                Should
      Teck exercise the T-1 Option, Teck will have the right and option
      (the“T-2
      Option”) to
      earn back to an additional 14% interest in the Property (to hold a 65%
      interest).

              

      

    

     

    
      
        	
                13.2

              	
                Teck
      may elect, concurrently with delivering Notice under § 12.5 that it has
      exercised the T-1 Option, to invoke the T-2 Option by delivering Notice
      (the“T-2 Notice”)
      to Kingsmere that it is invoking the T-2
  Option.

              

      

    

     

    
      
        	
                13.3

              	
                Teck
      may earn back the additional 14% interest in the Property (to hold a 65%
      interest) by incurring and sole funding an additional amount equal to the
      T-1 Requirement in optional Expenditures (the“T-2 Requirement”),
      which Expenditures must be incurred by Teck, subject to events of
      force
      majeure, within a period of time in months (rounded up to the
      nearest month), from the date of the T-2 Notice, equal to 50% of the T-1
      Term.

              

      

    

     

    
      
        	
                13.4

              	
                If
      Teck has not incurred the T-2 Requirement within the time period specified
      in § 13.3, Teck may pay in cash to Kingsmere, within 30 days of the due
      date listed for the Expenditures, the amount of the deficiency and any
      amount so paid shall thereupon be deemed to have been Expenditures duly
      and timely made or incurred by
Teck.

              

      

    

     

    
      
        	
                13.5

              	
                Subject
      to earlier termination hereunder, Teck shall have exercised its T-2 Option
      on the date(“T-2
      Exercise Date”) that it has completed the T-2 Requirement in
      accordance with § 13.3 or § 13.4 and delivered Notice thereof to Kingsmere
      which Notice shall include a statement in reasonable detail evidencing
      such Expenditures and a technical report on the results obtained from such
      Expenditures. On the T-2 Exercise Date, the Property shall be owned by
      Teck as to a 65% interest and Kingsmere as to a 35% interest and a Joint
      Venture shall be deemed to be formed under §
  15.1(b).

              

      

    

     

    
      
        	
                13.6

              	
                The
      T-2 Option will expire if Teck does not deliver the T-2 Notice within the
      time permitted in § 13.2 and will terminate
if:

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 12 -

    

     

    
      	
               
      

            	
              (a)

            	
              Teck
      fails to incur the requisite Expenditures as contemplated in § 13.3 and
      fails to make a cash payment in lieu of the deficiency pursuant to § 13.4;
      or

            

    

     

    
      	
               
      

            	
              (b)

            	
              Teck
      elects to terminate the T-2 Option which it may do at any time by giving
      Notice to Kingsmere;

            

    

     

    whereupon
the Property will be held 51% by Teck and 49% by Kingsmere and a Joint Venture
shall be deemed to be formed under § 15.1(a).

     

    
      	
              14.

            	
              Rights
      and Obligations during T-1 Option and T-2
Option

            

    

     

    
      
        	
                14.1

              	
                During
      the term of any T-1 Option and any T-2 Option Teck shall have the
      exclusive right and option, as between Kingsmere and Teck,
    to:

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              enter
      upon the Property;

            

    

     

    
      	
            	
              (b)

            	
              have
      exclusive and quiet possession
thereof;

            

    

     

    
      	
               
      

            	
              (c)

            	
              do
      such prospecting, exploration, development or other mining work thereon
      and thereunder as Teck in its sole discretion may consider advisable
      including, without limitation, the removal of ores, minerals and metals
      from the Property but only for the purpose of testing;
  and

            

    

     

    
      	
               
      

            	
              (d)

            	
              bring
      and erect upon, and remove from, the Property such facilities and workings
      (whether fixed or moveable) as Teck may consider
  advisable.

            

    

     

    and Teck
shall:

     

    
      	
               
      

            	
              (e)

            	
              assume
      all obligations and liabilities associated with any leases, licenses and
      authorizations in relation to the Property, and in connection therewith
      Teck shall have the same rights and obligations as Kingsmere had under
      §9.3 during the K-1 Option term;

            

    

     

    
      	
               
      

            	
              (f)

            	
              by
      March 1st in each year, deliver
      to Kingsmere a statement showing in reasonable detail the Expenditures
      incurred by Teck on the Property for the 12 month period ending December
      31st
      and the aggregate Expenditures incurred to the end of such period.
      Kingsmere shall have the same audit rights with respect to such statement
      as did Teck under §9.2 during the K-1 Option
  period.

            

    

     

    Joint Venture
Terms

     

    
      	
              15.

            	
              Formation,
      Funding and Dilution of the Joint
Venture

            

    

     

    
      
        	
                15.1

              	
                A
      joint venture (the“Joint Venture”) shall
      be deemed to be formed on the later of the T-1 Exercise Date and T-2
      Exercise Date or the date that the T-2 Option terminates or expires
      unexercised (the “Participation Date”),
      to further explore and, if warranted, develop the subject Property,
      with the parties’ Joint Venture interests
being:

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              51%
      Teck and 49% Kingsmere if the Joint Venture is formed as a result of §12.5
      or § 13.6; or

            

    

     

    
      	
               
      

            	
              (b)

            	
              65%
      Teck and 35% Kingsmere if the Joint Venture is formed as a result of
      §13.5.

            

    

     

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 13 -

    

     

    
      
        	
                15.2

              	
                From
      the formation of the Joint Venture, each party shall be liable for its
      pro-rata share of Costs and liabilities in accordance with its interest in
      the Joint Venture.

              

      

    

     

    
      
        	
                15.3

              	
                On
      the Participation Date, the total initial deemed Costs(“TDC”) for the purposes
      of the Joint Venture shall be equal to the sum of 100% of all Expenditures
      incurred by Teck to the Participation Date plus 100% of all Expenditures
      incurred by Kingsmere to the Participation Date. Teck’s initial deemed
      Costs shall be an amount equal to Teck’s initial interest in the Joint
      Venture on the Participation Date (being 51% or 65% as the case may be)
      multiplied by the TDC and Kingsmere’s initial deemed Costs shall be an
      amount equal to Kingsmere’s initial interest in the Joint Venture on the
      Participation Date (being 49% or 35% as the case may be) multiplied by the
      TDC.

              

      

    

     

    
      
        	
                15.4

              	
                Subsequent
      to the Participation Date, the respective interests of the parties shall
      be determined from time to time as being equal to the product obtained
      by:

              

      

    

     

    
      
        	
              	
                (a)

              	
                multiplying
      100% by;

              

      

    

     

    
      
        	
              	
                (b)

              	
                the
      respective parties initial deemed Costs on the Participation Date under
      §15.3 plus the amount of the respective parties’ contributions to Costs
      subsequent to the Participation
Date;

              

      

    

     

    
      
        	
              	
                (c)

              	
                divided
      by the TDC plus the amount of all contributions to Costs made subsequent
      to the Participation Date by all
parties.

              

      

    

     

    
      
        	
                15.5

              	
                Prior
      to a Production Decision, if a party elects not to contribute its pro-rata
      share of Costs of a work program or Feasibility Study, the other parties
      may contribute such shortfall pro-rata to their interests and if another
      party contributes to the shortfall thereby created the interests of the
      parties shall be adjusted according to § 15.4 so that each party holds an
      interest in the Joint Venture proportionate to its deemed and actual
      contributions. However, if any program is completed with less than 80% of
      the budgeted Costs having been incurred, the non-contributing party may
      contribute, within 30 days of completion of the program, its proportionate
      share of the actual Costs incurred and thereby maintain its
      interest.

              

      

    

     

    
      
        	
                15.6

              	
                If
      any party dilutes its interest to less than 10% in the Joint Venture, its
      interest shall then be converted to a 5% net profit interest royalty on
      the Property (the“NPI”), as further
      defined in Schedule “C”.

              

      

    

     

    
      
        	
                15.7

              	
                A
      party shall be entitled to surrender its interest to the other parties on
      Notice to them. A surrender of interest shall not release a party from
      liabilities accrued prior to the effective surrender date. Should the
      other parties not consent to receive the interest offered for surrender
      under this § 15.7 then the Joint Venture shall be terminated and the
      assets shall be liquidated or sold and the assets or proceeds from the
      sale thereof distributed to the parties, net of liabilities hereunder or
      related thereto, in accordance with their interests in the Joint Venture.
      Each party shall be responsible for its cost share of all costs and
      expenses related to such termination and
  liquidation.

              

      

    

     

    
      	
              15.8

            	
              Upon
      payment for Costs incurred by the Operator under the Joint Venture, a
      party contributing
      to those Costs shall be entitled to all tax benefits with respect
      thereto.

            

    

     

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 14 -

       

    

    
      
        	
                16.

              	
                Management
      Committee

              

      

    

     

    
      
        	
                16.1

              	
                Upon
      the formation of the Joint Venture, a management committee
      (the“Management
      Committee”) shall be formed to manage all exploration, development
      and operating programs on the Property with Kingsmere and Teck each having
      two representatives. Decisions will be made by simple majority vote based
      on the parties’ interests and each party’s representatives shall have a
      collective vote equal to the interest held by the party they
      represent.

              

      

    

     

    
      	
              17.

            	
              Operator

            

    

     

    
      
        	
                17.1

              	
                Except
      as otherwise specifically provided for herein to the contrary, Teck shall
      be the initial operator (the“Operator”) of all
      programs on the Property, and shall remain as Operator so long as Teck
      holds the single largest interest in the Joint Venture. The Operator will
      be responsible for the daily direction of exploration, development and
      mining activities which it carries out on behalf of the Joint Venture and,
      in connection therewith, will have the same rights and obligations as set
      out in §9.1, §9.2 and §9.3(a) through
§9.3(f).

              

      

    

     

    
      	
              18.

            	
              Costs Defined 

            

    

     

    
      	
              
                18.1

              

            	
              
                "Costs"
      means:

            

    

     

    
      
        	
              	
                (a)

              	
                all
      costs, expenses, charges and outlays, direct and indirect, made or
      incurred by the Operator on or in respect of the Property after the
      formation of the Joint Venture;
and

              

      

    

     

    
      
        	
              	
                (b)

              	
                an
      Operator's fee as follows:

              

      

    

     

    
      
        	
              	
                (i)

              	
                an
      operator's fee of 10% of all costs, expenses, changes and outlays under §
      18.1(a) incurred during the Joint Venture exploration period (prior to a
      Production Decision); and

              

      

    

     

    
      
        	
              	
                (ii)

              	
                an
      operator's fee of 3% of costs incurred after a Production Decision is made
      for the Property.

              

      

    

     

     
This fee is intended as a reimbursement of the costs of the time incurred by
head office management and support functions in respect of approval programs on
the Property, which is not billed as cost under § 18.1(a). The fee has been
established on the basis that the party acting as Operator shall not profit nor
suffer loss by virtue of providing these services. This fee shall not be subject
to audit but may be reviewed by the parties from time to time.

     

    
      	
              19.

            	
              Exploration
      Programs

            

    

     

    
      
        	
                19.1

              	
                Prior
      to a Production Decision, the Operator shall propose draft work programs,
      by February 28th
       of
      each year, for Management Committee approval and carry out approved
      programs. Any Feasibility Study (as defined in §21.2) shall be prepared
      under a separate program and budget and shall be for such term as the
      Operator feels is appropriate for the completion of such Feasibility
      Study.

