Document:

EX 10.6

    EXHIBIT
      10.6

     

    THIS
      AGREEMENT (this
      “Agreement”)
      is
      dated and effective as of the
      21 day
      of August,
      2006,

     

    BETWEEN:

     

    SAGE
      ASSOCIATES INC., an Arizona corporation with its head office at 2020
      North Huachuca Drive Tucson, AZ 85745

    

     

    (hereinafter
      referred to as “Sage”)

     

    -
      and
      -

     

    SILVER
      RESERVE CORP., a Delaware corporation with its administration offices at 1226
      White Oaks Blvd., Oakville, Ontario, Canada L6H 2B9. 

     

    (hereinafter
      referred to as “Silver Reserve”)

     

    WITNESSETH
      THAT:

     

    WHEREAS,
      Sage is the registered holder of twelve (12) mineral claims located in the
      Como
      District of Nevada and more particularly described in Schedule A attached hereto
      and forming part hereof (the “Claims”);

     

    WHEREAS,
      the Claims, together with such additional mineral claims as may be covered
      by
      this Agreement during the during of this Agreement as provided herein, are
      collectively referred to herein as the “Property;”
      and

     

    WHEREAS
      Sage has agreed that Silver Reserve may acquire an interest in the Claims,
      subject to the terms of this Agreement;

     

    NOW
      THEREFORE, the parties hereby do evidence their agreement with respect to the
      Claims as follows, in consideration of the premises and the mutual covenants
      hereinafter set out.

     

    1.    REPRESENTATIONS
      AND WARRANTIES

     

    1.1    SILVER
      RESERVE’S REPRESENTATIONS AND WARRANTIES

     

    Silver
      Reserve hereby represents and warrants to Sage that:

     

    
      	 	
              (a)

            	
              it
                is a company duly incorporated under the laws of the State of Delaware,
                and it is duly organized and validly existing under such laws and
                is
                qualified to do

            

    

    

    
      
        
           

        

        
            
            

          
            

          

        

        
           

        

      

    

     

    business
      in those states in the United States of America where it is necessary to conduct
      its business;

     

    
      	 	
              (b)

            	
              it
                has the power and capacity to carry on its business and to enter
                into this
                Agreement and any agreement or instrument referred to or contemplated
                by
                this Agreement and to carry out and perform all of its obligations
                and
                duties hereunder and thereunder;

            

    

     

    
      	 	
              (c)

            	
              it
                has duly obtained all necessary corporate authorizations for the
                execution, delivery and performance of this Agreement and such execution,
                delivery and performance and the consummation of the transactions
                herein
                contemplated will not contravene any applicable laws and will not
                conflict
                with or result in any breach of any covenants or agreements contained
                in,
                or constitute a default under, or result in the creation of any
                encumbrance, lien or charge under the provisions of its constating
                documents or any shareholders’ or directors’ resolution or any indenture,
                agreement or other instrument whatsoever to which it is a party or
                by
                which it is bound or to which it may be subject;
                and

            

    

     

    
      	 	
              (d)

            	
              this
                Agreement has been duly executed and delivered by it and is valid
                and
                binding upon it in accordance with its
                terms.

            

    

     

    1.2    SAGE’S
      REPRESENTATIONS AND WARRANTIES

     

    Sage
      hereby represents and warrants to Silver Reserve that:

     

    
      	 	
              (a)

            	
              it
                is a company duly incorporated under the laws of the State of Arizona,
                and
                it is duly organized and validly existing under such laws and is
                qualified
                to carry on business in the United States of
                America;

            

    

     

    
      	 	
              (b)

            	
              it
                has the power and capacity to carry on its business and to enter
                into this
                Agreement and any agreement or instrument referred to or contemplated
                by
                this Agreement and to carry out and perform all of its obligations
                and
                duties hereunder and thereunder;

            

    

     

    
      	 	
              (c)

            	
              it
                has duly obtained all necessary corporate authorizations for the
                execution, delivery and performance of this Agreement and such execution,
                delivery and performance and the consummation of the transactions
                herein
                contemplated will not contravene any applicable laws and will not
                conflict
                with or result in any breach of any covenants or agreements contained
                in,
                or constitute a default under, or result in the creation of any
                encumbrance, lien or charge under the provisions of its constating
                documents or any shareholders’ or directors’ resolution or any indenture,
                agreement or other instrument whatsoever to which it is a party or
                by
                which it is bound or to which it or the Claims may be
                subject;

            

    

     

    
      	 	
              (d)

            	
              this
                Agreement has been duly executed and delivered by it and is valid
                and
                binding upon it in accordance with its
                terms.

            

    

     

    
      	 	
              (e)

            	
              (1)

            	
              it
                is the exclusive beneficial and recorded or registered owner of a
                100%
                right, title and possessory interest in and to the mineral
                properties

            

    

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    subject
      to the paramount legal interest of the United States comprising the Claims
      and
      no other person has any proprietary or possessory interest in the Claims,
      and

     

    
      	 	
              (ii)

            	
              no
                person has any entitlement to any royalty or other payment in the
                nature
                of rent or royalty on any minerals, metals or concentrates or any
                other
                such products removed from the
                Claims.

            

    

     

    
      	 	
              (f)

            	
              the
                Claims are properly and accurately described in Schedule A, attached
                hereto, and, each of the unpatented Claims (A) has been properly
                located
                and recorded with the Bureau of Land Management (BLM) and (B) is in
                good standing under all applicable laws and regulations with respect
                to
                the incurrence of any expenditures and the payment of any monies
                or taxes
                and will remain so until at least the date set out as the expiry
                date
                opposite each claim on Schedule A;

            

    

     

    
      	 	
              (g)

            	
              the
                Claims are free and clear of all liens, charges and encumbrances,
                recorded
                or, to the best of Sage’s information, knowledge and belief,
                unrecorded;

            

    

     

    
      	 	
              (h)

            	
              there
                are no outstanding or, to the best of Sage’s information, knowledge and
                belief, proposed, threatened or alleged actions or suits which, if
                successful, would or could affect the market value or ownership of
                the
                Claims or any portion thereof;

            

    

     

    
      	 	
              (i)

            	
              conditions
                on and relating to the Claims are in compliance with all applicable
                laws,
                regulations and orders relating to environmental matters, including,
                but
                not limited to, waste disposal and storage and
                reclamation;

            

    

     

    
      	 	
              (j)

            	
              there
                are no outstanding work orders or actions required to be taken relating
                to
                the condition of the Claims or any operations thereon, as of the
                date
                hereof; and

            

    

     

    
      	 	
              (k)

            	
              Sage
                has or will make available to Silver Reserve all information in its
                possession or control relating to work done on or with respect to
                the
                Claims.

            

    

     

    1.3    DURATION
      AND EFFECT OF REPRESENTATIONS AND WARRANTIES

     

    
      	 	
              (a)

            	
              Sage
                acknowledges and agrees that Silver Reserve is entering into this
                Agreement relying upon the representations and warranties made to
                it
                herein and the correctness of each such representation and warranty
                is a
                condition upon which Silver Reserve is entering into this Agreement,
                each
                of which conditions may be waived in whole or in part solely by Silver
                Reserve and all such representations and warranties shall survive
                the
                execution, delivery and termination of this Agreement, the acquisition
                of
                any interest in the Claims by a party and the commencement and completion
                of any of the transactions contemplated herein, for a period of 4
                years
                following the execution of this
                Agreement.

