Document:

Exhibit 10.8

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE REDACTED
PORTIONS OF THIS AGREEMENT.  THE REDACTIONS
ARE INDICATED WITH THREE ASTERISKS (“***”). 
A COMPLETE VERSION OF THIS AGREEMENT HAS BEEN FILED WITH THE  U.S. SECURITIES AND EXCHANGE COMMISSION.

 

EXPLORATION, DEVELOPMENT AND MINE
OPERATING AGREEMENT

 

This Agreement is
made as of June 12, 1997 (“Effective
Date”) between Thompson Creek Mining Ltd., a Canadian corporation (“Thompson Creek”), the address of which is
5241 S. Quebec Street, Suite 103, Englewood, Colorado 80111 and Nissho
Iwai Moly Resources, Inc. (Canada), a British Columbia corporation (“Nissho Iwai”), the address of which is Suite 2624-1055
Dunsmuir Street, Vancouver, British Columbia, V7X1L3.

 

RECITALS

 

A.                       Concurrent
with this Agreement Thompson Creek and Nissho Iwai are acquiring ownership and
control of the Endako Molybdenum Mine and Processing Plant and other certain
properties in British Columbia, Canada, which properties are described in Exhibit A
and defined in Exhibit D.

 

B.                         Mining
is currently being conducted on the Properties.

 

C.                         The
parties intend to continue Mining and to explore for additional ore deposits on
the Properties.

 

D.                        Thompson
Creek and Nissho Iwai wish to set forth their agreement with respect to the exploration,
evaluation, development and mining of mineral resources within the Properties.

 

NOW THEREFORE, in
consideration of the covenants and conditions contained herein, Thompson Creek
and Nissho Iwai agree as follows:

 

ARTICLE I

DEFINITIONS AND CROSS-REFERENCES

 

1.1                   Definitions. The
terms defined in Exhibit D and elsewhere shall have the defined meaning
wherever used in this Agreement, including in Exhibits.

 

1.2                   Cross-References.
References to “Exhibits,”  “Articles,”  “Sections”
and “Subsections” refer to
Exhibits, Articles, Sections and Subsections of this Agreement. References to “Paragraphs” and “Subparagraphs” refer to paragraphs and subparagraphs of the
referenced Exhibits.

 

 

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ARTICLE II

NAME, PURPOSES AND TERM

 

2.1                   General.Thompson
Creek and Nissho Iwai hereby enter into this Agreement for the specific
purposes and undertaking hereinafter stated. This Agreement does not create any
rights, interests or obligations in respect of any other business undertakings
of any of the parties. All of the rights and obligations of the Participants in
connection with the Assets or the Area of Interest and all Operations shall be
subject to and governed by this Agreement.

 

2.2                   Name.                                    The
Assets shall be managed and operated by the Participants under the name of
Endako Joint Venture. The Manager shall accomplish any registration required by
applicable assumed or fictitious name statutes and similar statutes.

 

2.3                   Purposes.                This Agreement
is entered into for the following purposes and for no others, and shall serve
as the exclusive means by which each of the Participants accomplishes such
purposes:

 

(a)                    to conduct
Exploration within the Area of Interest,

 

(b)                   to acquire
additional real property and other interests within the Area of Interest,

 

(c)                    to evaluate
the possible Development and Mining of the Properties, and, if justified, to
engage in Development and Mining,

 

(d)                   to engage in
Mining and Operations on the Properties,

 

(e)                    to engage in
marketing Products, to the extent provided by Article XI,

 

(f)                      to complete
and satisfy all Environmental Compliance obligations and Continuing Obligations
affecting the Properties, and

 

(g)                   to perform any
other activity necessary, appropriate, or incidental to any of the foregoing.

 

2.4                   Limitation.          Unless the
Participants otherwise agree in writing, the Operations shall be limited to the
purposes described in Section 2.3, and nothing in this

 

 

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Agreement shall be
construed to enlarge such purposes or to change the relationships of the
Participants as set forth in Section 4.

 

2.5
Term.                  The
term of this Agreement shall be for twenty (20) years from the Effective Date
and for so long thereafter as Products are produced from the Properties on a
continuous basis, and thereafter until all materials, supplies, equipment and
infrastructure have been salvaged and disposed of, any required Environmental
Compliance is completed and accepted and the Participants have agreed to a
final accounting, unless the Business is earlier terminated as herein provided.
For purposes hereof, Products shall be deemed to be produced from the
Properties on a “continuous basis”
so long as production in commercial quantities is not halted for more than
fifteen hundred (1500) consecutive days, inclusive of force majeure.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES; TITLE
TO ASSETS; INDEMNITIES

 

3.1                   Representations
and Warranties of Both Participants. As of the Effective Date, each
Participant warrants and represents to the other that:

 

(a)                      it
is a corporation duly organized and in good standing in its province of
incorporation and is qualified to do business and is in good standing in those
provinces where necessary in order to carry out the purposes of this Agreement;

 

(b)                     it
has the capacity to enter into and perform this Agreement and all transactions
contemplated herein and that all corporate actions required to authorize it to
enter into and perform this Agreement have been properly taken;

 

(c)                      it
will not breach any other agreement or arrangement by entering into or
performing this Agreement;

 

(d)                     it
is not subject to any governmental order, judgment, decree, debarment, sanction
or Laws that would preclude the permitting or implementation of Operations
under this Agreement; and

 

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

 

3.2                   Disclosures.                                  Each
of the Participants represents and warrants that it is unaware of any material
facts or circumstances that have not been disclosed to the other

 

 

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Participant or, which
should be disclosed to the other Participant in order to prevent the
representations and warranties in this Article from being materially
misleading. Each Participant represents to the other that in negotiating and
entering into this Agreement it has relied solely on its own appraisals and
estimates as to the value of the Assets and upon its own geologic and
engineering interpretations related thereto.

 

3.3                   Record Title.                                  Title
to the Assets shall be held by Thompson Creek for Thompson Creek and in trust
for Nissho Iwai as beneficial owner, as their Participating Interests are
determined pursuant to this Agreement. Forthwith upon request of Nissho Iwai,
Thompson Creek will transfer to Nissho Iwai bare legal title to the Assets in
proportion to Nissho Iwai’s Participating Interest at such time. Such transfer
will be in a form suitable to be registered in all applicable offices of public
record as Nissho Iwai may reasonably request. The cost of such transfer will be
paid out of the Business Account.

 

3.4                   Loss of Title.                                  In
respect of any failure or loss of title to the-Assets, all costs of defending
title shall be charged to the Business Account.

 

3.5                   Royalties,
Production Taxes and Other Payments Based on Production.                                    All
required payments of production royalties, taxes based on production of
Products, and other payments out of production to private parties and
governmental entities shall be determined and made by each Participant in
proportion to its Participating Interest, and each Participant undertakes to
make such payments timely and otherwise in accordance with applicable laws and
agreements. If separate payment is not permitted, each Participant shall
determine and pay its proportionate share in advance to the Participant
obligated to make such payment and such Participant shall hold such amount in
trust for the Participants and shall timely make such payment. Each Participant
shall furnish to the other Participant evidence of timely payment for all such
required payments. In the event that either Participant fails to make any such
required payment, the other Participant shall have the right to make such
payment and shall thereby become subrogated to the rights of such third party; provided, however, that the making of any
such payment on behalf of the other Participant shall not constitute acceptance
by the paying Participant of any liability to such third party for the
underlying obligation.

 

3.6                   Indemnities/Limitation
of Liability.

 

(a)                      Each
Participant shall indemnify the other Participant, its directors, officers,
employees, agents and attorneys, or Affiliates (collectively “Indemnified Participant”) from and against
the entire amount of any Material Loss. A “Material
Loss” shall mean all costs, expenses, damages or liabilities,
including attorneys’ fees and other costs of litigation (either threatened or
pending) arising out of or based on a breach by a Participant

 

 

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(“Indemnifying Participant”) of any
representation, warranty or covenant contained in this Agreement, including
without limitation:

 

(i)                          any
failure by a Participant to determine accurately and make timely payment of its
proportionate share of required royalties, production taxes and other payments
out of production to third parties as required by Section 3.5;

 

(ii)                       any
action taken for or obligation or responsibility assumed on behalf of the other
Participant, its directors, officers, employees, agents and attorneys, or
Affiliates by a Participant, any of its directors, officers, employees, agents
and attorneys, or Affiliates, in violation of Section 4.1;

 

(iii)                    failure
of a Participant or its Affiliates to comply with the non-compete or Area of
Interest provisions of Section 12.6 or Article XIII;

 

(iv)                   failure
of a Participant or its Affiliates to comply with the preemptive right under Section 16.3
and Exhibit H.

 

A Material Loss
shall not be deemed to have occurred until, in the aggregate, an Indemnified
Participant incurs losses, costs, damages or liabilities in excess of Five
Hundred Thousand Dollars ($500,000) relating to breaches of warranties,
representations and covenants contained in this Agreement.

 

(b)                      If
any claim or demand is asserted against an Indemnified Participant in respect
of which such Indemnified Participant may be entitled to indemnification under
this Agreement, written notice of such claim or demand shall promptly be given
to the Indemnifying Participant. The Indemnifying Participant shall have the
right, but not the obligation, by notifying the Indemnified Participant within
thirty (30) days after its receipt of the notice of the claim or demand, to
assume the entire control of (subject to the right of the Indemnified
Participant to participate, at the Indemnified Participant’s expense and with
counsel of the Indemnified Participant’s choice), the defense, compromise, or
settlement of the matter, including, at the Indemnifying Participant’s expense,
employment of counsel of the Indemnifying Participant’s choice. Any damages to
the assets or business of the Indemnified Participant caused by a failure by
the Indemnifying Participant to defend, compromise, or settle a claim or demand
in a reasonable and expeditious manner requested by the Indemnified
Participant, after the Indemnifying Participant has given notice that it will
assume control of the defense, compromise, or settlement of the matter, shall
be included in the damages for which the Indemnifying Participant shall be
obligated to indemnify the Indemnified Participant. Any settlement or
compromise of a matter by the Indemnifying Participant shall include a full
release

 

 

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of claims against the
Indemnified Participant which has arisen out of the indemnified claim or
demand.

 

ARTICLE IV

RELATIONSHIP OF THE PARTICIPANTS

 

4.1                   No Partnership.                  Nothing
contained in this Agreement shall be deemed to constitute either Participant
the partner of the other, or, except as otherwise herein expressly provided, to
constitute either Participant the agent or legal representative of the other,
or to create any fiduciary relationship between them. The Participants do not
intend to create, and this Agreement shall not be construed to create, any
mining, commercial or other partnership. Neither Participant, nor any of its
directors, officers, employees, agents and attorneys, or Affiliates, shall act
for or assume any obligation or responsibility on behalf of the other Participant,
except as otherwise expressly provided herein, and any such action or
assumption by a Participant=s directors, officers, employees, agents and
attorneys, or Affiliates shall be a breach by such Participant of this
Agreement. The rights, duties, obligations and liabilities of the Participants
shall be several and not joint or collective. Each Participant shall be
responsible only for its obligations as herein set out and shall be liable only
for its share of the costs and expenses as provided herein, and it is the
express purpose and intention of the Participants that their ownership of
Assets and the rights acquired hereunder shall be as tenants in common.

 

4.2                   Tax Statements.                  Each
of the parties shall file their own individual tax returns and accompanying
financial statements in respect of the assets and the revenues and expenses
associated with that party’s interest in the joint venture. No financial
statements shall be prepared nor filed regarding the business carried on by the
joint venture other than operating statements prepared in accordance with Article X
and Subsection 8.2(m) and except as may otherwise be required by law.

 

4.3                   Deleted.

 

4.4                   Other Business
Opportunities.      Except as
expressly provided in this Agreement or in the Sales Representative Agreement,
each Participant shall have the right to engage in and receive full benefits
from any independent business activities or operations, whether or not
competitive with this Business, without consulting with, or obligation to, the
other Participant. The doctrines of “corporate
opportunity” or “business
opportunity” shall not be applied to this Business nor to any other
activity or operation of either Participant. Neither Participant shall have any
obligation to the other with respect to any opportunity to

 

 

6

 

acquire any property
outside the Area of Interest at any time, or, except as otherwise provided in Section 12.6,
within the Area of Interest after the termination of the Business. Unless
otherwise agreed in writing, neither Participant shall have any obligation to
mill, beneficiate or otherwise treat any Products in any facility owned or
controlled by such Participant.

 

4.5                   Waiver of
Rights to Partition or Other Division of Assets.  The
Participants hereby waive and release all rights of partition, or of sale in
lieu thereof, or other division of Assets, including any such rights provided
by Law.

 

4.6                   Transfer or
Termination of Rights to Properties.               Except
as otherwise provided in this Agreement, neither Participant shall Transfer all
or any part of its interest in the Assets or this Agreement or otherwise permit
or cause such interests to terminate.

 

4.7                   Implied
Covenants.   There are no
implied covenants contained in this Agreement other than those of good faith
and fair dealing.

 

ARTICLE V

CONTRIBUTIONS BY PARTICIPANTS

 

5.1                   Participants’
Initial Contributions.

 

(a)                      Thompson
Creek, as its Initial Contribution, hereby contributes its 75% interest in the
Assets described in Exhibit A to the purposes of this Agreement. The
amount of *** shall be credited to Thompson Creek’s Equity Account on the
Effective Date with respect to Thompson Creek’s Initial Contribution.

 

(b)                     Nissho
Iwai, as its Initial Contribution, hereby contributes its 25% interest in the Assets described in Exhibit A
to the purposes of this Agreement. The amount of *** shall be credited to
Nissho Iwai’s Equity Account on the Effective Date with respect to Nissho Iwai’s
Initial Contribution.

 

5.2                   Additional
Contributions.  The
Participants, subject to any election permitted by Subsection 9.5(a), shall be
obligated to contribute funds to adopted Programs and Budgets in proportion to
their respective Participating Interests.

 

 

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ARTICLE VI

INTERESTS OF PARTICIPANTS

 

6.1                   Initial
Participating Interests. The Participants shall have the following initial
Participating Interests:

 

Thompson Creek                        -                      75%

Nissho Iwai                                 -                      25%

 

6.2                   Changes in
Participating Interests.                  The
Participating Interests shall be adjusted from time to time upon the occurrence
of any of the following events:

 

(a)                      Upon
withdrawal or deemed withdrawal as provided in Section 6.3, and Article XII;

 

(b)                     Upon
an election by either Participant pursuant to Section 9.5 to contribute
less to an adopted Program and Budget than the percentage equal to its
Participating Interest, or to contribute nothing to an adopted Program and
Budget;

 

(c)                      In
the event of default by either Participant in making its agreed-upon
contribution to an adopted Program and Budget, followed by an election by the
other Participant to invoke any of the remedies in Section 10.5;

 

(d)                     Upon
Transfer by either Participant of part or all of its Participating Interest in
accordance with Article XVI; or

 

(e)                      Upon
acquisition by either Participant of part or all of the Participating Interest
of the other Participant, however arising.

 

6.3                   Elimination of
Minority Interest.

 

(a)                      A
Reduced Participant whose Recalculated Participating Interest becomes less than
five percent (5%) shall be deemed to have withdrawn from the Business and shall
relinquish its entire Participating Interest free and clear of any Encumbrances
arising by, through or under the Reduced Participant, except any such
Encumbrances listed in Paragraph 1.1 of Exhibit A or to which the
Participants have agreed. Such relinquished Participating Interest shall be
deemed to have accrued automatically to the other Participant. The Reduced
Participant’s Capital Account shall be transferred to the remaining
Participant. The Reduced Participant shall have the right to receive five
percent (5%) of Net Proceeds, if any, to a

 

 

8

 

maximum amount of fifty
percent (50%) of the Reduced Participant’s Equity Account balance as of the
effective date of the withdrawal. Upon receipt of such amount, and subject to Section 6,3(b) and
Section 6.4, the Reduced Participant shall thereafter have no further
right, title, or interest in the Assets or under this Agreement. In such event,
the Reduced Participant shall execute and deliver an appropriate conveyance of
all of its right, title and interest in the Assets to the remaining
Participant.

 

(b)                     The
relinquishment, withdrawal and entitlement for which this Section provides
shall be effective as of the effective date of the recalculation under Sections
9.5 or 10.5. However, if the final adjustment provided under Section 9.6
for any recalculation under Section 9.5 results in a Recalculated
Participating Interest of five percent (5%) or more: (i) the Recalculated
Participating Interest shall be deemed, effective retroactively as of the first
day of the Program Period, to have automatically revested; (ii) the
Reduced Participant shall be reinstated as a Participant, with all of the
rights and obligations pertaining thereto; (iii) the right to Net Proceeds
under Subsection 6.3(a) shall terminate; and (iv) the Manager, on
behalf of the Participants, shall make any necessary reimbursements,
reallocations of Products, contributions and other adjustments as provided in
Subsection 9.6(d). Similarly, if such final adjustment under Section 9.6
results in a Recalculated Participating Interest for either Participant of less
than five percent (5%) for a Program Period as to which the provisional
calculation under Section 9.5 had not resulted in a Participating Interest
of less than five percent (5%), then such Participant, at its election within
thirty (30) days after notice of the final adjustment, may contribute an amount
resulting in a revised final adjustment and resultant Recalculated
Participating Interest of five percent (5%). If no such election is made, such
Participant shall be deemed to have withdrawn under the terms of Subsection 6.3(a) as
of the beginning of such Program Period, and the Manager, on behalf of the
Participants, shall make any necessary reimbursements, reallocations of
Products, contributions and other adjustments as provided in Subsection 9.6(d),
including of any Net Proceeds to which such Participant may be entitled for
such Program Period.

 

6.4                   Continuing
Liabilities Upon Adjustments of Participating Interests.                   Any
reduction or elimination of either Participant’s Participating Interest under Section 6.3
shall not relieve such Participant of its share of any liability, including,
without limitation, Continuing Obligations, Environmental Liabilities and
Environmental Compliance, whether arising, before or after such reduction or
elimination, out of acts or omissions occurring or conditions existing prior to
the Effective Date or out of Operations conducted during the term of this
Agreement but prior to such reduction or elimination, regardless of when any
funds may be expended to satisfy such liability. For purposes of this Section,
such Participant’s share of such liability shall be equal to its Participating
Interest at the time the act or omission giving rise to the liability occurred,
after first taking into account any reduction, readjustment and restoration of

 

 

9

 

Participating Interests
under Sections 6.3, 9.5, 9.6 and 10.5 (or, as to such liability arising out of
acts or omissions occurring or conditions existing prior to the Effective Date,
equal to such Participant’s initial Participating Interest). Should the
cumulative cost of satisfying Continuing Obligations be in excess of cumulative
amounts accrued or otherwise charged to the Environmental Compliance Fund as
described in Exhibit B, each of the Participants shall be liable for its
proportionate share (i.e.,
Participating Interest at the time of the act or omission giving rise to such
liability occurred), after first taking into account any reduction,
readjustment and restoration of Participating Interests under Sections 6.3,
9.5, 9.6 and 10.5, of the cost of satisfying such Continuing Obligations,
notwithstanding that either Participant has previously withdrawn from the
Business or that its Participating Interest has been reduced or converted to an
interest in Net Proceeds pursuant to Subsection 6.3(a).