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 15 -

    

     

    
      
        
          	
                  19.2

                	
                  Each
      party may, within 30 days of Management Committee approval, elect to
      contribute its proportionate share of the Costs required to conduct each
      program. If a party (a“Non-Contributor”) elects or
      is deemed to have elected not to contribute its proportionate share of a
      program, the other party (a “Contributor”) that has
      elected to contribute its proportionate share of the program may give
      Notice to the Operator and the Non-Contributor stating that it will
      contribute, in addition to its own proportionate share, the proportionate
      share of the
Non-Contributor.

                

        

      

    

     

    
      
        	
                19.3

              	
                Notwithstanding
      §20.1, the Operator will not proceed with any program which is not fully
      subscribed. If the parties fully subscribe to a program, the Operator will
      proceed with such program.

              

      

    

     

    
      
        	
                19.4

              	
                The
      Operator may invoice for exploration Costs incurred or to cash call
      reasonably in advance of requirements. If a party has elected to
      contribute to a program and does not pay the amount invoiced for said
      program within 30 days, the Operator may demand payment. If payment is not
      made within 30 days of demand, and subject to §20.1, the Operator may, in
      its sole discretion, elect to
either:

              

      

    

     

    
      
        	
              	
                (a)

              	
                advance
      all of the unpaid Cost share of the defaulting party. The party or parties
      making the advance will be entitled to recover the amount so paid,
      together with interest thereon from the date so paid at the Prime Rate
      plus 2% calculated monthly. The party or parties making the advance shall
      have a lien against the defaulting party’s interest, which it may enforce
      by selling the defaulting party’s interest;
or

              

      

    

     

    
      
        	
              	
                (b)

              	
                pay
      the amount of the defaulted payment, in which case the defaulting party
      shall be deemed to have incurred dilution at a rate equal to twice the
      standard dilution rate. Thereupon the interests of the defaulting party
      and each party that made payment shall be adjusted and the deemed total
      Costs of those parties shall be adjusted to reflect the interest held
      (i.e.: the defaulting parties deemed Costs shall be reduced by an amount
      which is equal to the defaulted payment (in this § 19.4 the “reduced amount”) and
      the total deemed Costs of the parties who made payment on behalf of the
      defaulting party shall be increased by the payment made plus an equal
      share of the reduced amount); provided that if a party's interest is
      reduced to less than 10% it shall be deemed to have assigned and conveyed
      its interest to the other party, or parties as the case may be, and in
      consideration therefore the defaulting party will be entitled to receive a
      NPI capped at such party’s actual contributions to Costs hereunder. The
      remaining parties shall apportion the assigning party’s deemed Costs
      amongst them pro rata to their interests and adjust their interests
      according to § 15.4. If a written demand is made as aforesaid, it shall
      contain a reminder to the party upon which demand is being made that its
      interests under this Agreement will be converted to a NPI interest if
      payment of its proportionate share is not made as
  demanded.

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 16 -

    

     

    
      	
              20.

            	
              Mandatory
      Program

            

    

     

    
      
        	
                20.1

              	
                If,
      in any year prior to a Production Decision, there is no approved program
      and circumstances are such that the Operator must incur Costs in order to
      maintain tenure to the Property, to satisfy contractual obligations or
      obligations imposed by law or to prevent waste or protect life and
      property, the Operator shall be entitled to propose a program
      (the"Mandatory
      Program") of Costs to maintain tenure to the Property, to satisfy
      contractual obligations that have been entered into as the result of a
      previously approved program and to satisfy obligations imposed by law or
      to prevent waste or protect life and property. The Mandatory Program shall
      be deemed to be approved and each of the parties shall be obligated to
      contribute its proportionate share of Costs. If payment is not made within
      30 days of written demand, the other party may elect to advance the amount
      of the defaulted payment and the defaulting party shall be deemed to have
      assigned and conveyed its interest to the other party, or parties as the
      case may be, and in consideration therefore the defaulting party will be
      entitled to receive a NPI capped at such party’s actual contributions to
      Costs hereunder. The remaining parties shall apportion the assigning
      party’s deemed Costs amongst them pro rata to their interests and adjust
      their interests according to §15.4. If a written demand is made as
      aforesaid, it shall contain a reminder to the party upon which demand is
      being made that its interests under this Agreement will be converted to a
      NPI interest if payment of its proportionate share is not made as
      demanded.

              

      

    

     

    
      	
              21.

            	
              Feasibility
      Study

            

    

     

    
      
        	
                21.1

              	
                The
      Management Committee may direct the Operator to prepare a Feasibility
      Study, as herein defined, as a separate program. The Feasibility Study is
      to be in a form which the Operator, acting reasonably and in good faith,
      considers suitable for each of the parties to present to a lender in an
      application for production financing for their respective shares of mine
      construction Costs if the Feasibility Study was assumed to be positive and
      a production decision was assumed to be
made.

              

      

    

     

    
      
        	
                21.2

              	
                “Feasibility Study”
      means a study prepared pursuant to this Agreement that shows the
      feasibility of placing the Property or part thereof into commercial
      production. Any Feasibility Study prepared pursuant to this Agreement
      shall contain the geological, engineering, operating, economic and other
      factors which the Operator considers relevant, in sufficient detail to
      provide a comprehensive analysis of the economic and technical viability
      of constructing and operating a mine on the Property. The Feasibility
      Study shall examine the following matters: ore reserves; mining methods;
      metallurgy and processing (including metal recovery); environment,
      tailings and waste disposal; capital and operating cost estimates;
      manpower, social and community affairs; transportation methods and costs;
      marketing; project financing alternatives; a sensitivity analysis; such
      other matters as the Operator considers appropriate. The Feasibility Study
      shall include at least the following
  information:

              

      

    

     

    
      
        	
              	
                (a)

              	
                a
      description of that part of the Property to be covered by the proposed
      mine;

              

      

    

     

    
      
        	
              	
                (b)

              	
                the
      estimated recoverable reserves of minerals and the estimated composition
      and content thereof;

              

      

    

     

    
      
        	
              	
                (c)

              	
                the
      proposed procedure for development, mining and
  production;

              

      

    

     

    
      
        	
              	
                (d)

              	
                results
      of ore amenability tests;

              

      

    

    
      
        	
              	
                (e)

              	
                the
      nature and extent of the facilities proposed to be acquired which may
      include mill facilities, if the size, extent and location of the ore body
      makes such mill facilities feasible, in which event the study shall also
      include a preliminary design for such
mill;

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 17 -

    

     

    
      
        	
              	
                (f)

              	
                the
      total costs, including capital budget, which are reasonably required to
      purchase, construct and install all structures, machinery and equipment
      required for the proposed mine, including a schedule of timing of such
      requirements;

              

      

    

     

    
      
        	
              	
                (g)

              	
                all
      environmental impact studies and
costs;

              

      

    

     

    
      
        	
              	
                (h)

              	
                the
      period in which it is proposed the Property shall be brought to commercial
      production;

              

      

    

     

    
      
        	
              	
                (i)

              	
                such
      other data and information as are reasonably necessary to substantiate the
      existence of an ore deposit of sufficient size and grade to justify
      development of a mine, taking into account relevant business, tax and
      other economic considerations;
and

              

      

    

     

    
      
        	
              	
                (j)

              	
                working
      capital requirements for the initial four months of operation of the
      Property as a mine or such longer period as may be reasonably justified in
      the circumstances.

              

      

    

     

    
      	
              22.

            	
              Production
      Decision and Funding

            

    

     

    
      
        	
                22.1

              	
                The
      Management Committee shall not meet to consider a Feasibility Study any
      sooner than 60 days after it was delivered to each party, unless the
      parties agree to an earlier meeting. Any decision to place the Property
      into production is to be based on a production plan approved by the
      Management Committee and based on an approved Feasibility Study with such
      modifications, if any, as the Management Committee considers necessary or
      desirable.

              

      

    

     

    
      
        	
                22.2

              	
                The
      Management Committee may approve a production plan (including a mine
      construction Cost estimate, with reasonable allowance for contingencies,
      which the Management Committee considers necessary to implement the
      production plan, together with a schedule of advances which the parties
      shall be required to make in respect of Costs required to construct and to
      operate the mine) and the giving of a Notice to each of the parties that a
      decision has been made to construct a mine on the Property (a“Production
      Decision”).

              

      

    

     

    
      
        	
                22.3

              	
                Each
      party may, by Notice within 60 days of receipt of Notice of a Production
      Decision, elect to participate in placing the Property into production by
      committing to contribute its proportionate share of the Costs required to
      construct and to operate the mine in proportion to its interest, or some
      lesser share but at least 10%. If a party so elects to contribute, it
      shall be deemed to hold an interest equivalent to that percentage which it
      elected to contribute. If a party elects not to contribute at least a 10%
      share, it shall be deemed to have assigned and conveyed its interest to
      the other party, or parties as the case may be, and in consideration
      therefore the party will be entitled to receive a NPI. If a party elects
      to fund some lesser share than its entire interest percentage, but at
      least 10%, the interest that was forgone in the election shall be deemed
      to have been assigned to the other party, for no consideration, if such
      other party elects to increase its contribution thereby. If elections have
      not been made to fully fund the mine construction Costs then the
      production plan shall be deemed
withdrawn.

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 18 -

    

     

    
      
        	
                22.4

              	
                A
      party that elected to contribute to mine construction Costs as
      contemplated in §22.3 shall separately provide its share of mine
      construction Costs. Solely in order to secure loans to meet its
      contributions toward mine construction Costs, a party may pledge,
      mortgage, charge or otherwise encumber its interest provided that pledgee,
      mortgagee, holder of the charge or encumbrance undertakes in writing with
      all of the parties that:

              

      

    

     

    
      
        	
              	
                (a)

              	
                its
      security shall be held subject to this
  Agreement;

              

      

    

     

    
      
        	
              	
                (b)

              	
                its
      remedies under that security shall be limited to the sale of the whole
      (but only the whole) of the encumbering party’s secured interest;
      and

              

      

    

     

    
      
        	
              	
                (c)

              	
                its
      security and right of payment shall be subordinate to the terms of this
      Agreement.

              

      

    

     

    
      	
              23.

            	
              Mine
      Construction and Operations

            

    

     

    
      
        	
                23.1

              	
                A
      mine shall be constructed substantially in conformity with the production
      plan approved under §22.2, but subject to the right of the Management
      Committee to approve such reasonable variations in construction as it may
      deem advisable. Upon mine construction commencing the Operator shall
      provide monthly progress reports to the
  non-Operator.

              

      

    

     

    
      
        	
                23.2

              	
                Commencing
      with the completion date of mine construction, all mining operations shall
      be planned and conducted and all estimates, reports and statements shall
      be prepared and made on the basis of annual operating plans approved by
      the Management Committee. Operating plans will be decided by the
      Management Committee on a calendar year basis taking into reasonable
      account the views of the parties in respect of the operating plans with
      the intent that operating plans will be designed so that the mine is
      operated at production rates contemplated in the Feasibility Study but
      subject to the right of the Management Committee to approve such
      reasonable variations in production rates as it may deem advisable. If the
      Management Committee is deadlocked over the first or any subsequent
      operating plan, the operating plan proposed by the Operator will prevail
      provided the budget does not exceed the budget forecast for that year in
      the Feasibility Study, or a forecast subsequently unanimously approved by
      the Management Committee, plus
10%.