            

    

     

    
      	 	
              (b)

            	
              Silver
                Reserve acknowledges and agrees that Sage is entering into this Agreement
                relying upon the representations and warranties made to it herein
                and the
                correctness of each such representation and warranty is a condition
                upon
                which Sage is entering into this Agreement, each of which conditions
                may
                be waived in whole or in part solely by an instrument in writing
                signed by
                Sage and all such

            

    

    

    
      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

    

     

    representations
      and warranties shall survive the execution, delivery and termination of this
      Agreement, the acquisition of any interest in the Claims by a party and the
      commencement and completion of any of the transactions contemplated herein
      for a
      period of 4 years following the execution of this Agreement.

     

    
      	 	
              (c)

            	 

    

     

    
      	 	
              (d)

            	
              Sage
                agrees to indemnify and hold harmless Silver Reserve from all claims,
                actions, damages and losses arising out of or in connection with
                a breach
                of any representation or warranty made by Sage contained
                herein.

            

    

     

    
      	 	
              (e)

            	
              Silver
                Reserve agrees to indemnify and hold harmless Sage from all claims,
                actions, damages and losses arising out of or in connection with
                a breach
                of any representation or warranty made by Silver Reserve contained
                herein.

            

    

     

    2.    OPTION

     

    2.1    GRANT
      OF OPTION

     

    Sage
      hereby grants to Silver Reserve the sole and exclusive right and option to
      acquire up to an undivided 100% right, title and interest (the “Earned
      Interest”)in
      and
      to the Claims (the “Option”)
      in
      accordance with the terms of this Agreement.

     

    2.2    TERMS
      OF OPTION

     

    To
      exercise the Option and thereby earn an undivided 100% right, title and interest
      in and to the Claims subject to the NSR royalty set out in 2.2.4 below, Silver
      Reserve shall;

     

    
      	
              2.2.1

            	
              Make
                payment to Sage of $20,000 upon execution of this
                Agreement.

            

    

     

    
      	
              2.2.2

            	
              Year One

            

    

     

    (a) stake
      up
      to 250 claims adjoining the Claims to be held by Silver Reserve and dealt with
      as set out herein;

     

    (b) commission
      a geophysical review of Property by Jim Fink;

     

    (c) commission
      Sage as geological consultants at a rate of $400.00 per day to assist in
      establishing drill targets; and

     

    (d) Complete
      a drill program of reverse calculation and core drilling of not less than
      $500,000.

     

    
      	
              2.2.3

            	
              Year
                Two - complete an additional drill program of not less than
                $500,000.

            

    

     

    
      	2.2.4	
              Royalty
                - Sage shall be entitled to a 2.1% Net Smelter Return (“NSR”) royalty on
                the Property payable in accordance with the terms as set out in Schedule
                B
                hereto and forming part hereof.

            

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

    

     

    
      	
              2.2.5

            	
              Advanced
                Royalty Payment - Silver Reserve shall make advance royalty payment
                in the
                amount of $10,000 on each anniversary date of this Agreement and
                continuing after the Option is fully exercised, until Sage has received
                a
                total of $100,000 or until a feasibility study recommending the Property
                be put into production has been completed, which ever shall occur
                first.
                All advance royalty payments shall be applied to the reduction of
                any
                future royalty payments due under the NSR
                royalty.

            

    

     

    
      	
              2.2.6

            	
              Stock
                Payment - on the second anniversary of this Agreement or on completion
                of
                drilling programs totalling $1,000,000, which ever occurs first,
                Silver
                Reserve shall issue to Sage 500,000 of its common shares as fully
                paid and
                non assessable shares.

            

    

     

    
      	
              2.2.7

            	
              Sustaining
                Fees - Silver Reserve shall be responsible for the payment of all
                sustaining fees on the Property due to the BLM before September
                1st
                each year during the term of this Agreement and continuing after
                it has
                earned a 100% interest in the Claims.

            

    

     

    
      	
              2.2.8

            	
              Other
                Acquisition - Silver Reserve shall on a best effort basis, enter
                into
                negotiation to acquire the five adjoining claims held by John Tom
                Ross,
                Boyd Mitchell and Albert Perondi. Terms of any acquisition of these
                claims
                must be to the satisfaction of Silver Reserve at its sole discretion.
                If
                an acquisition is successful, those claims shall form part of the
                “Property.” 

            

    

     

    
      	
              2.2.9

            	
              Earned
                Interest - Silver Reserve shall have earned
                a:

            

    

     

    
      	 	
              (a)

            	
              40%
                interest in the Property when it has fulfilled all the items set
                out in
                2.2.1 and 2.2.2, plus made the first annual Advanced Royalty Payment
                set
                out in 2.2.5.

            

    

     

    
      	 	
              (b)

            	
              100%
                interest in the Property when it has fulfilled all the items set
                out in
                2.2.1, 2.2.2 and 2.2.3, and paid all required payments under 2.2.5,
                2.2.6
                and 2.2.7.

            

    

     

    Any
      drill
      program costs in excess of the $500,000 set out in 2.2.2 (c) incurred in the
      first year of this Option may be carried over and applied against the drilling
      expenditures required in the second year under 2.2.3. 

     

    2.3    TITLE

     

    
      	 	
              (a)

            	
              Sage
                shall hold title to the Claims in trust for the benefit of both parties
                until Silver Reserve has earned its 100%
                interest.

            

    

     

    
      	 	
              (b)

            	
              Silver
                Reserve shall hold title in trust to all additional claims it stakes
                or
                acquires for the benefit of both parties during the term of this
                Agreement.

            

    

     

    
      	 	
              (c)

            	
              At
                such time as Silver Reserve has earned a 100% interest in the Claims,
                Sage
                shall transfer title to the Claims to Silver Reserve and execute
                and
                deliver such documents as may be required to convey such title subject
                to
                the NSR royalty.

            

    

     

    
      	 	
              (d)

            	
              If
                this Agreement is terminated for any reason prior to Silver Reserve
                earning an interest in the Claims, it will transfer title it holds
                in any
                portion of the Property to Sage including any other acquisition within
                the
                area of interest.

            

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

    

     

    
      
        2.4    TERMINATION

         

      

    

    
      	
              2.4.1

            	
              Silver
                Reserve may terminate this Agreement at any time during the first
                year by
                giving notice in writing to Sage. In the event of such termination,
                Silver
                Reserve shall have no further obligation to Sage except as set out
                in 2.3
                (d) above.

            

    

     

    
      	
              2.4.2

            	
              If
                this Agreement is terminated after Silver Reserve has earned a 40%
                interest, the parties shall enter into a Joint Venture Agreement
                (JV) to
                continue the development of the Property as set out in 2.6
                (c).

            

    

     

    2.5    OPTION
      PERIOD RIGHTS AND OBLIGATIONS

     

    
      	 	
              (a)

            	
              During
                the term of this Agreement: Silver Reserve shall have the exclusive
                right
                to conduct exploration and development work on the Property with
                the right
                to remove mineral samples therefrom, including bulk mineral samples,
                for
                the purpose of assays and tests. Silver
                Reserve shall have the right to erect, bring and install all such
                buildings, machinery, equipment and supplies on the Property as it
                shall
                deem necessary and proper; and all
                work done by Silver Reserve on the Property shall be done in accordance
                with good mining practice and in compliance with the applicable laws
                and
                regulations including environmental laws and regulations applicable
                to the
                Property.