 

6.5                   Documentation
of Adjustments to Participating Interests.     Adjustments
to the Participating Interests need not be evidenced during the term of this
Agreement by the execution and recording of appropriate instruments, but each
Participant’s Participating Interest and related Equity Account balance shall
be shown in the accounting records of the Manager, and any adjustments thereto,
including any reduction, readjustment, and restoration of Participating
Interests under Sections 6.3, 9.5, 9.6 and 10.5, shall be made monthly.
However, either Participant, at any time upon the request of the other
Participant, shall execute and acknowledge instruments necessary to evidence
such adjustments in form sufficient for filing and recording in the
jurisdiction where the Properties are located.

 

6.6                   Grant
of Lien and Security Interest.

 

(a)                      Subject
to Section 6.7, each Participant grants to the other Participant a lien
upon and a security interest in its Participating Interest, including all of
its right, title and interest in the Assets, whenever acquired or arising, and
the proceeds from and accessions to the foregoing.

 

(b)                     The
liens and security interests granted by Subsection 6.6(a) shall secure
every obligation or liability of the Participant granting such lien or security
interest created under this Agreement, including the obligation to repay a
Cover Payment in accordance with Section 10.4. Each Participant hereby
agrees to take all action necessary to perfect such lien and security interest
and hereby appoints the other Participant its attorney-in-fact to execute, file
and record all financing statements and other documents necessary to perfect or
maintain such lien and security interest.

 

 

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6.7                   Subordination of Interests.                              Each
Participant shall, from time to time, take all necessary actions, including
execution of appropriate agreements, to pledge and subordinate its
Participating Interest, any liens it may hold which are created under this
Agreement other than those created pursuant to Section 6.6 hereof, and any
other right or interest it holds with respect to the Assets (other than any
statutory lien of the Manager) to any secured borrowings for Operations
approved by the Management Committee, including any secured borrowings relating
to Project Financing, and any modifications or renewals thereof. In addition
Thompson Creek will subordinate its lien hereunder to all security interests
granted from time to time pursuant to the Credit Facility Agreement.

 

ARTICLE VII

MANAGEMENT COMMITTEE

 

7.1                   Organization and Composition.      The
Participants hereby-establish a Management Committee to determine overall
policies, objectives, procedures, methods and actions under this Agreement. The
Management Committee shall consist of three (3) member(s) appointed
by Thompson Creek and two (2) member(s) appointed by Nissho Iwai.
Each Participant may appoint one or more alternates to act in the absence of a
regular member. Any alternate so acting shall be deemed a member. Appointments
by a Participant shall be made or changed by notice to the other members.
Thompson Creek shall designate one of its members to serve as the chair of the
Management Committee.

 

7.2                   Decisions.

 

(a)                      Each
Participant, acting through its appointed member(s) in attendance at the
meeting, shall have the votes on the Management Committee in proportion to its
Participating Interest. Except as provided in Section 7.2 (b) and
otherwise in this Agreement, the vote of the Participant with a Participating
Interest over fifty (50%) shall determine the decisions of the Management
Committee.

 

(b)                     The
following matters shall require the unanimous vote of the Management Committee:

 

(i)                        disposition
of all or a substantial portion of the Assets including by way of liquidation
or winding up;

 

 

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(ii)                     contracts
with affiliates over $500,000 or sales of product to affiliates of Nissho Iwai
Corporation or Thompson Creek Metals LLC;

 

(iii)                  compensation for
management of the Business;

 

(iv)                 modification of
this Agreement;

 

(v)                    any change in
business purpose;

 

(vi)                 any modifications
or replacements to the Production Plan;

 

(vii)              investment in other
companies;

 

(viii)           any borrowing by the
joint venture or loan to any third party or any guarantee;

 

(ix)                   changes in the
Manager other than by reasons of default; and

 

(x)                      except as
provided in Subsection 9.9, a discretionary capital expenditure in excess of
$1,000,000.

 

7.3                   Meetings.

 

(a)                      The
Management Committee shall hold regular meetings at least quarterly in
Englewood, Colorado, or at other agreed places. The Manager shall give twenty
(20) days notice to the Participants of such meetings. Additionally, either
Participant may call a special meeting upon seven (7) days notice to the
other Participant. In case of an emergency, reasonable notice of a special
meeting shall suffice. There shall be a quorum if at least one member
representing each Participant is present; provided,
however, that if a Participant fails to attend two consecutive
properly called meetings, then a quorum shall exist at the second meeting if
the other Participant is represented by at least one appointed member, and a
vote of such Participant shall be considered the vote required for the purposes
of the conduct of all business properly noticed even if such vote would
otherwise require unanimity.

 

(b)                     If
business cannot be conducted at a regular or special meeting due to the lack of
a quorum, either Participant may call the next meeting upon ten (10) days
notice to the other Participant.

 

 

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(c)                      Each
notice of a meeting shall include an itemized agenda prepared by the Manager in
the case of a regular meeting or by the Participant calling the meeting in the
case of a special meeting, but any matters may be considered if either
Participant adds the matter to the agenda at least two (2) business days
before the meeting or with the consent of the other Participant. The Manager
shall prepare minutes of all meetings and shall distribute copies of such
minutes to the other Participant within ten (10) days after the meeting.
Either Participant may electronically record the proceedings of a meeting. The
other Participant shall sign and return or object to the minutes prepared by
the Manager within thirty (30) days after receipt, and failure to do either
shall be deemed acceptance of the minutes as prepared by the Manager. The
minutes, when signed or deemed accepted by both Participants, shall be the
official record of the decisions made by the Management Committee. Decisions
made at a Management Committee meeting shall be implemented in accordance with
adopted Programs and Budgets. If a Participant timely objects to minutes
proposed by the Manager, the members of the Management Committee shall seek,
for a period not to exceed thirty (30) days from receipt by the Manager of
notice of the objections, to agree upon minutes acceptable to both
Participants. If the Management Committee does not reach agreement on the
minutes of the meeting within such thirty (30) day period, the minutes of the
meeting as prepared by the Manager together with the other Participant’s
proposed changes shall collectively constitute the record of the meeting. If
personnel employed in Operations are required to attend a Management Committee
meeting, reasonable costs incurred in connection with such attendance shall be
charged to the Business Account. All other costs shall be paid by the
Participants individually.

 

7.4                   Action Without
Meeting in Person.                   In
lieu of meetings in person, the Management Committee may conduct meetings by
telephone or video conference, so long as minutes of such meetings are prepared
in accordance with Subsection 7.3(c). The Management Committee may also take
actions in writing signed by all members.

 

7.5                   Matters
Requiring Approval.      Except as
otherwise delegated to the Manager in Section 8.2, the Management
Committee shall have exclusive authority to determine all matters related to
overall policies, objectives, procedures, methods and actions under this
Agreement.

 

ARTICLE VIII

MANAGER

 

8.1                   Appointment.                                 The
Participants hereby appoint Thompson Creek as the Manager with overall
management responsibility for Operations.

 

 

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8.2                   Powers and Duties of Manager.      Subject
to the terms and provisions of this Agreement, and the supervision of the
Management Committee, the Manager shall have the following powers and duties,
which shall be discharged in accordance with adopted Programs and Budgets.

 

(a)                      The
Manager shall manage, direct and control Operations, and shall prepare and
present to the Management Committee proposed Programs and Budgets as provided
in Article IX.

 

(b)                     The
Manager shall implement the decisions of the Management Committee, shall make
all expenditures necessary to carry out adopted Programs, and Budgets, and
shall promptly advise the Management Committee if it lacks sufficient funds to
carry out its responsibilities under this Agreement.

 

(c)                      The
Manager shall use reasonable efforts to:       (i) purchase
or otherwise acquire all material, supplies, equipment, water, utility and
transportation services required for Operations, such purchases and
acquisitions to be made to the extent reasonably possible on the best terms
available, taking into account all of the circumstances; (ii) obtain such
customary warranties and guarantees as are available in connection with such
purchases and acquisitions; and (iii) keep the Assets free and clear of
all Encumbrances, except any such Encumbrances listed in Paragraph 1.1 of Exhibit A
and those existing at the time of, or created concurrent with, the acquisition
of such Assets, or mechanic’s or materialmen’s liens (which shall be contested,
released or discharged in a diligent matter) or Encumbrances specifically
approved by the Management Committee.

 

(d)                     The
Manager shall conduct such title examinations of the Properties and cure such
title defects pertaining to the Properties as may be advisable in its
reasonable judgment.

 

(e)                      The
Manager shall:  (i) make or arrange for all
payments required by leases, licenses, permits, contracts and other agreements
related to the Assets; (ii) pay all taxes, assessments and like charges on
Operations and Assets except taxes determined or measured by a Participant’s
sales revenue or net income and taxes, including production taxes, attributable
to a Participant’s share of Products, and shall otherwise promptly pay and
discharge expenses incurred in Operations; provided,
however, that if authorized by the Management Committee, the Manager
shall have the right to contest (in the courts or otherwise) the validity or
amount of any taxes, assessments or charges if the Manager deems them to be
unlawful, unjust, unequal or excessive, or to undertake such other steps or
proceedings as the Manager may deem reasonably necessary to secure a
cancellation, reduction, readjustment or equalization

 

 

14

 

thereof before the
Manager shall be required to pay them, but in no event shall the Manager permit
or allow title to the Assets to be lost as the result of the nonpayment of any
taxes, assessments or like charges; and (iii) do all other acts reasonably
necessary to maintain the Assets in a condition suitable to conduct Operations
in accordance with this Agreement.

 

(f)                        The
Manager shall:  (i) apply for all necessary
permits, claims licenses and approvals; (ii) comply with all Laws; (iii) notify
promptly the Management Committee of any allegations of substantial violation
thereof; and (iv) prepare and file all reports or notices required for or
as a result of Operations. The Manager shall not be in breach of this provision
for a violation if it has complied with its standard of care under Section 8.3.
In the event of any such violation, the Manager shall timely cure or dispose of
such violation on behalf of both Participants through performance, payment of
fines and penalties, or both, and the cost thereof shall be charged to the
Business Account.

 

(g)                     The
Manager shall prosecute and defend, but shall -not initiate without consent of
the Management Committee, all litigation or administrative proceedings arising
out of Operations. The non-managing Participant shall have the right to
participate, at its own expense, in such litigation or administrative
proceedings. The Manager shall not approve in advance any settlement involving
payments, commitments or obligations in excess of Fifty Thousand Dollars
($50,000) in cash or value without the prior written consent of the
non-managing Participant.

 

(h)                     The
Manager shall provide insurance for the benefit of the Participants as provided
in Exhibit F or as may otherwise be determined from time to time by the
Management Committee.

 

(i)                         The
Manager may dispose of Assets, whether by abandonment, surrender, or Transfer
in the ordinary course of business, except that Properties may be abandoned or
surrendered only as provided in Article XIV. Without prior authorization
from the Management Committee, however, the Manager shall not: (i) dispose
of Assets in any one transaction (or in any series of related transactions) having
a value in excess of One Hundred Thousand Dollars ($100,000); (ii) enter
into any sales contracts or commitments for Product, except as permitted in Section 11.1;
(iii) begin a liquidation of the Business; or (iv) dispose of all or
a substantial part of the Assets necessary to achieve the purposes of the
Business.

 

(j)                         The
Manager shall have the right to carry out its responsibilities hereunder
through agents, Affiliates or independent contractors but may not assign or
subcontract out all or substantially all of its responsibilities without
consent pursuant to Subsection 7.2(b).

 

 

15

 

(k)                      The
Manager shall keep and maintain all required accounting and financial records
pursuant to the procedures described in Exhibit B and in accordance with
customary cost accounting practices in the mining industry, and shall ensure
appropriate separation of accounts unless otherwise agreed by the Participants.

 

(1)                      The
Manager shall maintain Equity Accounts for each Participant. Each Participant’s
Equity Account shall be credited with the value of such Participant’s
contributions under Subsections 5.1 (a) and 5.1(b) and shall be
credited with amounts contributed by such Participant under Section 5.2.
Each Participant’s Equity Account shall be charged with the cash and the fair
market value of property distributed to such Participant (net of liabilities
assumed by such Participant and liabilities to which such distributed property
is subject). Contributions and distributions shall include all cash
contributions or distributions plus the agreed value (expressed in dollars) of
all in-kind contributions or distributions. Solely for purposes of determining
the Equity Account balances of the Participants, the Manager shall reasonably
estimate the fair market value of all Products distributed to the Participants,
and such estimated value shall be used regardless of the actual amount received
by each Participant upon disposition of such Products.

 

(m)                   The
Manager shall keep the Management Committee advised of all Operations by
submitting in writing to the members of the Management Committee: (i) monthly
progress reports that include statements of expenditures and comparisons of
such expenditures to the adopted Budget; (ii) periodic summaries of data
acquired; (iii) copies of reports concerning Operations; (iv) a
detailed final report within thirty (30) days after completion of each Program
and Budget, which shall include comparisons between actual and budgeted
expenditures and comparisons between the objectives and results of Programs;
and (v) such other reports as any member of the Management Committee may
reasonably request. Subject to Article XVIII, at all reasonable times the
Manager shall provide the Management Committee, or other representative of a
Participant upon the request of such Participant’s member of the Management
Committee, access to, and the right to inspect and, at such Participant’s cost
and expense, copies of the Existing Data and all maps, drill logs and other
drilling data, core, pulps, reports, surveys, assays, analyses, production
reports, operations, technical, accounting and financial records, and other
Business Information, to the extent preserved or kept by the Manager, subject
to Article XVIII. In addition, the Manager shall allow the non-managing
Participant, at the latter’s sole risk, cost and expense, and subject to
reasonable safety regulations, to inspect the Assets and Operations at all
reasonable times, so long as the non-managing Participant does not unreasonably
interfere with Operations.

 

(n)                     The
Manager shall prepare an Environmental Compliance plan for

 

 

16

 

all Operations consistent
with the requirements of any applicable Laws or contractual obligations and
shall include in each Program and Budget sufficient funding to implement the
Environmental Compliance plan and to satisfy the financial assurance
requirements of any applicable Law or contractual obligation pertaining to
Environmental Compliance. To the extent practical, the Environmental Compliance
plan shall incorporate concurrent reclamation of Properties disturbed by
Operations.

 

(o)                     The
Manager shall undertake to perform Continuing Obligations when and as economic
and appropriate, whether before or after termination of the Business. The
Manager shall have the right to delegate performance of Continuing Obligations
to persons having demonstrated skill and experience in relevant disciplines. As
part of each Program and Budget submittal, the Manager shall specify in such
Program and Budget the measures to be taken for performance of Continuing
Obligations and the cost of such measures. The Manager shall keep the other
Participant reasonably informed about the Manager’s efforts to discharge
Continuing Obligations. Authorized representatives of each Participant shall
have the right from time to time to enter the Properties to inspect work
directed toward satisfaction of Continuing Obligations and audit books,
records, and accounts related thereto.

 

(p)                     The
funds that are to be deposited into the Environmental Compliance Fund shall be
maintained by the Manager in a separate, interest bearing cash management
account, which may include, but is not limited to, money market investments and
money market funds, and/or in longer term investments if approved by the
Management Committee. Such funds shall be used solely for Environmental
Compliance and Continuing Obligations, including the committing of such funds,
interests in property, insurance or bond policies, or other security to satisfy
Laws regarding financial assurance for the reclamation or restoration of the
Properties, and for other Environmental Compliance requirements.

 

(q)                     The
Manager shall undertake all other activities reasonably necessary to fulfill
the foregoing, and to implement the policies, objectives, procedures, methods
and actions determined by the Management Committee pursuant to Section 7.1.

 

8.3                   Standard of
Care.        The Manager
shall discharge its duties under Section 8.2 and conduct all Operations in
a good, workmanlike and efficient manner, in accordance with sound mining and
other applicable industry standards and practices, and in accordance with Laws
and with the terms and provisions of leases, licenses, permits, contracts and
other agreements pertaining to the Assets. The Manager shall not be liable to
the other Participant for any act or omission resulting in damage or loss
except to the extent caused by or attributable to the Manager’s willful
misconduct or gross negligence. The Manager shall not be in default of any

 

 

17

 

of its duties under Section 8.2
if its inability or failure to perform results from the failure of the other
Participant to perform acts or to contribute amounts required of it by this
Agreement.

 

8.4                   Resignation; Deemed Offer to Resign.   The
Manager may resign upon not less than nine (9) months’ prior notice to the
other Participant, in which case the other Participant may elect to become the
new Manager by notice to the resigning Participant within thirty (30) days
after the notice of resignation. If any of the following shall occur, at the
option of the other Participant, the Manager shall be deemed to have resigned
upon the occurrence of the event described in each of the following
Subsections, with the successor Manager to be appointed by the other
Participant at a subsequently called meeting of the Management Committee, at
which the Manager shall not be entitled to vote. The other Participant may
appoint itself or a third party as the Manager.

 

(a)                      The
aggregate Participating Interest of the Manager and its Affiliates becomes less
than fifty percent (50%);

 

(b)                     The
Manager fails to perform a material obligation imposed upon it under this
Agreement and such failure continues for a period of sixty (60) days after
notice from the other Participant demanding performance;

 

(c)                      The
Manager fails to pay or contest in good faith its bills and Business debts as
such obligations become due;

 

(d)                     A
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for a substantial part of its assets is appointed and such appointment
is neither made ineffective nor discharged within sixty (60) days after the
making thereof, or such appointment is consented to, requested by, or
acquiesced in by the Manager;

 

(e)                      The
Manager commences a voluntary case under any applicable bankruptcy, insolvency
or similar law now or hereafter in effect; or consents to the entry of an order
for relief in an involuntary case under any such law or to the appointment of
or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or other similar official of any substantial part of its assets;
or makes a general assignment for the benefit of creditors; or takes corporate
or other action in furtherance of any of the foregoing; or

 

(f)                        Entry
is made against the Manager of a judgment, decree or order for relief affecting
its ability to serve as Manager, or a substantial part of its Participating
Interest or its other assets by a court of competent jurisdiction in an
involuntary case commenced

 

 

18

 

under any applicable
bankruptcy, insolvency or other similar law of any jurisdiction now or
hereafter in effect.