              

      

    

     

    
      
        	
                23.3

              	
                The
      Operator may invoice for mine construction Costs or mine operating Costs
      incurred or to cash call reasonably in advance of requirements. If a party
      does not pay the amount invoiced within 30 days, the Operator may demand
      payment. If payment is not made within 30 days of demand the other party
      may elect to pay all or a portion of the unpaid cost share of the
      defaulting party. If the other party advances such unpaid share, then it
      shall be entitled to recover the amount so paid, together with interest
      thereon from the date so paid at a per annum rate equal to Prime Rate plus
      2%, calculated monthly. The party making the advance shall have a lien
      against the defaulting party’s interest and shall
  have:

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              the
      right to take possession of all or a portion of the defaulting party’s
      interest in the Property and to sell, or purchase, such interest to
      recover the amount of such default;

            

    

     

    provided
that

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 19 -

    

     

    
      	
               
      

            	
              (b)

            	
              if
      the Property is in production the party making the advance will, in the
      interim of proceeding under §23.3(a) above, have a prior and a first right
      to receive, sell and retain the profits from the share of mineral products
      of the defaulting party until such party has received proceeds of a value
      equal to (after the costs of sale of the mineral products and costs of
      enforcement of the lien) the amount advanced, together with interest
      thereon at the rate specified.

            

    

     

    
      
        	
                23.4

              	
                The
      Management Committee may temporarily suspend or permanently terminate
      operations pursuant to a suspension or closure plan approved by the
      Management Committee. The definitive agreement contemplated under §33.2
      shall provide for suspension of operations during sustained periods of
      sustained negative operating cash flow and a process for resumption of
      suspended operations.

              

      

    

     

    
      	
              24.

            	
              Abandonment
      of Property

            

    

     

    
      
        	
                24.1

              	
                If
      the Management Committee elects to abandon any mineral claim comprising
      the Property and any party (the“Contesting Party”) has
      voted against such abandonment, then each party shall be notified promptly
      of such abandonment at least 60 days prior to the anniversary of the
      recording date for the claim to be abandoned. If the Contesting Party,
      within 30 days of receiving a Notice of abandonment, notifies the
      Management Committee that the Contesting Party wishes to acquire the
      abandoned claim, then the parties shall cause a transfer of the claim to
      be abandoned to the Contesting Party as soon as practicable
      thereafter.

              

      

    

     

    
      	
              25.

            	
              Indemnification
      During Joint Venture

            

    

     

    
      
        	
                25.1

              	
                Subject
      to §25.2 and §25.5, following the formation of the Joint Venture, each
      party shall indemnify and save the Operator harmless from and against any
      loss, liability, claim, demand, damage, expense, injury and death,
      including legal fees, resulting from any act or omission of the Operator
      or its officers, employees or
agents.

              

      

    

     

    
      
        	
                25.2

              	
                Notwithstanding
      §25.1, the Operator shall not be indemnified nor held harmless by any of
      the parties for any loss, liability, claim, demand, damage, expense,
      injury or death (including, without limiting the generality of the
      foregoing, legal fees) resulting from the negligence or willful misconduct
      of the Operator or its officers, employees or
  agents.

              

      

    

     

    
      
        	
                25.3

              	
                An
      act or omission of the Operator or its officers, employees or agents done
      or omitted to be done:

              

      

    

     

    
      
        	
              	
                (a)

              	
                at
      the direction, or within the scope of the direction, of the Management
      Committee; or

              

      

    

     

    
      
        	
              	
                (b)

              	
                with
      the concurrence of the Management Committee;
or

              

      

    

     

    unilaterally
and in good faith by the Operator to protect life or property; shall be deemed
not to be negligence or willful misconduct provided that the Operator has
otherwise performed its duties and obligations as contemplated in §
17.1.

     

    
      
        	
                25.4

              	
                The
      obligation of the other Parties to indemnify and save the Operator
      harmless pursuant to §25.1 shall be in proportion to their respective
      interest in the Joint Venture as at the date that the loss, liability,
      claim, demand, damage, expense, injury or death occurred or
      arose.

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 20 -

    

     

    
      
        	
                25.5

              	
                The
      Operator shall not be liable to any other party nor shall any party be
      liable to the Operator in contract, tort or otherwise for any special or
      consequential damages, including, without limiting the generality, loss of
      revenues or profits.

              

      

    

     

    
      	
              26.

            	
              Marketing
      Rights

            

    

     

    
      
        	
                26.1

              	
                A
      party contributing to mine construction Costs and mine operating Costs
      shall take, in kind, its proportionate share of any minerals produced and
      to separately dispose of the same. Kingsmere shall appoint Teck as their
      sole marketing agent to sell and dispose of their share of all base metals
      or base metal concentrates produced from the Property. Kingsmere and Teck
      shall negotiate in good faith as to the commercially competitive terms
      under which Teck shall market Kingsmere’s share of such
      products.

              

      

    

     

    Terms Applicable to the
Entire Agreement

     

    The
following terms apply to the K-1 Option, T-1 Option, T-2 Option and Joint
Venture phases:

     

    
      	
              27.

            	
              Restrictions
      On Alienation

            

    

     

    
      
        	
                27.1

              	
                Except
      in accordance with this Agreement no party shall transfer, sell, dispose
      or encumber its interest in the Property or rights under this
      Agreement.

              

      

    

     

    
      	
              27.2

            	
              No
      party shall institute any proceedings to partition the
      Property.

            

    

     

    
      
        	
                27.3

              	
                Subject
      to §27.4 and §27.5, each party shall have the right to transfer, sell or
      assign its interest or rights under this Agreement to a third party. For
      greater certainty, a party wishing to dispose of its interest or rights
      under this Agreement does not have to offer to sell all or any such
      interest or rights under this Agreement to the other
  party.

              

      

    

     

    
      
        	
                27.4

              	
                Prior
      to Kingsmere Earn-in Date, should Kingsmere transfer, sell or assign its
      interest or rights under this Agreement to a third party such transfer,
      sale or assignment shall be subject to Kingsmere unconditionally
      guaranteeing to Teck the due and punctual payment by such assignee of any
      shortfall in the Expenditures and any interest as contemplated in §4.6 of
      this Agreement.

              

      

    

     

    
      
        	
                27.5

              	
                Any
      allowable transfers under this §27 are subject to: (a) the transferee
      delivering, in a form acceptable to the other party, a document whereby it
      agrees to be bound by, and comply with, the terms of this Agreement; and
      (b) such assignment does not result in any one party holding less than a
      10% interest in the Property and if a party assigns, transfers, sells or
      disposes of an interest in this Agreement or the Property to an affiliate,
      it shall, so long as such party remains an affiliate covenant to cause
      such affiliate to perform all of the obligations on its part to be
      performed under this Agreement so long as such party remains an
      affiliate.

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 21 -

    

     

    
      	
              28.

            	
              Area
      of Interest

            

    

     

    
      
        	
                28.1

              	
                During
      the term of this Agreement and any Joint Venture formed hereunder, there
      shall be an area of interest around the Property which will comprise any
      lands within the area of interest, inclusive of the Property, as the area
      of interest is described on the attached Schedule “A1”. If either party
      stakes or acquires any surface or water rights or mineral Property within
      the area of interest, it will offer to have those rights or Property
      included in this Agreement; it being agreed that the parties shall consult
      each other prior to making any acquisitions of lands held by third parties
      within the area of interest. The other party shall have 30 days to elect
      whether to accept that offer and, where appropriate, pay its share of the
      costs of acquisition; failing which election and payment, the acquiring
      party may retain the rights or Property so acquired free of the terms of
      this Agreement. This Agreement shall not restrict the rights of either
      party to acquire mineral rights or other Property outside the area of
      interest.

              

      

    

     

    
      
        	
                28.2

              	
                If
      the K-1 Option terminates the area of interest provision shall remain in
      effect as follows:

              

      

    

    
      
        	
              	
                (a)

              	
                in
      the case of Kingsmere’s obligations to Teck, for 120 days after Kingsmere
      has delivered a comprehensive report under §6.1(c) to Teck in respect of
      Kingsmere’s work on the Property;
and

              

      

    

    
      	  	
              (b)

            	
              shall
      terminate immediately with respect to Teck’s obligations to Kingsmere.
      

            

    

     

    
      
        	
                29.

              	
                 Force
      Majeure

              

      

    

     

    
      
        
          
            	
                    29.1

                  	
                    A
      party may claim force majeure if such
      party is prevented from or delayed in performing any obligation under this
      Agreement by any cause beyond its reasonable control, excluding only lack
      of finances, but including, without limitation, acts of God, strikes,
      lockouts, or other industrial disputes, laws, rules and regulations or
      orders of any duly constituted court or governmental authority, acts of
      terrorism, acts of the public enemy, war, insurrection, riots, fire,
      storm, flood, unusually harsh weather causing delay, explosion, government
      restriction, failure to obtain any approvals required from regulatory
      authorities or unavailability of equipment, materials or transportation
      (provided the approvals were properly applied for and pursued in good
      faith and on a timely basis or the equipment, materials or transportation
      were sought in a timely way), any delay by a regulatory authority in
      renewing a tenure to the Property or, where a party is entitled thereto,
      to a higher form of tenure being issued (provided applications therefor
      were made reasonably in advance of the tenure due date and pursued in good
      faith), interference by third party interests groups (including
      environmental lobbyists and First Nations or indigenous peoples’ groups)
      or other causes whether of the kind enumerated above or otherwise, then
      the time for the performance of that obligation shall be extended for a
      period equivalent to the total period the cause of the prevention or delay
      persists regardless of the length of such total period. A party may also
      claim force majeure,
      if such party, acting reasonably, believes that social or political
      unrest in the region of the Property or the threat of that unrest will
      endanger the safety of its employees or the employees of its contractors
      if the party were to continue with the work program unless such social or
      political unrest is caused by action or inaction by that party. The party
      that claims force
      majeure shall promptly notify the other party and shall take all
      reasonable steps to remove or remedy the cause of the prevention or delay
      insofar as it is reasonably able to do so and as soon as possible. The
      party claiming force
      majeure will provide the other party with a regular a written
      report summarizing events that have occurred and prospects for
      resolution.

                  

          

        

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 22 -

    

     

    
      	
              30.

            	
              Confidentiality
      and Disclosure

            

    

     

    
      
        	
                30.1

              	
                During
      the term of this Agreement, all information and data concerning the
      Property shall generally be kept confidential and, except to the extent
      required by law or in connection with the customary reporting
      requirements, investor relations activity or financing activities of a
      party or its affiliates, shall not be disclosed to any person other than
      an affiliate without the prior consent of the other party, which consent
      shall not unreasonably be withheld, conditioned or
  delayed.