            

    

     

    
      	 	
              (b)

            	
              During
                the term of this Agreement: Sage
                shall have access to the Property and to all the records of
                Silver Reserve, at its sole risk and expense, to review work being
                carried
                out on the Property or to review results obtained from work carried
                out on
                the Property, as the case may be, provided however, that reasonable
                notice
                is given and that such access shall not unduly interfere with or
                disrupt
                the activities of Silver Reserve; Silver Reserve shall provide Sage
                with
                copies of all reports produced from work conducted on the
                Property.
                Silver Reserve shall provide Sage with a report within 45 days following
                the first anniversary date of this Agreement disclosing the costs
                incurred
                in carrying out the drilling program work and a further report disclosing
                drilling costs that total up to $1,000,000 at such time as total
                drilling
                expenses in this amount have been incurred.

            

    

     

    
      	 	
              (c)

            	
              Silver
                Reserve shall indemnify and save harmless Sage from and against all
                suits,
                claims, demands, losses and expenses which they may each suffer by
                reason
                of any act or thing done or omitted to be done during the term of
                this
                Agreement by or on behalf of Silver Reserve in relation to its exploration
                and development operations on the Property, including any consequences
                arising from the non-payment of workmen and wage earners employed
                by it or
                its contractors on or in connection with the Property or suppliers
                of
                materials purchased in connection therewith. During the term of this
                Agreement, so long as Silver Reserve’s Option is in effect, Silver Reserve
                shall keep the Property free from claims for liens, charges and
                encumbrances and, in the event of a lien, charge or encumbrance being
                recorded, it will on this fact becoming known to it forthwith take
                proceedings to have such lien, charge or encumbrance removed as soon
                as
                possible. Silver Reserve may, however, dispute and contest any suit,
                claim,

            

    

    

    
      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

    

     

    demand,
      loss or expense which forms the basis of a recorded lien, charge or
      encumbrance.

     

    2.6    EXERCISE
      OF OPTION

     

    
      	 	
              (a)

            	
              At
                such time as Silver Reserve has made the payments, incurred the expenses
                and carried out such other required commitments as set out in 2.2.1,
                2.2.2, 2.2.3, 2.2.5, 2.2.6 and 2.2.7 as set out herein it shall have
                earned a 100% interest in the Claims and the property subject only
                to the
                NSR royalty and Advance Royalty Payments due to
                Sage.

            

    

     

    
      	 	
              (b)

            	
              Should
                Silver Reserve elect not to proceed further with expenditures after
                earning a 40% interest in the Claims the parties hereto agree to
                form a JV
                to continue the maintenance of the claims and any further work on
                the
                Property subject to the NSR
                royalty.

            

    

     

    
      	 	
              (c)

            	
              Upon
                the JV being formed,
                each party shall have, subject to the terms of this Agreement, its
                respective undivided right, title and interest in and to the Property
                (the
                “Participating
                Interest”),
                the right to participate in the JV and the corresponding obligation
                to
                fund further exploration and development of the Property. The
                Participating Interests, at the time of the formation of the JV,
                shall
                be:

            

    

     

    Sage                              
      60%,
      and

    Silver
      Reserve             
40%

     

    The
      JV
      agreement shall contain such provisions as are acceptable to the parties
      including but not limited to a provision making the party with the majority
      interest in the Property the Operator and proportionate dilution provisions
      which would apply where a party fails to contribute their share of any approved
      work program. No party shall arbitrarily withhold their approval and execution
      of the JV Agreement.

     

    2.7    SAGE
      ROYALTY

     

    Sage
      shall retain a 2.1% net smelter returns royalty to be calculated and paid in
      accordance with the provisions of Schedule B attached hereto and to Advance
      Royalty Payments as set out in 2.2.5 hereof.

    
      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

    

     

    3.    GENERAL
      PROVISIONS

     

    3.1    NATURE
      OF RELATIONSHIP

     

    Nothing
      herein shall be construed as creating a partnership between the parties.
Nothing
      contained in this Agreement shall be construed so as to constitute a party
      an
      agent or legal representative of another party. Except as otherwise specifically
      provided in this Agreement, a party shall not have any authority to act for,
      or
      to assume any obligation or responsibility on behalf of, any other party. Except
      as expressly provided in this Agreement, each party shall have the free and
      unrestricted right to independently engage in and receive the full benefits
      of
      any and all business endeavours of any sort whatsoever not related to the
      Property and the area of interest, whether or not competitive with the
      endeavours contemplated herein, without consulting or inviting or allowing
      the
      other party any interest therein and the legal doctrines of “corporate
      opportunity” or “business opportunity” sometimes applied to joint venturers
      shall not apply in the case of such other endeavours, as all fiduciary duties
      arising from the Joint Venture and owed by one party to another have been
      specifically outlined in this Agreement.

     

    
      	
              3.2

            	
              AREA
                OF INTEREST

            

    

     

    The
      area of
      interest shall
      be
      deemed
      to
comprise
      that area which is included within ten (10) kilometres of the outermost
      boundary
      of the
      mineral
      properties, which
      constitute the Property.
      Any
      acquisition acquired by either party within the area of interest shall be added
      to and form part of the Property subject to the consent of the non acquiring
      party. The acquirer shall hold title to such acquisition in trust for the
      benefit of the parties to this Agreement and transfer it to the appropriate
      party in accordance with the terms hereof.

     

    3.3    DEFAULT
      PROVISIONS

     

    The
      following shall be considered a default on the part of Silver
      Reserve:

     

    
      	 	
              (a)

            	
              if
                it fails to make the Advance Royalty Payments, referred to in 2.2.5
                hereof, when due during the term of this Agreement and after it has
                earned
                a 100% interest in the Claims.

            

    

     

    
      	 	
              (b)

            	
              If
                it fails to make the NSR royalty payments when due in accordance
                with
                Schedule B hereto.

            

    

     

    
      	 	
              (c)

            	
              If
                it fails to make the Stock Payment referred to in 2.26
                hereof.

            

    

     

    
      	 	
              (d)

            	
              In
                the event of a default in any of the above items Sage shall give
                Silver
                Reserve written notice in accordance herewith, describing the default
                and
                allowing Silver Reserve 15 business days to correct said default.
                Failure
                of Silver reserve to correct the default within the allotted time
                shall
                result in Silver Reserve forfeiting all interest in the Property
                and being
                required to transfer any property interests to
                Sage.

            

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

    

     

    
      	 	
              3.4

            	
              CONFIDENTIAL
                INFORMATION

            

    

     

    All
      data
      and information provided to or received by the parties with respect to the
      Property shall be treated as confidential. A party shall not disclose such
      information to third parties whether by way of press release or otherwise,
      unless the disclosure is required by law, stock exchange rules or a regulatory
      authority having jurisdiction or the disclosure is consented to by the other
      party (the “Non-Disclosing
      Party”);
      consent of such Non-Disclosing Party shall not be unreasonably withheld or
      delayed in view of the parties’ timely disclosure obligations. Without limiting
      the foregoing, the Non-Disclosing Party may reasonably withhold its consent
      to
      the issuance of a press release where it has not been provided with an advance
      draft copy of such press release. Where disclosure is required by law, stock
      exchange rules or a regulatory authority having jurisdiction, a party shall,
      if
      permitted by such law, stock exchange rule or regulatory authority, use its
      reasonable best efforts to provide a copy of the information to be disclosed
      (the “Disclosure
      Statement”)
      to the
      Non-Disclosing Party in advance of its disclosure and make reasonable changes
      to
      such Disclosure Statement as may be requested by the Non-Disclosing
      Party.