 

Under Subsections (d), (e) or
(f) above, the appointment of a successor Manager shall be deemed to
pre-date the event causing a deemed resignation.

 

8.5                   Payments To Manager.               The
Manager shall be compensated for its services and reimbursed for its costs
hereunder in accordance with Exhibit B.

 

8.6                   Transactions With Affiliates.               If
the Manager engages Affiliates to provide services hereunder, it shall do so on
terms no less favourable than would be the case in arm’s-length transactions
with unrelated persons.

 

8.7                   Activities During Deadlock.                       If
the Management Committee for any reason fails to adopt an Exploration,
Pre-Feasibility Study, Feasibility Study or Development Program and Budget, the
Manager shall continue Operations at levels sufficient to maintain the Properties.
If the Management Committee for any reason fails to adopt Programs and Budgets
subsequent to the initial Program and Budget, subject to the contrary direction
of the Management Committee and receipt of necessary funds, the Manager shall
continue Operations at levels comparable with the last adopted Program and
Budget. All of the foregoing shall be subject to the contrary direction of the
Management Committee and the receipt of necessary funds.

 

ARTICLE IX

PROGRAMS AND BUDGETS

 

9.1                   Initial Program
and Budget.                       The
Initial Program and Budget to which both Participants have agreed is hereby
adopted and is attached as Exhibit G.

 

9.2                   Operations Pursuant
to Programs and Budgets.                     Except
as otherwise provided in Section 9.13, and Article XIII, Operations
shall be conducted, expenses shall be incurred, and Assets shall be acquired
only pursuant to adopted Programs and Budgets. Every Program and Budget adopted
pursuant to this Agreement shall conform to the Production Plan and provide for
accrual of reasonably anticipated Environmental Compliance expenses for all
Operations contemplated under the Program and Budget.

 

9.3                   Presentation of
Programs and Budgets.                               Proposed
Programs and Budgets shall be prepared by the Manager for a period of one (1) year
or any other period as approved

 

 

19

 

by the Management
Committee, and shall be submitted to the Management Committee for review and
consideration. All proposed Programs and Budgets may include Exploration,
Pre-Feasibility Studies, Feasibility Study, Development, Mining and Expansion
or Modification Operations components, or any combination thereof, and shall be
reviewed and adopted upon a vote of the Management Committee in accordance with
Sections 7.2 and 9.4. Each Program and Budget adopted by the Management
Committee, regardless of length, shall be reviewed at least once a year at a
meeting of the Management Committee. During the period encompassed by any
Program and Budget, and at least three (3) months prior to its expiration,
a proposed Program and Budget for the succeeding period shall be prepared by
the Manager and submitted to the Management Committee for review and
consideration. The Manager will submit its first Program and Budget on or
before August 31, 1997.

 

9.4                   Review and Adoption of Proposed Programs and Budgets.       Within
sixty (60) days after submission of a proposed Program and Budget which
includes all background information reasonably required to evaluate it, each
Participant shall submit in writing to the Management Committee:

 

(a)                      Notice
that the Participant approves any or all of the components of the proposed
Program and Budget;

 

(b)                     Modifications
proposed by the Participant to the components of the proposed Program and
Budget; or

 

(c)                      Notice
that the Participant rejects any or all of the components of the proposed
Program and Budget.

 

If a Participant fails to
give any of the foregoing responses within the allotted time, the failure shall
be deemed to be a vote by the Participant for adoption of the Manager’s
proposed Program and Budget. If a Participant makes a timely submission to the
Management Committee pursuant to Subsections 9.4(a), (b) or (c), then the
Manager working with the other Participant shall seek for a period of time not
to exceed twenty (20) days to develop a complete Program and Budget acceptable
to both Participants. The Manager shall then call a Management Committee
meeting in accordance with Section 7.3 for purposes of reviewing and
voting upon the proposed Program and Budget.

 

9.5                   Election to
Participate.

 

(a)                      By
notice to the Management Committee within twenty (20) days after the final vote
adopting a Program and Budget, and notwithstanding its vote concerning

 

 

20

 

adoption of a Program and
Budget, a Participant may elect to participate in the approved Program and
Budget: (i) in proportion to its respective Participating Interest, (ii) in
some lesser amount than its respective Participating Interest, or (iii) not
at all. In case of an election under Subsection 9.5(a)(ii) or (iii), its
Participating Interest shall be recalculated as provided in Subsection 9.5(b) below,
with dilution effective as of the first day of the Program Period for the
adopted Program and Budget. If a Participant fails to so notify the Management
Committee of the extent to which it elects to participate, the Participant
shall be deemed to have elected to contribute to such Program and Budget in
proportion to its respective Participating Interest as of the beginning of the
Program Period;

 

(b)                     If
a Participant elects to contribute to an adopted Program and Budget some lesser
amount than in proportion to its respective Participating Interest, or not at
all, and the other Participant elects to fund all or any portion of the
deficiency, the Participating Interest of the Reduced Participant shall be
provisionally recalculated by dividing: (A) the sum of (1) the amount
credited to the Reduced Participant’s Equity Account with respect to its
Initial Contribution under Section 5.1, (2) the total of all of the
Reduced Participant’s contributions under Section 5.2, and (3) the
amount, if any, the Reduced Participant elects to contribute to the adopted
Program and Budget; by (B) the sum of (1), (2) and (3) above for
both Participants; and then multiplying the result by seventy five percent
(75%); or

 

The Participating
Interest of the other Participant shall be increased by the amount of the
reduction in the Participating Interest of the Reduced Participant, and if the
other Participant elects not to fund the entire deficiency, the Manager shall
adjust the Program and Budget to reflect the funds available.

 

(c)                      Whenever
the Participating Interests are recalculated pursuant to this Subsection 9.5, (i) the
Equity Accounts of both Participants shall be revised to bear the same ratio to
each other as their recalculated Participating Interests; and (ii) the
portion of Capital Account attributable to the reduced Participating Interest
of the Reduced Participant shall be transferred to the other Participant.

 

(d)                     An
illustration of the manner in which adjustment described in Section 9.5  would be effected is as follows: Assuming

 

(i)                        there are
two patties (A and B);

 

(ii)                     the total
amount to be contributed pursuant to an approved Program and Budget is
24,000,000; and

 

 

21

 

(iii)                  A’s
Participating Interest is 25% and B’s Participating Interest is 75%.

 

(iv)                 the amount in
Party A’s Equity Account with respect to its Initial Contribution: ***

 

(v)                    the amount in
Party B’s Equity Account with respect to its Initial Contribution: ***

 

(vi)                 total of Party A’s
contributions under Section 5.2: $2,500,000;

 

(vii)              total of Party B’s
contributions under Section 5.2: $7,500,000;

 

(viii)           A’s
contribution to adopted Program: $4,000,000;

 

(ix)                   B’s
contribution to adopted Program: $18,000,000.

 

Then, Party A’s revised
Participating Interest would be calculated as follows:

 

(*** + $2,500,000 +
$4,000,000)

*** + $10,000,000 +
22,000,000

 

=
*** x 75%

 

= ***%

 

9.6                   Recalculation
or Restoration of Reduced Interest Based on Actual Expenditures.

 

(a)                      If
a Participant makes an election under Subsection 9.5(a)(ii) or (iii), then
within thirty (30) days after the conclusion of such Program and Budget, the
Manager shall report the total amount of money expended plus the total
obligations incurred by the Manager for such Budget.

 

(b)                     If
the Manager expended or incurred obligations that were more or less than the
adopted Budget, the Participating Interests shall be recalculated pursuant to

 

 

22

 

Subsection 9.5(b) by
substituting each Participant’s actual contribution to the adopted Budget for
that Participant’s estimated contribution at the time of the Reduced
Participant’s election under Subsection 9.5(a).

 

(c)                      All
recalculations under this Section IX shall be effective as of the first
day of the Program Period for the Program and Budget. The Manager, on behalf of
both Participants, shall make such reimbursements, reallocations of Products,
contributions and other adjustments as are necessary so that, to the extent
possible, each Participant will be placed in the position it would have been in
had its Participating Interests as recalculated under this Section been in
effect throughout the Program Period for such Program and Budget.

 

(d)                     Whenever the
Participating Interests are recalculated pursuant to this Section, (i) the
Participants’ Equity Accounts shall be revised to bear the same ratio to each
other as their Recalculated Participating Interests; and (ii) the portion
of Capital Account attributable to the reduced Participating Interest of the
Reduced Participant shall be transferred to the other Participant.

 

9.7                   Expansion or
Modification Programs and Budgets.        Any Program and Budget proposed
by the Manager involving Expansion or Modification shall be based on a
Feasibility Study prepared by the Manager, Feasibility Contractors, or both, or
prepared by the Manager and audited by Feasibility Contractors, as the
Management Committee determines. The Program and Budget, which include
Expansion or Modification, shall be submitted for review and approval by the
Management Committee within sixty (60) days following receipt by the Manager of
such Feasibility Study.

 

9.8                   Budget Overruns;
Program Changes.     The
Manager shall immediately notify the Management Committee of any material
departure from an adopted Program and Budget. If the Manager exceeds an adopted
Budget by more than ten percent (10%) in the aggregate, then the excess over
ten percent (10%), unless directly caused by an emergency or unexpected
expenditure made pursuant to Section 9.9 or unless otherwise authorized or
ratified by the Management Committee, shall be for the sole account of the
Manager and such excess shall not be included in the calculations of the
Participating Interests nor deemed a contribution under this Agreement. Budget
overruns of ten percent (10%) or less in the aggregate shall be borne by the
Participants in proportion to their respective Participating Interests.

 

9.9                   Emergency or
Unexpected Expenditures.                            In
case of emergency, the Manager may take any reasonable action it deems
necessary to protect life or property, to protect the Assets or to comply with
Laws. The Manager may make reasonable expenditures on behalf of the
Participants for unexpected events that are beyond its reasonable control and
that do not

 

 

23

 

result from a breach by
it of its standard of care. The Manager shall promptly notify the Participants
of the emergency or unexpected expenditure, and the Manager shall be reimbursed
for all resulting costs by the Participants in proportion to their respective
Participating Interests.

 

ARTICLE X

ACCOUNTS AND SETTLEMENTS

 

10.1            Monthly Statements.                            The
Manager shall promptly submit to the Management Committee monthly statements of
account reflecting in reasonable detail the charges and credits to the Business
Account during the preceding month.

 

10.2            Cash Calls.  On
the basis of each adopted Program and Budget, the Manager shall submit prior to
the last day of each month a billing for estimated cash requirements for the
next month. Within ten (10) days after receipt of each billing -or a
billing made pursuant to Section 9.9 or 12.4, each Participant shall
advance its proportionate share of such cash requirements based upon the
percentage that it has agreed to advance pursuant to Section 9.5. The
Manager shall record all funds received in the Business Account. The Manager
shall at all times maintain a cash balance approximately equal to the rate of
disbursement for up to fifteen (15) days. All funds in excess of immediate cash
requirements shall be invested by the Manager for the benefit of the Business
in cash management accounts and investments selected at the discretion of the
Manager, which accounts may include, but are not limited to, money market
investments and money market funds.

 

10.3            Failure to Meet Cash
Calls.                          A
Participant that fails to meet cash calls in the amount and at the times
specified in Section 10.2 shall be in default, and the amounts of the
defaulted cash call shall bear interest from the date due at an annual rate
equal to five (5) percentage points over the Prime Rate, but in no event
shall the rate of interest exceed the maximum permitted by Law. Such interest
shall accrue to the benefit of and be payable to the non-defaulting
Participant, but shall not be deemed as amounts contributed by the
non-defaulting Participant in the event dilution occurs in accordance with Article VI.
In addition to any other rights and remedies available to it by Law, the
non-defaulting Participant shall have those other rights, remedies, and
elections specified in Sections 10.4 and 10.5.

 

10.4            Cover Payment.                    If
a Participant defaults in making a contribution or cash call required by an
adopted Program and Budget, the non-defaulting Participant may, but shall not
be obligated to, advance some portion or all of the amount in default on behalf
of the defaulting Participant (a “Cover
Payment”). Each and every Cover Payment shall constitute a demand
loan bearing interest from the date of the advance at the rate provided in Section 10.3.

 

 

24

 

If more than one Cover
Payment is made, the Cover Payments shall be aggregated and the rights and
remedies described herein pertaining to an individual Cover Payment shall apply
to the aggregated Cover Payments. The failure to repay such loan upon demand
shall be a default.

 

10.5            Remedies.              The
Participants acknowledge that if either Participant defaults in making a
contribution required by Article V or a cash call, or in repaying a loan,
as required under Sections 10.2, 10.3 or 10.4, whether or not a Cover Payment
is made, it will be difficult to measure the damages resulting from such default
(it being hereby understood and agreed that the Participants have attempted to
determine such damages in advance and determined that the calculation of such
damages cannot be ascertained with reasonable certainty). Both Participants
acknowledge and recognize that the damage to the non-defaulting Participant
could be significant. In the event of such default, as reasonable liquidated
damages, the non-defaulting Participant may, with respect to any such default
not cured within thirty (30) days after notice to the defaulting Participant of
such default, elect any of the following remedies by giving notice to the
defaulting Participant. Such election may be made with respect to each failure
to meet a cash call relating to a Program and Budget, regardless of the
frequency of such cash calls, provided such cash calls are made in accordance
with Section 10.2.

 

(a)                      The
defaulting Participant grants to the non-defaulting Participant a power of sale
as to all or any portion of its interest in any Assets or in its Participating
Interest that is subject to the lien and security interest granted in Section 6.6
(whether or not such lien and security interest has been perfected), upon a
default under Sections 10.3 or 10.4. Such power shall be exercised in the
manner provided by applicable Law or otherwise in a commercially reasonable
manner and upon reasonable notice. If the non-defaulting Participant elects to
enforce the lien or security interest pursuant to the terms of this Subsection,
the defaulting Participant shall be deemed to have waived any available right
of redemption, any required valuation or appraisal of the secured property
prior to sale, any available right to stay execution or to require a
marshalling of assets, and any required bond in the event a receiver is
appointed, and the defaulting Participant shall be liable for any deficiency.

 

(b)                     The
non-defaulting Participant may elect to have the defaulting Participant’s
Participating Interest reduced or eliminated as follows:

 

(i)                          The
Reduced Participant’s Participating Interest shall be recalculated by dividing:
(X) the sum of (1) the value of the Reduced Participant’s Initial
Contribution under Section 5.1, (2) the total of all of the Reduced
Participant’s contributions under Section 5.2, and (3) the amount, if
any, the Reduced Participant contributed to the adopted Program and Budget with
respect to which the default occurred; by (Y) the sum of (1), (2) and
(3) above for both Participants; and then multiplying the result by sixty
percent (60%).

 

 

25

 

The Participating
Interest of the other Participant shall be increased by the amount of the
reduction in the Participating Interest of the Reduced Participant.

 

(ii)                       Dilution
under this Subsection 10.5(b) shall be effective as of the date of the
original default, and Section 9.6 shall not apply. The amount of any Cover
Payment under Section 10.4 and interest thereon, or any interest accrued
in accordance with Section 10.3, shall be deemed to be amounts contributed
by the non-defaulting Participant, and not as amounts contributed by the
defaulting Participant.

 

(iii)                    Whenever the
Participating Interests are recalculated pursuant to this Subsection 10.5(b), (A) the
Equity Accounts of both Participants shall be adjusted to bear the same ratio
to each other as their Recalculated Participating Interests; and (B) the
portion of Capital Account attributable to the reduced Participating Interest
of the Reduced Participant shall be transferred to the other Participant.

 

(iv)                   The defaulting
Participant shall be deemed to have withdrawn and to have automatically
relinquished its interest in the Assets to the non-defaulting Participant; provided, however, the defaulting
Participant shall have the right to receive only from five percent (5%) of Net
Proceeds, if any, and not from any other source, an amount equal to fifty
percent (50%) of the defaulting Participant’s Equity Account balance at the
time of such default. Upon receipt of such amount the defaulting Participant
shall thereafter have no further right, title or interest in the Assets, but
shall remain liable to the extent provided in Section 6.4.

 

10.6
Audits.

 

(a)                      Within
ninety (90) days after the end of each calendar year, at the request of a
Participant, an audit shall be completed by certified public accountants
selected by, and independent of, the Manager. The audit shall be conducted in
accordance with generally accepted auditing standards and shall cover all books
and records maintained by the Manager pursuant to this Agreement, all Assets
and Encumbrances, and all transactions and Operations conducted during such
calendar year, including production and inventory records and all costs for
which the Manager sought reimbursement under this Agreement, together with all
other matters customarily included in such audits. All written exceptions to
and claims upon the Manager for discrepancies disclosed by such audit shall be
made not more than three (3) months after receipt of the audit report,
unless either Participant elects to conduct an independent audit pursuant to
Subsection 10.6(b) which is ongoing at the end of such three (3) month
period, in which case such exceptions and claims may be made within the period
provided in Subsection 10.6(b). Failure to make any such exception or claim
within such period shall mean the audit

 

 

26

 

is deemed to be correct
and binding upon the Participants. The cost of all audits under this Subsection
shall be charged to the Business Account.

 

(b)                     Notwithstanding
the annual audit conducted by certified public accountants selected by the
Manager, each Participant shall have the right to have an independent audit of
all Business books, records and accounts, including all charges to the Business
Account. This audit shall review all issues raised by the requesting
Participant, with all costs borne by the requesting Participant. The requesting
Participant shall give the other Participant thirty (30) days prior notice of
such audit. Any audit conducted on behalf of either Participant shall be made
during the Manager’s normal business hours and shall not interfere with
Operations. Neither Participant shall have the right to audit records and
accounts of the Business relating to transactions or Operations more than
twenty-four (24) months after the calendar year during which such transactions,
or transactions related to such Operations, were charged to the Business
Account. All written exceptions to and claims upon the Manager for
discrepancies disclosed by such audit shall be made not more than three (3) months
after completion and delivery of such audit, or they shall be deemed waived.

 

ARTICLE XI

DISPOSITION OF PRODUCTION

 

11.1            Taking In Kind.                   Each
Participant shall take in kind or separately dispose of its share of all
Products in proportion to its Participating Interest. Any extra expenditure
incurred in the taking in kind or separate disposition by either Participant of
its proportionate share of Products shall be borne by such Participant. The
marketing and selling of Products shall be accomplished pursuant to the Sales
Representative Agreement set forth as Exhibit I hereto. The Manager shall
give notice in advance of the anticipated delivery date upon which Products
will be available.