              

      

    

     

    
      	
              30.2

            	
              A
      party (or its affiliates)
proposing:

            

    

     

    
      
        	
              	
                (a)

              	
                a
      press release; or

              

      

    

    
      
        	
              	
                (b)

              	
                other
      written public disclosure, to the extent that such public disclosure
      contains material information not previously publicly
      disclosed;

              

      

    

     

    relating
to the Property, or the terms of this Agreement, work thereon, or the activities
of the parties or their affiliates with respect thereto, shall provide a copy to
the other party for its information and comments using its commercially
reasonable efforts to ensure it is provided at least 3 business days (being a
business day in Vancouver, B.C. and Reno, Nevada, a “Business Day”), prior to
release. Any comments that the receiving party may make shall not be considered
certification by the other party of the accuracy of the information in such
release, or a confirmation by it that the content of such release complies with
the rules, policies, by-laws and disclosure standards of the applicable
regulatory authorities or stock exchanges. If the receiving party fails to
provide comments within said time period the providing party may, subject to
§30.3 make the proposed release.

     

    
      
        	
                30.3

              	
                Each
      party shall obtain prior approval of the other party before issuing any
      press release, other public disclosure or public statement using the other
      party’s name, the name of any of the officers, directors or employees of
      the other party, or the name of any of its affiliates. The foregoing
      prohibition shall not apply if disclosure of the other party’s name is
      required, in the opinion of counsel to a party, by applicable public
      disclosure requirements however in such a case the party wishing to make
      the disclosure must provide a copy to the other party for its information
      and comments using its best efforts to ensure it is provided at least 3
      Business Days prior to release. However, such approval shall not be
      considered certification by the other party of the accuracy of the
      information in such release, or a confirmation by it that the content of
      such release complies with the rules, policies, by-laws and disclosure
      standards of the applicable regulatory authorities or stock
      exchanges.

              

      

    

     

    
      
        	
                30.4

              	
                For
      greater certainty and notwithstanding the foregoing, the parties
      acknowledge and agree that the provisions of §30.1 and §30.2 shall not
      operate so as to prevent either party from complying with its timely
      disclosure obligations under applicable law and
    regulations.

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      - 23 -

    

     

    
      	
              31.

            	
              Notices

            

    

     

    
      
        	
                31.1

              	
                Any
      notice(“Notice”),
      direction or other instrument given hereunder shall be in writing
      and will, if delivered, be deemed to have been given and received on the
      Business Day following the day it was delivered and, if sent by facsimile
      prior to 5:00 p.m. local time of the place of receipt), be deemed to have
      been given or received on the Business Day following the day it was so
      sent, or in the case of facsimile sent outside normal business hours, on
      the next following Business Day. Any Notice to be given under this
      Agreement will be addressed as
follows:

              

      

    

     

    If to
Teck:

     

    Teck CO,
LLC,

    Suite
300, 501 North Riverpoint Blvd. 

    Spokane,
WA 99202 USA

     

    Attention:
President

     

    Fax (509)
459-4400

     

    With a
copy to Teck Resources
Limited:

     

    Teck
Resources Limited 

    3300 -
550 Burrard Street 

    Vancouver,
BC

    Canada

    V6C
0B3

     

    Attention:
Corporate Secretary 

     

    Fax:
(604) 699-4729

     

    If to
Kingsmere
at:

     

    Kingsmere
Mining Ltd.

    73460
Desert Greens Drive N., 

    Palm
Desert, California 92260

     

    Attention:
President 

     

    Fax:
(604) 960-0536

     

    Any party
may at any time give to the other Notice 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 purposes of giving Notice hereunder.

     

    
      	
              32.

            	
              Termination

            

    

     

    
      	
              32.1

            	
              This
      Agreement shall terminate upon the occurrence of the earliest
      of:

            

    

     

    
      
        	
              	
                (a)

              	
                a
      termination of the K-1 Option pursuant to
§6;

              

      

    

     

    
      	
            	
              (b)

            	
              except
      with respect to Teck’s NSR royalty, the expiry of T-1 Option
      unexercised;

            

    

     

    
      
        	
              	
                (c)

              	
                except
      with respect to a NPI royalty received by a party under § 15.6, § 19.4(b),
      §20.1 or §22.3, one party acquiring 100% interest in the Property after
      formation of the Joint Venture;
or

              

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    
      
        - 24 -

         

      

      
        	
                 
      

              	
                (d)

              	
                sale
      or other disposition of the Property and other assets following the
      written agreement by the parties to wind down and terminate the Joint
      Venture.

              

      

       

      
        	
                33. 

              	
                Definitive
      Agreement

              

      

       

      
        
          	
                  33.1

                	
                  This
      Agreement shall be a binding agreement between the parties, until such
      time, if any, as a more definitive is executed, that shall govern joint
      operations on or in respect of the
Property.

                

        

      

       

      
        
          	
                  33.2

                	
                  After
      the execution of this Agreement, and prior to Teck delivering the T-1
      Exercise Notice, Teck’s solicitors shall prepare a definitive agreement,
      which the parties shall endeavour to settle in a timely
      fashion.

                

        

      

       

      
        	
                34. 

              	
                Governing
      Law

              

      

       

      
        
          	
                  34.1

                	
                  This
      Agreement shall be governed by the laws of the State of Nevada and the
      parties agree to attorn to the jurisdiction of the courts of the State of
      Nevada on any legal proceedings related to this
  Agreement.

                

        

      

       

      
        	
                35. 

              	
                General

              

      

       

      
        
          	
                  35.1

                	
                  This
      is the entire agreement between the parties relating to the Property and
      supersedes all previous negotiations and communications related to the
      terms set out in this letter.

                

        

      

       

      
        
          	
                  35.2

                	
                  A
      Memorandum of this Agreement substantially in the form of Schedule “D”
      shall be recorded with the Elko County, Nevada recording office after
      execution of this Agreement.

                

        

      

       

      
        	
                
                  35.3

                

              	
                
                  Each
      of the parties shall do all such further acts and execute and deliver such
      further deeds and documents as shall be reasonably required in order fully
      to perform the terms of this
Agreement.

                

              

      

       

      
        	
                
                  35.4

                

              	
                
                  No
      modification of this Agreement shall be valid unless made in writing and
      duly executed by the parties.

                

              

      

       

      
        	
                35.5

              	
                The
      rights and obligations of the parties shall be
  several.

              

      

       

      
        
          	
                  35.6

                	
                  Nothing
      contained in this Agreement shall be construed as creating a partnership
      or in imposing any fiduciary duty on any
party.

                

        

      

       

      
        	
                
                  35.7

                

              	
                
                  The
      failure of a party to insist on the strict performance of any provision of
      this Agreement or to exercise any right, power or remedy upon a breach
      hereof shall not constitute a waiver of any provision of this Agreement or
      limit the party’s right thereafter to enforce any provision or exercise
      any right.

                

              

      

       

      
        	
                35.8

              	
                Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall be ineffective in such jurisdiction only to the extent
      of such prohibition or unenforceability without affecting the remaining
      provisions of this Agreement.

              

      

       

      
        	
                
                  35.9

                

              	
                
                  This
      Agreement may be executed in counterparts and by facsimile, each of which
      when so executed shall be deemed an original, and such counterparts shall
      together constitute but one and the same
  instrument.

                

              

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      
        - 25 -

      

       

      
        
          	
                  35.10

                	
                  This
      Agreement shall be read with such changes in gender or number as the
      context shall require.

                

        

      

       

      
        	
                
                  35.11

                

              	
                
                  The
      captions in this Agreement have been provided for ease of reference and
      shall be disregarded in interpreting this
  Agreement.

                

              

      

       

      
        	
                
                  35.12

                

              	
                
                  Unless
      otherwise stated, a reference to an Article means an Article of this
      Agreement and the symbol “§” followed by a number or some combination of
      numbers and letters refers to the provision of this Agreement so
      designated and the symbol “§” followed by a letter within a provision
      refers to a clause within such provision. A reference to “this Agreement”,
      “hereof”, “hereunder”, “herein” or words of similar meaning, means this
      agreement including the schedules hereto, together with any amendments
      thereof.

                

              

      

       

      
        	
                
                  35.13

                

              	
                
                  Time
      is of the essence in this Agreement and the performance by the parties of
      their respective duties and obligations
  hereunder.

                

              

      

       

      If the
terms set out above are satisfactory please sign all copies of this Agreement
and return three copies to Teck. Upon receipt of the signed copy this Agreement
shall become a binding and enforceable agreement which will continue in effect
until such time, if any, as it is replaced by a more formal and comprehensive
agreement.

       

      Yours
truly, TECK CO,
LLC

       

      
        By:  
C. Bruce
DiLuzio

      

       President

       

      
        
          
            
              
                
                  
                    
                      	
                              Agreed
      this 26th
      day of October 2009

                            
	 
      
	
                              KINGSMERE
      MINING LTD.

                            
	 
      
	
                              By:

                            	 
      	 
      
	
                              [Title: 

                            	
                              ]

                            

                    

                  

                

              

            

          

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Page B-1

       

      This is
SCHEDULE “B” to the Rock
Creek Agreement between

      Teck CO, LLC and Kingsmere Mining
Ltd.

      dated
October 26, 2009

       

      
        	
                 

                NET
      SMELTER RETURNS ROYALTY

              

      

       

      
        	
                1 

              	
                THE
    ROYALTY

              

      

       

      
        1.01 An NSR
royalty has been reserved pursuant to the Agreement. The royalty shall be 2.5%
of Net Smelter Returns.

      

       

      
        	
                2

              	
                DEFINITION

              

      

       

      2.01       "Net Smelter Returns" for
purposes of the Agreement are defined as follows:

       

      (a)          where
all or a portion of the ores or concentrates derived from the Property are sold
as ores or concentrates, the Net Smelter Returns shall be the gross amount
received from the purchaser following sale thereof after deduction
of:

       

      (i)           if
applicable under the sale contract, of all smelter charges, penalties and other
deductions;

       

      (ii)          all
costs of transporting and insuring the ores or concentrates from the mine to the
smelter or other place of final delivery; and

       

      (iii)         sales,
use, severance, excise, net proceeds of mine, and ad valorem taxes and any tax
on or measured by mineral production, but excluding income taxes of the
Royaltypayor; and

       

      (b)          where
all or a portion of the said ores or concentrates derived from the Property are
treated in a smelter and a portion of the metals recovered therefrom are
delivered to, and sold by Royaltypayor, the Net Smelter Returns shall be the
gross amount received from the purchaser following sale of the metals so
delivered, after deduction of:

       

      (i)          all
smelter charges, penalties and other deductions;

       

      (ii)         all
costs of transporting and insuring the ores or concentrates from the mine to the
smelter; and

       

      (iii)       
 if applicable under the smelter contract, all costs of transporting and
insuring the metals from the smelter to the place of final delivery by the
purchaser; and

       

      (iv)        sales,
use, severance, excise, net proceeds of mine, and ad valorem taxes and any tax
on or measured by mineral production, but excluding income taxes of the
Royaltypayor.

       

      Where any
ores or concentrates are sold to, or treated in, a smelter owned or controlled
by Royaltypayor, the pricing for that sale or treatment will be established by
Royaltypayor on an arms-length basis so as to be fairly competitive with
pricing, net of transportation, insurance, treatment charges and other related
costs, then available on world markets for product of like quantity and
quality.