     

    3.5    GEOLOGICAL
      INTERPRETATIONS

     

    No
      party
      (the “Reporting
      Party”)
      shall
      be liable to another party (the “Receiving
      Party”)
      in
      respect of any opinions, findings, conclusions or other non-factual information
      included by the Reporting Party in any report or other document provided to
      the
      Receiving Party, whether included by negligence or otherwise. Each party hereby
      indemnifies and saves harmless the other from and against all suits, claims,
      demands, losses and expenses arising in respect of the release by a Receiving
      Party of such non-factual information in such report or other document to third
      parties, irrespective of whether such release was consented to by the Reporting
      Party.

     

    Sage
      shall deliver to Silver Reserve, immediately after execution of this Agreement,
      copies of all reports, information and data in its possession related to the
      Claims and the geological structures in the area of the Claims.

     

    3.6    FORCE
      MAJEURE

     

    
      	 	
              (a)

            	
              No
                party hereto shall be liable under this Agreement to another party
                for any
                failure to perform any of its obligations caused by or arising out
                of any
                act not within the control of the party, excluding lack of funds,
                but
                including, without limitation, acts of God, strikes, acts or terrorism,
                lockouts or other industrial disputes, acts of a public enemy, riots,
                fire, storm, flood, explosion, government restriction, failure to
                obtain
                any approvals required from regulatory authorities, including
                environmental protection agencies, unavailability of equipment,
                interference of persons primarily concerned about environmental or
                native
                rights issues and any other cause, whether of the kind enumerated
                above or
                otherwise, which is not reasonably within the control of the party
                (the
                “Event
                of Force Majeure”).

            

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

    

     

    
      	 	
              (b)

            	
              No
                right of a party shall be affected, and no party shall be found in
                default, under this Agreement by the failure of such party to meet
                any
                term or condition of this Agreement, excluding lack of funds, where
                such
                failure is caused by an Event of Force Majeure and, in such event,
                all
                times specified or provided for in this Agreement shall be extended
                by a
                period commensurate with the period during which the Event of Force
                Majeure causes such failure.

            

    

     

    
      	 	
              (c)

            	
              A
                party affected by an Event of Force Majeure shall take all reasonable
                steps within its control to remedy the failure caused by such event,
                provided, however, that nothing contained in this
                section 3.6
                shall require any party to settle any labour or industrial dispute
                or to
                test the constitutionality of any law enacted by any Legislature
                of or
                within the United States.

            

    

     

    
      	 	
              (d)

            	
              Any
                party relying on the provisions of this section 3.6
                shall forthwith give notice to the other party of the commencement
                of an
                Event of Force Majeure and of its
                end.

            

    

     

    3.7    NOTICES

     

    
      	 	
              (a)

            	
              Any
                notice, direction or other communication (the “Notice”)
                given hereunder, irrespective of whether such Notice was required,
                permitted or otherwise provided pursuant to or in respect of this
                Agreement, shall be in writing and:

            

    

     

    
      	 	
              (i)

            	
              if
                delivered, shall be deemed to have been given and received on the
                day it
                was delivered;

            

    

     

    
      	 	
              (ii)

            	
              if
                mailed, shall be deemed to have been given and received on the seventh
                business day following the day of mailing, except in the event of
                disruption of postal services in which event such Notice shall be
                deemed
                to have been given and received only when actually received;
                

            

    

     

    
      	 	
              (iii)

            	
              if
                sent by facsimile shall be deemed to have been given and received
                on the
                day it was so sent, except where sent outside of normal business
                hours
                (9:00 a.m. to 5:00 p.m. local time at the place of receipt), in which
                event such Notice shall be deemed to have been given and received
                on the
                next following business day; and

            

    

     

    
      	 	
              (b)

            	
              Notices
                in each case shall be addressed as
                follows:

            

    

     

    
      	 	
              (i)

            	
              if
                to Silver Reserve, at:

            

    

     

    Silver
      Reserve Corp.

    1226
      White Oaks Blvd., Suite 10A

    Oakville,
      Ontario, Canada L6H 2B9

    Attention: 
      Stafford
      Kelley 

    Fax: 
      (905)
      845-6415

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

    
      	
            	(ii)	
              if
                to Sage, at:

            

    

     

    Sage
      Associates Inc.

    2020
      North Huachuca Drive

    Tucson,
      AZ 85745

    Attention:
      Dave Hackman

    Fax
      #520-623-3326

    

    Any
      party
      may give, at any time, notice in writing to the other party 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 shall be deemed to be the
      address of such party for the purpose of giving Notice hereunder.

     

    3.8    INTERPRETATION

     

    
      	 	
              (a)

            	
              This
                Agreement shall be interpreted and governed according to the laws
                of the
                State of Nevada. The parties hereby attorn to the jurisdiction of
                the
                courts of the State of Nevada and agree to submit any disputes in
                respect
                of this Agreement to the courts of the State of
                Nevada.

            

    

     

    
      	 	
              (b)

            	
              All
                references in this Agreement to monetary amounts are expressed in
                US
                currency.

            

    

     

    
      	 	
              (c)

            	
              In
                this Agreement, headings have been inserted for ease of reference
                and may
                not accurately describe the provisions that follow them. Consequently,
                headings shall not be used for purposes of interpreting this
                Agreement.

            

    

     

    
      	 	
              (d)

            	
              In
                this Agreement, the singular encompasses the plural and vice
                versa,
                and the masculine encompasses the feminine and vice
                versa.

            

    

     

    3.9    WHOLE
      AGREEMENT AND FURTHER ASSURANCES

     

    
      	 	
              (a)

            	
              This
                Agreement, including Schedules A and B attached hereto, constitutes
                the whole of this Agreement and encompasses the entire agreement
                between
                Silver Reserve and Sage pertaining to the Property. This Agreement
                supersedes all prior agreements, understandings, negotiations and
                discussions, whether oral or written, between Silver Reserve and
                Sage, and
                there are no warranties, representations or other agreements between
                Silver Reserve and Sage in connection with the Property, except as
                specifically set forth herein.

            

    

     

    
      	 	
              (b)

            	
              The
                parties agree to execute and cause to be executed such other documents,
                and take and cause to be taken such other actions, as are reasonably
                necessary: (2) to
                secure and give effect to the rights and obligations granted and
                assumed
                hereunder; and (3)
                to
                maintain the Property in good
                standing.

            

    

     

    3.10    ENVIRONMENTAL
      RECLAMATION

     

    
      	 	
              (a)

            	
              Notwithstanding
                any other provision in this Agreement, Sage shall remain liable and
                Silver
                Reserve shall have no obligations in respect of environmental
                liabilities

            

    

    

    
      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

    

     

    incurred
      or arising as a result of the state or condition of the Claims prior to the
      date
      of this Agreement.

     

    
      	 	
              (b)

            	
              For
                purposes of section 3.10
                (a), environmental liabilities shall mean any and all damages (including
                but not limited to exemplary and punitive damages), losses, costs,
                expenses, liabilities and obligations of whatsoever kind, direct
                or
                indirect (including but not limited to fines, penalties, interest,
                lawyers’ fees and expenses, damages for personal injury, death, property
                damage and economic loss, including but not limited to reduction
                in the
                value of the Property (or any other person’s property) incurred or arising
                as a result of the state or condition of the Claims, including costs
                relating to the removal, treatment, storage and disposal of hazardous
                substances and the remediation, clean-up, restoration, abatement,
                reclamation or other securing or remedial action in respect of the
                Claims
                (or any other person’s property) under or for breach of or failure to
                comply with any and all environmental laws, whether statutory, in
                contract
                or in tort, including negligence and strict liability, or howsoever
                otherwise arising.

