Document:

Exhibit 10.13

 

RESTRICTED STOCK AGREEMENT (this “Agreement”) made as of
this               
(the “Effective Date”), by and between Niagara Holdings, Inc., a
Delaware corporation (the “Company”) and           
(the “Executive”).

 

Certain capitalized terms used herein are defined in Section 8
hereof and capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Employment Agreement (as defined below).

 

In consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Purchase and Sale of Executive Stock.

 

(a)                                  Upon execution of this Agreement and the
Stockholders Agreement, and in connection with the Subscription Agreement and
upon payment of the Purchase Price (as defined therein), the Company will issue
to the Executive                  
shares of class A common stock of the Company, par value $0.01 per share (the “Class A
Common Stock”), for a purchase price of $          per
share (the “Class A Purchase Price”).  All of such shares of Class A Common
Stock purchased by the Executive pursuant to the Subscription Agreement are
referred to herein as “Executive Stock.” 
To secure the Company’s rights under the Repurchase Option in Section 3,
the Company will retain possession of the certificates representing the Class A
Common Stock.

 

(b)                                 The parties agree that the Fair Market
Value of each share of Class A Common Stock as of the Effective Date is $          .  The Executive, in his sole discretion, may
make an election with the Internal Revenue Service (the “IRS”) under Section 83(b) of
the Code and the regulations promulgated thereunder in the form of Exhibit A attached hereto (the
“83(b) Election”).  The
Executive understands that under applicable law such election must be filed
with the IRS no later than thirty (30) days after any acquisition of the Class A
Common Stock to be effective.  If the
Executive files an effective 83(b) Election, the excess of the fair market
value of the Class A Common Stock (which the IRS may assert is different
from the Fair Market Value determined by the parties) covered by such election
over the amount paid by the Executive for the stock shall be treated as
ordinary income received by the Executive, and the Company or one of its
Subsidiaries shall withhold from Executive’s compensation all amounts required
to be withheld under applicable law.  If
the Executive does not file an 83(b) Election, future appreciation on the Class A
Common Stock will generally be taxable as ordinary income when such stock vests
pursuant to this Agreement.  The
foregoing is merely a brief summary of complex tax laws and regulations, and
therefore the Executive is advised to consult with his own tax advisors
regarding the purchase and holding of Class A Common Stock.

 

(c)                                  As an inducement to the Company to issue
the Executive Stock to the Executive and as a condition thereto, the Executive
acknowledges and agrees that:

 

(i)                                     this Agreement constitutes the legal,
valid and binding obligation of the Executive, enforceable against him in
accordance with its terms, and the execution, delivery and performance of this
Agreement by the Executive does not and will not conflict with, violate or
cause a breach of any agreement, contract or instrument to which

 

 

the
Executive is a party or any judgment, order or decree to which the Executive is
subject;

 

(ii)                                  neither the issuance of the Executive
Stock to the Executive nor any provision contained herein shall entitle the
Executive to remain in the employment of the Company and its Subsidiaries, or
affect the right of the Company or any Subsidiary to terminate the Executive’s
employment at any time for any reason (but nothing herein is intended to limit
the Executive’s rights under the Employment Agreement); and

 

(iii)                               except as provided in any other agreement
between the Company and/or one of its Subsidiaries and the Executive, the
Company shall have no duty or obligation to disclose to the Executive, and the
Executive shall not have any right to be advised of, any material information
regarding the Company and its Subsidiaries at any time prior to, upon or in
connection with the exercise of the Repurchase Option or forfeiture of the
Executive Stock upon the termination of the Executive’s employment with the
Company or one of it Subsidiaries.

 

(iv)                              the Executive has purchased,
directly or indirectly, or caused PQP LLC to purchase for his benefit, not less
than              
shares of Class B Common Stock (the “Class B Stock”).  The Executive hereby each represents and
warrants that at all times during the Employment Period, he shall maintain his
direct or indirect beneficial ownership of the Class B Stock (as adjusted
for any stock dividend, stock split, reverse stock split or recapitalization)
and shall not transfer, and shall cause the record owner of the Class B
Stock or any voting or economic interest therein not to transfer, the Class B
Stock other than pursuant to and in compliance with the Stockholders Agreement.

 

2.                                      Vesting of Class A Common Stock.

 

(a)                                  All shares of Class A Common Stock
shall initially be unvested and subject to repurchase by the Company at the Class A
Purchase Price pursuant to Section 3.  The Executive will be entitled to receive all
dividends payable with respect to shares of Class A Common Stock held by
it, whether or not then vested.

 

(b)                                 Time-Vesting.               
shares of Class A Stock shall be “Time Vesting Shares.”

 

(i)                                     Vesting Schedule. 
Subject to subsections (b)(ii) and (d), the Time Vesting
Shares shall vest as set forth below, provided that the Executive remains
employed with the Company or one of its Subsidiaries on such Vesting Date:

 

	
  Vesting Date

  	
   

  	
  Vested Percentage of 

  Time Vesting Shares

  	
   

  
	
   

  	
   

  	
  20

  	
  %

  	
   

  
	
   

  	
   

  	
  40

  	
  %

  	
   

  
	
   

  	
   

  	
  60

  	
  %

  	
   

  
	
   

  	
   

  	
  80

  	
  %

  	
   

  
	
   

  	
   

  	
  100

  	
  %

  	
   

  

 

2

 

(ii)                                  Acceleration upon Change of Control or
IPO.  Upon the occurrence of a Change of Control or
IPO prior to          , all
then unvested Time Vesting Shares shall immediately vest in full provided the
Executive remains employed with the Company or one of its Subsidiaries on the
applicable Change of Control Date or IPO Date.

 

(iii)                               Cessation of Vesting.  The vesting
of all Time Vesting Shares shall cease upon the Termination Date and Time
Vesting Shares that have not become vested pursuant to this subsection (b) or
subsection (d) as of the Termination Date shall be subject to
repurchase by the Company at the Class A Purchase Price pursuant to Section 3.