 

11.2            Hedging.                     Neither
Participant shall have any obligation to account to the other Participant for,
nor have any interest or right of participation in any profits or proceeds nor
have any obligation to share in any losses from, futures contracts, forward
sales, trading in puts, calls, options or any similar hedging, price protection
or marketing mechanism employed by a Participant with respect to its
proportionate share of any Products produced or to be produced from the
Properties.

 

 

27

 

ARTICLE XII

WITHDRAWAL AND TERMINATION

 

12.1            Termination by
Expiration or Agreement.  This
Agreement shall terminate as expressly provided herein, unless earlier
terminated by written agreement.

 

12.2            If the Management
Committee fails to agree upon an amended Production Plan for six months after
the Manager submits it to the other Participant either Participant may elect to
terminate the Business by giving ninety (90) days notice of termination to the
other Participant.

 

12.3            Withdrawal.   A
Participant may elect to withdraw from the Business by giving notice to the
other Participant of the effective date of withdrawal, which shall be the later
of the end of the then current Program Period or thirty (30) days after the
date of the notice. Upon such withdrawal, the Business shall terminate, and the
withdrawing Participant shall be deemed to have transferred to the remaining
Participant all of its Participating Interest, including all of its interest in
the Assets, without cost and free and clear of all Encumbrances arising by,
through or under such withdrawing Participant, except those described in
Paragraph 1.1 of Exhibit A and those to which both Participants have
agreed. The withdrawing Participant shall execute and deliver all instruments
as may be necessary in the reasonable judgment of the other Participant to
effect the transfer of its interests in the Assets to the other Participant. If
within a sixty (60) day period both Participants elect to withdraw, then the
Business shall instead be deemed to have been terminated by the consent of the
Participants pursuant to Section 12.1.

 

12.4            Continuing Obligations
and Environmental Liabilities.                    On
termination of the Business under Sections 12.1, 12.2 or 12.3, each Participant
shall remain liable for its respective share of liabilities to third persons
(whether such arises before or after such withdrawal), including Environmental
Liabilities and Continuing Obligations. The withdrawing Participant’s share of
such liabilities shall be equal to its Participating Interest at the time such
liability was incurred, after first taking into account any reduction,
readjustment, and restoration of Participating Interests under Sections 6.3,
9.5, 9.6 and 10.5 (or, as to liabilities arising prior to the Effective Date,
its initial Participating Interest).

 

12.5            Disposition of Assets
on Termination.     Promptly
after termination under Sections 12.1 or 12.2, the Manager shall take all
action necessary to wind up the activities of the Business. All costs and
expenses incurred in connection with the termination of the Business shall be
expenses chargeable to the Business Account.

 

12.6            Non-Compete Covenants.     Neither a Participant
that withdraws pursuant to Section 12.3, or is deemed to have withdrawn
pursuant to Sections 6.3 or 10.5, nor any Affiliate of such a Participant, shall directly or indirectly
acquire any interest or right to explore or mine, or both, on any property any
part of which is within the Area of Interest for twenty-

 

 

28

 

four (24) months after
the effective date of withdrawal. If a withdrawing Participant, or the
Affiliate of a withdrawing Participant, breaches this Section 12.6, such
Participant shall be obligated to offer to convey to the non-withdrawing Participant,
without cost, any such property or interest so acquired (or ensure its
Affiliate offers to convey the property or interest to the non-withdrawing
Participant, if the acquiring party is the withdrawing Participant’s
Affiliate). Such offer shall be made in writing and can be accepted by the
non-withdrawing Participant at any time within ten (10) days after the
offer is received by such non-withdrawing Participant. Failure of a Participant’s
Affiliate to comply with this Section 12.6 shall be a breach by such
Participant of this Agreement.

 

12.7            Right to Data After
Termination.                                After
termination of the Business pursuant to Sections 12.1 or 12.2, each Participant
shall be entitled to make copies of all applicable information acquired
hereunder before the effective date of termination not previously furnished to
it, but a terminating or withdrawing Participant shall not be entitled, to any
such copies after any other termination or withdrawal.

 

12.8            Continuing Authority.                   On
termination of the Business under Sections 12.1, 12.2 or 12.3 or the deemed
withdrawal of either Participant pursuant to Sections 6.3 or 10.5, the
Participant which was the Manager prior to such termination or withdrawal (or
the other Participant in the event of a withdrawal by the Manager) shall have
the power and authority to do all things on behalf of both Participants which
are reasonably necessary or convenient to: (a) wind up Operations and (b) complete
any transaction and satisfy any obligation, unfinished or unsatisfied, at the time
of such termination or withdrawal, if the transaction or obligation arises out
of Operations prior to such termination or withdrawal. The Manager shall have
the power and authority to grant or receive extensions of time or change the
method of payment of an already existing liability or obligation, prosecute and
defend actions on behalf of both Participants and the Business, encumber
Assets, and, except as provided in the Credit Facility Agreement of even date
herewith, take any other reasonable action in any matter with respect to which
the former Participants continue to have, or appear or are alleged to have, a
common interest or a common liability.

 

ARTICLE XIII

ACQUISITIONS WITHIN AREA OF INTEREST

 

13.1            General.                       Any
interest or right to acquire any interest in real property or water rights
related thereto within the Area of Interest either acquired or proposed to be
acquired during the term of this Agreement by or on behalf of either
Participant (“Acquiring Participant”)
or any Affiliate of such Participant shall be subject to the terms and
provisions

 

 

29

 

of this Agreement.
Thompson Creek and Nissho Iwai and their respective Affiliates for their
separate account shall be free to acquire lands and interests in lands outside
the Area of Interest. Failure of any Affiliate of either Participant to comply
with this Article XIII shall be a breach by such Participant of this
Agreement.

 

13.2            Notice to
Non-Acquiring Participant.          Within
thirty (30) days after the acquisition or proposed acquisition, as the case may
be, of any interest or the right to acquire any interest in real property or
water rights wholly or partially within the Area of Interest (except real
property acquired by the Manager pursuant to a Program), the Acquiring
Participant shall notify the other Participant of such acquisition by it or its
Affiliate; provided further that if the acquisition of any interest or right to
acquire any interest pertains to real property or water rights partially within
the Area of Interest, then all such real property (i.e.,  the part
within the Area of Interest and the part outside the Area of Interest) shall be
subject to this Article XIII. The Acquiring Participant’s notice shall
describe in detail the acquisition, the acquiring party if that party is an
Affiliate, the lands and minerals covered thereby, any water rights related
thereto, the cost thereof, and the reasons why the Acquiring Participant
believes that the acquisition (or proposed acquisition) of the interest is in
the best interests of the Participants under this Agreement. In addition to
such notice, the Acquiring Participant shall make any and all information
concerning the relevant interest available for inspection by the other
Participant.

 

13.3            Option
Exercised.   Within ninety (90) days after receiving the
Acquiring Participant’s notice, the other Participant may notify the Acquiring
Participant of its election to accept a proportionate interest in the acquired
interest equal to its Participating Interest. Promptly upon such notice, the
Acquiring Participant shall convey or cause its Affiliate to convey to the
Participants, in proportion to their respective Participating Interests, by
special warranty deed with title held as described in Section 3.4, all of
the Acquiring Participant’s (or its Affiliate’s) interest in such acquired
interest, free and clear of all Encumbrances arising by, through or under the
Acquiring Participant (or its Affiliate) other than those to which both
Participants have agreed. The acquired interests shall become a part of the
Properties for all purposes of this Agreement immediately upon such notice. The
other Participant shall promptly pay to the Acquiring Participant its
proportionate share of the latter’s actual out-of-pocket acquisition costs.

 

13.4            Option Not Exercised.                      If the
other Participant does not give such notice within the ninety (90) day period
set forth in Section 13.3, it shall have no interest in the acquired
interests, and the acquired interests shall not be a part of the Assets or
continue to be subject to this Agreement.

 

 

30

 

ARTICLE XIV

ABANDONMENT AND SURRENDER OF
PROPERTIES

 

Either Participant
may request the Management Committee to authorize the Manager to surrender or
abandon part or all of the Properties. If the Management Committee does not
authorize such surrender or abandonment, or authorizes any such surrender or
abandonment over the objection of either Participant, the Participant that
desires to surrender or abandon shall assign to the objecting Participant, by
special warranty deed and without cost to the objecting Participant, all of the
abandoning Participant’s interest in the Properties sought to be abandoned or
surrendered, free and clear of all Encumbrances created by, through or under
the abandoning Participant other than those to which both Participants have
agreed. Upon the assignment, such properties shall cease to be part of the
Properties. The Participant that desires to abandon or surrender shall remain
liable for its share (determined by its Participating Interest as of the date
of such abandonment, after first taking into account any reduction,
readjustment, and restoration of Participating Interests under Sections 6.3,
9.5, 9.6 and 10.5) of any liability with respect to such Properties, including,
without limitation, Continuing Obligations, Environmental Liabilities and
Environmental Compliance, whether accruing before or after such abandonment,
arising out of activities prior to the Effective Date and out of Operations
conducted prior to the date of such abandonment, regardless of when any funds
may be expended to satisfy such liability.

 

ARTICLE XV

SUPPLEMENTAL BUSINESS AGREEMENT

 

At any time during
the term of this Agreement, the Management Committee may determine by unanimous
vote of both Participants that it is appropriate to segregate the Area of
Interest into areas subject to separate Programs and Budgets for purposes of
conducting further Exploration, Pre-Feasibility or Feasibility Studies,
Development, or Mining. At such time, the Management Committee shall designate
which portion of the Properties will comprise an area of interest under a
separate business arrangement (“Supplemental
Business”), and the
Participants shall enter into a new agreement (“Supplemental Business Agreement”)  for the purpose of further exploring, analyzing, developing,
and mining such portion of the Properties. The Supplemental Business Agreement
shall be in substantially the same form as this Agreement, with rights and
interests of the Participants in the Supplemental Business identical to the
rights and interests of the Participants in this Business at the time of the
designation, unless otherwise agreed by the Participants, and with the
Participants agreeing to new Capital and Equity Accounts and other terms
necessary for the Supplemental Business Agreement to comply with the nature and
purpose of the designation. Following execution of the Supplemental Business

 

 

31

 

Agreement, this Agreement
shall terminate insofar as it affects the Properties covered by the
Supplemental Business Agreement.

 

ARTICLE XVI

TRANSFER OF INTEREST; PREEMPTIVE
RIGHT

 

16.1            General.                       A
Participant shall have the right to Transfer to a third party an interest in
its Participating Interest, including an interest in this Agreement or the
Assets, solely as provided in this Article XVI.

 

16.2            Limitations on Free
Transferability.   Any Transfer by either Participant under Section 16.1
shall be subject to the following limitations:

 

(a)                      Neither
Participant shall Transfer any interest in this Agreement or the Assets
(including, but not limited to, any royalty, profits, or other interest in the
Products) except in conjunction with the Transfer of part or all of its
Participating Interest;

 

(b)                     No transferee
of all or any part of a Participant’s Participating Interest shall have the
rights of a Participant unless and until the transferring Participant has
provided to the other Participant notice of the Transfer, and, except as
provided in Subsections 16.2(g) and 16.2(h), the transferee, as of the
effective date of the Transfer, has committed in writing to assume and be bound
by this Agreement to the same extent as the transferring Participant;

 

(c)                      Neither
Participant, without the consent of the other Participant, shall make a
Transfer that shall violate any Law, or result in the cancellation of any
permits, licenses, or other similar authorization;

 

(d)                     No Transfer
permitted by this Article XVI shall relieve the transferring Participant
of its share of any liability, whether accruing before or after such Transfer,
which arises out of Operations conducted prior to such Transfer or exists on
the Effective Date;

 

(e)                      In the event
of a Transfer of less than all of a Participating Interest, the transferring
Participant and its transferee shall act and be treated as one Participant;
provided however, that in order for such Transfer to be effective, the
transferring Participant and its transferee must first:

 

 

32

 

(i)                          agree,
as between themselves, that one of them is authorized to act as the sole agent
(“Agent”) on their behalf with
respect to all matters pertaining to this Agreement and the Business; and

 

(ii)                       notify the
other Participant of the designation of the Agent, and in such notice warrant
and represent to other Participant that:

 

(A)                   the Agent has
the sole authority to act on behalf of, and to bind, the transferring
Participant and its transferee with respect to all matters pertaining to this
Agreement and the Business;

 

(B)                     the other
Participant may rely on all decisions of, notices and other communications
from, and failures to respond by, the Agent, as if given (or not given) by the
transferring Participant and its transferee; and

 

(C)                     all decisions
of, notices and other communications from, and failures to respond by, the
other Participant to the Agent shall be deemed to have been given (or not
given) to the transferring Participant and its transferee.

 

The transferring
Participant and its transferee may change the Agent (but such replacement must
be one of them) by giving notice to the other Participant, which notice must
conform to Subsection 16.2(f)(ii).

 

(f)                        If the
Transfer is the grant of an Encumbrance in a Participating Interest to secure a
loan or other indebtedness of either Participant in a bona fide transaction,
other than a transaction approved unanimously by the Management Committee or
Project Financing approved by the Management Committee, such Encumbrance shall
be granted only in connection with such Participant’s financing payment or
performance of that Participant’s obligations under this Agreement and shall be
subject to the terms of this Agreement and the rights and interests of the
other Participant hereunder (including without limitation under Section 6.7).
Any such Encumbrance shall be further subject to the condition that the holder
of such Encumbrance (“Chargee”)
first enter into a written agreement with the other Participant in form
satisfactory to the other Participant, acting reasonably, binding upon the
Chargee, to the effect that:

 

(i)                          the
Chargee shall not enter into possession or institute any proceedings for
foreclosure or partition of the encumbering Participant’s Participating
Interest and that such Encumbrance shall be subject to the provisions of this
Agreement;

 

 

33

 

(ii)                       the Chargee’s remedies under the Encumbrance
shall be limited to the sale of the whole (but only of the whole) of the
encumbering Participant’s Participating Interest to the other Participant, or,
failing such a sale, at a public auction to be held at least sixty (60) days
after prior notice to the other Participant, such sale to be subject to the
purchaser entering into a written agreement with the other Participant whereby
such purchaser assumes all obligations of the encumbering Participant under the
terms of this Agreement. The price of any preemptive sale to the other
Participant shall be the remaining principal amount of the loan plus accrued
interest and related expenses, and such preemptive sale shall occur within
sixty (60) days of the Chargee’s notice to the other Participant of its intent
to sell the encumbering Participant’s Participating Interest. Failure of a sale
to the other Participant to close by the end of such period, unless failure is
caused by the encumbering Participant or by the Chargee, shall permit the
Chargee to sell the encumbering Participant’s Participating Interest at a
public sale; and

 

(iii)                    the charge
shall be subordinate to any then-existing debt, including Project Financing
previously approved by the Management Committee, encumbering the transferring
Participant’s Participating Interest;

 

(h)                     If a sale or
other commitment or disposition of Products or proceeds from the sale of
Products by either Participant upon distribution to it pursuant to Article XI
creates in a third party a security interest by Encumbrance in Products or
proceeds therefrom prior to such distribution, such sales, commitment or
disposition shall be subject to the terms and conditions of this Agreement
including, without limitation, Section 6.7.

 

16.3            Preemptive Right. Any
Transfer by either Participant under Section 16.1 and any Transfer by an
Affiliate of Control of either Participant shall be subject to a preemptive
right of the other Participant to the extent provided in Exhibit H.
Failure of a Participant’s Affiliate to comply with this Article XVI and Exhibit H
shall be a breach by such Participant of this Agreement.

 

16.4            Credit Facility
Agreement Exemption. The Participants hereby expressly acknowledge and
consent to the grant by Thompson Creek of security interests over its
Participating Interest to Nissho Iwai Corporation, and that the limitations,
conditions and further requirements in this Agreement regarding the granting,
exercise, enforcement and realization of security interests and encumbrances
(including without limitation those contained in Subsection 16.2(f)), and the
limitations on Transfer contained herein, shall not be applicable to the granting
of such security interests or the enforcement and realization thereof by Nissho
Iwai Corporation, including the realization of security over Thompson Creek’s
Participating Interest.

 

 

34

 

16.5            Security Restitution.                          No
Participant shall be under any obligation whatsoever to permit the Assets to be
charged as security. However, if as an accommodation to facilitate the granting
of security for the indebtedness of one Participant, the other Participant has
permitted the Assets as a whole to be charged, and, if there ultimately is a
realization upon such security, the Participant in respect of whose
indebtedness the security was granted will forthwith indemnify and hold
harmless the other Participant for an amount equal to the product of (a) the
latter’s Participating Interest in the Joint Venture, and (b) the gross
proceeds of disposition of the Assets disposed of pursuant to such security.

 

ARTICLE XVII

DISPUTES

 

17.1            Governing Law.                    Except
for matters of title to the Properties or their Transfer, which shall be
governed by the law of their situs, this Agreement shall be governed by and
interpreted in accordance with the laws of the Province of British Columbia,
Canada, without regard for any conflict of laws or choice of laws principles
that would permit or require the application of the laws of any other
jurisdiction.

 

17.2            Forum.                               The
parties hereby irrevocably attorn to the non-exclusive jurisdiction of the
courts of the Province of British Columbia, Canada.

 

17.3            Dispute Resolution.                                 All
disputes arising under or in connection with this Agreement which cannot be
resolved by agreement between the Participants shall be resolved in accordance
with applicable Law. If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
Agreement, the successful or substantially prevailing Participant shall be
entitled to recover reasonable attorneys’ fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or they may
be entitled.

 

ARTICLE XVIII

CONFIDENTIALITY, OWNERSHIP, USE AND
DISCLOSURE OF INFORMATION

 

18.1            Business Information.                   All
Business Information shall be owned jointly by the Participants as their
Participating Interests are determined pursuant to this Agreement. Both before
and after the termination of the Business, all Business Information may be used
by either Participant for any purpose, whether or not competitive with the
Business, without

 

 

35

 

consulting with, or
obligation to, the other Participant. Except as provided in Sections 18.2 and
18.3, or with the prior written consent of the other Participant, each
Participant shall keep confidential and not disclose to any third party or the
public any portion of the Business Information that constitutes Confidential
Information.