            

    

     

    
      	 	
              (c)

            	
              For
                purposes of sections 1.2 (i) and 3.10(b):

            

    

     

    
      	 	
              (i)

            	
              environmental
                laws shall mean any and all federal, state and local laws, statutes,
                rules, regulations, ordinances, bylaws, orders, permits, licences,
                approvals, policies and consents and the common law to the extent
                that any
                of the foregoing regulate, ascribe, provide for or pertain to liabilities
                or obligations in relation to the existence, use, production, manufacture,
                processing, distribution, production, transport, handling, storage,
                removal, treatment, disposal, emission, discharge, migration, seepage,
                leakage, spillage or release of hazardous substances or the construction,
                alteration, use or operation, demolition or decommissioning of any
                facilities or other real or personal property in relation to the
                foregoing
                or otherwise in relation to the protection of the life, health or
                safety
                of persons, or to the protection of property or the environment,
                including
                but not limited to air, soil, surface water, ground water, biota,
                wildlife
                and personal or real property; and 

            

    

     

    
      	 	
              (ii)

            	
              hazardous
                substances shall mean any substance
                that:

            

    

     

    
      	 	
              (A)

            	
              when
                released to the natural environment is likely to cause or does cause,
                immediately or at some future time, material harm or degradation
                to the
                natural environment or any risk to human health and, without restricting
                the generality of the foregoing, includes any pollutant, contaminant,
                waste or hazardous waste, or any “dangerous goods”, “hazardous chemical”,
                “hazardous substance” or “hazardous waste”, as may be defined by
                environmental laws; or

            

    

     

    
      	 	
              (B)

            	
              exhibits
                characteristics of flammability, corrosivity, reactivity or
                toxicity.

            

    

    

    
      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

    

     

    3.11    COUNTERPARTS

     

    This
      Agreement may be executed in multiple counterparts, each of which shall
      be deemed
      an
      original, and all of which together shall constitute one and the same
      instrument. Execution and delivery of this Agreement by exchange of facsimile
      copies bearing facsimile signature of a party shall constitute a valid and
      binding execution and delivery of this Agreement by such party. Such facsimile
      copies shall constitute enforceable original documents.

     

     

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

     

    
      	 	
              SAGE
                ASSOCIATES INC. 

            	 	 	
              SILVER
                RESERVE CORP.

            
	 	 	 	 	 
	 	 	 	 	 
	by:	
              s/
                David B. Hackman

            	 	by:	
              s/
                Todd Montgomery

            
	 	
              David
                Hackman 

            	 	 	
              Todd
                Montgomery

            
	 	
              President

            	 	 	
              President

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	by:	
              s/
                Stafford Kelley

            
	 	 	 	 	
              Stafford
                Kelley

            
	 	 	 	 	
              Secretary

            

    

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

     

    SCHEDULE
      A

    TO

    SAGE
      / SILVER RESERVE AGREEMENT

    DATED
      August
      21, 2006

    

    DESCRIPTION
      OF SAGE PROPERTIES

    Claims
      in the Como Mining District, Lyon County, Nevada

    

    The
      following unpatented mining claims have been located within the sections of
      the
      public land survey indicated below and the location notices thereof are of
      record in the Nevada State Office of the Bureau of Land Management the Office
      of
      the Clerk/Recorder of Lyon County as follows:

    

    
      	
              Claim

            	 	
              BLM

            	 	
              Public
                Land Survey

            	 	 	 	
              Lyon
                County

            
	
              Name

            	
              Number

            	 	
              NMC
                No.

            	 	
              Twn

            	
              Rng

            	
              Sec

            	 	
              Subdiv

            	 	
              Doc.
                No.

            
	 	 	 	 	 	 	 	 	 	 	 	 
	
              Sue

            	
              30

            	 	
              814022

            	 	
              15N

            	
              23E

            	
              7

            	 	
              NW

            	 	
              245277

            
	
              Sue

            	
              31

            	 	
              814023

            	 	
              15N

            	
              23E

            	
              7

            	 	
              NW

            	 	
              245278

            
	
              Sue

            	
              33

            	 	
              814024

            	 	
              15N

            	
              23E

            	
              7

            	 	
              NW

            	 	
              245279

            
	
              Sue

            	
              35

            	 	
              667248

            	 	
              15N

            	
              23E

            	
              6

            	 	
              SE

            	 	
              96462

            
	
              Sue

            	
              36

            	 	
              667249

            	 	
              15N

            	
              23E

            	
              6

            	 	
              SE

            	 	
              96463

            
	
              Sue

            	
              37

            	 	
              667250

            	 	
              15N

            	
              23E

            	
              6

            	 	
              SW

            	 	
              96464

            
	
              Sue

            	
              38

            	 	
              667251

            	 	
              15N

            	
              23E

            	
              6

            	 	
              SW

            	 	
              96465

            
	
              Sue

            	
              136

            	 	
              667280

            	 	
              15N

            	
              23E

            	
              6

            	 	
              NE

            	 	
              96504

            
	
              Sue

            	
              138

            	 	
              667282

            	 	
              15N

            	
              23E

            	
              6

            	 	
              NE

            	 	
              96506

            
	
              Sue

            	
              145

            	 	
              667288

            	 	
              15N

            	
              23E

            	
              5

            	 	
              NW

            	 	
              96512

            
	
              Sue

            	
              147

            	 	
              667289

            	 	
              15N

            	
              23E

            	
              6

            	 	
              NE

            	 	
              96513

            
	
              Sue

            	
              149

            	 	
              667290

            	 	
              15N

            	
              23E

            	
              6

            	 	
              NE

            	 	
              96514

            

    

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

     

    SCHEDULE
      B

    TO

    SAGE
      / SILVER RESERVE AGREEMENT

    DATED
      August
      21, 2006

    

    Net
      Smelter Return Royalty

    

    

    1. The
      NSR
      which may be payable to a party (the “Payee”)
      by a
      party (the “Payor”)
      shall
      be calculated and paid to the Payee in accordance with the terms of this
      Schedule.

     

    2. The
      NSR
      shall be calculated on a calendar quarterly basis.

     

    3. The
      following words shall have the following meanings:

     

    
      	 	
              3.1

            	
              “Gross
                Revenue”
                shall mean the aggregate of the following amounts received in each
                quarterly period:

            

    

     

    
      	 	
              (a)

            	
              (4)

            	
              all
                revenue received by the Payor in such quarter from arm’s length purchasers
                of mineral products, or

            

    

     

    
      	 	
              (ii)

            	
              the
                fair market value of all mineral products sold by the Payor in such
                quarter to persons not dealing at arm’s length with the Payor;
                and

            

    

     

    
      	 	
              (b)

            	
              any
                proceeds of insurance received in such quarter due to losses or damages
                in
                respect to mineral products.

            

    

     

    
      	 	
              3.2

            	
              “Permissible
                Deductions”
                shall mean the aggregate of the following charges (to the extent
                not
                previously deducted or accrued in computing Gross Revenue) that are
                paid
                in each quarterly period:

            

    

     

    
      	 	
              (a)

            	
              sales
                charges levied by any sales agent in respect to the sale of mineral
                products;

            

    

     

    
      	 	
              (b)

            	
              all
                costs, expenses and charges of any nature whatsoever which are either
                paid
                or incurred by the Payor in connection with the refinement or
                beneficiation (in the case of direct-shipping ore) of mineral products
                after leaving the Property, including all weighing, sampling, assaying
                and
                representation costs, metal losses, any umpire charges and any penalties
                charged by the processor, refinery or smelter;
                and

            

    

     

    
      	 	
              (c)

            	
              all
                other insurance costs in respect of mineral
                products;

            

    

     

    provided:
      (i)
      that
      where a cost or expense otherwise constituting a Permissible Deduction is
      incurred by the Payor in a transaction with a party with whom it is not dealing
      at arm’s length (as that term is defined in the Income
      Tax Act
      (Canada)), such costs or expenses may be deducted, but only as to the lesser
      of

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

     

    the
      actual cost incurred by the Payor and the fair market value thereof
      considering the time of such transaction and under all the circumstances
      thereof;
      and
      (ii) transportation costs and milling costs at another site, prior to the
      smelting and refining shall not be included in the definition of Permissible
      Deductions.