 

(c)                                  Performance-Based Vesting.

 

(i)                                     General.  Subject to subsections
(c)(v) and (d),               shares
of Class A Common Stock shall be eligible to vest as set forth in this subsection (c) upon
the occurrence of a Change of Control or IPO, provided the Executive remains employed
with the Company or one of its Subsidiaries on such Change of Control Date or
IPO Date, as applicable (the “Performance Vesting Shares”).

 

(ii)                                  Early Change of Control or IPO. 
If the Change of Control Date or IPO Date is on or prior to            
and the Class B Return is equal to or greater than   ,
one hundred percent (100%) of the Performance Vesting Shares shall vest on the
Change of Control Date or IPO Date, as applicable.

 

(iii)                               Later Change of Control or IPO.  
If the Change of Control Date or IPO Date, as applicable, is after           :

 

(A)      twenty-five percent (25%) of the
Performance Vesting Shares shall vest if the Class B Return is at least
equal to     but less than     ;

 

(B)        seventy-five percent (75%) of the
Performance Vesting Shares shall vest if the Class B Return is at least
equal to     but less than     ; and

 

(C)        one hundred percent (100%) of the
Performance Vesting Shares shall vest if the Class B Return is at least
equal to     .

 

(iv)                              Cessation of Vesting upon Change of Control
or IPO.  The vesting of all Performance Vesting Shares
shall cease upon the first to occur of a Change of Control or IPO, and
Performance Vesting Shares, if any, that do not become vested upon the
occurrence of such Change of Control or IPO, as applicable, in accordance with subsections
(c)(ii) or (c)(iii) shall be subject to repurchase by the Company
at the Class A Purchase Price pursuant to Section 3
immediately prior to the consummation of such Change of Control or IPO, as
applicable.

 

(v)                                 Partial Cessation
of Vesting upon Termination of Employment Prior to Change of Control or IPO.  In the event of the Executive’s termination
of employment for any reason other than Termination for Cause prior to the
occurrence of a Change of Control or IPO (and if vesting is not accelerated
pursuant to subsection (d)),

 

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(A)      vesting shall cease
for the Forfeited Performance Vesting Shares and the Forfeited Performance
Vesting Shares shall be subject to repurchase by the Company at the Class A Purchase
Price pursuant to Section 3; and 

 

(B)        vesting shall not cease for the
Continuing Performance Vesting Shares and the Continuing Performance Vesting
Shares shall
continue to be eligible to vest upon a Change of Control or IPO pursuant to subsections(c)(ii) and
(iii).

 

The number of “Continuing
Performance Vesting Shares” as of any date of determination under this subsection (v) shall
equal the product of (x) the total number of Performance Vesting Shares and
(y) the percentage of Time Vesting Shares that have vested as of the
Termination Date pursuant to subsection (b)(i); provided, that if
no Time Vesting Shares have then vested, the number of Continuing Performance
Vesting Shares will equal zero.  The
number of “Forfeited Performance Vesting Shares” as of any date of
determination under this subsection (v) shall equal the excess
of the (x) the total number of Performance Vesting Shares over (y) the number
of Continuing Vesting Performance Shares.

 

(d)                                 Accelerated Vesting upon Termination of
Employment.  Notwithstanding the foregoing provisions of
this Section 2, Time Vesting Shares and Performance Vesting Shares
shall be subject to vesting upon the Executive’s termination of employment with
the Company and its Subsidiaries as follows:

 

(i)                                     Termination
without Cause:

 

(A)      In the event that
Michael R. Boyce is no longer employed by the Company or any of its
Subsidiaries and the Executive’s employment with the Company and its
Subsidiaries is terminated by reason of Termination without Cause on or prior
to         , one hundred percent
(100%) of the Class A Common Stock shall vest on the Termination Date if
the Implied Class B Return as of such date is at least equal to     .

 

(B)        In the event that
Michael R. Boyce is no longer employed by the Company or any of its
Subsidiaries and the Executive’s employment with the Company and its
Subsidiaries is terminated by reason of Termination without Cause after February 11,
2007 but on or prior to February 11, 2008, one hundred percent (100%) of
the Class A Common Stock shall vest on the Termination Date if the
Implied Class B Return as of such date is at least     .

 

(C)        In the event that
Michael R. Boyce voluntarily resigns from the Company or any of its
Subsidiaries on or after February 11, 2008 and the Executive’s employment
with the Company and its Subsidiaries is concurrently or subsequently
terminated by reason of Termination without Cause, the vested percentage of
Time Vesting Shares as of the Executive’s Termination Date calculated pursuant
to Section 2(b)(i) shall be determined as if the Executive’s
Termination Date had occurred one calendar year later.

 

(ii)                                  Death or Disability: 
In the event of the Executive’s termination of employment with the
Company and its Subsidiaries by reason of his death or Disability on or after February 11,
2007:

 

4

 

(A)      if the Implied Class B Return as of
such date is at least     , one hundred percent (100%) of
the Class A Common Stock shall vest on the Termination Date;

 

(B)        if the Implied Class B Return as of
such date is less than        , that
portion, if any, of the Time Vesting Shares that would otherwise have been
become vested within twelve months following the Termination Date shall vest as
of such Termination Date.

 

(iii)                               Notwithstanding the foregoing, vesting set forth in
this subsection (d) (other than upon termination by reason of
his death) is subject to the Executive’s execution without subsequent
revocation of a Release.