 

18.2            Permitted Disclosure of Confidential Business
Information.                          Either
Participant may disclose Business Information that is Confidential Information:
(a) to a Participant’s officers, directors, partners, members, employees,
Affiliates, shareholders, agents, attorneys, accountants, consultants, contractors,
subcontractors or advisors, for the sole purpose of such Participant’s
performance of its obligations under this Agreement; (b) to any party to
whom the disclosing Participant contemplates a Transfer of all or any part of
its Participating Interest, for the sole purpose of evaluating the proposed
Transfer; (c) to any actual or potential lender, underwriter or investor
for the sole purpose of evaluating whether to make a loan to or investment in
the disclosing Participant; or (d) to a third party with whom the
disclosing Participant contemplates any independent business activity or
operation.

 

The Participant
disclosing Confidential Information pursuant to this Section 18.2, shall
disclose such Confidential Information to only those parties who have a bona
fide need to have access to such Confidential Information for the purpose for
which disclosure to such parties is permitted under this Section 18.2 and
who have agreed in writing to be bound by confidentiality provisions consistent
herewith to protect the Confidential Information from further disclosure, to
use such Confidential Information solely for such purpose and to otherwise be
bound by the provisions of this Article XVIII. Such writing shall not
preclude parties described in Subsection 18.2 from discussing and completing a
Transfer with the other Participant. The Participant disclosing Confidential
Information shall be responsible and liable for any use or disclosure of the
Confidential Information by such parties in violation of this Agreement and
such other writing.

 

18.3            Disclosure Required By Law.                Notwithstanding
anything contained in this Article XVIII, a Participant may disclose any
Confidential Information if, in the opinion of the disclosing Participant’s
legal counsel: (a) such disclosure is legally required to be made in a
judicial, administrative or governmental proceeding pursuant to a valid
subpoena or other applicable order; or (b) such disclosure is legally
required to be made pursuant to the rules or regulations of a stock
exchange or similar trading market applicable to the disclosing Participant.

 

Prior to any
disclosure of Confidential Information under this Section 18.3, the
disclosing Participant shall give the other Participant at least ten (10) days
prior written notice (unless less time is permitted by such rules, regulations
or proceeding) and, in making such disclosure, the disclosing Participant shall
disclose only that portion of Confidential

 

 

36

 

Information required to be
disclosed and shall take all reasonable steps to preserve the confidentiality
thereof, including, without limitation, obtaining protective orders and
supporting the other Participant in intervention in any such proceeding.

 

18.4            Public Announcements.   Prior
to making or issuing any press release or other public announcement or
disclosure of Business Information that is not Confidential Information, a
Participant shall first consult with the other Participant as to the content
and timing of such announcement or disclosure, unless in the good faith
judgment of such Participant, there is not sufficient time to consult with the
other Participant before such announcement or disclosure must be made under
applicable Laws; but in such event, the disclosing Participant shall notify the
other Participant, as soon as possible, of the pendency of such announcement or
disclosure, and it shall notify the other Participant before such announcement
or disclosure is made if at all reasonably possible. Any press release or other
public announcement or disclosure to be issued by either Participant relating
to this Business shall also identify the other Participant.

 

18.5            Other Permitted
Disclosures.             Business
information and Confidential Information shall not include:

 

(a)                    information
which is in the public domain at the time of disclosure to the other
Participant;

 

(b)                   information
obtained from third party sources with full right of disclosure; and

 

(c)                    information
which is subsequently provided to the public.

 

ARTICLE XIX

GENERAL PROVISIONS

 

19.1
Notices. All notices, payments and other required or
permitted communications (“Notices”)  to either Participant shall be in writing,
and shall be addressed respectively as follows:

 

 

37

 

	
  If to Thompson Creek:

  	
   

  	
  Thompson Creek Mining Ltd.

  
	
   

  	
   

  	
  5241 South Quebec Street, Suite 103 

  
	
   

  	
   

  	
  Englewood, Colorado 80111

  
	
  Attention: 

  	
   

  	
  F. Steven Mooney

  
	
  Telephone: 

  	
   

  	
  (303) 740-9022

  
	
  Facsimile: 

  	
   

  	
  (303) 740-9016

  
	
   

  	
   

  	
   

  
	
  If to Nissho Iwai: 

  	
   

  	
  Nissho Iwai Moly Resources Inc.

  
	
   

  	
   

  	
  c/o Nissho Iwai Canada, Ltd.

  
	
   

  	
   

  	
  Suite 2624-1055
  Dunsmuir Street,

  
	
   

  	
   

  	
  Vancouver,
  British Columbia

  
	
   

  	
   

  	
  Canada
  V7X1L3

  
	
  Attention: 

  	
   

  	
  Mr. S. Yoshimoto 

  
	
  Telephone: 

  	
   

  	
  (604) 684-8351

  
	
  Facsimile:

  	
   

  	
  (604) 687-8512

  
	
   

  	
   

  	
   

  
	
  With a Copy to: 

  	
   

  	
  Nissho Iwai Corporation

  
	
   

  	
   

  	
  Metal and Ore Department 

  
	
  Attention: 

  	
   

  	
  Mr. S. Okue

  
	
   

  	
   

  	
  4-5, Akasaka 2-chome, Minato-ku.

  
	
   

  	
   

  	
  Tokyo 107 Japan

  
	
  Telephone: 

  	
   

  	
  011-81-33-588-2381 

  
	
  Facsimile: 

  	
   

  	
  011-81-33-588-4816

  

 

All Notices shall
be given (a) by personal delivery to the Participant, (b) by
electronic communication, capable of producing a printed transmission, (c) by
registered or certified mail return receipt requested; or (d) by overnight
or other express courier service. All Notices shall be effective and shall be
deemed given on the date of receipt at the principal address if received during
normal business hours, and, if not received during normal business hours, on
the next business day following receipt, or if by electronic communication, on
the date of such confirmed communication. Either Participant may change its
address by Notice to the other Participant.

 

19.2            Gender.                           The
singular shall include the plural, and the plural the singular wherever the
context so requires, and the masculine, the feminine, and the neuter genders shall
be mutually inclusive.

 

19.3            Currency. All
references to “dollars” or “$” herein shall mean lawful currency of the
United States of America.

 

 

38

 

19.4            Headings.                The
subject headings of the Sections and Subsections of this Agreement and the
Paragraphs and Subparagraphs of the Exhibits to this Agreement are included for
purposes of convenience only, and shall not affect the construction or
interpretation of any of its provisions.

 

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

 

19.6            Modification.                                  No
modification of this Agreement shall be valid unless made in writing and duly
executed by both Participants.

 

19.7            Force Majeure.                      Except
for the obligation to make payments when due hereunder, the obligations of a
Participant shall be suspended to the extent and for the period that
performance is prevented by any cause, whether foreseeable or unforeseeable,
beyond its reasonable control, including, without limitation, labour disputes
(however arising and whether or not employee demands are reasonable or within
the power of the Participant to grant); acts of God; Laws, instructions or
requests of any government or governmental entity; judgments or orders of any
court; inability to obtain on reasonably acceptable terms any public or private
license, permit or other authorization; curtailment or suspension of activities
to remedy or avoid an actual or alleged, present or prospective violation of
Environmental Laws; action or inaction by any federal, state or local agency
that delays or prevents the issuance or granting of any approval or
authorization required to conduct Operations beyond the reasonable expectations
of the Participant seeking the approval or authorization; acts of war or
conditions arising out of or attributable to war, whether declared or
undeclared; riot, civil strife, insurrection or rebellion; fire, explosion,
earthquake, storm, flood, sink holes, drought or other adverse weather
condition; delay or failure by suppliers or transporters of materials, parts,
supplies, services or equipment or by contractors’ or subcontractors’ shortage
of, or inability to obtain, labour, transportation, materials, machinery,
equipment, supplies, utilities or services; accidents; breakdown of equipment,
machinery or facilities; actions by native rights groups, environmental groups,
or other similar special interest groups; or any other cause whether similar or
dissimilar to the foregoing. The affected Participant shall promptly give notice
to the other Participant of the suspension of performance, stating therein the
nature of the suspension, the reasons therefor, and the expected duration
thereof. The affected Participant shall resume performance as soon as
reasonably possible. During the period of suspension the obligations of both
Participants to advance funds pursuant to Section 10.2 shall be reduced to
levels consistent with then current Operations.

 

 

39

 

19.8            Rule Against
Perpetuities.                              The
Participants do not intend that there shall be any violation of the Rule Against
Perpetuities, the Rule Against Unreasonable Restraints on the Alienation
of Property, or any similar rule. Accordingly, if any right or option to
acquire any interest in the Properties, in a Participating Interest, in the
Assets, or in any real property exists under this Agreement, such right or
option must be exercised, if at all, so as to vest such interest within time
periods permitted by applicable rules. If, however, any such violation should
inadvertently occur, the Participants hereby agree that a court shall reform
that provision in such a way as to approximate most closely the intent of the
Participants within the limits permissible under such rules.

 

19.9            Further Assurances.                          Each
of the Participants shall take, from time to time and without additional
consideration, such further actions and execute such additional instruments as
may be reasonably necessary or convenient to implement and carry out the intent
and purpose of this Agreement or as may be reasonably required by lenders in
connection with Project Financing. Nissho Iwai will, from time to time, perform
the obligations of Nissho Iwai under this Agreement in such a way that no
breach of this Agreement by Nissho Iwai would constitute default by Thompson
Creek under the Credit Facility Agreement or the security granted pursuant to
it which default would not exist but for the breach hereof by Nissho Iwai.

 

19.10     Entire Agreement; Successors
and Assigns.    This Agreement contains the
entire understanding of the Participants and supersedes all prior agreements
and understandings between the Participants relating to the subject matter
hereof. This Agreement shall be binding upon and inure to the benefit of the
respective successors and permitted assigns of the Participants.

 

19.11     Memorandum.                           At
the request of either Participant, a Memorandum or short form of this
Agreement, or a Financing Statement(s) (to which copies of the Memorandum
or short form of this Agreement shall be attached) shall be prepared by the
Manager, executed and acknowledged by both Participants, and delivered to the
Manager for recording and filing in those appropriate recording districts as
may be necessary to provide constructive notice of this Agreement and the
rights and obligations of the Participants hereunder. The Manager shall record
and file in the proper recording offices, all such documents delivered to it by
the Participants. Unless both Participants agree, this Agreement shall not be recorded.

 

 

40

 

19.12     Counterparts.                             This
Agreement may be executed in any number of counterparts, and it shall not be
necessary that the signatures of both Participants be contained on any
counterpart. Each counterpart shall be deemed an original, but all counterparts
together shall constitute one and the same instrument.

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the Effective
Date.

 

	
   

  	
   

  	
  Thompson
  Creek Mining Ltd.

  
	
  

  	
   

  	
  By 

  	
  

  /s/ Illegible

  
	
   

  	
   

  	
   

  	
  President

  

 

	
   

  	
   

  	
  Nissho
  Iwai Moly Resources, Inc.

  
	
  

  	
   

  	
  By 

  	
  

  /s/ Illegible

  
	
   

  	
   

  	
   

  	
  Chairman

  

 

 

41

 

EXHIBIT A

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By and Between

Thompson Creek Mining Ltd.

And

Nissho Iwai Moly Resources, Inc.

 

 

 

ASSETS AND AREA OF INTEREST

 

 

 

1.1                    PROPERTIES,
PERSONAL PROPERTY AND TITLE EXCEPTIONS

 

The “Assets” and “Properties”
for the purposes of this Agreement shall include all “Assets” as that term is
defined in the “Asset Sale Agreement” entered into between Placer Dome (CLA)
Limited as the Vendor of the First Part and Thompson Creek, Thompson Creek
Mining Co. of the Second Part providing for the transfer of the Endako
Mine, British Columbia, Canada.

 

1.2                    AREA OF
INTEREST

 

All property and mineral
rights lying within a two mile radius of any parcels of real property or
mineral rights included within the “Assets” referred to in paragraph 1.1 of
this Exhibit A.

 

 

EXHIBIT A

Page  1 of 1

 

EXHIBIT B

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

Thompson Creek Mining, Ltd.

And

Nissho Iwai Corporation

 

 

 

ACCOUNTING PROCEDURES

 

The financing and
accounting procedures to be followed by the Manager and the Participants under
the Agreement are set forth below. All capitalized terms in these Accounting
Procedures shall have the definition attributed to them in the Agreement,
unless defined otherwise herein.

 

The purpose of
these Accounting Procedures is to establish equitable methods for determining
charges and credits applicable to Operations. It is the intent of the
Participants that neither of them shall lose or profit by reason of the
designation of one of them to exercise the duties and responsibilities of the
Manager. The Participants shall meet and in good faith endeavor to agree upon
changes deemed necessary to correct any unfairness or inequity. In the event of
a conflict between the provisions of these Accounting Procedures and those of
the Agreement, the provisions of the Agreement shall control.

 

ARTICLE I

GENERAL PROVISIONS

 

1.1                     General
Accounting Records.                  The Manager
shall maintain detailed and comprehensive cost accounting records in accordance
with these Canadian generally accepted accounting principles and Accounting
Procedures, including general ledgers, supporting and subsidiary journals,
invoices, checks and other customary documentation, sufficient to provide a
record of revenues and expenditures and periodic statements of financial
position and the results of Operations for managerial, regulatory, or legal
reporting purposes related to the Business. Such records shall be retained for
the duration of the period allowed the Participants for audit or the period
necessary to comply with regulatory requirements. The records shall reflect all
obligations, advances and credits of the Participants.

 

1.2                     Cash
Management.

 

(a)                      Simultaneously
with the execution of this Agreement, Nissho Iwai and Thompson Creek shall
initially open and maintain the Joint Accounts for the purpose

 

EXHIBIT B

Page 1 of 8

 

of receiving and
disbursing all revenues generated by the Endako Joint Venture and capital
contributions from Thompson Creek and Nissho Iwai. Amounts may be withdrawn
from the Joint Accounts the Environmental Compliance Fund only in accordance
with the following instructions:

 

(i)                       by
written instructions or authorizations signed by authorized signatories of both
Nissho Iwai and Thompson Creek if the amount to be withdrawn exceeds
U.S.$100,000, provided that amounts greater than U.S.$100,000 for
payments of utilities such as electricity, water or gas or for payments of
wages to regular hourly workers at the Endako Mine and salaried employees of
the Endako Joint Venture regularly employed at the Endako mine site may be
withdrawn from the Joint Accounts pursuant to Subsection 1.2(a)(ii); and

 

(ii)                    by
written instructions or authorizations signed by authorized signatories of
Thompson Creek singly if the amount to be withdrawn is equal to or less than
U.S.$100,000 or for payments for utilities such as electricity, water or gas
for payments of wages to regular hourly workers at the Endako Mine and salaried
employees of the Endako Joint Venture regularly employed at the Endako mine
site, or payments to regulatory agencies.

 

(b)                      All
expenses of the Endako mine and Endako Joint Venture shall be paid only from
the Joint Accounts (and with regard to certain environmental expenses, the
Environmental Compliance Fund). For so long as any of Thompson Creek’s
obligations under the Credit Facility Agreement remain outstanding, in case of
a shortage of funds available in any month in the Joint Accounts necessary to
cover operation expenses (other than by reason of Nissho Iwai’s failure to meet
cash calls in accordance with Article X) (a “Shortage”), Thompson Creek
shall:

 

(i)                       forthwith
after the Initial Shortage occurs, remit to the Joint Accounts an amount equal
to the lesser of the Aggregate Escrow Contributions and such Initial Shortage;
and

 

(ii)                    forthwith
after the occurrence of any subsequent Shortage, remit to the Joint Accounts an
amount equal to the lesser of (x) the amount of such Shortage and (y) the
then current Aggregate Escrow Contributions minus the cumulative amount
of remittances made pursuant to Sections 1.2(b)(I) and (ii) remitted
since and including the Initial Shortage,

 

EXHIBIT B

Page 2 of 8

 

                                  and
the remaining balance of any Shortage shall be remitted to the Joint Accounts
by Nissho Iwai and Thompson Creek in proportion to their respective
Participating Interests.

 

1.3                     Statements
and Billings.            The Manager shall
prepare statements and bill the Participants as provided in Article X of
the Agreement. Payment of any such billings by either Participant, including
the Manager, shall not prejudice such Participant’s right to protest or
question the correctness thereof for a period not to exceed twelve (12) months
following the calendar year during which such billings were received by such
Participant. All written exceptions to and claims upon the Manager for
incorrect charges, billings or statements shall be made upon the Manager within
such twelve (12) month period. The time period permitted for adjustments
hereunder shall not apply to adjustments resulting from periodic inventories as
provided in Paragraphs 5.1 and 5.2.

 

ARTICLE II

CHARGES TO BUSINESS ACCOUNT

 

Subject to the
limitations hereinafter set forth, the Manager shall charge the Business
Account with the following:

 

2.                           Property
Acquisition Costs, Rentals, Royalties and Other Payments.                       All
property acquisition and holding costs, including Governmental Fees, filing
fees, license fees, costs of permits and assessment work, delay rentals,
production royalties, including any required advances, and all other payments
made by the Manager which are necessary to acquire or maintain title to the
Assets.

 

2.2                     Labor
and Employee Benefits

 

(a)                      Salaries,
wages and bonus (if applicable) of the Manager’s employees directly engaged in Operations,
including salaries or wages of employees who are temporarily assigned to and
directly employed by same.

 

(b)                     The
Manager’s cost of holiday, vacation, sickness and disability benefits, and
other customary allowances applicable to the salaries and wages chargeable
under Subparagraph 2.2. Such costs may be charged on a “when and as paid basis”
or by “percentage assessment” on the amount of salaries and wages. If
percentage assessment is used, the rate shall be applied to wages or salaries
excluding overtime and bonuses. Such rate shall be based on the Manager’s cost
experience and it shall be periodically adjusted at least annually to ensure
that the total of such charges does not exceed the actual cost thereof to the
Manager.

 

EXHIBIT B

Page 3 of 8

 

(c)                      The
Manager’s actual cost of established plans for employees’ group life insurance,
hospitalization, pension, retirement, stock purchase, thrift, and other benefit
plans of a like nature  applicable
to salaries, wages and bonus chargeable under Subparagraphs 2.2(a) provided
that the plans are limited to the extent feasible to those customary in the
industry.

 

(d)                     Cost
of assessments imposed by governmental authority that are applicable to
salaries, wages and bonuses chargeable under Subparagraph 2.2(a), including all
penalties except those resulting from the willful misconduct or gross
negligence of the Manager.

 

2.3                     Materials,
Equipment and Supplies.                      The cost of
materials, equipment and supplies (herein called “Material”) purchased from
unaffiliated third parties or furnished by either Participant as provided in
Paragraph 3.1. The Manager shall purchase or furnish only so much Material as
may be required for efficient and economical Operations. The Manager shall also
maintain inventory levels of Material at reasonable levels to avoid unnecessary
accumulation of surplus stock.