     

    
      	 	
              3.3

            	
              “Net
                Smelter Returns”
                shall mean Gross Revenue less Permissible Deductions in respect to
                such
                quarter.

            

    

     

    
      	 	
              3.4

            	
              “NSR”
                shall mean Net Smelter Returns.

            

    

     

    4. The
      NSR
      shall be calculated and paid within 45 days after the end of each calendar
      quarter ending March 31, June 30, September 30 and December 31 of each year.
      Smelter settlement sheets, if any, and a statement setting forth calculations
      in
      sufficient detail to show how the payment was derived (the “Statement”)
      shall
      be submitted with the payment.

     

    5. In
      the
      event that final amounts required for the calculation of the NSR are not
      available within the time period referred to in paragraph 4 of this
      Schedule, then provisional amounts shall be established, the NSR shall be paid
      on the basis of such provisional amounts and positive or negative adjustments
      shall be made to the payment in the succeeding quarter, as
      necessary.

     

    6. All
      NSR
      payments shall be considered final and in full satisfaction of all obligations
      of the Payor with respect thereto, unless the Payee delivers to the Payor a
      written notice (the “Objection
      Notice”)
      describing and setting forth a specific objection to the calculation thereof
      within 60 days after receipt by the Payee of the Statement. If the Payee objects
      to a particular Statement as herein provided, the Payee shall, for a period
      of
      60 days after the Payor’s receipt of such Objection Notice, have the right, upon
      reasonable notice and at a reasonable time, to have the Payor’s accounts and
      records relating to the calculation of the NSR in question audited by the
      auditors of the Payor. If such audit determines that there has been a deficiency
      or an excess in the payment made to the Payee, such deficiency or excess will
      be
      resolved by adjusting the next monthly NSR payment due hereunder. The Payee
      shall pay all the costs and expenses of such audit unless a deficiency of 2
      1/2%
      or more of the amount due is determined to exist. The Payor shall pay the costs
      and expenses of such audit if a deficiency of 2 1/2% or more of the amount
      due
      is determined to exist. All books and records used and kept by the Payor to
      calculate the NSR due hereunder shall be kept in accordance with U.S. generally
      accepted accounting principles. Failure on the part of the Payee to make claim
      against the Payor for adjustment in such 60 day period by delivery of an
      Objection Notice shall conclusively establish the correctness and sufficiency
      of
      the Statement and NSR payment in respect of the applicable quarter.

     

    7. All
      profits and losses resulting from the Payor engaging in any commodity futures
      trading, option trading, metals trading, gold loans or any combination thereof,
      and any other hedging transactions with respect to mineral products
      (collectively, “Hedging
      Transactions”)
      are
      specifically excluded from calculations of the NSR pursuant to this Schedule,
      it
      being understood by the parties that both the Payor and Payee may engage in
      speculative hedging trading activities for their own account. All Hedging
      Transactions by the Payor and all profits or losses associated therewith, if
      any, shall be solely for the Payor’s account, irrespective of whether or not
      mineral products are delivered in fulfilment of such obligations. When
      necessary

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

    to
      give
      effect to the provisions of this paragraph 7, Gross Revenue from mineral
      products subject to Hedging Transactions by the Payor shall be determined
      pursuant to sub clause 3.1(a)(ii), rather than 3.1(a)(i)
      hereof.

     

    8. Fair
      market value shall be determined by using, for gold, the quarterly average
      price
      of gold which shall be calculated by dividing the sum of all London Bullion
      Market Association P.M. Gold Fix prices reported for the calendar quarter in
      question by the number of days for which such prices were quoted and, for silver
      and other metals, the quarterly average price which shall be calculated by
      dividing the sum of all New York Commodity Exchange (“COMEX”)
      prices
      reported for silver and the other metal quoted by and at the closing of COMEX
      for the calendar quarter in question by a number of days for which such prices
      were quoted, less, in each case, an amount reasonably equivalent to the
      deductions permitted by clause 3.2 hereof.

    
      
         

      

        -17-EX 10.7

    EXHIBIT
      10.7

     

    PROPERTY
      PURCHASE AGREEMENT

     

    

     

    THIS
      AGREEMENT (this “Agreement”) is made as of the 1st
      day
      of
      August, 2006,

     

    BETWEEN:

     

    NEVADA
      REFINERY INC.,
      a Nevada
      Corporation

     

    (hereinafter
      referred to as the “Vendor”)

     

    OF
      THE
      FIRST PART,

     

    AND:

     

    SILVER
      RESERVE CORP.,
      a
      company incorporated under the laws of the State of Delaware 

     

    (hereinafter
      referred to as the “Purchaser”)

     

    OF
      THE
      SECOND PART.

     

    RECITALS

     

    WHEREAS
      the Vendor is the recorded and beneficial owner of a 100% interest in a refinery
      facility and equipment described in Schedule “A” hereto, hereinafter referred to
      as the “Property”;

     

    WHEREAS
      the Vendor has agreed to sell to the Purchaser all of its right, title and
      interest in and to the Property.

     

    NOW
      THEREFORE, in consideration of the mutual covenants and agreements herein
      contained and subject to the terms and conditions hereafter set out, the parties
      hereto agree as follows:

     

    1.    PURCHASE
      AND SALE

     

    1.01  The
      Vendor hereby sells and transfers to the Purchaser, and the Purchaser hereby
      buys and accepts from the Vendor, all of the Vendor’s right, title and interest
      in

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    and
      to
      the Property in consideration of the sum of 88,500 common shares in the capital
      of the Purchaser (the “Shares”),
      to be
      paid and delivered to the Vendor on closing.

     

    2.    CLOSING
      DATE 

     

    2.01  In
      this
      agreement, “Closing
      Date”
      means
      August 31st,
      2006,
      or such other date as may be agreed to by the parties hereto.

     

    3.    TRANSFER
      OF TITLE

     

    3.01  On
      the
      Closing Date, the Vendor shall deliver to the Purchaser recordable Bills of
      Sale
      or other applicable conveyancing documentation sufficient to affect the transfer
      of a 100% interest in and to the Property to the Purchaser. Vendor agrees to
      execute such further documentation as may be necessary or desirable to evidence
      such transfer of title and/or to record such transfer in appropriate registries,
      at the request of Purchaser.

     

    4.    RIGHT
      OF ENTRY

     

    4.01  The
      Purchaser, its servants, agents and workmen and any persons duly authorized
      by
      the Purchaser following execution of this Agreement, shall have the exclusive
      right to enter upon and carry out work on the Property in such manner as the
      Purchaser in its sole discretion may deem advisable. 