 

(e)                                  Class B Return, Implied Class B
Return, Implied Class A Value, JPMP Investment Percentage, Class A
Percentage, Class B Common Stock Cost and JPMP Investment Determinations. 
The Board (or Compensation Committee) shall make all determinations as
to the amount of Class B Return, Implied Class B Return,
Implied Class A Value, JPMP Investment Percentage, Class A
Percentage, Class B Common Stock Cost and JPMP Investment and whether the
respective targets specified in this Section 2 have been met, and
shall determine the extent, if any, to which the Class A Common Stock has
become vested as of any date of determination.

 

3.                                      Repurchase of Class A Common Stock.

 

(a)                                  Repurchase Option. 
Shares of Class A Common Stock shall be subject to repurchase by
the Company, at its option (the “Repurchase Option”), for the Class A
Purchase Price as set forth in this Section 3.  From and after the date that any share of Class A
Common Stock becomes subject to the Repurchase Option, such share shall cease
to be a “Time Vesting Share” or “Performance Vesting Share” under Section 2
hereof.

 

(b)                                 Termination for Cause/Breach of
Agreements.  In the event that (i) the Executive
ceases to be employed by the Company or any of its Subsidiaries by reason of
Termination for Cause or (ii) the Executive breaches any provision of the
Subscription Agreement or this Agreement, then all shares of Class A
Common Stock (vested and unvested), will be subject to the Repurchase Option.

 

(c)                                  Repurchase Option for Unvested Shares.  
Unvested shares of Class A Common Stock will be subject to the
Repurchase Option as set forth below:

 

(i)                                     Repurchase of Time Vesting Shares. 
Upon the Termination Date, the Company shall have the Repurchase Option
for all Time Vesting Shares that have not vested on or prior to such date.

 

(ii)                                  Repurchase of Performance Vesting Shares.

 

(A)      Change of Control or IPO prior to
Termination of Employment.  Upon the occurrence of a
Change of Control or IPO prior to the Executive’s termination of employment
with the Company and its Subsidiaries, all Performance Vesting Shares shall
cease vesting and the Company shall have the Repurchase Option for all

 

5

 

Performance
Vesting Shares that have not vested on or prior to such Change of Control Date
or IPO Date, as applicable.

 

(B)        Termination of Employment prior to Change
of Control or IPO.  Upon the Executive’s termination of
employment with the Company and its Subsidiaries prior to a Change of Control
or IPO, and other than by reason of Termination for Cause, all Forfeited
Performance Vesting Shares shall cease vesting and the Company shall have the
Repurchase Option for the Forfeited Performance Vesting Shares.  Upon a subsequent Change of Control or IPO,
all Performance Vesting Shares shall cease vesting and the Company shall have
the Repurchase Options for all Performance Vesting Shares that have not vested
on or prior to such Change of Control Date or IPO Date, as applicable.

 

(C)        Termination of Employment concurrent with
a Change of Control or IPO.  Upon the Executive’s
termination of employment with the Company and its Subsidiaries coincident with
a Change of Control or IPO, all Performance Vesting Shares shall cease vesting
as of such date, and the Company shall have the Repurchase Option for all
Performance Vesting Shares that are unvested as of such date.

 

(d)                                 Exercise of Repurchase Option. 
The Repurchase Option shall be exercised by the Company, or its
designee, by delivering to the Executive a written notice of exercise within
six (6) months following the event that triggers the Repurchase Option
(the Executive’s termination of employment, a breach of the Subscription
Agreement or this Agreement, or a Change of Control or IPO, as
applicable).  The Company in its
discretion may elect to exercise the Repurchase Option with respect to all or
any portion of the shares of Class A Common Stock subject thereto.  Upon delivery of such notice and payment of
the purchase price as described above, the Company, or its designee, shall
become the legal and beneficial owner of the shares of Class A Common
Stock being repurchased and all rights and interest therein or related thereto,
and the Company, or its designee, shall have the right to transfer to its own
name the number of shares of Class A Common Stock being repurchased
without further action by the Executive or any of his transferees.

 

(e)                                  In the event that Class A Common
Stock is repurchased pursuant to this Section 3, the Executive and
his successors, assigns or Representatives shall take (at the Company’s expense)
all steps necessary and desirable to obtain all required third-party and
Governmental Approvals and take all other actions necessary and desirable to
facilitate consummation of such repurchase in a timely manner.

 

4.                                      Intentionally Omitted.

 

5.                                      Repurchase Disability.

 

(a)                                  Notwithstanding anything to the contrary
herein, the Company shall not be permitted to purchase any Executive Stock upon
exercise of the Repurchase Option if the Board determines that:

 

(i)                                     Such purchase would render the Company or
its Subsidiaries unable to meet their obligations in the ordinary course of
business taking into account any pending

 

6

 

or
proposed transactions, capital expenditures or other budgeted cash outlays by
the Company, including, without limitation, any proposed acquisition of any
other entity by the Company or any of its Subsidiaries;

 

(ii)                                  The Company is prohibited from purchasing
the Executive Stock by applicable law restricting the purchase by a corporation
of its own shares; or

 

(iii)                               The purchase of Executive Stock would constitute a
breach of, default, or event of default under, or is otherwise prohibited or
limited by, the terms of any loan agreement, indenture, or other agreement or
instrument to which the Company or any of its Subsidiaries is a party (the “Financing
Documents”) or the Company is not able to obtain the requisite consent of
any of its senior lenders to the purchase of the Executive Stock.

 

The
events described in (i) through (iii) above each constitute a “Repurchase Disability.”

 

(b)                                 In the event of a Repurchase Disability,
the Company shall notify the Executive (or his Representative or heirs) in
writing (a “Disability Notice”).  The Disability Notice shall specify the
nature of the Repurchase Disability.  The
Company shall thereafter repurchase the Executive Stock as soon as reasonably
practicable after all Repurchase Disabilities cease to exist (or the Company
may elect, but shall have no obligation, to cause its nominee to repurchase the
Executive Stock while any Repurchase Disabilities continue to exist).  In the event the Company suspends its
obligations to repurchase the Executive Stock pursuant to a Repurchase
Disability, (A) the Company shall provide written notice to the Executive
(or his Representative or heirs) as soon as practicable after all Repurchase
Disabilities cease to exist (the “Reinstatement
Notice”); (B) the Fair Market Value of the Executive Stock
shall be determined as of the date the Reinstatement Notice is delivered; and (C) the
repurchase shall occur on a date specified by the Company within 10 days
following the delivery of the Reinstatement Notice.