       

      
        	
                3

              	
                PAYMENT OF NET SMELTER
      RETURNS

              

      

       

      3.01 If a party becomes entitled to a
Net Smelter Returns royalty pursuant to the Agreement, the party paying the Net
Smelter Returns (the “Royaltypayor”)
shall calculate the Net
Smelter Returns and the sums to be disbursed to
the party receiving the Net Smelter Returns (the “Royaltyholder”) as at the end
of each calendar quarter.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Page B-2

       

      3.02 The
Royaltypayor shall, within 60 days of the end of each calendar quarter, as and
when any Net Smelter Returns are available for distribution:

       

      (a)          pay
or cause to be paid to the Royaltyholder that percentage of the Net Smelter
Returns to which the Royaltyholder are entitled under the
Agreement;

       

      (b)          deliver
to the Royaltyholder a statement indicating:

       

      (i)           the
gross amounts received from the purchaser contemplated in §2.01 of this Schedule
“B”;

       

      (ii)          the
deductions therefrom in accordance with §2.01 of this Schedule “B”;

       

      (iii)         the
amount of Net Smelter Returns remaining; and

       

      (iv)         the
amount of those Net Smelter Returns to which the Royaltyholder are
entitled;

       

      supported
by such reasonable information as to the tonnage and grade of ores or
concentrates shipped as will enable the Royaltyholder to verify the gross amount
payable by the smelter or other purchaser.

       

      
        	
                4

              	
                ADJUSTMENTS AND
      VERIFICATION

              

      

       

      4.01
Payment of any Net Smelter Returns by Royaltypayor shall not prejudice the right
of Royaltypayor to adjust any statement supporting the payment; provided,
however, that all statements presented to the Royaltyholder by Royaltypayor for
any quarter shall conclusively be presumed to be true and correct upon the
expiration of 12 months following the end of the quarter to which the statement
relates, unless within that 12-month period Royaltypayor gives Notice to the
Royaltyholder claiming an adjustment to the statement which will be reflected in
subsequent payment of Net Smelter Returns.

       

      4.02
Royaltypayor shall not adjust any statement in favour of itself more than 12
months following the end of the quarter to which the statement
relates.

       

      4.03 The
Royaltyholder shall, upon 30 days' Notice in advance to Royaltypayor, have the
right to request that Royaltypayor have its independent external auditors
provide their audit certificate for the statement or adjusted statement, as it
may relate to the Agreement and the calculation of Net Smelter
Returns.

       

      4.04        The
cost of the audit certificate shall be solely for the Royaltyholder's account
unless the audit certificate discloses material error in the calculation of Net
Smelter Returns, in which case Royaltypayor shall reimburse the Royaltyholder
the cost of the audit certificate. Without limiting the generality of the
foregoing, a discrepancy of one percent in the calculation of Net Smelter
Returns shall be deemed to be material.

       

      
        	
                5

              	
                ROYALTYPAYOR TO DETERMINE
      OPERATIONS

              

      

       

      5.01        The
Royaltypayor will have complete discretion concerning the nature, timing and
extent of all exploration, development, mining and other operations conducted on
or for the benefit of the Property and may suspend operations and production on
the Property at any time it considers prudent or appropriate to do so. The
Royaltypayor will owe the Royaltyholder no duty to explore, develop or mine the
Property, or to do so at any rate or in any manner other than that which the
Royaltypayor may determine in its sole and unfettered discretion. The
Royaltypayor may, but will not be obligated to treat, mill, heap leach, sort,
concentrate, refine, smelt, or otherwise process, beneficiate or upgrade the
ores, concentrates, and other products at sites located on or off the Property,
prior to sale, transfer, or conveyance to a purchaser, user, or consumer. The
Royaltypayor will not be liable for mineral values lost in processing under
sound practices and procedures, and no royalty will be due on any such lost
mineral values.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Page B-3

       

      
        	
                6

              	
                COMMINGLING

              

      

       

      6.01
Ores, concentrates and derivatives mined or retrieved from the Property may be
commingled with ores, concentrates or derivatives mined or retrieved from other
Property. All determinations required for calculation of Net Smelter Returns,
including without limitation the amount of the metals contained in or recovered
from ores, solutions, concentrates or derivatives mined or retrieved from the
Property, the amount of the metals contained in or recovered from commingled
ores, solutions, concentrates or derivatives shall be made in accordance with
prudent engineering, metallurgical and cost accounting practices.

       

      
        	
                7

              	
                TRADING
      ACTIVITIES

              

      

       

      7.01 The
Royaltypayor may, but need not, engage in forward sales, futures trading or
commodity options trading, and other price hedging, price protection, and
speculative arrangements (“Trading Activities”) which
may involve the possible delivery of base or precious metals produced from the
Property. The parties acknowledge and agree that the Royaltyholder shall not be
entitled to participate in the proceeds or be obligated to share in any losses
generated by the Trading Activities.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Page C-1

       

      This is
SCHEDULE “C” to the Rock
Creek Agreement between

      Teck CO, LLC and Kingsmere Mining
Ltd.

      dated
October 26, 2009

       

      
        	
                 

                NPI
ROYALTY

              

      

       

      
        	
                1

              	
                THE
      ROYALTY

              

      

       

      
        
          	
                  1.01

                	
                  An
      NPI Royalty has been reserved pursuant to the Agreement. The royalty shall
      be 5% of Net Profits.

                

        

      

       

      
        	
                2

              	
                OBLIGATION

              

      

       

      
        
          	
                  2.01

                	
                  If
      a party (the“Royaltyholder”) becomes
      entitled to an NPI Royalty pursuant to the Agreement, Holdco (hereinafter
      the “Royaltypayor”)
      shall calculate, as at the end of each calendar quarter subsequent
      to the Completion Date, the Net Profits in accordance with generally
      accepted accounting principles consistently applied as applied in the
      Canada.

                

        

      

       

      
        
          	
                  2.02

                	
                  Subsequent
      to the Completion Date, the Royaltypayor shall within 60 days of the end
      of each calendar quarter:

                

        

      

       

      (a)          deliver
to the Royaltyholder a statement indicating:

       

      
        	
                 
      

              	
                (i)

              	
                the
      Gross Receipts during the calendar
quarter;

              

      

       

      
        	
              	
                (ii) 

              	
                the
      deductions therefrom made in the order itemized in §3.01 of this Schedule
      C;

              

      

       

      
        	
              	
                (iii) 

              	
                the
      amount of Net Profits remaining, if any;
and

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                the
      amount of those Net Profits, if any, to which the Royaltyholder is
      entitled; and

              

      

       

      
        	
                 
      

              	
                (b)

              	
                pay
      or cause to be paid to the Royaltyholder that percentage of the Net
      Profits, if any, to which the Royaltyholder is entitled under the
      Agreement.

              

      

       

      
        
          	
                  2.03

                	
                  Nothing
      contained in the Agreement or this Schedule C shall be construed as
      conferring on the Royaltyholder any right to or interest in any Property
      or assets except the right to receive royalty payments from the
      Royaltypayor as and when due.

                

        

      

       

      
        	
                3

              	
                NET
      PROFITS DEFINED

              

      

       

      
        	
                3.01

              	
                "Net Profits" means the
      Gross Receipts minus deductions therefrom, to the extent of but not
      exceeding the amount of those Gross Receipts, of the then net unrecovered
      amounts of the following classes of Costs, as further defined in §4.01(c),
      made in the following itemized
order:

              

      

       

      (a)           Marketing
Costs;

       

      (b)           Distribution
Costs;

       

      (c)           Operating
Costs;

       

      (d)      
    Taxes and Royalties;

       

      (e)           Interest
Costs;

       

      (f)            Capital
Costs; and

       

      (g)        
  Exploration Costs.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Page C-2

       

      
        	
                3.02

              	
                For
      greater certainty, in calculating Net Profits at any time, each of the
      classes of Costs shall constitute a separate pool from which all Costs
      deducted on any previous quarterly calculation shall be removed and to
      which Costs of those classes recorded since the date of the Agreement (in
      the case of the first quarterly calculation) or since the date of the last
      quarterly calculation (in the case of any calculation subsequent to the
      first quarterly calculation) shall be
added.

              

      

       

      
        	
                3.03

              	
                If
      the application of credits to a pool of Costs results in a negative
      balance in that pool of Costs, the amount of any negative balance from a
      Cost pool shall be applied to reduce the balances then remaining in pools
      itemized in §3.01 of this Schedule C in the order
  itemized.

              

      

       

      
        	
                4

              	
                DEFINITIONS

              

      

       

      
        	
                4.01

              	
                In
      addition to the definitions provided in the Agreement and without limiting
      the generality thereof:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                "Commercial Production"
      shall mean the operation of the Property or any part thereof as a
      mine but does not include milling for the purpose of testing or milling by
      a pilot plant. Commercial Production shall be deemed to have commenced on
      the first day of the month following the first 15 consecutive days during
      which Products have been produced from the
  Property

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Completion Date" means
      the date on which the Royaltypayor determines that the project of
      preparing and equipping a Mine for Commercial Production is
      complete;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                “Costs" means all items
      of outlay and expense whatsoever, both direct and indirect, with respect
      to the Property, the Products or any Mine recorded by the Royaltypayor in
      accordance with industry standard accounting practices applicable from
      time to time and, without limiting generality, more
      particularly:

              

      

       

      
        	
              	
                (i) 

              	
                "Capital Costs"
      means

              

      

       

      
        	
                 
      

              	
                (A)

              	
                all
      Costs of preparing and equipping a Mine for Commercial Production which
      are recorded by the Royaltypayor from and including the Production
      Decision Date to and including the Completion Date, and all Costs of
      obtaining financing and providing security;
and

              

      

       

      
        	
                 
      

              	
                (B)

              	
                a
      charge of three percent of the Capital Costs referred to in §(A) in return
      for its overhead functions which are not charged
  directly;

              

      

       

      
        	
              	
                (ii) 

              	
                "Distribution Costs"
      means all Costs of

              

      

       

      
        	
                 
      

              	
                (A)

              	
                transporting
      Products from a Mine or a concentrating plant to a smelter, refinery or
      other place of delivery designated by the purchaser and, in the case of
      concentrates tolled, of transporting the metal from a smelter to the place
      of delivery designated by the
purchaser;

              

      

       

      
        	
                 
      

              	
                (B)

              	
                handling,
      warehousing and insuring the Products;
and

              

      

       

      
        	
                 
      

              	
                (C)

              	
                in
      the case of concentrates tolled, of smelting and refining, including any
      penalties thereon or in connection
therewith;

              

      

       

      
        	
              	
                (iii) 

              	
                "Exploration Costs"
      means:

              

      

       

      
        	
                 
      

              	
                (A)

              	
                all
      Costs of Mining Operations recorded by the Royaltypayor prior to the
      Production Decision Date; and

              

      

       

      
        	
                 
      

              	
                (B)

              	
                a
      charge which shall not aggregate more than 10 percent of the Exploration
      Costs referred to in §(A), reduced to five percent on amounts in excess of
      $100,000 on any single third party contract, in return for its overhead
      functions which are not charged
directly;

              

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Page C-3

       

      
        	
                 
      

              	
                (iv)

              	
                "Interest Costs" means
      interest computed quarterly and not in advance and being the aggregate of
      the interest determined for each month in the quarter as
      follows:

              

      

       

      
        	
                 
      

              	
                (A)

              	
                the
      average of the opening and closing monthly outstanding balances for each
      month of the net unrecovered amounts of all Costs in the classes
      enumerated in §3.01 of this Schedule
C;

              

      

       

      
        	
                 
      

              	
                (B)

              	
                multiplied
      by,

              

      

       

      
        	
                 
      

              	
                (C)

              	
                the
      Prime Rate plus two percent;

              

      

       

      
        	
                 
      

              	
                (D)

              	
                multiplied
      by,

              

      

       

      
        	
                 
      

              	
                (E)

              	
                the
      number of days in the month;

              

      

       

      
        	
                 
      

              	
                (F)

              	
                divided
      by,

              

      

       

      
        	
                 
      

              	
                (G)

              	
                the
      number of days in the year.