     

    5.    REPRESENTATIONS
      AND WARRANTIES OF THE VENDOR

     

    5.01  The
      Vendor hereby represents and warrants to the Purchaser that:

     

    
      	 	
              (a)

            	
              it
                is a company in good standing under the laws of the State of Nevada
                and
                has the power and authority to enter into this
                Agreement;

            

    

     

    
      	 	
              (b)

            	
              immediately
                prior to the closing of this Agreement it is the recorded and beneficial
                owner of a 100% interest in and to the Property and the Property
                is not
                subject to any liens or encumbrances of any kind
                whatsoever;

            

    

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    
      	 	
              (c)

            	
              the
                entering into this Agreement does not conflict with any applicable
                law nor
                does it conflict with, or result in a breach of or accelerate the
                performance required by, any contract or other commitment to which
                it is a
                party or by which it is bound;

            

    

     

    
      	 	
              (d)

            	
              it
                has the exclusive right to enter into this Agreement and all necessary
                authority to assign to the Purchaser all of its right, title and
                interest
                in and to the Property in accordance with the terms and conditions
                of this
                Agreement;

            

    

     

    
      	 	
              (e)

            	
              the
                Property is free and clear of all liens and encumbrances and all
                claims
                are in good standing with assessment work filed for, not less than
                one
                year following closing;

            

    

     

    
      	 	
              (f)

            	
              there
                are no outstanding or, to the best of the Vendor’s information, knowledge
                and belief, proposed, threatened or contemplated actions or suits
                which,
                if successful, would or could affect the market value or ownership
                of the
                Property or any portion thereof;

            

    

     

    
      	 	
              (g)

            	
              conditions
                on and relating to the Property are in compliance with all applicable
                laws, regulations and orders relating to environmental matters, including,
                but not limited to, waste disposal and storage and Vendor is not
                aware of
                any conditions with respect to the Property that could give rise
                to
                environmental claims that would impair the Purchaser’s title to the
                Property; 

            

    

     

    
      	 	
              (h)

            	
              there
                are no reclamation liabilities to be carried out in the future,
                outstanding work orders or actions required to be taken relating
                to the
                condition of the Property, or any operations that have been carried
                out
                thereon; 

            

    

     

    
      	 	
              (i)

            	
              on
                the Closing Date the Vendor will deliver to the Purchaser copies
                of all
                operating reports and other documents and or materials relating to
                the
                Property in the Vendor’s
                possession.

            

    

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    
      	 	
              (j)

            	
              the
                Vendor has been informed as to, and is familiar with, the business
                activities of the Purchaser and its affiliates, and has had an opportunity
                and proceeded, or waived the opportunity, to (i) review the books
                and
                records of the Purchaser and its affiliates and to ask questions
                of, and
                receive answers from, appropriate representatives of the Purchaser
                and its
                affiliates concerning the Purchaser and its affiliates and the terms
                and
                conditions of this Agreement, and (ii) obtain and review all additional
                information relating to the history and proposed business plan of
                the
                Purchaser and its affiliates that it deems
                necessary.

            

    

     

    
      	 	
              (k)

            	
              the
                Vendor fully understands that the Shares have not been registered
                under
                the Securities Act in reliance upon exemptions therefrom, and,
                accordingly, to the extent that it is not supplied with the information
                which would have been contained in a registration statement filed
                under
                the Securities Act, it must rely on its own access to such
                information.

            

    

     

    
      	 	
              (l)

            	
              the
                Vendor has had an opportunity to obtain and has obtained a general
                and
                complete understanding satisfactory to it of the Purchaser, its affiliates
                and their services, potential assets, finances, and manner of doing
                business sufficient to permit it to evaluate (i) the Purchaser and
                its
                prospects and (ii) the risks and merits of accepting the Shares on
                payment
                for the Property.

            

    

     

    
      	 	
              (m)

            	
              the
                Vendor (i) recognizes that accepting the Shares involves risk, (ii)
                has
                carefully considered whether accepting he Shares is appropriate,
                and (iii)
                has obtained such individual financial, tax and legal advice as it
                deems
                necessary or appropriate to fully understand the risks involved and
                to
                evaluate accepting the Shares.

            

    

     

    
      	 	
              (n)

            	
              the
                Vendor recognizes that it must bear the economic risk involved in
                accepting the Shares for an indefinite period of time because, among
                other
                reasons, the Shares have not been registered under the Securities
                Act and
                therefore cannot be sold, pledged, assigned or otherwise disposed
                of
                unless (i) they are subsequently registered under the Securities
                Act or
                (ii)

            

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    an
      exemption from such registration is available and an opinion of counsel
      acceptable to the Purchaser that the transfer is not in violation of any federal
      securities act or state securities law is provided to the
      Purchaser.

     

    
      	 	
              (o)

            	
              the
                Vendor recognizes that there is no current market for the Shares;
                that
                there can be no assurances that such a market will exist any time
                in the
                future and accordingly it may not be able to sell or dispose of any
                of the
                Shares even if it had held them for a number of years; that its right
                to
                transfer the Shares will be restricted by federal and state securities
                laws and a legend to this effect will be placed on the certificates
                representing the Shares and that such laws impose strict limitations
                upon
                such transfer; and the Purchaser is under no obligation in connection
                with
                the subsequent transfer thereof by it or to aid it in obtaining an
                exemption from such registration.

            

    

     

    
      	 	
              (p)

            	
              the
                Vendor acknowledges that the Share certificate representing the purchase
                price shall be legended with a legend substantially in the following
                form:

            

    

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED OR APPLICABLE STATE SECURITIES LAWS. THESE
      SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
      ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITY UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, AND QUALIFICATION UNDER ANY APPLICABLE
      STATE
      SECURITIES LAWS OR (B) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
      COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
      SECURITIES LAWS. ANY PURPORTED TRANSFER OR OTHER DISPOSITION OF THE SECURITIES
      REPRESENTED BY THIS CERTIFICATE IN ANY MANNER WHICH IS IN VIOLATION OF THE
      FOREGOING LIMITATIONS IS INVALID AND THE COMPANY WILL NOT TRANSFER SUCH
      INVALIDLY TRANSFERRED SECURITY ON THE BOOKS OF THE COMPANY.

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    5.02    The
      representations and warranties hereinbefore set out are conditions upon which
      the Purchaser has relied in entering into this Agreement and shall survive
      the
      Closing Date by a period of 24 months, except that the representation and
      warranty of Vendor pursuant to Sections 6.01 (b), (c), (d) and (e) shall survive
      indefinitely. The Vendor hereby indemnifies and saves the Purchaser harmless
      from all loss, damage, costs, actions and suits arising out of or in connection
      with any breach of any representation or warranty made by it and contained
      in
      this Agreement.

     

    6.    REPRESENTATIONS
      AND WARRANTIES OF THE PURCHASER

     

    6.01  The
      Purchaser represents and warrants to the Vendor that:

     

    
      	 	
              (a)

            	
              it
                has full corporate power and authority to enter into this Agreement
                and
                the entering into of this Agreement does not conflict with any applicable
                laws or with its charter documents nor does it conflict with, or
                result in
                a breach of, or accelerate the performance required by any contract
                or
                other commitment to which it is party or by which it is
                bound;

            

    

     

    
      	 	
              (b)

            	
              the
                shares to be delivered to the Vendor upon the Closing Date will be
                duly
                and validly authorized and issued and
                non-assessable.

            

    

     

    6.02    The
      representations and warranties hereinbefore set out are conditions upon which
      the Vendor has relied on entering into this Agreement and shall survive the
      Closing Date. The Purchaser hereby indemnifies and saves the Vendor harmless
      from all loss, damage, costs, actions and suits arising out of or in connection
      with any breach of any representation or warranty made by it and contained
      in
      this Agreement.

     

    6.03  The
      Purchaser accepts, as of the date of this Agreement, responsibility for all
      ongoing cost of the maintenance of the Property.