 

6.                                      Legend.

 

(a)                                  To the extent applicable, each
certificate representing shares of Executive Stock shall bear each of the following
legends (in addition to any legends required under the Subscription Agreement
or the Stockholders Agreement) until such time as such shares of Executive
Stock represented thereby are no longer subject to the provisions hereof.

 

“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

 

“THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXCHANGED UNLESS
SUCH TRANSFER, SALE,

 

7

 

ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OR EXCHANGE COMPLIES WITH THE
PROVISIONS OF THE STOCKHOLDERS’ AGREEMENT AND THE RESTRICTED STOCK AGREEMENT,
AS AMENDED FROM TIME TO TIME, BETWEEN THE COMPANY AND THE INVESTORS PARTY
THERETO, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY.”

 

(b)                                 The certificates shall also bear any legend
required by any applicable state securities law.

 

7.                                      Restrictions on Transfer and Conversion.

 

(a)                                  The Company and the Executive acknowledge
and agree that the shares of Executive Stock are subject to and restricted by
the Stockholders Agreement and with respect to such shares of Executive Stock,
the Executive shall be an “Investor” as such term is used in the
Stockholders Agreement.  Notwithstanding
anything to the contrary contained in the Stockholders Agreement, no shares of
Executive Stock that have not vested pursuant to Section 2 hereof
may be transferred to any Person and no shares of vested Class A Common
Stock may be transferred to any Person who is not an Affiliate of the
Executive.  The shares of vested Class A
Common Stock may be transferred by will or the laws of descent and
distribution.

 

(b)                                 Prior to any Transfer, the transferee
shall agree, by execution of a Joinder Agreement, to be bound by this Agreement
as holder of Executive Stock and by the Stockholders Agreement as an
Investor.  Any Transfer or attempted
Transfer of any Executive Stock in violation of this Section 7
shall be void, and the Company shall not record such Transfer on its books or
treat any purported transferee of such Executive Stock as the owner of such
stock for any purpose.

 

8.                                      Definitions.

 

The following terms shall have the meanings ascribed
below:

 

“Change of Control” means the first occurrence
of any one of the following:  (i) a change in the ownership or
control of the Company effected through a transaction or series of transactions
(including by way of merger, consolidation, business combination or similar
transaction involving the Company or any of its Subsidiaries) whereby any “person”
or related “group” of “persons” (as such terms are used in Sections 13(d) and
14(d)(2) of the Exchange Act) (other than the Company, any of its
Subsidiaries, an employee benefit plan maintained by the Company or any of its
Subsidiaries, or a “person” that, prior to such transaction, directly or
indirectly controls, is controlled by, or is under common control with, the
Company) directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act), of 50% or more of the total
combined voting power of the Company’s Shares outstanding immediately after
such transaction or series of transactions; or (ii) the sale, lease,
transfer, conveyance or other disposition (other than by way of a transaction
that would not be deemed a Change of Control pursuant to clause (i) above),
in one or a series of related transactions, of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole, to any “person”
(as defined above).

 

“Change of Control Date” means the date of
consummation of a Change of Control.

 

8

 

“Class A Common Stock” has the meaning set
forth in Section 1(a) hereof.

 

“Class A Percentage” as of any date of
determination means       %, adjusted for any
increase or decrease in the number of Class A Common Shares or Class B
Common Shares then outstanding.

 

“Class B Common Stock Cost” as of any date
of determination means $           ,
adjusted for all cash or other consideration received by, and all cash or other
consideration contributed to, the Class B Common Stock.

 

“Class B Return” as of any date of
determination means the ratio, the numerator of which is the cumulative value
of the aggregate cash proceeds received by the JPMP Investors with respect to
shares of Class B Common Stock through such date, and the denominator of
which is the JPMP Investment; provided, however, that in the
event of an IPO, the numerator of the ratio shall be determined to equal the
sum of (A) the cumulative value of the aggregate cash proceeds received by
the JPMP Investors with respect to shares of Class B Common Stock prior to
the IPO and (B) the product of (x) the per share mid-point of the
valuation range provided by the underwriters and (y) the number of Shares held
by the JPMP Investors.

 

“Code” means the Internal Revenue Code of 1986,
as amended.

 

“Company Equity Value” as of any date of
determination means the excess of (A) the product of (i) EBITDA as of
such date and (ii) seven, over (B) Net Debt as of such date.

 

“Convertible Securities” means any evidence of
indebtedness, shares of stock or other securities that are directly or
indirectly convertible into or exchangeable or exercisable for Shares.

 

“EBITDA” as of any date of determination means
the consolidated earnings before interest, taxes, depreciation, amortization
and extraordinary items all as reflected on the Company’s most recent quarterly
financial statements filed with the Securities and Exchange Commission or as
prepared and delivered to the holders of the Company’s 2013 senior subordinated
notes in accordance with the indenture relating thereto.

 

“Employment Agreement” means the employment
agreement between Niagara Acquisition, Inc. and the Executive effective as
of                 .