              

      

       

      These
Interest Costs are in lieu of an inclusion in Costs for the interest charged by
third party project lenders of Capital Costs and Operating Costs;

       

      
        	
                 
      

              	
                (v)

              	
                "Marketing Costs" means
      such reasonable charge for marketing of ores and concentrates sold or of
      concentrates tolled as is consistent with generally accepted industry
      marketing practices;

              

      

       

      
        	
              	
                (vi) 

              	
                "Operating Costs"
      means:

              

      

       

      
        	
                 
      

              	
                (A)

              	
                all
      Costs of Mining Operations recorded by the Royaltypayor subsequent to the
      Completion Date, including, without limiting generality, an amount to be
      established by the Royaltypayor in good faith as representing the cost of
      rehabilitation which will have to be spent after Commercial Production has
      terminated, it being agreed that the Royaltypayor may charge a portion of
      that cost to the royalty account over a reasonable period of time prior to
      the anticipated termination of Commercial Production;
  and

              

      

       

      
        	
                 
      

              	
                (B)

              	
                a
      charge of three percent of the Operating Costs referred to in §(A) in
      return for its overhead functions which are not charged
      directly;

              

      

       

      
        	
                 
      

              	
                (vii)

              	
                "Taxes and Royalties"
      means all taxes (other than income taxes), royalties or other
      charges or imposts provided for pursuant to any law or legal obligation
      imposed by any government if paid by the Royaltypayor, except where such
      Taxes and Royalties or equivalent taxes or royalties are assessed against
      and paid by the Royaltyholder.

              

      

       

      
        	
                (d)

              	
                "Gross Receipts" means
      the aggregate of all receipts, recoveries or amounts received by or
      credited to the Royaltypayor in connection with this Agreement including,
      without limiting the generality of the
  foregoing:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                the
      receipts from the sale of the Royaltypayor's proportionate share of
      Products produced from the Mine together with interest on those receipts
      calculated as follows:

              

      

       

      (A)          the
aggregate of the cumulative daily receipts for each day of the
quarter;

       

      (B)  
        divided by,

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Page C-4

       

      (C)           the
number of days in the quarter;

       

      (D)           multiplied
by,

       

      (E)           the
Prime Rate;

       

      (F)           multiplied
by,

       

      (G)           the
number of days in the quarter;

       

      (H)          divided
by,

       

      (I)  
         the number of days in the
year;

       

      
        	
                 
      

              	
                (ii)

              	
                all
      proceeds received from the sale of the Property or assets subsequent to
      the Operative Date;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                all
      insurance recoveries (including amounts received to settle claims) in
      respect of loss of, or damage to any portion of the Property or assets
      subsequent to the Operative Date;

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                all
      amounts received as compensation for the expropriation or forcible taking
      of any portion of the Property or assets subsequent to the Operative
      Date;

              

      

       

      
        	
                 
      

              	
                (v)

              	
                the
      fair market value, at the Property, of those assets, if any, that are
      transferred from the Property for use by the Royaltypayor elsewhere
      subsequent to the Completion Date;
and

              

      

       

      
        	
                 
      

              	
                (vi)

              	
                the
      amount of any negative balance remaining after the reallocation of
      negative balances pursuant to §3.03 of this Schedule C; to the extent that
      those receipts, recoveries or amounts have not been applied by the
      Royaltypayor as a recovery of any of the classes of Costs itemized in
      §3.01 of this Schedule C;

              

      

       

      provided
that where any Products are sold to, or treated in, a smelter or refinery owned
or controlled by Royaltypayor, the pricing for that sale or treatment will be
established by Royaltypayor on an arms-length basis so as to be fairly
competitive with pricing, net of transportation, insurance, treatment charges
and other related costs, then available on world markets for product of like
quantity and quality.

       

      
        	
                (e)

              	
                "Mine" means the
      workings established and assets acquired in order to bring the Property or
      a portion thereof into Commercial Production, including, without limiting
      generality, development headings, plant and concentrator installations and
      all infrastructure, plant, housing, airport, roads and other
      facilities.

              

      

       

      
        	
                (f)

              	
                "Mining Operations"
      means every kind of work done by the Royaltypayor on or in respect
      of the Property in contemplation or as a consequence of the Agreement
      including, without limiting generality, investigating, prospecting,
      exploring, developing, property maintenance, preparing reports, estimates
      and studies, designing, equipping, improving, surveying, construction and
      mining, milling, concentrating, and
reclamation.

              

      

       

      
        	
                (g)

              	
                “Operative Date” means
      the date of the Agreement.

              

      

       

      
        	
                (h)

              	
                "Prime Rate" means the
      weighted average of the rates of interest for the period of calculation as
      stated by the Bank of Montreal, Main Office, Vancouver, British Columbia,
      as being charged by it on Canadian Dollar demand loans to its most
      creditworthy domestic commercial
customers.

              

      

       

      
        	
                (i)

              	
                “Production Decision Date"
      means the date on which a decision is made by the Royaltypayor to
      establish and operate a Mine on the
Property.

              

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Page C-5

       

      
        	
                 
      

              	
                (j)

              	
                “Products” shall mean
      ores, concentrates and minerals mined from the Property, or solutions,
      concentrates or cathodes retrieved through leaching or solution mining or
      solution extraction/electrowinning or other processing of mineralized
      material mined from the Property.

              

      

       

      
        	
                 
      

              	
                (k)

              	
                “Trading Activities”
      shall have the meaning set out in §7 of this Schedule
      C.

              

      

       

      
        	
                5

              	
                ROYALTY
      PAYOR TO DETERMINE OPERATIONS

              

      

       

      
        	
                5.01

              	
                The
      Royaltypayor will have complete discretion concerning the nature, timing
      and extent of all exploration, development, mining and other operations
      conducted on or for the benefit of the Property and may suspend operations
      and production on the Property at any time it considers prudent or
      appropriate to do so. The Royaltypayor will owe the Royaltyholder no duty
      to explore, develop or mine the Property, or to do so at any rate or in
      any manner other than that which the Royaltypayor may determine in its
      sole and unfettered discretion. The Royaltypayor may, but will not be
      obligated to treat, mill, heap leach, sort, concentrate, refine, smelt, or
      otherwise process, beneficiate or upgrade the ores, concentrates, and
      other products at sites located on or off the Property, prior to sale,
      transfer, or conveyance to a purchaser, user, or consumer. The
      Royaltypayor will not be liable for mineral values lost in processing
      under sound practices and procedures, and no royalty will be due on any
      such lost mineral values.

              

      

       

      
        	
                6

              	
                COMMINGLING

              

      

       

      
        
          	
                  6.01

                	
                  Ores,
      concentrates and derivatives mined or retrieved from the Property may be
      commingled with ores, concentrates or derivatives mined or retrieved from
      other properties. All determinations required for calculation of Net
      Profits, including without limitation the amount of the metals contained
      in or recovered from ores, solutions, concentrates or derivatives mined or
      retrieved from the Property, the amount of the metals contained in or
      recovered from commingled ores, solutions, concentrates or derivatives,
      gross revenues from the sale of Products, and costs and expenses allocated
      to the Property or Products shall be made in accordance with prudent
      engineering, metallurgical and cost accounting
  practices.

                

        

      

       

      
        	
                7 

              	
                TRADING
      ACTIVITIES

              

      

       

      
        
          	
                  7.01

                	
                  The
      Royaltypayor may, but need not, engage in forward sales, futures trading
      or commodity options trading, and other price hedging, price protection,
      and speculative arrangements(“Trading Activities”)
      which may involve the possible delivery of base or precious metals
      produced from the Property. The parties acknowledge and agree that the
      Royaltyholder shall not be entitled to participate in the proceeds or be
      obligated to share in any losses generated by the Trading
      Activities.

                

        

      

       

      
        	
                8

              	
                ADJUSTMENTS
      AND VERIFICATION

              

      

       

      
        
          	
                  8.01

                	
                  Payment
      of any Net Profits by the Royaltypayor shall not prejudice the right of
      the Royaltypayor to protest the correctness of the statement supporting
      the payment; provided, however, that all statements presented to the
      Royaltyholder by the Royaltypayor for any quarter shall conclusively be
      presumed to be true and correct upon the expiration of 12 months following
      the end of the quarter to which the statement relates, unless within that
      12 month period that the Royaltypayor gives Notice to the Royaltyholder
      making claim on the Royaltyholder for an adjustment to the statement which
      will be reflected in subsequent payment of Net
  Profits.

                

        

      

       

      
        
          	
                  8.02

                	
                  The
      Royaltypayor shall not adjust any statement in favour of itself after the
      expiration of 12 months following the end of the quarter to which the
      statement relates.

                

        

      

       

      
        
          	
                  8.03

                	
                  The
      Royaltyholder may from time to time request reasonable supporting
      documentation for statements that are within the period contemplated in
      §8.01 and the Royaltypayor, acting in good faith, shall provide the same
      promptly to the
Royaltyholder.

                

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Page C-6

       

      
        
          	
                  8.04

                	
                  If
      the supporting documentation and any discussion with the Royaltypayor do
      not resolve the Royaltyholder’s concerns, the Royaltyholder shall be
      entitled upon Notice to the Royaltypayor to request from the Royaltypayor
      that mutually accepted auditors be requested to provide the Royaltyholder
      with their opinion that any statement delivered pursuant to §2.02 of this
      Schedule C in respect of any quarterly period falling with the 12 month
      period immediately preceding the date of the Royaltyholder's Notice has
      been prepared in accordance with this Agreement. When giving any Notice
      aforesaid, the Royaltyholder will articulate the matter or matters of
      concern to it.

                

        

      

       

      
        
          	
                  8.05

                	
                  The
      time required for giving the audit opinion contemplated in §8.04 of this
      Schedule C shall not extend the time for the taking of exception to and
      making claim on the Royaltyholder for adjustment as provided in §8.01 of
      this Schedule C.

                

        

      

       

      
        
          	
                  8.06

                	
                  The
      cost of the auditors opinion referred to in §8.04 of this Schedule C shall
      be shared by the Royaltypayor and Royaltyholder unless the audit opinion
      reveals a material error adverse to the Royaltyholder, in which case the
      cost shall be solely for the account of the
  Royaltypayor.