 

2.4                     Equipment
and Facilities Furnished by Manager.                      The cost of
machinery, equipment and facilities owned by the Manager and used in Operations
or used to provide support or utility services to Operations charged at rates
commensurate with the actual costs of ownership and operation of such
machinery, equipment and facilities. Such rates shall include costs of
maintenance, repairs, other operating expenses, insurance, taxes, depreciation
and interest at a rate not to exceed Prime Rate plus three percent (3%) per
annum. Such rates shall not exceed the average commercial rates currently
prevailing in the vicinity of the Operations.

 

2.5                     Transportation.                      Reasonable
transportation costs incurred in connection with the transportation of
employees and material necessary for Operations.

 

2.6                     Contract
Services and Utilities.           The cost of contract
services and utilities procured from outside sources, other than services
described in Paragraphs 2.9 and 2.13. If contract services are performed by the
Manager or an Affiliate thereof, the cost charged to the Business Account shall
not be greater than that for which comparable services and utilities are available
in the open market within the vicinity of Operations. The cost of professional
consultant services procured from outside sources in excess of One Hundred
Thousand Dollars ($100,000.00) per annum per contract shall not be charged to
the Business Account unless approved by the Management Committee.

 

EXHIBIT B

Page 4 of 8

 

2.7                     Insurance
Premiums.                              Premiums
paid for insurance required to be carried for Operations for the protection of
the Participants.

 

2.8                     Damages
and Losses.                        All costs
in excess of insurance proceeds necessary to repair or replace damage or losses
to any Assets resulting from any cause other than the willful misconduct or
gross negligence of the Manager. The Manager shall furnish the Management
Committee with written notice of damages or losses as soon as practicable after
a report thereof has been received by the Manager.

 

2.9                     Legal
and Regulatory Expense.           Except as otherwise
provided in Paragraph 2.13, all legal and regulatory costs and expenses
incurred in or resulting from Operations or necessary to protect or recover the
Assets of the Business, including costs of title investigation and title
curative services. All attorneys fees and other legal costs to handle,
investigate and settle litigation or claims, and amounts paid in settlement of
such litigation or claims in excess of One Hundred Thousand Dollars
($100,000.00) per annum shall not be charged to the Business Account unless
approved by the Management Committee.

 

2.10     Audit.   Cost
of annual audits under Subsection 10.6(a) of the Agreement.

 

2.11 Taxes.             All
taxes, assessments and like charges on Operations and Assets which have been
paid by the Manager for the benefit of the Participants. Each Participant is
separately responsible for taxes determined or measured by a Participant’s
sales revenue or net income.

 

2.12               Administrative
Charge.

 

(a)                      Each
month in arrears, the Manager shall charge the Business Account a sum equal to ***
of the Joint Venture’s sales revenue for which the Joint Venture has received
payment during the month then ended from sales by Thompson Creek and Nissho
Iwai, which shall be a liquidated amount to compensate the Manager for services
rendered on behalf of the joint venture by employees of affiliates of Manager
in the Denver office, office overhead and general and administrative expenses
which shall be in lieu of any other management fee (“Administration Charge”).
Provided always that in each fiscal year of this Joint Venture, the
Administration Charge shall not be less than *** per annum (or a pro rata
portion thereof if the fiscal year is less than 12 months).

 

EXHIBIT B

Page 5 of 8

 

(b)                     The
Management Committee shall annually review the administrative charges and shall
amend the rate if it is found to be insufficient based on the principle that
the Manager shall not suffer a loss and should be fairly and adequately
compensated for its costs and expenses.

 

2.13               Environmental
Compliance Fund.                                  Costs
of reasonably anticipated Environmental Compliance which, on a Program basis,
shall be determined by the Management Committee and shall be based on
proportionate contributions in an amount sufficient to establish a fund, which
through successive proportionate contributions during the life of the Business,
will pay for ongoing Environmental Compliance conducted during Operations and
which will aggregate the reasonably anticipated costs of mine closure,
post-Operations Environmental Compliance and Continuing Obligations. The
Manager shall invest such amounts on behalf of the Participants as provided in
Subsection 8.2(p).

 

2.14               Other
Expenditures.                                   Any
reasonable direct expenditure, other than expenditures which are covered by the
foregoing provisions, incurred by the Manager for the necessary and proper
conduct of Operations.

 

2.15               Letter
of Credit.                      All fees
changed to Nissho Iwai or Nissho Iwai Corporation by Bank of Tokyo - Mitsubishi
Ltd. In connection with the issuance of the letter of credit dated June 12,
1997 in the amount of Cdn.$5,804,000.00 in favour of British Columbia Ministry
of Employment and Investment, Energy and Minerals Division, together with a
guarantee fee equal to one-tenth of one percent (.1%)% of the Letter of Credit
amount, shall be paid from the Joint Account to NIMO upon its submission of an
invoice for such amount.

 

ARTICLE III

BASIS OF CHARGES TO BUSINESS ACCOUNT

 

3.1                     Purchases.            Material
purchased and services procured from third parties shall be charged to the
Business Account by the Manager at invoiced cost, including applicable transfer
taxes, less all discounts taken. If any Material is determined to be defective
or is returned to a vendor for any other reason, the Manager shall credit the
Business Account when an adjustment is received from the vendor.

 

3.2                     Material
Furnished by a Participant for Use in the Business.                                 Any
Material furnished by either Participant for use in the Business or distributed
to either Participant by the Manager shall be priced on the following basis:

 

(a)                      New
Material:                               New
Material furnished by either Participant shall be priced F.O.B. the nearest
reputable supply store or railway receiving point, where like

 

EXHIBIT B

Page 6 of 8

 

Material is available, at
the current replacement cost of the same kind of Material, exclusive of any
available cash discounts, at the time it is furnished (herein called “New Price”).

 

(b)                     Used
Material.

 

(i)                          Used
Material in sound and serviceable condition and suitable for reuse without
reconditioning shall be priced as follows:

 

(A)                   Used
Material furnished by either Participant shall be priced at seventy-five
percent (75%) of the New Price;

 

(B)                     Used
Material distributed to either Participant shall be priced (I) at
seventy-five percent (75%) of the New Price if such Material was originally
charged to the Business Account as new Material, or (ii) at sixty-five
percent (65%) of the New Price if such Material was originally charged to the
Business Account as good used Material at seventy-five percent (75%) of the New
Price.

 

(ii)                       Other
used Material finished by either Participant that, after reconditioning, will
be further serviceable for original function as good secondhand Material, or
that is serviceable for original function but not substantially suitable for
reconditioning, shall be priced at fifty percent (50%) of New Price. The cost
of any reconditioning shall be borne by the transferee.

 

(iii)                    Bad-Order
Material which is no longer usable for its original purpose without excessive
repair cost but further usable for some other purpose shall be priced on a
basis comparable with items normally used for that purpose.

 

(iv)                   All
other Material, including junk, shall be priced at a value commensurate with
its use or at prevailing prices.

 

(c)                      Obsolete
Material.       Any Material that is
serviceable and usable for its original function, but its condition is not
equivalent to that which would justify a price as provided above, shall be
priced by the Management Committee. Such price shall be set at a level that will
result in a charge to the Business Account equal to the value of the service to
be rendered by such Material.

 

3.3                     Premium
Prices.                      Whenever
Material is not readily obtainable at published or listed prices because of
national emergencies, strikes or other unusual circumstances over which the
Manager has no control, the Manager may charge the Business Account for the
required Material on the basis of the Manager’s direct cost and expenses
incurred in procuring such Material and making it suitable for use. The Manager
shall give written notice of the proposed charge to the Participants prior to
the time when such charge is

 

EXHIBIT B

Page 7 of 8

 

to be billed, whereupon
either Participant shall have the right, by notifying the Manager within ten (10) days
of the delivery of the notice from the Manager, to furnish at the usual
receiving point all or part of its share of Material suitable for use and
acceptable to the Manager.

 

3.4                     Warranty
of Material Furnished by the Manager or Participants.          Neither
Participant warrants any Material furnished beyond any dealer’s or manufacturer’s
warranty and no credits shall be made to the Business Account for defective
Material until adjustments are received by the Manager from the dealer,
manufacturer or their respective agents.

 

ARTICLE IV

DISPOSAL OF MATERIAL

 

4.1                     Disposition
Generally.                      The Manager
shall have no obligation to purchase either Participant’s interest in Material.
The Management Committee shall determine the disposition of major items of
surplus Material, provided the Manager shall have the right to dispose of
normal accumulations of junk and scrap Material either by sale or by transfer
to the Participants as provided in Paragraph 4.2.

 

4.2                     Distribution
to Participants.                            Any
Material to be distributed to the Participants shall be made in proportion to
their respective Participating Interests, and corresponding credits shall be
made to the Business Account on the basis provided in Paragraph 3.2.

 

4.3                     Sales.    Sales
of Material to third parties shall be credited to the Business Account at the
net amount received. Any damages or claims by the Purchaser shall be charged
back to the Business Account if and when paid.

 

ARTICLE V

INVENTORIES

 

5.1                     Periodic
Inventories, Notice and Representations.                At
reasonable intervals, inventories shall be taken by the Manager, which shall
include all such Material as is ordinarily considered controllable by operators
of mining properties, and the expense of conducting such periodic inventories
shall be charged to the Business Account. The Manager shall give written notice
to the Participants of its intent to take any inventory at least thirty (30)
days before such inventory is scheduled to take place. A Participant shall be
deemed to have accepted the results of any inventory taken by the Manager if
the Participant fails to be represented at such inventory.

 

5.2                     Reconciliation
and Adjustment of Inventories.                                  Reconciliation
of inventory with charges to the Business Account shall be made, and a list of
overages and shortages shall be furnished to the Management Committee within
six (6) months after the inventory is taken. Inventory adjustments shall
be made by the Manager to the Business Account for overages and shortages, but
the Manager shall be held accountable to the Business only for shortages due to
lack of reasonable diligence.

 

EXHIBIT B

Page 8 of 8

 

EXHIBIT C

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By and Between

Thompson Creek Mining Ltd.

And

Nissho Iwai Moly Resources, Inc.

 

 

Interim Long Term Production Plan

 

	
   

  	
   

  	
  Partial

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  YEAR

  	
   

  	
  YEAR

  	
   

  	
  YEAR

  	
   

  	
  YEAR

  	
   

  	
  YEAR

  	
   

  	
  YEAR

  	
   

  	
  YEAR

  	
   

  	
  YEAR

  	
   

  	
  YEAR

  	
   

  	
  YEAR

  	
   

  	
  TOTAL

  	
   

  
	
   

  	
   

  	
  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  	
  6

  	
   

  	
  7

  	
   

  	
  8

  	
   

  	
  9

  	
   

  	
  10

  	
   

  	
  MINE

  	
   

  
	
   

  	
   

  	
  1997

  	
   

  	
  1998

  	
   

  	
  1999

  	
   

  	
  2000

  	
   

  	
  2001

  	
   

  	
  2002

  	
   

  	
  2003

  	
   

  	
  2004

  	
   

  	
  2005

  	
   

  	
  2006

  	
   

  	
   

  	
   

  
	
  Production

  	
   

  	
  0.50

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ora
  Mined (M Tonnes)

  	
   

  	
  5,123

  	
   

  	
  10,245

  	
   

  	
  10,245

  	
   

  	
  10,245

  	
   

  	
  10,245

  	
   

  	
  10,245

  	
   

  	
  10,245

  	
   

  	
  10,245

  	
   

  	
  4,503

  	
   

  	
  0

  	
   

  	
  81,341

  	
   

  
	
  Stockpile
  Milled

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Waste
  Mined (M Tonnes)

  	
   

  	
  3,128

  	
   

  	
  6,255

  	
   

  	
  6,255

  	
   

  	
  6,255

  	
   

  	
  6,255

  	
   

  	
  6,255

  	
   

  	
  6,255

  	
   

  	
  6,255

  	
   

  	
  2,740

  	
   

  	
  0

  	
   

  	
  49,653

  	
   

  
	
  Total
  Production (M Tonnes)

  	
   

  	
  8,250

  	
   

  	
  16,500

  	
   

  	
  16,500

  	
   

  	
  16,500

  	
   

  	
  16,500

  	
   

  	
  16,500

  	
   

  	
  16,500

  	
   

  	
  16,500

  	
   

  	
  7,243

  	
   

  	
  0

  	
   

  	
  130,993

  	
   

  
	
  Strip
  Ratio

  	
   

  	
  0.61

  	
   

  	
  0.61

  	
   

  	
  0.61

  	
   

  	
  0.61

  	
   

  	
  0.61

  	
   

  	
  0.61

  	
   

  	
  0.61

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.61

  	
   

  
	
  Ore
  Grade (%-Mo62)

  	
   

  	
  0.127

  	
  %

  	
  0.130

  	
  %

  	
  0.122

  	
  %

  	
  0.115

  	
  %

  	
  0.130

  	
  %

  	
  0.135

  	
  %

  	
  0.131

  	
  %

  	
  0.123

  	
  %

  	
  0.110

  	
  %

  	
  0.000

  	
  %

  	
   

  	
   

  
	
  Ore
  Grade (%-Mo)

  	
   

  	
  0.075

  	
  %

  	
  0.077

  	
  %

  	
  0.072

  	
  %

  	
  0.068

  	
  %

  	
  0.077

  	
  %

  	
  0.080

  	
  %

  	
  0.078

  	
  %

  	
  0.073

  	
  %

  	
  0.065

  	
  %

  	
  0.000

  	
  %

  	
  0.075

  	
  %

  
	
  Stockpile
  Grade (%-MoS2)

  	
   

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
   

  	
   

  
	
  Stockpile
  Grade (%)

  	
   

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  	
  0.000

  	
  %

  
	
  Ore &
  Stockpile Grade (%)

  	
   

  	
  0.075

  	
  %

  	
  0.077

  	
  %

  	
  0.072

  	
  %

  	
  0.068

  	
  %

  	
  0.077

  	
  %

  	
  0.080

  	
  %

  	
  0.078

  	
  %

  	
  0.073

  	
  %

  	
  0.065

  	
  %

  	
  0.000

  	
  %

  	
  0.075

  	
  %

  

 

 

 

EXHIBIT D

To

 EXPLORATION, DEVELOPMENT AND
MINE OPERATING AGREEMENT

By And Between

Thompson Creek Mining Ltd.

And

Nissho Iwai Moly Resources, Inc.

 

 

DEFINITIONS

 

 

“Affiliate”
means any person, partnership, limited liability company,
joint venture, corporation, or other form of enterprise which Controls, is
Controlled by, or is under common Control with a Participant.

 

“Aggregate Escrow Contributions” means the
aggregate of (i) the amount of funds in the Escrow Account at the relevant
time and (ii) the aggregate amount of funds removed from the Escrow
Account by Nissho Iwai Corporation in accordance with the Escrow Agreement and
the Credit Agreement.

 

“Agreement”
means this Exploration, Development and Mine Operating
Agreement, including all amendments and modifications, and all schedules and
exhibits, all of which are incorporated by this reference.

 

“Area
of Interest” means the area described in Paragraph 1.2 of Exhibit A.

 

“Assets” means the Properties, Products,
Business Information, and all other real and personal property, tangible and
intangible, including existing or after-acquired properties and all contract
rights held for the benefit of the Participants hereunder.

 

“Budget”
means a detailed estimate of all costs to be incurred and a
schedule of cash advances to be made by the Participants with respect to a
Program.

 

“Business”
means the contractual relationship of the Participants under
this Agreement.

 

“Business
Account” means the account maintained by the Manager for the
Business in accordance with Exhibit B.

 

“Business
Information” means the terms of this Agreement, and any other
agreement relating to the Business, the Existing Data, and all information,
data, knowledge and know-how, in whatever form and however communicated
(including, without limitation,

 

 

 

Confidential
Information), developed, conceived, originated or obtained by either
Participant in performing its obligations under this Agreement.

 

“Capital
Account” means the account maintained for each Participant in
accordance with Exhibit C.

 

“Confidential
Information” means all information, data, knowledge and
know-how (including, but not limited to, formulas, patterns, compilations,
programs, devices, methods, techniques and processes) that derives independent
economic value, actual or potential, as a result of not being generally known
to, or readily ascertainable by, third parties and which is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy, including
without limitation all analyses, interpretations, compilations, studies and
evaluations of such information, data, knowledge and know-how generated or
prepared by or on behalf of either Participant.

 

“Continuing
Obligations” mean obligations or responsibilities that are
reasonably expected to continue or arise after Operations on a particular area
of the Properties have ceased or are suspended, such as future monitoring,
stabilization, or Environmental Compliance.

 

“Control”
used as a verb means, when used with respect to an entity,
the ability, directly or indirectly through one or more intermediaries, to
direct or cause the direction of the management and policies of such entity
through (I) the legal or beneficial ownership of voting securities or membership
interests; (ii) the right to appoint managers, directors or corporate
management; (iii) contract; (iv) operating agreement; (v) voting
trust; or otherwise; and, when used with respect to a person, means the actual
or legal ability to control the actions of another, through family
relationship, agency, contract or otherwise; and “Control” used as a noun means
an interest which gives the holder the ability to exercise any of the foregoing
powers.

 

“Cover
Payment” shall have the meaning as set forth in Section 10.4
of the Agreement.

 

“Credit
Facility Agreement” means the Credit Facility Agreement dated
June 9, 1997 between Nissho Iwai Corporation, as Lender, and Thompson
Creek, as Borrower.

 

“Development”
means all preparation (other than Exploration) for the
removal and recovery of Products, including construction and installation of a
mill or any other improvements to be used for the mining, handling, milling,
processing, or other beneficiation of Products, and all related Environmental
Compliance.

 

“Effective
Date” means the date set forth in the preamble to this
Agreement.

 

 

 

“Encumbrance”
or “Encumbrances” means
mortgages, deeds of trust, security interests, pledges, liens, net profits
interests, royalties or overriding royalty interests, other payments out of
production, or other burdens of any nature.

 

“Environmental
Compliance” means actions performed during or after
Operations to comply with the requirements of all Environmental Laws or
contractual commitments related to reclamation of the Properties or other
compliance with Environmental Laws.

 

“Environmental
Laws” means Laws aimed at reclamation or restoration of the
Properties; abatement of pollution; protection of the environment; protection
of wildlife, including endangered species; ensuring public safety from
environmental hazards; protection of cultural or historic resources;
management, storage or control of hazardous materials and substances; releases
or threatened releases of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances as wastes into the environment, including without
limitation, ambient air, surface water and groundwater; and all other Laws
relating to the manufacturing, processing, distribution, use, treatment,
storage, disposal, handling or transport of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes.