 

“Equivalent Shares” means, at any date of
determination, (a) as to any outstanding Shares, such number of Shares, (b) as
to any outstanding Convertible Securities, the maximum number of Shares for
which or into which such Convertible Securities may at the time be exercised,
converted or exchanged (or which will become exercisable, convertible or exchangeable
on or prior to, or by reason of, the transaction or circumstances in connection
with which the number of Equivalent Shares is to be determined) and (c) in
respect of any Subsidiary of the Company, (i) as to any outstanding shares
of stock of any Subsidiary of the Company, such number of shares of stock or (ii) as
to any outstanding options, warrants or convertible securities, the maximum
number of shares of stock of any Subsidiary of the Company for which or into
which such options, warrants or convertible securities may at the time be
exercised, converted or exchanged (or which will become exercisable,
convertible or exchangeable on or

 

9

 

prior to, or by reason
of, the transaction or circumstances in connection with which the number of
Equivalent Shares is to be determined).

 

“Executive Stock” has the meaning set forth in Section 1(a) hereof.  The Executive Stock will continue to be
Executive Stock in the hands of any holder other than the Executive (except for
the Company) and, except as otherwise provided herein, each such other holder
of the Executive Stock will succeed to all rights and obligations attributable
to the Executive as a holder of the Executive Stock hereunder.  The Executive Stock will also include shares
of the Company’s capital stock issued with respect to, or exchanged or
substituted for, the Executive Stock by way of a stock split, stock dividend or
other recapitalization, merger, consolidation, reorganization or similar
transaction.

 

“Fair Market Value” with respect to Class A
Common Stock or Class B Common Stock means the fair market value of a
share of such respective class of stock, as the same is determined in good
faith by the Board of Directors of the Company.

 

“Governmental
Approval” means, with respect to any Transfer of Shares, any consent
or other action by, or filing with, any governmental authority required in
connection with such Transfer and the expiration or early termination of any
applicable statutory waiting period in connection with such action or filing.

 

“Implied Class A Value” as of
any date of determination means the product of (A) the excess of
(x) Company Equity Value over (y) the Class B Common Stock Cost,
and (B) the Class A Percentage, all as determined as of such date.

 

“Implied Class B Return” as of any date of
determination means a ratio (I) the numerator of which is the product of (A) the
JPMP Investment Percentage and (B) the excess of (x) Company Equity
Value over (y) the Implied Class A Value, and (II) the denominator of
which is the JPMP Investment, all as determined as of such date.

 

 “IPO”
means the initial public offering of Shares registered on Form S-1 (or any
equivalent or successor form under the Securities Act)

 

“IPO Date” means the date on which the Company
consummates an IPO of the Company.

 

“JPMP BHCA” means J.P. Morgan Partners (BHCA),
L.P., a Delaware limited partnership.

 

“JPMP Global” means J.P. Morgan Partners Global
Investors, L.P., a Delaware limited partnership.

 

“JPMP Investment” means initially $            ,
and shall be adjusted for any cash or other consideration contributed from the
JPMP Investors.

 

“JPMP Investment Percentage” means,
initially               percent
(       %), and shall be adjusted for any
increases or decrease in Class B Common Shares outstanding and/or Class B
Common Shares owned by the JPMP Investors.

 

10

 

“JPMP Investors” means JPMP BHCA, JPMP Global,
J.P. Morgan Partners Global Investors A, L.P., a Delaware limited partnership,
J.P. Morgan Partners Global Investors (Cayman), L.P., a Cayman Islands exempted
limited partnership, J.P. Morgan Partners Global Investors (Cayman) II, L.P., a
Cayman Islands exempted limited partnership, and JPMP Selldown.

 

“JPMP Selldown” means J.P. Morgan Partners
Global Investors (Selldown), L.P., a Delaware limited partnership.

 

“Net Debt” as of any date of determination
means the total debt less cash, all as reflected on the Company’s balance sheet
as of such date.

 

“Person” shall be construed broadly and shall
include, without limitation, an individual, a partnership, an investment fund,
a limited liability company, a corporation, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision thereof.

 

“Representative” means, with respect to a
deceased Executive, the duly appointed, qualified and acting personal
representative (or personal representatives collectively) of the estate of the
deceased Executive (or portion of such estate that includes Executive Stock),
whether such personal representative holds the position of executor,
administrator or other similar position qualified to act on behalf of such
estate.

 

“Securities Act” means the Securities Act of
1933, as amended, or any successor federal law then in force.

 

“Shares” means (a) all shares of Class A
Common Stock and Class B Common Stock, whenever issued, including all
shares of Class A Common Stock and Class B Common Stock issued upon
the exercise, conversion or exchange of any Convertible Securities and (b) all
Convertible Securities (treating such Convertible Securities as a number of
Shares equal to the number of Equivalent Shares represented by such Convertible
Securities for all purposes of this Agreement except as otherwise specifically
set forth herein).

 

“Stockholders Agreement” means the Stockholders
Agreement dated February 11, 2005 between the Company and certain
stockholders of the Company, as amended, modified or supplemented from time to
time.

 

“Subscription Agreement” means that certain
Subscription and Stock Purchase Agreement dated on or about the date hereof
among the Company and the Executive pursuant to which the Executive is
purchasing Class A Common Stock and Class B Common Stock.

 

“Subsidiary” or “Subsidiaries” of any
Person means any corporation, partnership, joint venture or other legal entity
of which such Person (either alone or through or together with any other
Person), owns, directly or indirectly, 50% or more of the stock or other equity
interests which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity.

 

11

 

“Transfer” means the sale, transfer,
assignment, pledge or other disposal (whether with or without consideration and
whether voluntarily or involuntarily or by operation of law) of any Executive
Stock.

 

9.                                      General Provisions.

 

(a)                                  Severability. 
It is the desire and intent of the parties hereto that the provisions of
this Agreement be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.  Accordingly, if any particular provision of
this Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining provisions
of this Agreement or affecting the validity or enforceability of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.  Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such provision in any other jurisdiction.

 

(b)                                 Entire Agreement. 
This Agreement, the Subscription Agreement, the Stockholders Agreement
and the Employment Agreement embody the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersedes and preempts any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.

 

(c)                                  Counterparts. 
This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and all of which taken together constitute one and
the same agreement.