                

        

      

       

      
        
          	
                  8.07

                	
                  If
      the audit opinion delivered under §8.04 does not adequately address the
      concerns raised by the Royaltyholder, the Royaltyholder, acting
      reasonably, will have the right to have an independent accounting firm,
      that is one of the three largest international accounting firms that does
      not act for either the Royaltypayor or Royaltyholder, audit the
      Royaltypayor’s accounts related to the calculation of Net Profits. In
      order to exercise this right, the Royaltyholder will provide the
      Royaltypayor with Notice, within 30 days of receipt of the audit opinion
      under §8.04, of its intention to do so. Thereupon, the Royaltyholder shall
      cause the accounting firm to proceed promptly and complete the audit
      efficiently, undertaking to minimize disruption to the Royaltypayor. The
      cost of this audit shall be solely for the account of the
      Royaltyholder.

                

        

      

       

      
        
          	
                  8.08

                	
                  The
      provisions of §8.04 and 8.07 are intended to provide an effective
      mechanism for the Royaltyholder to resolve its unresolved concerns
      regarding Net Profits accounting and not to effect a regular audit of the
      Net Profits calculation.Unassociated Document

    FORM
OF

    SUBSCRIPTION
AGREEMENT

    

    Universal
Travel Group

    5th
Floor, South Block, Building 11,

    Shenzhen
Software Park,

    Zhongke
2nd Road,

    Nanshan
District, Shenzhen,

    China,
518000

     

    Gentlemen:

     

    The
undersigned (the “Investor”) hereby confirms
its agreement with you as follows:

    

    1.           This
Subscription Agreement, including the Terms and Conditions For Purchase of
Shares attached hereto as Annex I (collectively, this
“Agreement”), is made
as of the date set forth below between Universal Travel Group, a Nevada
corporation (the “Company”), and the
Investor.

    

    2.           The
Company has authorized the sale and issuance to certain investors of up to an
aggregate of 2,222,222 shares (each a “Share,” collectively the
“Shares”) of its common
stock, par value $0.001 per share (the “Common Stock”) for a purchase
price of $9.00 per Share (the “Purchase
Price”).  The Shares are sometimes referred to herein as the
“Securities.”

    

    3.           The
offering and sale of the Securities (the “Offering”) are being made
pursuant to (1) an effective Registration Statement on Form S-3 (including the
Prospectus contained therein (the “Base Prospectus”), the “Registration Statement”)
filed by the Company with the Securities and Exchange Commission (the “Commission”), (2) if
applicable, certain “free writing prospectuses” (as that term is defined in Rule
405 under the Securities Act of 1933, as amended (the “Act”)), that have or will be
filed with the Commission and delivered to the Investor on or prior to the date
hereof and (3) a Prospectus Supplement (the “Prospectus Supplement” and
together with the Base Prospectus, the “Prospectus”) containing
certain supplemental information regarding the Shares and terms of the offering
that will be filed with the Commission and delivered to the Investor (or made
available to the Investor by the filing by the Company of an electronic version
thereof with the Commission).

    

    4.           The
Company and the Investor agree that the Investor will purchase from the Company
and the Company will issue and sell to the Investor the number of Shares set
forth below for the aggregate purchase price set forth below.  The
Shares shall be purchased pursuant to the Terms and Conditions for Purchase of
Shares attached hereto as Annex I and
incorporated herein by this reference as if fully set forth
herein.  The Investor acknowledges that the Offering is not being
underwritten by the placement agent (the “Placement Agent”) named in
the Prospectus Supplement and that there is no minimum offering
amount.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.           The
manner of settlement of the Shares purchased by the Investor shall be as
follows:

     

    Delivery
versus payment (“DVP”)
through DTC (i.e., the Company shall deliver Shares registered in the Investor’s
name and address as set forth below and released by the Transfer Agent to the
Investor through DTC at the Closing.  NO LATER THAN ONE (1) BUSINESS DAY
AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE
INVESTOR SHALL PAY BY WIRE TRANSFER TO THE ESCROW ACCOUNT DESIGNATED BY THE
COMPANY AND BREAN MURRAY CARRET & CO., (“BMC”) PURSUANT TO THE ESCROW
AGREEMENT IN THE FORM ATTACHED HERETO AS EXHIBIT A, AN AMOUNT EQUAL TO THE
AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY SUCH INVESTOR.
:

    

    

    IT IS THE INVESTOR’S
RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER AND (B) ARRANGE FOR
SETTLEMENT BY WAY OF DVP IN A TIMELY MANNER.  IF THE INVESTOR DOES NOT
DELIVER THE AGGREGATE PURCHASE PRICE FOR THE SHARES OR DOES NOT MAKE PROPER
ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES MAY NOT BE DELIVERED
AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
ALTOGETHER.

    

    6.           [RESERVED]

    

    7.           The
Investor represents that it (a) is knowledgeable, sophisticated and experienced
in making, and is qualified to make decisions with respect to, investments in
shares presenting an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company and
investments in comparable companies, (b) has answered all questions on the
Investor Questionnaire for use in preparation of the Prospectus Supplement and
the answers thereto are true and correct as of the date hereof and will be true
and correct as of the Closing Date and (c) in connection with its decision to
purchase the number of Shares set forth on Annex I, has received
and is relying solely upon (i) the Disclosure Package and the documents
incorporated by reference therein and (ii) the Offering
Information.

    

    8.           The
Investor represents that (a) no action has been or will be taken in any
jurisdiction outside the United States by the Company or the Placement Agent
that would permit an offering of the Shares, or possession or distribution of
offering materials in connection with the issue of the Shares in any
jurisdiction outside the United States where action for that purpose is
required, (b) if the Investor is outside the United States, it will comply with
all applicable laws and regulations in each foreign jurisdiction in which it
purchases, offers, sells or delivers securities or has in its possession or
distributes any offering material, in all cases at its own expense and (c) the
Placement Agent is not authorized to make and has not made any representation,
disclosure or use of any information in connection with the issue, placement,
purchase and sale of the Shares, except as set forth or incorporated by
reference in the Base Prospectus or the Prospectus Supplement.

    

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    9.           The
Investor represents that (a) the Investor has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (b) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as to the enforceability of any rights to
indemnification or contribution that may be violative of the public policy
underlying any law, rule or regulation (including any federal or state
securities law, rule or regulation).

    

    10.           The
Investor represents that nothing in this Agreement, the Prospectus or any other
materials presented to the Investor in connection with the purchase and sale of
the Shares constitutes legal, tax or investment advice.  The Investor
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of Shares.

    

    11.           The
Investor represents that since the date on which the Placement Agent first
contacted such Investor about the Offering, Investor has not engaged in any
purchases or sales of the securities of the Company (including, without
limitation, any Short Sales (as defined below) involving the Company’s
securities).  Each Investor covenants that it will not engage in any
purchases or sales of the securities of the Company (including Short Sales)
prior to the time that the transactions contemplated by this Agreement are
publicly disclosed.  Each Investor agrees that it will not use any of
the Shares acquired pursuant to this Agreement to cover any short position in
the Common Stock if doing so would be in violation of applicable securities
laws.  For purposes hereof, “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sales contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total
return basis), and sales and other transactions through non-US broker dealers or
foreign regulated brokers.

    

    12.           The
Investor represents that, except as set forth below, (a) it has had no position,
office or other material relationship within the past three years with the
Company or persons known to it to be affiliates of the Company, (b) it is not a
NASD member or an Associated Person (as such term is defined under the NASD
Membership and Registration Rules Section 1011) as of the Closing, and (c)
neither the Investor nor any group of Investors (as identified in a public
filing made with the Commission) of which the Investor is a part in connection
with the Offering of the Shares, acquired, or obtained the right to acquire, 20%
or more of the Common Stock (or securities convertible into or exercisable for
Common Stock) or the voting power of the Company on a post-transaction
basis.  Exceptions:

     

     

      
        

      

    

    (If no
exceptions, write “none.” If left blank, response will be deemed to be
“none.”)

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    

    13.           The
Investor represents that it has received (or otherwise had made available to it
by the filing by the Company of an electronic version thereof with the
Commission) the Base Prospectus, the documents incorporated by reference therein
and any free writing prospectus (collectively, the “ General Disclosure
Package”), prior to or in connection with the receipt of this
Agreement.  The Investor acknowledges that, prior to the delivery of
this Agreement to the Company, the Investor will receive certain additional
information regarding the Offering, including pricing information (the “Offering Information”). Such
information may be provided to the Investor by any means permitted under the
Act, including in the Prospectus Supplement, a free writing prospectus or oral
communications.

     

    

    14.           The
Investor represents that neither the Investor nor any person acting on behalf
of, or pursuant to any understanding with or based upon any information received
from, the Investor has, directly or indirectly, as of the date of this
Subscription Agreement, violated its obligations of confidentiality with respect
to the Offering since the time that the Investor was first contacted by the
Company or its agents with respect to the transactions contemplated
hereby.

    

    15.           The
Company represents and warrants to the Investor, that (i) the Company has full
right, power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement
and (ii) this Agreement constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as to the enforceability of any
rights to indemnification or contribution that may be violative of the public
policy underlying any law, rule or regulation (including any federal or state
securities law, rule or regulation).

    

    16.           The
Company covenants that it will not, for a period of sixty (60) days from the
date hereof (the “Lock-Up
Period”) without the prior written consent of BMC, directly or indirectly
offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose
of, any shares of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, other than the Company’s sale of the Shares
hereunder and the issuance of restricted Common Stock or options to acquire
Common Stock pursuant to the Company’s employee benefit plans, qualified stock
option plans or other employee compensation plans as such plans are in existence
on the date hereof and described in the Prospectus and the issuance of Common
Stock pursuant to the valid exercises of options, warrants or rights outstanding
on the date hereof.  The Company will cause Ms. Jiangping Jiang, the
Company’s Chief Executive Officer, to furnish to BMC, on or prior to the date
hereof, a letter pursuant to which she shall agree, among other things, not to
directly or indirectly offer, sell, assign, transfer, pledge, contract to sell,
or otherwise dispose of, or announce the intention to otherwise dispose of, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, not to engage in any swap, hedge or similar
agreement or arrangement that transfers, in whole or in part, directly or
indirectly, the economic risk of ownership of Common Stock or any such
securities and not to engage in any short selling of any Common Stock or any
such securities, during the Lock-Up Period, without the prior written consent of
BMC.  The Company also agrees that during such period, other than for
the sale of the Shares hereunder, the Company will not file any registration
statement, preliminary prospectus or prospectus, or any amendment or supplement
thereto, under the Securities Act for any such transaction or which registers,
or offers for sale, Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, except for a registration
statement on Form S-8 relating to employee benefit plans.

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    17.           Notwithstanding
any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company
and the Investor herein will survive the execution of this Agreement, the
delivery to the Investor of the Shares being purchased and the payment
therefor.  The Placement Agent shall be a third party beneficiary with
respect to the representations, warranties and agreements of the Investor in
Sections 7 through 14 hereof.