     

    7.    CONFIDENTIALITY
      OF
      INFORMATION

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    
      	
              7.01

            	 	
              The
                parties hereto shall, subject to the exceptions set out hereinafter,
                treat
                all data, reports, records and other information relating to this
                agreement and the Property as confidential. While this Agreement
                is in
                effect, no party hereto shall, without the express written consent
                of the
                other, disclose to any third party any information concerning the
                results
                of the operations hereunder nor issue any press releases concerning
                this
                Agreement or its exploration operations except where such disclosure
                is
                mandatory under the law or is deemed necessary by the disclosing
                party's
                counsel for the satisfaction by the disclosing party of its obligations
                under applicable securities law, and the disclosing party has, prior
                to
                the public disclosure, given the non-disclosing parties a draft copy
                of
                the disclosure.

            

    

     

    7.02    The
      Purchaser accepts, as of the date of this Agreement, responsibility for all
      ongoing cost of the maintenance of the Property.

     

    8.    ARBITRATION

     

    8.01  Any
      controversy between the parties hereto involving any claim arising out of or
      relating to this Agreement, will be submitted to and be settled by final and
      binding arbitration in Las Vegas, Nevada, in accordance with the then current
      Commercial Arbitration Rules of the American Arbitration Association (the
“AAA”), and judgment upon the award rendered by the arbitrators may be entered
      in any court having jurisdiction thereof. Such arbitration shall be conducted
      by
      three (3) arbitrators chosen by the Vendor and the Purchaser, or failing such
      agreement, an arbitrator experienced in the sale of similar mineral assets
      appointed by the AAA. There shall be limited discovery prior to the arbitration
      hearing as follows: (a) exchange of witness lists and copies of documentary
      evidence and documents relating to or arising out of the issues to be
      arbitrated, (b) depositions of all party witnesses, and (c) such other
      depositions as may be allowed by the arbitrators upon a showing of good cause.
      Depositions shall be conducted in accordance with the Nevada Code of Civil
      Procedure, the arbitrator(s) shall be required to provide in writing to the
      parties the basis for the award or order of such arbitrator(s), and a court
      reporter shall record all hearings, with such record constituting the official
      transcript of such proceedings.

    
      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

    

     

    9.    NOTICES

     

    9.01    Any
      notice, election, consent or other writing required or permitted to be given
      hereunder shall be deemed to be sufficiently given if delivered or if mailed
      by
      registered air mail or by fax, addressed as follows:

     

    In
      the
      case of the Vendor:

     

    Nevada
      Refinery Inc.

    Suite
      106, 1135 Terminal Way

    Reno,
      Nevada

    89502

     

    In
      the
      case of the Purchaser:

    

    Silver
      Reserve Corp.

    1226
      White Oaks Blvd., Suite 10A

    Oakville,
      Ontario L6H 2B9

    Fax
      #905-845-6415

    Attention:
      Stafford Kelley

     

    and
      any
      such notice given as aforesaid shall be deemed to have been given to the parties
      hereto if delivered, when delivered, or if mailed, on the tenth business day
      following the date of mailing, or, if faxed, on the next succeeding day
      following the faxing thereof PROVIDED HOWEVER that during the period of any
      postal interruption in either the country of mailing or the country of delivery,
      any notice given hereunder by mail shall be deemed to have been given only
      as of
      the date of actual delivery of the same. Any party may from time to time by
      notice in writing change its address for the purpose of this
      paragraph.

     

    10.    GENERAL
      TERMS AND CONDITIONS

     

    10.01  The
      parties hereto hereby covenant and agree that they will execute such further
      agreements, conveyances and assurances as may be requisite, or which counsel
      for
      the parties may deem necessary to effectually carry out the intent of this
      Agreement.

    
      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

    

     

    10.02  This
      Agreement shall represent the entire understanding between the parties with
      respect to the Property. No representa-tions or inducements have been made
      save
      as herein set forth. No changes, alterations, or modifications of this Agreement
      shall be binding upon either party until and unless an amendment to this
      Agreement or a memorandum in writing to such effect shall have been signed
      by
      all parties hereto.

     

    10.03  The
      titles to the articles to this Agreement shall not be deemed to form part of
      this Agreement but shall be regarded as having been used for convenience of
      reference only.

     

    10.04  The
      schedules to this Agreement shall be construed with and as an integral part
      of
      this Agreement to the same extent as if they were set forth verbatim
      herein.

     

    10.05  This
      Agreement shall be governed by and interpreted in accordance with the laws
      in
      effect in the State of Delaware.

     

    10.06  This
      Agreement shall enure to the benefit of and be binding upon the parties hereto
      and their respective successors and assigns.

     

    10.07 This
      Agreement may be executed in multiple counterparts, each of which shall be
      deemed an original, and all of which together shall constitute one and the
      same
      instrument. Execution and delivery of this Agreement by exchange of facsimile
      copies bearing facsimile signature of a party shall constitute a valid and
      binding execution and delivery of this Agreement by such party. Such facsimile
      copies shall constitute enforceable original documents.

     

    10.08  Time
      shall be of the essence of this agreement.

     

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

    

    NEVADA
      REFINERY INC.

    

    

    By: 
      s/
      Todd Montgomery

      
        

      

    

    Todd
      Montgomery

    Its:
      President

    

    

    SILVER
      RESERVE CORP.

    

    

    By: 
      s/
      Stafford Kelley

      
        

      

    

    Stafford
      Kelley

    Its: Secretary

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    SCHEDULE
      "A"

     

    TO
      THAT
      CERTAIN AGREEMENT MADE AS OF THE 

    1ST
      DAY OF
      AUGUST, 2006 BETWEEN NEVADA

    REFINERY
      INC., OF THE FIRST PART AND SILVER

    RESERVE
      CORP., OF THE SECOND PART

    
      
        

      

    

     

    THE
      “PROPERTY”

     

    Silver
      Refinery

    

    
      	 	
              1.

            	
              Crucibles

            

    

    
      	 	
              2.

            	
              Dust
                Collector

            

    

    
      	 	
              3.

            	
              Model
                200 Furnace

            

    

    
      	 	
              4.

            	
              Small
                Pot Furnace

            

    

    
      	 	
              5.

            	
              3
                Lab Hot Plates Ring Stand

            

    

    
      	 	
              6.

            	
              Immersion
                Heater

            

    

    
      	 	
              7.

            	
              Burette
                Stand and Burettes

            

    

    
      	 	
              8.

            	
              Mold
                Carbon 100oz

            

    

    
      	 	
              9.

            	
              Mold
                Bullion 25oz Steel

            

    

    
      	 	
              10.

            	
              Mold
                Bullion 500oz Steel

            

    

    
      	 	
              11.

            	
              Mold
                Anode Refining Cells

            

    

    
      	 	
              12.

            	
              Oven
                Drying

            

    

    
      	 	
              13.

            	
              Therm
                Electrorefining Cells

            

    

    
      	 	
              14.

            	
              Safe
                4 drawer

            

    

    
      	 	
              15.

            	
              Scale
                Platform Analog

            

    

    
      	 	
              16.

            	
              Sieves
                Brass & Shaker

            

    

    
      	 	
              17.

            	
              Stamps
                Hand

            

    

    
      	 	
              18.

            	
              Rotating
                Pouring Table

            

    

    
      	 	
              19.

            	
              Shop
                Tank Cooling Pump

            

    

    
      	 	
              20.

            	
              Model
                400 Furnace

            

    

     

    
      
         

      

        -10-

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