 

(d)                                 Successors and Assigns. 
Except as otherwise provided herein, this Agreement shall bind and inure
to the benefit of and be enforceable by the Executive, the Company, and their
respective successors, assigns, heirs, representative and estate, as the case
may be (including subsequent holders of Executive Stock); provided that the
rights and obligations of the Executive under this Agreement shall not be
assignable except in connection with a permitted transfer of Executive Stock
hereunder.

 

(e)                                  Governing Law. 
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICTS PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE, OR ANY OTHER
JURISDICTION), THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF DELAWARE TO BE APPLIED.  IN
FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER
SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE
LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

 

12

 

(f)                                    Jurisdiction and Venue. 
SUBJECT TO THE TERMS OF THIS AGREEMENT, THE PARTIES AGREE THAT ANY AND
ALL ACTIONS ARISING UNDER OR IN RESPECT OF THIS AGREEMENT SHALL BE LITIGATED IN
THE FEDERAL OR STATE COURTS IN NEW YORK. 
BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY IRREVOCABLY
SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS FOR ITSELF, HIMSELF, OR
HERSELF AND IN RESPECT OF ITS, HIS OR HER PROPERTY WITH RESPECT TO SUCH
ACTION.  EACH PARTY AGREES THAT VENUE
WOULD BE PROPER IN ANY OF SUCH COURTS, AND HEREBY WAIVES ANY OBJECTION THAT ANY
SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH
ACTION.  THE PARTIES FURTHER AGREE THAT
THE MAILING BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, OF ANY
PROCESS REQUIRED BY ANY SUCH COURT SHALL CONSTITUTE VALID AND LAWFUL SERVICE OF
PROCESS AGAINST THEM, WITHOUT THE NECESSITY FOR SERVICE BY ANY OTHER MEANS
PROVIDED BY STATUTE OR RULE OF COURT.

 

(g)                                 Remedies.  Each of the
parties to this Agreement and any such Person granted rights hereunder whether
or not such Person is a signatory hereto shall be entitled to enforce his, her
or its rights under this Agreement specifically to recover damages and costs
(including reasonable attorney’s fees) for any breach of any provision of this
Agreement and to exercise all other rights existing in his, her or its
favor.  The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that any party and any such
Person granted rights hereunder whether or not such Person is a signatory
hereto may in his, her or its sole discretion apply to any court of law or
equity of competent jurisdiction for specific performance and/or other
injunctive relief (without posting any bond or deposit) in order to enforce or
prevent any violations of the provisions of this Agreement.

 

(h)                                 Claw-Backs.  In the event that the Executive violates any
of the covenants set forth in Section 8(a), (b), or (c) of the Employment Agreement or materially
violates any of the covenants set forth in Section 6, 7 or 9 of the
Employment Agreement, the Executive shall, in addition to any other remedy
which may be available (i) at law or in equity or (ii) pursuant to subsection (g) hereof
or Section 11 of the Employment Agreement, be required to repay to the
Company immediately upon demand thereof an amount determined by the Board which
may equal up to all amounts the Executive has received from the Executive Stock
during the twelve-month period immediately preceding (or at any time after) the
date that the Executive first breaches such covenant (and, to the extent that
any such amount has not been paid or become vested, it will be forfeited to
satisfy such repayment obligation).

 

(i)                                     Amendment and Waiver. 
The provisions of this Agreement may be amended and waived only with the
prior written consent of the Company and the Executive and no course of conduct
or failure or delay in enforcing the provisions of this Agreement shall be
construed as a waiver of such provisions or affect the validity, binding effect
or enforceability of this Agreement or any provision hereof.

 

(j)                                     Notices.  Any notice
provided for in this Agreement must be in writing and must be either personally
delivered, transmitted via facsimile, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the

 

13

 

recipient at the address below indicated or at such
other address or to the attention of such other person as the recipient party
has specified by prior written notice to the sending party.  Notices will be deemed to have been given
hereunder and received when delivered personally, when received if transmitted
via facsimile, five (5) days after deposit in the U.S. mail and one (1) day
after deposit with a reputable overnight courier service.

 

	
  If to the Company, to:

  	
  Niagara Holdings, Inc.

  
	
   

  	
  c/o J.P. Morgan Partners (BHCA), L.P.

  
	
   

  	
  1221 Avenue of the Americas, 39th Floor

  
	
   

  	
  New York, New York 10020

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Timothy J. Walsh

  
	
   

  	
   

  	
  Stephen V. McKenna

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  (212) 899-3401

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
  Latham & Watkins LLP

  
	
   

  	
  885 Third Avenue, Suite 1000

  
	
   

  	
  New York, NY 10022

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  David S. Allinson

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  (212) 751-4864

  
	
   

  	
   

  	
   

  
	
  If to the Executive, to him at his most recent address in the Company’s
  records

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
  Peak Investments, L.L.C.

  
	
   

  	
  15700 College Blvd.

  
	
   

  	
  Suite 101

  
	
   

  	
  Lenexa, KS 66219

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  William J. Sichko, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
  (913) 227-0287

  

 

(k)                                  Business Days. 
If any time period for giving notice or taking action hereunder expires
on a day which is a Saturday, Sunday or holiday in the state in which the
Company’s chief executive office is located, the time period for giving notice
or taking action shall be automatically extended to the business day
immediately following such Saturday, Sunday or holiday.

 

(l)                                     Survival of Representations, Warranties
and Agreements.  All representations, warranties and agreements
contained herein shall survive the consummation of the transactions
contemplated hereby and the termination of this Agreement indefinitely.