     

    

    18.           No
offer by the Investor to buy Shares will be accepted and no part of the Purchase
Price will be delivered to the Company until the Investor has received the
Offering Information and the Company has accepted such offer by countersigning a
copy of this Agreement, and any such offer may be withdrawn or revoked, without
obligation or commitment of any kind, at any time prior to the Company (or BMC
on behalf of the Company) sending (orally, in writing or by electronic mail)
notice of its acceptance of such offer.  An indication of interest
will involve no obligation or commitment of any kind until the Investor has been
delivered the Offering Information and this Agreement is accepted and
countersigned by or on behalf of the Company.

    

    19.           The
Company acknowledges that the only material, non-public information relating to
the Company or its subsidiaries that the Company, its employees or agents has
provided to the Investor in connection with the Offering prior to the date
hereof is the existence of the Offering and that neither the Company nor any
other person acting on its behalf has provided the Investor or any other
investor or its respective agents or counsel with any information that the
Company believes constitutes or might constitute material, non-public
information which is not otherwise disclosed in the Press Release.

    

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    20.           In
the event the Lock-Up Period is waived by BMC pursuant to Section 16 hereof, the
Company agrees that it will not issue or sell any Common Stock or other equity
or equity-linked securities (other than under existing equity incentive plans or
as a result of the exercise, exchange or conversion of outstanding Company
securities that are exercisable or exchangeable for, or convertible into Common
Stock) for sixty calendar days from the date of this Subscription Agreement at
less than the per share Purchase Price or equivalent.

    

    21.           The
Company and the Investor agree that the Company shall, (i) prior to the opening
of the financial markets in New York City on the business day immediately after
the date hereof issue a press release announcing the Offering and disclosing all
material information regarding the Offering (the “Press Release”) and (ii)
within the timeframe required, file a current report on Form 8-K with the
Securities and Exchange Commission including, but not limited to, a form of this
Agreement as an exhibit thereto (the “8-K”).  From and
after the issuance of the Press Release and the 8-K, the Company shall have
publicly disclosed all material, non-public information delivered to the
Investor by the Company, if any, or any of its officers or directors in
connection with the transactions contemplated hereby.  The Company
shall not identify any Investor by name in any press release or public filing,
or otherwise publicly disclose any Investor’s name, without such Investor’s
prior written consent, unless required by law or the rules and regulations of a
national securities exchange, provided, however, that promptly after becoming
aware of any request or requirement to so disclose (a “Disclosure Requirement”), and
in any event prior to any such disclosure, the Company will provide such
Investor with notice of such request or requirement so that such Investor may at
its election seek a protective order or other appropriate remedy and the Company
will fully cooperate with such Investor’s efforts to obtain the same; provided,
further, however, if, absent the entry of such a protective order or other
remedy, the Company is compelled by applicable law, rule or regulation or a
court order, subpoena, similar judicial process, regulatory agency or stock
exchange rule to disclose such Investor’s name, the Company may disclose only
that portion of such information that the Company is so compelled to disclose
and will use its reasonable best efforts to obtain assurance that confidential
treatment will be accorded to that portion of such information that is being
disclosed.  As of the date hereof, the Company is not aware of any
Disclosure Requirement

    

    22.           This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor. This Agreement will be governed
by the internal laws of the State of New York, without giving effect to the
principles of conflicts of law. This Subscription Agreement may be executed in
one or more counterparts, each of which will constitute an original, but all of
which, when taken together, will constitute but one instrument, and signatures
may be delivered by facsimile or by e-mail delivery of a “.pdf” format data
file.

     

    

    [Signature
page follows]

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.

    

    
      
        
          	
                  Dated
      as of: December 10, 2009

                
	 
      
	 
      
	
                  INVESTOR

                   

                  By:           __________________________

                  Name:      __________________________

                  Title:        __________________________

                

        

      

    

    Agreed
and Accepted

    this
10th
day of December, 2009:

    

    
      
        	
                UNIVERSAL
      TRAVEL GROUP

              
	
                 

                ________________________________

              
	
                By:           __________________________

                Name:      __________________________

                Title:        __________________________

              

      

    

     

    

     

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                	
                                                                                        Address
      for Notice of Purchaser:

                                                                                      	 	  
      
	 	 	 
      
	 	 	 
      
	 	 	 
	
                                                                                        Address
      for Delivery of Securities

                                                                                      	 	  
      
	for
      Purchaser (if different):	 	  
      
	 	 	 
      
	 	 	 
	
                                                                                        Email
      Address of Purchaser:

                                                                                      	 	  
      
	 
      	 	 
      
	
                                                                                        Fax
      Number of Purchaser:

                                                                                      	 	  
      
	 
      	 	 
      
	
                                                                                        Subscription
      Amount: $

                                                                                      	 	  
      
	 
      	 	 
      
	
                                                                                        Shares:

                                                                                      	 	  
      
	 
      	 	 
      
	
                                                                                        EIN
      Number:  

                                                                                      	 	 
       

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

    

     

    [PURCHASER
SIGNATURE PAGE TO

    UNIVERSAL
TRAVEL GROUP SUBSCRIPTION AGREEMENT]

     

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    ANNEX I

    

    TERMS
AND CONDITIONS FOR PURCHASE OF SHARES

    OF

    UNIVERSAL
TRAVEL GROUP

    

    1.           Authorization and Sale of the
Shares.  Subject to the terms and conditions of this Agreement,
the Company has authorized the sale of the Shares.

     

    2.          
Agreement to Sell and Purchase
the Shares; Placement Agent.

     

    2.1           At
the Closing (as defined in Section 3.1), the
Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions set forth herein, the number of Shares at
the purchase price set forth on the signature page of this
Agreement.

     

    2.2           The
Company proposes to enter into substantially this same form of Subscription
Agreement with certain other investors (the “Other Investors”) and expects
to complete sales of Shares to them.  The Investor and the Other
Investors are hereinafter sometimes collectively referred to as the “Investors,” and this
Agreement and the Subscription Agreements executed by the Other Investors are
hereinafter sometimes collectively referred to as the “Agreements.”

     

    2.3           The
Investor acknowledges that the Company has agreed to pay Brean Murray, Carret
& Co., LLC (“BMC” or the “Placement Agent”) a fee in
respect of the sale of Shares to the Investor.

     

    2.4           The
Company has entered into a Placement Agent Agreement, dated December 10, 2009
(the “Placement
Agreement”), with the Placement Agent that contains certain
representations, warranties, covenants and agreements of the Company that may be
relied upon by the Investor, which shall be a third party beneficiary
thereof.

     

    3.          Closings and Delivery of the Shares
and Funds.

     

    3.1           The
completion of the purchase and sale of the Shares (the “Closing”) shall occur at a
place and time (the “Closing
Date”) to be specified by the Company and the Placement Agent, and of
which the Investors will be notified in advance by the Placement Agent, in
accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange Act”).  At
the Closing, (a) the Company shall cause the Transfer Agent to deliver to the
Investor the number of Shares set forth above registered in the name of the
Investor or in the name of a nominee designated by the Investor, and the
aggregate purchase price for the Shares being purchased by the Investor will be
delivered by or on behalf of the Investor to the Company..

     

    3.2           The
Company’s obligation to issue and sell the Shares to the Investor shall be
subject to: (a) the receipt by the Company of the purchase price for the Shares
being purchased hereunder as set forth above and (b) the accuracy of the
representations and warranties made by the Investor and the fulfillment of those
undertakings of the Investor to be fulfilled prior to the Closing
Date.

    

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    3.3           The
Investor’s obligation to purchase the Shares will be subject to the satisfaction
(or waiver by the Investor) of the following: (i) the delivery by the Company of
the Shares in accordance with the provisions of this Agreement, (ii) the
accuracy of the representations and warranties made by the Company and the
fulfillment of those undertakings of the Company to be fulfilled prior to the
Closing Date, including without limitation, those contained in the Placement
Agreement, (iii) the satisfaction of the conditions to the closing set forth in
the Placement Agreement.  The Investor’s obligations are expressly not
conditioned on the purchase by any or all of the Other Investors of the Shares
that they have agreed to purchase from the Company; provided, however, that the
right of the Investor to waive any of such condition to closing shall be
conditioned upon a duly authorized, executed and delivered and legally binding
and unconditional written commitment of the Investor, in form and substance
reasonably acceptable to the Placement Agent, (a) not to assert or pursue any
claim or seek any remedy against the Placement Agent related or in connection
with the failure by the Company to perform any such condition waived by the
Investor and (b) to hold harmless and indemnify the Placement Agent against any
loss, expense (including without limitation the reasonable fees and expenses of
its counsel), damages or other obligation incurred as a result of the assertion
or pursuit by the Investor of any claim or the seeking by the Investor of any
remedy in violation of clause (a) of this Section 3.3.

    

    3.4           [Intentionally
Omitted]

     

    3.5           No later than one (1) business day
after the execution of this Agreement by the Investor and the Company,
the Investor shall notify BMC of the account or accounts to be credited with the
Shares being purchased by such Investor.  On the Closing Date, the
Company shall deliver the Shares to the Investor through DTC directly to the
account or accounts identified by Investor and simultaneously therewith payment
for the Shares shall by made via wire transfer to the Company.

     

    

    4.          Notices.  All
notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile or (b) if delivered from outside the
United States, by International Federal Express or facsimile, and will be deemed
given (i) if delivered by first-class registered or certified mail domestic,
three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by
International Federal Express, two business days after so mailed and (iv) if
delivered by facsimile, upon electric confirmation of receipt and will be
delivered and addressed as follows:

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    if to the
Company, to:

     

    Universal
Travel Group

    5th
Floor, South Block, Building 11,

    Shenzhen
Software Park,

    Zhongke
2nd Road,

    Nanshan
District, Shenzhen,

    China,
518000

    Attention:
Chief Financial Officer

     

    with
copies to:

     

    Sichenzia
Ross Friedman Ference LLP

    61
Broadway, 32nd Floor

    New York,
NY 10006

    Attention:
Gregory Sichenzia, Esq. & Benjamin Tan, Esq.

    

    if to the
Investor, to the address on the signature page hereto, or at such other address
or addresses as may have been furnished to the Company in writing.

     

    5.          Changes.  This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.

     

    6.          Headings.  The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this
Agreement.

     

    7.          Severability.  In
case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein will not in any way be affected or
impaired thereby.

     

    8.          Governing Law.  This
Agreement will be governed by, and construed in accordance with, the internal
laws of the State of New York, without giving effect to the principles of
conflicts of law that would require the application of the laws of any other
jurisdiction.

     

    9.        Counterparts.  This
Agreement may be executed in two or more counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute
but one instrument, and will become effective when one or more counterparts have
been signed by each party hereto and delivered to the other
parties.  The Company and the Investor acknowledge and agree that the
Company shall deliver its counterpart to the Investor along with the Prospectus
Supplement (or the filing by the Company of an electronic version thereof with
the Commission).

     

    10.        Confirmation of
Sale.  The Investor acknowledges and agrees that such
Investor’s receipt of the Company’s counterpart to this Agreement, together with
the Prospectus Supplement (or the filing by the Company of an electronic version
thereof with the Commission), shall constitute written confirmation of the
Company’s sale of Shares to such Investor.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

     

     

    11.        Termination.  In the
event that the Placement Agreement is terminated by the Placement Agent pursuant
to the terms thereof, this Agreement shall terminate without any further action
on the part of the parties hereto.

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        -11-

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