 

“Environmental
Liabilities” means any and all claims, actions, causes of
action, damages, losses, liabilities, obligations, penalties, judgments,
amounts paid in settlement, assessments, costs, disbursements, or expenses
(including, without limitation, attorneys’ fees and costs,
experts’ fees and costs, and consultants’ fees and costs) of any kind or of any
nature whatsoever that are asserted against either Participant, by any person
or entity other than the other Participant, alleging liability (including,
without limitation, liability for studies, testing or investigatory costs,
cleanup costs, response costs, removal costs, remediation costs, containment costs,
restoration costs, corrective action costs, closure costs, reclamation costs,
natural resource damages, property damages, business losses, personal injuries,
penalties or fines) arising out of, based on or resulting from (I) the
presence, release, threatened release, discharge or emission into the
environment of any hazardous materials or substances existing or arising on,
beneath or above the Properties and/or emanating or migrating and/or
threatening to emanate or migrate from the Properties to off-site properties; (ii) physical
disturbance of the environment; or (iii) the violation or alleged
violation of any Environmental Laws.

 

“Equity
Account” means the account maintained for each Participant by
the Manager in accordance with Subsection 8.2(1) of the Agreement.

 

 

“Escrow
Account” means the escrow account established by Nissho Iwai
Corporation, as Lender, and Thompson Creek, as Borrower, pursuant to the Credit
Facility Agreement and the Escrow Agreement.

 

“Escrow
Agreement” means the escrow agreement dated June 12,
1997 among Thompson Creek, Nissho Iwai Corporation and Montreal Trust Company
of Canada.

 

“Existing
Data” means maps, drill logs and other drilling data, core
tests, pulps, reports, surveys, assays, analyses, production reports,
operations, technical, accounting and financial records, and other material
information developed in operations on the Properties prior to the Effective
Date.

 

“Expansion”
or “Modification” means
(i) a material increase in mining or production capacity; (ii) a
material change in the recovery process; or (iii) a material change in
waste or tailings disposal methods. An increase or change shall be deemed “material”
if it is anticipated to cost more than Five Hundred Thousand Dollars
($500,000).

 

“Exploration”
means all activities directed toward ascertaining the
existence, location, quantity, quality or commercial value of deposits of
Products, including but not limited to additional drilling required after
discovery of potentially commercial mineralization, and including related
Environmental Compliance.

 

“Feasibility
Study” means a report to be prepared following selection by
the Management Committee of a development and mining plan. The Feasibility
Study shall include a review of information presented in any Pre-Feasibility
Studies. The Feasibility Study shall be in a form and of a scope generally
acceptable to reputable financial institutions that provide financing to the
mining industry.

 

“Initial
Contribution” means that contribution each Participant has
made or agrees to make pursuant to Section 5.1 of the Agreement.

 

“Initial
Shortage” means, the first Shortage to occur after the
execution of this Agreement.

 

“Joint
Accounts” means accounts numbered 90-10211, 90-10319,
90-21116, 03-23217, 90-21213 and 03-23314 with the Canadian Imperial Bank of
Commerce, or such other accounts as  the
participants shall agree.

 

“Law”
or “Laws” means
all applicable federal, state and local laws (statutory or common), rules,
ordinances, regulations, grants, concessions, franchises, licenses, orders,
directives, judgments, decrees, and other governmental restrictions, including
permits and other similar requirements, whether legislative, municipal,
administrative or judicial in nature.

 

 

“Management
Committee” means the committee established under Article VII
of the Agreement.

 

“Manager” means the Participant appointed
under Article VIII of the Agreement to manage Operations, or any successor
Manager.

 

“Mining”
means the mining, extracting, producing, beneficiating,
handling, milling or other processing of Products.

 

“Net Proceeds” means certain amounts
calculated as provided in Exhibit E, which may be payable to a Participant
under Subsections 6.3 (b) or 10.5(b) of the Agreement.

 

“Operations”
means the activities carried out under this Agreement.

 

“Participant”
means Thompson Creek or Nissho Iwai, or any permitted
successor or assign of Thompson Creek or Nissho Iwai under the Agreement.

 

“Participating
Interest” means the percentage interest representing the
ownership interest of a Participant in the Assets, and all other rights and
obligations arising under this Agreement, as such interest may from time to
time be adjusted hereunder. Participating Interests shall be calculated to
three decimal places and rounded to two decimal places as follows: Decimals of
..005 or more shall be rounded up (e.g.,  1.519% rounded to 1.52%); decimals of
less than .005 shall be rounded down (e.g.,  1.514% rounded to 1.51%). The initial
Participating Interests of the Participants are set forth in Section 6.1 of
the Agreement.

 

“Pre-Feasibility
Studies” means one or more studies prepared to analyze
whether economically viable Mining Operations may be possible on the
Properties.

 

“Prime
Rate” means the interest rate quoted and published as “Prime”
as published in The Wall Street Journal, under
the heading “Money Rate,” as the rate may change from day to day.

 

“Production
Plan” means the plan attached as Exhibit C and any
amendments or replacements thereof from time to time approved pursuant to
Subsection 7.2(b) of the Agreement.

 

“Products”
means all ores, minerals and mineral resources produced from
the Properties.

 

“Program”
means a description in reasonable detail of Operations to be
conducted and objectives to be accomplished by the Manager for a period determined
by the Management Committee.

 

 

“Program
Period” means the time period covered by an adopted Program
and Budget.

 

“Project
Financing” means any financing approved by the Management
Committee and obtained by the Participants for the purpose of placing a mineral
deposit situated on the Properties into commercial production, but shall not
include any such financing obtained individually by either Participant to
finance payment or performance of its obligations under the Agreement.

 

“Properties”
means those interests in real property described in Paragraph
1.1 of Exhibit A and all other interests in real property within the Area
of Interest that are acquired and held subject to the Agreement.

 

“Recalculated
Participating Interest” means the reduced Participating
Interest of a Participant as recalculated under Sections 9.5, 9.6 or 10.5 of
the Agreement.

 

“Reduced
Participant” means a Participant whose Participating Interest
is reduced under Sections 9.5 or 10.5 of the Agreement.

 

“Security
Documents” has the meaning given to it in the Credit Facility
Agreement.

 

“Shortage”
has the meaning given to it in Subsection 1.2(b) of Exhibit B.

 

“Transfer”
means, when used as a verb, to sell, grant, assign, create an
Encumbrance, pledge or otherwise convey, or dispose of or commit to do any of
the foregoing, or to arrange for substitute performance by an Affiliate or
third party (except as permitted under Subsection 8.2(j) and Section 8.6
of the Agreement), either directly or indirectly; and, when used as a noun,
means such a sale, grant, assignment, Encumbrance, pledge or other conveyance
or disposition, or such an arrangement.

 

 

EXHIBIT E

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

Thompson Creek Mining Ltd.

And

Nissho Iwai Moly Resources Inc.

 

 

 

NET PROCEEDS CALCULATION

 

1.1                     Income
and Expenses.                      Net Proceeds
shall be calculated by deducting from the Gross Revenue (as defined below)
realized (or deemed to be realized), such costs and expenses attributable to
Exploration, Development, Mining, and other Operations as would be deductible
under generally accepted accounting principles and practices consistently
applied, including without limitation:

 

(a)                      All
costs and expenses of replacing, expanding, modifying, altering or changing
from time to time the Mining facilities. Costs and expenses of improvements
(such as haulage ways or mill facilities) that are also used in connection with
workings other than the Properties shall be charged to the Properties only in
the proportion that their use in connection with the Properties bears to their
total use;

 

(b)                     Ad
valorem real property and unsecured personal property taxes, and all taxes,
other than income taxes, applicable to Mining of the Properties, including
without limitation all state mining taxes, sales taxes, severance taxes,
license fees and governmental levies of a similar nature;

 

(c)                      Allowance
for overhead in accordance with Paragraph 2.13 of Exhibit B;

 

(d)                     All
expenses incurred relative to the sale of Products, including an allowance for
commissions at rates which are normal and customary in the industry;

 

(e)                      All
amounts payable to the remaining Participant during Mining pursuant to any
applicable operating or similar agreement in force with respect thereto;

 

(f)                        The
actual cost of investment under the Agreement but prior to beginning of Mining,
which shall include all expenditures for Exploration and Development of the
Properties incurred by the non-withdrawing Participant both prior and
subsequent to the withdrawing Participant acquiring a Net Proceeds interest;

 

EXHIBIT E

Page 1 of 2

 

(g)                     Interest
on monies borrowed or advanced for costs and expenses, but in no event in
excess of the maximum permitted by law;

 

(h)                     An
allowance for reasonable working capital and inventory;

 

(i)                         Costs
of funding the Environmental Compliance Fund as provided in Paragraph 2.14 of Exhibit B;

 

(j)                         Actual
costs of Operations; and

 

(k)                      Rental,
royalty, production, and purchase payments.

 

For purposes
hereof, the term “Gross Revenue” shall mean the sum of (I) gross receipts
from sale of Products, less any charges for sampling, assaying, or penalties; (ii) gross
receipts from the sale or other disposition of Assets; (iii) insurance
proceeds; (iv) compensation for expropriation of Assets; and (v) judgment
proceeds. Gross receipts for sale of Products shall be determined by sales
price received by the remaining Participant.

 

It is intended
that the remaining Participant shall recoup from Gross Revenue all of its
on-going contributions for Exploration, Development, Mining, Expansion and
Modification and marketing Products before any Net Proceeds are distributed to
any person holding a Net Proceeds interest. No deduction shall be made for
income taxes, depreciation, amortization or depletion. If in any year after the
beginning of Mining of the Properties an operating loss relative thereto is
incurred, the amount thereof shall be considered as and be included with
outstanding costs and expenses and carried forward in determining Net Proceeds
for subsequent periods. If Products are processed by the remaining Participant,
or are sold to an Affiliate of the remaining Participant, then, for purposes of
calculating Net Proceeds, such Products shall be deemed conclusively to have been
sold at a price equal to fair market value to an arm’s length purchaser FOB the
concentrator for the Properties, and Net Proceeds relative thereto shall be
calculated without reference to any profits or losses attributable to smelting
or refining.

 

1.2                     Payment
of Net Proceeds.   Payments of Net Proceeds shall
commence in the calendar quarter following the calendar quarter in which Net
Proceeds are first realized, and shall be made forty-five (45) days following
the end of each calendar quarter during which Net Proceeds are realized, and
shall be subject to adjustment, if required, at the end of each calendar year.
The recipient of such Net Proceeds payments shall have the right to audit such
payments following receipt of each payment by giving notice to the remaining
Participant and by conducting such audit in accordance with Section 10.6
of the Agreement. Costs of such an audit shall be borne by the holder of the
Net Proceeds interest described herein.

 

1.3                     Definitions.  All
capitalized words and terms used herein have the same meaning as in the
Agreement.

 

EXHIBIT E

Page 2 of 2

 

EXHIBIT F

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

Thompson Creek Mining Ltd.

And

Nissho Iwai Moly Resources, Inc.

 

 

 

INSURANCE

 

Manager shall for
so long as any of its obligations under the Credit Facility Agreement remain
outstanding keep the properties and assets comprising the Endako Mine insured
in accordance with the Credit Facility Agreement, and thereafter against such
losses as are insured against by comparable corporations engaged in comparable
businesses. Manager shall cause the Endako Joint Venture to maintain public
liability insurance in such amounts and against such risks as is normally carried
by entities engaged in comparable businesses and business interruption
insurance of a type and in amounts similar to that carried by comparable
corporations engaged in comparable businesses. Each insurance policy shall,
where applicable, (i) be written by insurers with a corporate debt rating
of Aa and claims paid rating of Aaa, as rated by Moody’s Investors Service
Inc., and (ii) include a standard mortgage clause, (iii) provide for
30 days’ written notice to Nissho Iwai, of any proposed cancellation or non-renewal
of any such policy or deletion of any coverages thereunder or of any property
covered thereby, and (iv) include both Manager as representative of its
75% ownership interest and the 25% ownership interest of Nissho Iwai as named
insurers and Manager shall, upon request, provide Nissho Iwai with copies of
all insurance policies together with evidence of payment of all premiums due
thereon. If the Manager fails to perform duly or punctually any obligation
under this Exhibit F, Nissho Iwai may obtain such insurance and all
expenses therefor shall be paid by the parties in accordance with their
respective Participating Interests.

 

EXHIBIT F

Page 1 of 1

 

EXHIBIT G

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

Thompson Creek Mining Ltd.

And

Nissho Iwai Moly Resources, Inc.

 

 

 

INITIAL PROGRAM AND BUDGET

 

The Placer Dome 1997
Control Budget will be utilized for operations and cost purposes until the
first Program and Budget under Subsection 9.3 is approved.

 

EXHIBIT G

Page 1 of 1

 

EXHIBIT H

To

EXPLORATION, DEVELOPMENT AND MINE OPERATING AGREEMENT

By And Between

Thompson Creek Mining Ltd.

And

Nissho Iwai Moly Resources, Inc.

 

 

 

PREEMPTIVE RIGHTS

 

1.1                     Preemptive
Rights.  If either Participant intends to Transfer all or any
part of its Participating Interest, or an Affiliate of either Participant
intends to Transfer Control of such Participant (“Transferring Entity”), such
Participant shall promptly notify the other Participant of such intentions. The
notice shall state the price and all other pertinent terms and conditions of
the intended Transfer, and shall be accompanied by a copy of the offer or the
contract for sale. If the consideration for the intended transfer is, in whole
or in part, other than monetary, the notice shall describe such consideration
and its monetary equivalent (based upon the fair market value of the
nonmonetary consideration and stated in terms of cash or currency). The other
Participant shall have sixty (60) days from the date such notice is delivered
to notify the Transferring Entity (and the Participant if its Affiliate is the
Transferring Entity) whether it elects to acquire the offered interest at the
same price (or its monetary equivalent in cash or currency) and on the same
terms and conditions as set forth in the notice. If it does so elect, the
acquisition by the other Participant shall be consummated promptly after notice
of such election is delivered;

 

(a)                      If
the other Participant fails to so elect within the period provided for above,
the Transferring Entity shall have sixty (60) days following the expiration of
such period to consummate the Transfer to a third party at a price and on terms
no less favorable to the Transferring Entity than those offered by the
Transferring Entity to the other Participant in the aforementioned notice;

 

(b)                     If the
Transferring Entity fails to consummate the Transfer to a third party within
the period set forth above, the preemptive right of the other Participant in
such offered interest shall be deemed to be revived. Any subsequent proposal to
Transfer such interest shall be conducted in accordance with all of the
procedures set forth in this Paragraph.

 

1.2                     Exceptions
to Preemptive Right.      Paragraph 1.1 above shall
not apply to the following:

 

EXHIBIT H

Page 1 of 4

 

(a)                       Transfer
by either Participant of all or any part of its Participating Interest to an
Affiliate;

 

(b)                      Incorporation
of either Participant, or corporate consolidation or reorganization of either
Participant by which the surviving entity shall possess substantially all of
the stock or all of the property rights and interests, and be subject to
substantially all of the liabilities and obligations of that Participant;

 

(c)                       Corporate
merger or amalgamation involving either Participant by which the surviving
entity or amalgamated company shall possess all of the stock or all of the
property rights and interests, and be subject to substantially all of the
liabilities and obligations of that Participant;

 

(d)                      the
transfer of Control of either Participant by an Affiliate to such Participant
or to another Affiliate;

 

(e)                       subject
to Subsection 16.2(g) of the Agreement, the grant by either Participant of
a security interest in its Participating Interest by Encumbrance;

 

(f)                         the
creation by any Affiliate of either Participant of an Encumbrance affecting its
Control of such Participant; or

 

(g)                      a
sale or other commitment or disposition of Products or proceeds from sale of
Products by either Participant upon distribution to it pursuant to Article XI
of the Agreement.

 

EXHIBIT H

Page 2 of 4Exhibit 10.9

 

CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED FOR THE REDACTED PORTIONS OF THIS AGREEMENT.  THE REDACTIONS ARE INDICATED WITH THREE
ASTERISKS (“***”).  A COMPLETE VERSION OF
THIS AGREEMENT HAS BEEN FILED WITH THE 
U.S. SECURITIES AND EXCHANGE COMMISSION.

 

DISTRIBUTORSHIP AND SALES AGREEMENT

 

THIS AGREEMENT is
made on  September 1, 2006,
by and between BLUE PEARL MINING LTD., a corporation existing under the laws of
the Province of Ontario (hereinafter referred to as “Company”) and
SOJITZ CORPORATION, a Japanese corporation (hereinafter referred to as “Distributor”).

 

WHEREAS, Company
has entered into a Merger Agreement dated as of September 1, 2006 among
Company, Blue Pearl USA Ltd., Thompson Creek Metals Company (“TCMC”),
and F. Steven Mooney, pursuant to which the Company will acquire TCMC and its
subsidiaries, including the Thompson Creek mine (the “Thompson Creek Mine”
located near Challis, in Custer County, Idaho (the “Acquisition”); and

 

WHEREAS, Company
and TCMC have requested that Distributor waive any preemptive right it may have
with respect to the Acquisition, and Distributor has agreed to waive any such
preemptive right related to the Acquisition (but not as to any other
transaction), in connection with and conditioned upon Company and Distributor
entering into this Agreement; and

 

WHEREAS, TCMC and
its subsidiaries produce a variety of molybdenum products, and Company desires
to appoint Distributor as the exclusive distributor in the Territory (as
defined herein) of molybdic oxide, ferromolybdenum and molybdic oxide
briquettes produced from the Thompson Creek Mine and TCMC’s molybdenum
disulfide roasting facility (the “Langeloth Roaster”) located in
Langeloth, Pennsylvania (hereinafter referred to as “Product”) and to
supply Product to Distributor, on the terms and conditions of this Agreement;

 

NOW THEREFORE, in
consideration of the premises and the mutual covenants of the parties set forth
herein and the waiver described above, the parties agree as follows:

 

1.                          APPOINTMENT;
EXCLUSIVITY

 

Company hereby
appoints Distributor as the exclusive distributor of the Product in the
Territory and agrees to supply Distributor with the quantity of Product elected
by Distributor as provided in this Agreement. Company shall not directly or
indirectly enter into any other agreement with another distributor or reseller
to distribute Product in the Territory during the Term, except as permitted
under Section 3(b). Distributor shall not distribute or resell the Product
supplied by Company under this Agreement outside of the Territory during the
Term.