 

14

 

(m)                               Recapitalization, Exchange, Etc.
Affecting the Company’s Shares.  The
provisions of this Agreement shall apply, to the full extent set forth herein,
with respect to any and all Shares of the Company or any successor or assign of
the Company (whether by merger, consolidation, sale of assets, conversion to a
corporation or otherwise) that may be issued in respect of, in exchange for, or
in substitution of, the Shares of the Company and shall be appropriately
adjusted for any dividends, splits, reverse splits, combinations,
recapitalizations, and the like occurring after the date hereof.

 

(n)                                 Descriptive Headings. 
The descriptive headings of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.

 

(o)                                 Construction. 
Where specific language is used to clarify by example a general
statement contained herein, such specific language shall not be deemed to
modify, limit or restrict in any manner the construction of the general
statement to which it relates.  The
language used in this Agreement shall be deemed to be the language chosen by
the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party.

 

(p)                                 WAIVER OF JURY TRIAL. 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT.

 

(q)                                 Nouns and Pronouns. 
Whenever the context may require, any pronouns used herein shall include
the corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.

 

(r)                                    Non-Qualified Deferred Compensation. 
The parties acknowledge and agree that, to the extent applicable, this
Agreement shall be interpreted in accordance with Section 409A of the Code
and Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance
that may be issued after the Effective Date. 
Notwithstanding any provision of this Agreement to the contrary, in the
event that the Company determines that any amounts payable hereunder will be
immediately taxable to the Executive under Section 409A of the Code and
related Department of Treasury guidance, the Company may (a) adopt such
amendments to this Agreement and appropriate policies and procedures, including
amendments and policies with retroactive effect, that the Company determines
necessary or appropriate to preserve the intended tax treatment of the benefits
provided by this Agreement and/or (b) take such other actions as the
Company determines necessary or appropriate to comply with the requirements of Section 409A
of the Code and related Department of Treasury guidance, including such
Department of Treasury guidance and other interpretive materials as may be
issued after the Effective Date.

 

[SIGNATURE PAGE FOLLOWS]

 

15

 

IN WITNESS WHEREOF, the parties hereto have executed
this Restricted Stock Agreement as of the date first written above.

 

 

	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NIAGARA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

16

 

EXHIBIT A

 

ELECTION
TO INCLUDE STOCK IN GROSS

INCOME PURSUANT TO SECTION 83(b) OF THE

INTERNAL REVENUE CODE

 

The undersigned purchased      shares
of Class A Common Stock, par value $0.01 per share (the “Common Stock”),
of Niagara Holdings, Inc. (the “Company”) pursuant to a
Subscription and Stock Purchase Agreement and a Restricted Stock Agreement (the
“Restricted Stock Agreement”), each dated as of              
     , 2005 (the “Effective Date”) and each
between the Company and the undersigned. 
Under certain circumstances, the Company has the right to repurchase the
Common Stock from the undersigned (or from the holder of the Common Stock, if
different from the undersigned) upon the occurrence of certain events as
described in the Restricted Stock Agreement. 
Hence, the Common Stock is subject to a substantial risk of forfeiture
and is nontransferable to other than family members (within the meaning of
Treasury Regulation §1.83-3(d)).  The
undersigned desires to make an election under Section 83(b) of the
Internal Revenue Code of 1986, as amended (“Code”) to have the Common
Stock taxed at the time the undersigned purchased the Common Stock.

 

Therefore, pursuant to Code §83(b) and Treasury
Regulation §1.83-2 promulgated thereunder, the undersigned hereby makes an
election, with respect to the Common Stock, to report as taxable income for the
undersigned’s taxable year ended December 31, 2005 the excess (if any) of
the Common Stock’s fair market value on the Effective Date, over the purchase
price thereof.

 

The following information is supplied in accordance
with Treasury Regulation §1.83-2(e):

 

1.  The name,
address and social security number of the undersigned:

 

[Name]

[Address]

 

Social Security Number:              

 

2.  A description of the property with respect to
which the election is being made:              
shares of Class A Common Stock, par value $0.01 per share of Niagara
Holdings, Inc.

 

3.  The date on which the property was
transferred:              
     , 2005. 
The taxable year for which such election is made:  the undersigned’s taxable year ending December 31,
2005.

 

4.  The restrictions
to which the property is subject:

 

 

The Shares may not be transferred and are subject to
forfeiture under the terms of an agreement between the taxpayer and the
Company.  These restrictions lapse upon
the satisfaction of certain conditions contained in such agreement.

 

5.  The fair market value on              
     , 2005, of the property with respect to which the
election is being made, determined without regard to any lapse restrictions: $           .

 

6.  The amount
paid for such property: $                 .

 

7.  A copy of this election has been furnished to
the person for whom the services are performed: 
Secretary of the Company and Secretary PQ Corporation pursuant to
Treasury Regulation §1.83-2(e)(7).(1)

 

This election is being sent to the Internal Revenue
Service office with which the undersigned files his return.  In addition, a copy of this election will be
submitted with the income tax return of the undersigned for the taxable year in
which the Common Stock was purchased.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [NAME]

  

 

 

 

(1) If the services are performed for a person,
e.g., a subsidiary, which is different from the issuer of the stock, then item
7 should read that a copy has been furnished to such person.  In addition, if the person who performs the
services and the transferee of the stock (or other property) are not the same
person (e.g., a trust), then (i) the person who performs the services
shall submit a copy of this election to such transferee of the stock (or other
property) and (ii) item 7 should have an additional statement that a copy
of the election has been sent to such transferee.

 

A-2Filed by Automated Filing Services Inc. (604) 609-0244 - Cignus Ventures Inc. - Exhibit 10-1

PURCHASE AGREEMENT

THIS AGREEMENT dated as of the 23rd day of March,
2005.

BETWEEN:

LARRY R.W. SOSTAD, of 818
– 470 Granville Street, Vancouver, British Columbia, Canada V6C 1V5

(hereinafter called the “Vendor”)

OF THE FIRST PART

AND:

CVI EXPLORATION LTD., a
British Columbia corporation having its registered office at #1880, 1055 West
Georgia Street, Vancouver, British Columbia, Canada V6E 3P3

(hereinafter called the
“Purchaser”)

OF THE SECOND PART

WHEREAS:

A. The Vendor is the sole recorded and beneficial owner of the
mineral claims described in Schedule “A” hereto (the “Property”);

B. The Vendor wishes to sell an undivided 100% interest in and
to the Property to the Purchaser and the Purchaser wishes to acquire such
interest pursuant to the terms and conditions hereinafter set out;

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

VENDOR’S REPRESENTATIONS AND WARRANTIES

	1. 	
      The Vendor represents and warrants to the Purchaser
      that:

	 	 	 
		(a) 	
      He is the sole recorded and beneficial owner of an
      undivided l00% interest in and to the Property;

	 	 	 
		(b) 	
      The claims comprising the Property have been, to the best
      of the information and belief of the Vendor, properly located and staked
      and recorded in compliance with the laws of the jurisdiction in which they
      are situate, are

2

			 accurately described in Schedule “A” and are
        valid and subsisting mineral claims as at the date of this Agreement;

	 	 	 
	 	(c) 	 The Property is in good standing under all applicable
        laws and regulations, all assessment work required to be performed and
        filed has been performed and filed, all taxes and other payments have
        been paid and all filings have been made;

	 	 	 
	 	(d) 	 The Property is free and clear of any encumbrances,
        liens or charges and neither the Vendor nor, to the best of the Vendor’s
        knowledge, any of his predecessors in interest or title, have done anything
        whereby the Property may be encumbered; and

	 	 	 
	 	(e) 	 He has the right to enter into this Agreement and to
        deal with the Property in accordance with the terms of this Agreement,
        there are no disputes over the title to the Property, and no other party
        has any interest in the Property or the production therefrom or any right
        to acquire any such interest.

PURCHASER’S REPRESENTATIONS AND WARRANTIES

	2. 	
      The Purchaser represents and warrants to the Vendor
      that:

	 	 	 
		(a) 	
      it has been duly incorporated, amalgamated or continued
      and validly exists as a corporation in good standing under the laws of its
      jurisdiction of incorporation, amalgamation or continuation;

	 	 	 
		(b) 	
      it has duly obtained all corporate authorizations for the
      execution of this Agreement and for the performance of this Agreement by
      it, and the consummation of the transactions herein contemplated 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 under the provisions of the Articles or the constating
      documents of the Purchaser or any shareholders’ or directors’ resolution,
      indenture, agreement or other instrument whatsoever to which the Purchaser
      is a party or by which it is bound or to which it or the Property may be
      subject; and

	 	 	 
		(c) 	
      no proceedings are pending for, and the Purchaser is
      unaware of any basis for the institution of any proceedings leading to,
      the dissolution or winding up of the Purchaser or the placing of the
      Purchaser in bankruptcy or subject to any other laws governing the affairs
      of insolvent corporations.

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

3. The representations and warranties in this Agreement shall
survive the closing of this transaction and shall apply to all assignments,
conveyances, transfers and documents delivered in connection with this Agreement
and there shall not be any merger of any representations and warranties in such
assignments, conveyances, transfers or documents notwithstanding any rule of
law, equity or statute to the contrary and all such 

3

rules are hereby waived. The Vendor shall have the right to
waive any representation and warranty made by the Purchaser in the Vendor’s
favour without prejudice to any of its rights with respect to any other breach
by the Purchaser and the Purchaser shall have the same right with respect to any
of the Vendor’s representations in the Purchaser’s favour.

PURCHASE AND SALE

4. The Vendor hereby sells and assigns and the Purchaser hereby
purchases an undivided 100% interest in and to the Property for the sum of
$5,000 US.

FURTHER ASSURANCES

5. Concurrently with the execution of this Agreement the Vendor
shall execute or cause to be executed a Bill of Sale or such other documents as
the Purchaser may reasonable require transferring a 100% interest in and to the
Property to the Purchaser which the Purchaser shall be at liberty to record
forthwith. The parties shall execute all further documents or assurances as may
be required to carry out the full intent of this Agreement.

NOTICE

6. Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing and shall be
delivered, telegraphed or telecopied to such party at the address for such party
specified above. The date of receipt of such notice, demand or other
communication shall be the date of delivery thereof if delivered or telegraphed
or, if given by telecopier, shall be deemed conclusively to be the next business
day. Either party may at any time and from time to time notify the other party
in writing of a change of address and the new address to which notice shall be
given to it thereafter until further change.

PAYMENT

7. All references to monies hereunder will be in United States
funds. All payments to be made to any party hereunder may be made by cheque
mailed or delivered to such party to its address for notice purposes as provided
herein.

ENTIRE AGREEMENT

8. This Agreement constitutes the entire agreement between the
parties and replaces and supercedes all agreements, memoranda, correspondence,
communications, negotiations and representations, whether verbal or express or
implied, statutory or otherwise, between the parties with respect to the subject
matter herein.

4 

GENDER

9. Wherever the singular or neuter are used herein the same
shall be deemed to include the plural, feminine or masculine.

ENUREMENT

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

COUNTERPART EXECUTION

11. This Agreement may be executed in several parts in the same
form and such parts as so executed shall together constitute one original
agreement, and such parts, if more than one, shall be read together and
construed as if all the signing parties hereto had executed one copy of this
Agreement.

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

	/s/ Larry R.W.
      Sostad                              
    
	LARRY R.W. SOSTAD 
	    
	CVI EXPLORATION LTD. 
	by its authorized signatory: 
	    
	/s/ David K.
      Ryan                                   
    

 SCHEDULE “A”

 THE PROPERTY

	 Claim Name 	 Tenure Number 
	  	  
	 Moscena 1 	 404539 
	 Moscena 2 	 404540 

 All located in the Alberni Mining Division, British Columbia

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