 

2.                          TERM

 

The term of the distributorship (“Term”) shall be 10 years,
commencing on January 1, 2007 and expiring on December 31,
2016. Both parties shall review the relationship in 2016 prior to December 31
to determine if they elect to extend the distributorship, but neither party
shall be obligated to extend.

 

3.                          DISTRIBUTOR EFFORTS

 

(a)       Distributor agrees to devote Distributor’s
commercially reasonable efforts to the business of selling the Product of the
Company in the Territory, but such efforts shall not

 

 

obligate Distributor to
take Product in excess of the amount it elects in its sole discretion under Section 5.
Company acknowledges that Distributor obtains molybdenum products from other
sources and markets such products in the Territory. Nothing in this Agreement
shall restrict or prohibit Distributor from marketing such other products in or
out of the Territory under existing and future agreements, whether or not
competitive with sales of the Company’s Product.

 

(b)       If Distributor fails to purchase at least
five percent (5%) of the Product produced each month for any period of six
consecutive months during the Term, Seller may sell Product in the Territory
through another distributor or reseller until the first day of the month after
the month in which Distributor takes delivery of at least five percent (5%) of
the Product produced.

 

4.                          TERRITORY

 

The
distributorship created herein shall be for selling Product in any country in
Asia (including without limitation Turkey, the Middle East, India, China,
Korea, and Japan) and Oceania (including without limitation Australia and New
Zealand).

 

5.                          QUANTITY

 

Company shall
supply to Distributor, and Distributor shall have the option to purchase, up to
*** of all Product produced during the Term, in quantities and types of Product
as elected by Distributor in its sole discretion. Distributor shall give
advance notice to Company of the quantity, if any, of Product it elects to
purchase for each month during the Term. Such notice shall be delivered on or
before the first day of the month prior to the month in which shipment of the
Product is to occur, except that elections for Product shipped in January shall
be made on or before December 15th.

 

6.                          SPECIFICATIONS

 

(a)       The Product delivered pursuant to the
Agreement shall conform to the following specifications (“Specifications”):

 

Mo:   57.0   %
Minimum

Cu:    0.30   %
Maximum

P:       0.05   %
Maximum

Pb:     0.05   %
Maximum

S:       0.10   %
Maximum

 

(b)       Company shall be responsible for any
short delivery, any defect in title or encumbrance on the Product, and failure
of Product to conform with the Specifications.

 

(c)       Distributor shall notify Company of any
claim that the Product fails to conform with the Specifications within one year
following delivery of the Product, or such claim shall be waived. Company shall
be permitted to sample any material that is alleged to be non-conforming to the
Specifications. In the event that the analyses of Company and Distributor
disagree, a mutually acceptable independent testing authority shall be retained
to test the material alleged to be non-conforming to the Specifications. The
analysis of such authority shall be

 

2

 

binding on the parties
hereto and the cost of such testing shall be borne by the party whose analysis
is furthest from that of the independent testing authority.

 

(d)       If it is finally determined that Product
shipped to Distributor does not conform to the Specifications, then; (i) Distributor
shall have no obligation to purchase such non-conforming Product, and (ii) Company
shall be responsible for the costs of storage and shipping of such
non-conforming Product for alternative disposition.

 

(e)       Distributor reserves all rights and
remedies under this agreement and applicable law for any short delivery, any
defect in title or encumbrance on the Product, and failure of Product to
conform with the Specifications, including without limitation the right of
cover under the Uniform Commercial Code, Nothing in this Agreement shall limit
any special, indirect, incidental or consequential damages arising from any of
the foregoing breaches.

 

(f)        Other than as provided in this Section 6,
COMPANY MAKES NO AND EXPRESSLY DISCLAIMS ALL
OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED,
IN FACT OR BY LAW, WHETHER OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
PURPOSE OR USE OR OTHERWISE, CONCERNING THE PRODUCT TO BE DELIVERED UNDER THIS
AGREEMENT.

 

7.                          PRICE

 

(a)       The price paid by Distributor for Product
in the form of drummed molybdenum oxide powder shall be the mean of the Dealer
Oxide high and low quotations for technical grade molybdic oxide as published
weekly in Metals Week and averaged for the month prior to the contractual month
of shipment of the Product.

 

(b)       If Distributor elects to take delivery of
Product in the form of molybdenum oxide in cans or in the form of briquettes or
ferromolybdenum, then prior to shipment of these Products, Distributor and
Company shall agree on the premium, for the applicable Product.

 

8.                          DELIVERY

 

The delivery of
the Product shall be made CIF main ports of import in Territory (to the ports
specified by Distributor for each shipment) in accordance with INCOTERMS 2000.
Company shall deliver Product to Distributor monthly in the quantities elected
by Distributor under Section 5. Product shall be shipped, at Distributor’s
option, in drums, cans, or bags (super sacks) on pallets, suitable and safe for
ocean transportation in accordance with internationally recognized safety
standards for container cargo. Unless otherwise agreed by the party, each
monthly shipment shall consist of one or more Full Container Loads (“FCL”)
of Product, each FCL containing approximately 18 metric tons of material
consisting of approximately 25,000 pounds of molybdenum contained. On or before
September 30 of each year, Company shall notify Distributor of the
proposed schedule for delivery of Products to Distributor during the next year,
based on Company’s mine plan. The Company and the Distributor shall arrange a
mutually acceptable delivery schedule for the Product; provided that Company
shall ship Product in approximately equal monthly quantities. As soon as
reasonably possible after each shipment of

 

3

 

Product leaves the port
of loading, Company shall fax and mail to Distributor a weight and assay
certificate, invoice and a full set of clean on board bills of lading.

 

9.                          PAYMENT

 

Distributor shall
pay the invoice amount of each shipment of Product in US Dollars to the account
indicated on the Company’s invoice, not more than thirty (30) days after the
delivery to Distributor of the Bill of Lading for such shipment. Company
acknowledges and agrees that payment by Distributor’s affiliate, Sojitz Noble
Alloys Corporation, of any amount owed to Company hereunder shall constitute
full and final satisfaction of Distributor’s obligation.

 

10.                    TAXES

 

Company shall pay
all taxes (except for income taxes of Distributor), including those resulting
from future changes and amendments to existing tax laws, which are imposed on
the manufacture, transportation, delivery, sale, or use of Product, other than
taxes imposed on the resale of Product in the Territory. In the event
Distributor shall be required to pay any such tax, or shall do so as a
convenience to Company, Company shall promptly shall reimburse Distributor for
the same.

 

11.                    DISTRIBUTOR’S
EXPENSES

 

All expenses for
traveling, entertainment, office, clerical, office and equipment maintenance,
and general selling expenses that may be incurred by Distributor in connection
with this Agreement will be borne wholly by Distributor. In no case shall the
Company be responsible for such expenses. In lieu of any right to reimbursement
for such expenses, Company hereby grants Distributor an allowance of *** of the
price paid under Section 7 per pound for each pound of molybdenum
contained in Product shipped during the term of this agreement. Distributor
shall be entitled to deduct such allowance from each invoice for Product
shipped hereunder.

 

12.                    PRODUCTION
AND SALES INFORMATION; TRADE NAMES AND TRADEMARKS

 

(a)       Distributor agrees to maintain accurate
records of its activities pursuant to this Agreement, including but not limited
to customer lists, call reports and related market information and to supply
the Company, on a regular basis, with such information and any other
information as the Company may reasonably request.

 

(b)       Company agrees to provide Distributor
with production, product availability and other such information as Distributor
may reasonably request to carry out the purposes of the Agreement.

 

(c)       The Company grants to Distributor, and
Distributor shall have, the right to use the names “Thompson Creek Metals
Company,” “Blue Pearl,” and any other words, names, logos, trade names or
trademarks now or hereafter used by it to designate Product produced from the
Thompson Creek Mine and Langeloth Roaster, in connection with its marketing and
resale of Product. Except as set forth in the preceding sentence, Distributor
expressly acknowledges that

 

4

 

Distributor shall not
acquire any other right, title or interest in, and shall not use any, words,
names, logos, trade names, or trademarks belonging to the Company and its
affiliates.

 

13.                    CUSTOMERS
AND CUSTOMER SERVICE

 

Distributor will
use its commercially reasonable efforts, in portions of the Territory chosen by
it in its sole discretion, to (i) promote the development of markets and
uses for the Product, (ii) render customer support service to customers in
accordance with the Company’s directions, and (iii) promote the placement
of orders by customers for the Product. Distributor shall not knowingly
distribute Product to arty customer that is purchasing Product primarily for
purposes of resale rather than use in customer’s business.

 

14.                    TERMINATION

 

This Agreement may
be terminated only upon the occurrence of a material breach by either of the
parties.

 

15.                    CONFIDENTIALITY

 

(a)       Company and Distributor shall each
maintain the confidentiality of the terms of this Agreement and the information
that it (as recipient, “Receiving Party”) acquires under this Agreement
from the other party (as disclosing party, “Disclosing Party”) about the
business of the Disclosing Party (the “Confidential Information”), as
provided in this Section. “Confidential Information” shall not include
information which (i) is or becomes generally available to the public
other than as a result of a disclosure by the Receiving Party or its Representatives
in violation of this Agreement or other obligation of confidentiality, (ii) was
available to the Receiving Party on a non-confidential basis prior to its
disclosure by the Disclosing Party or its Representatives, (iii) was
available to Receiving Party or its Representatives under other agreements
between Receiving Party and Disclosing Party or their affiliates relating to (A) the
Endako molybdenum mine and processing plant and other properties located in
British Columbia, Canada, or (B) the Agreement dated September 28,
2005 regarding the purchase of molybdenum from the Thompson Creek Mine, as
amended (collectively, the “Other Agreements”) fund the confidentiality
of such information shall remain subject to the Other Agreements), or (iv) becomes
available to the Receiving Party on a non-confidential basis from a person
(other than the Disclosing Party or its Representatives) who is not known to
the Receiving Party to be prohibited from disclosing such information to the
Receiving Party by a legal, contractual or fiduciary obligation to the
Disclosing Party or any of its Representatives. “Representative” means,
as to either party, such person’s affiliates and its and their controlling
persons, directors, officers, employees, agents, advisors (including, without
limitation, financial institutions, counsel and accountants).

 

(b)       Subject to paragraph (a), unless
otherwise agreed to in writing by the Disclosing Party, the Receiving Party
agrees:

 

(i)                       except as
required by Law (as defined below) or permitted under the Other Agreements, to
keep confidential and not to disclose or reveal any to any person, other than
Receiving Party’s Representatives assisting Receiving Party to carry

 

5

 

out the purposes
of this Agreement the Confidential Information, the Confidential Information;
and

 

(ii)                    not to use
Confidential Information for any purpose other than (A) to carry out the
purposes of this Agreement, and (B) any other purposes for which Receiving
Party is expressly entitled to use such Confidential Information under the
Other Agreements, including without limitation audit rights of Receiving Party
or its affiliates under the Other Agreements.

 

“Law” means any
applicable law, regulation (including, without limitation, any rule, regulation
or policy statement of any organized, securities exchange, market or automated
quotation system on which any of either party’s securities are listed or
quoted) or any order or other legal process of any court or governmental agency.

 

(c)       Prior to making
or issuing any press release or other public announcement or disclosure
concerning this Agreement or the transactions contemplated herein, the party
contemplating such disclosure first shall consult with the other party, and the
Parties together shall agree upon the content and timing of such announcement
or disclosure; provided, however, that disclosure prior to such agreement may
be made if, in the good faith judgment of the disclosing party, there is not
sufficient time to consult with and obtain agreement from the other party
before such announcement or disclosure must be made under applicable laws. In
the case where disclosure is made prior to the parties’ agreement on content
and timing, the disclosing party shall notify the other party before such
announcement or disclosure is made if at all reasonably possible; but if not,
then as soon as reasonably possible thereafter.

 

16.                    COMPLIANCE
WITH LAWS

 

Distributor and
Company shall give all necessary notices and shall comply and ensure that their
respective employees comply with all applicable laws, ordinances, governmental rules and
regulations relative to, as the case may be, the Distributor’s or Company’s
obligations pursuant to this Agreement.

 

17.                 INDEMNIFICATION

 

Distributor agrees
to indemnify Company, its agents and employees against all claims, damages,
losses, and expenses, including reasonable attorney’s fees, of Company or
others, arising out of the breach by Distributor of this Agreement. Company
shall indemnify Distributor, its agents and employees against all claims,
damages, losses, and expenses, including reasonable attorney’s fees, of
Distributor or others, arising out of the breach by Company of this Agreement.

 

18.                  ASSIGNMENT

 

This Agreement may
not be assigned or otherwise transferred by either party without the written
consent of the other party.

 

6

 

19.      GOVERNING LAW AND
DISPUTE RESOLUTION

 

This Agreement
shall be construed, interpreted and enforced in accordance with, and the
respective rights and obligations of the parties shall be governed by, the laws
of the state of Colorado, excluding conflicts of law principles thereof that
would require or permit the application of the laws of a different
jurisdiction, including without limitation the United Nations Convention on
Contracts for the International Sale of Goods. If any dispute between the parties
arises concerning or relating to this Agreement (other than any claim alleging
that Product is non-conforming to the Specifications, which shall be resolved
under the procedure of Section 6), and initial negotiations are
unsuccessful in resolving such disagreement or dispute within 15 calendar days
following written notice thereof, the matter shall be referred for resolution
to one senior executive of each party having at least the title of Vice
President, General Manager, or their equivalent. If such senior executives
fail, after reasonable good faith efforts, to arrive at a satisfactory
resolution of such dispute within 30 calendar days following the date of the
initial written notice of dispute, or if no such officer of a party is made
available to confer within that period, either party may initiate binding
arbitration to resolve the dispute. Any such arbitration shall be administered
by the International Chamber of Commerce and conducted pursuant to the Rules of
Arbitration of the International Chamber of Commerce (“Rules”) before
one or more arbitrators appointed in accordance with the Rules. If the amount
of the dispute is $1 million or less, the parties agree that the dispute shall
be heard and resolved by one arbitrator appointed pursuant to the Rules;
otherwise, the parties agree that the dispute shall be heard and resolved by
three arbitrators appointed pursuant to the Rules (except that the two
party-appointed arbitrators and not the ICC Court shall appoint the chair). The
parties agree that the two party-appointed arbitrators shall select the chair
not later than 30 days after the date the second arbitrator is appointed. The
place of arbitration shall be Denver, Colorado, and the arbitration shall be
conducted in the English language. The award of the arbitrators shall be final
and binding upon the parties and judgment thereon may be entered in any court
of competent jurisdiction.

 

20.      ENTIRE AGREEMENT;
RELATIONSHIP OF PARTIES

 

This Agreement
constitutes the entire agreement between the parties relating to the
distributorship and sale of Product described herein. The parties acknowledge
and agree that neither of them has made any representation with respect to the
subject matter of the Agreement or any representations inducing its execution
and delivery except those specifically set forth. Each of the parties
acknowledges that such party has relied on the party’s own judgment in entering
into the Agreement. This Agreement shall not limit, amend, or otherwise affect
the rights and obligations of either party or their affiliates under the Other
Agreements. Nothing contained in this Agreement shall be deemed to constitute
either party the partner or the venturer of the other, or, to constitute either
party the agent or legal representative of the other, or to create any
fiduciary relationship between them. The parties do not intend to create, and
this Agreement shall not be construed to create, any mining, commercial or
other partnership or joint venture.

 

21.      NOTICES

 

Any notice
required or desired to be given hereunder shall be effective if made in writing
and delivered in person, or by recognized overnight courier, sent by facsimile
transmission, or sent by certified or registered U.S. mail, return receipt
requested, to the following addresses or to

 

7

 

such other person or
address as such party may have specified in a notice duly given in accordance
with this Section:

 

	
  If to
  Company:

  	
   

  	
  If to Sojitz:

  
	
   

  	
   

  	
   

  
	
  Blue Pearl Mining Ltd.

  6 Adelaide Street East

  Suite 500

  	
   

  	
  Sojitz Corporation

  1-20, Akasaka 6-chorne

  
	
   

  	
   

  	
   

  
	
  Toronto, ON M5C 1H6

  Attention: Ian McDonald

   

  Fax No.: 416-367-0182

  	
   

  	
  Minato-ku, Tokyo,
  107-8655 Japan

  Attn: Shigeru Ohno, General Manager

            Iron
  Ore & Ferro Alloys Dept.

  Fax:     +81-3-5520-3517

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Sojitz Noble Alloys
  Corporation

  1211 Avenue of the Americas

  New York, New York 10036

  
	
   

  	
   

  	
  Attn: 

  	
  Kiyotaka Tomita

  
	
   

  	
   

  	
  Fax:

  	
  (212) 704-6630

  

 

22.       FORCE 
MAJEURE

 

(a)       Either party hereto
shall be relieved from liability for delay in performance or failure to
perform any of the obligations herein imposed, except the obligation to pay for
the Product already delivered, for the time and to the extent such delay or
failure (including Distributor’s failure to take delivery or Company’s failure
to make delivery of Product) is occasioned by acts of God, or acts of public
enemy; strike, lockout, or other industrial disturbances, riots, flood,
hurricanes, fire, explosion; or any other cause or causes of any kind or
character beyond the reasonable control of the party delayed or failing to
perform and which by the exercise of reasonable diligence the party is unable
to prevent (any such cause herein called “Force Majeure”).
Notwithstanding this Force Majeure clause, reduction or cessation of operations
as a result of economic conditions and the fact that the price of the Product
provided for in this Agreement is divergent from the market price shall not be
events of Force Majeure and thus shall not operate to relieve either party from
the obligation to perform.

 

(b)       A party shall be excused from its
obligations hereunder during a period of Force Majeure affecting that party to
the extent prevented by Force Majeure, provided that:

 

(i)                       The party
claiming Force Majeure gives the other party prompt written notice describing
the particulars of the occurrence of the condition or event of Force Majeure;

 

(ii)                    The suspension
of performance is of no greater scope and of no longer duration than is
required by the condition or event of Force Majeure;

 

8

 

(iii)                 The
non-performing party proceeds with reasonable diligence to remedy its inability
to perform and provides monthly progress reports to the other party describing
actions taken to end the non-performance due to the condition or event of Force
Majeure; and

 

(iv)                As soon as the
non-performing party is able to resume performance of its obligations under
this Agreement, that Party shall give the other Party written notice to that
effect.

 

(c)       If Company claims Force Majeure, Company
shall reimburse Distributor for any additional costs incurred by Distributor to
obtain molybdenum products from other sources to satisfy any contracts of
Distributor to re-sell Product that existed on the date of Distributor’s receipt
of notice of such Force Majeure, or shall sell sufficient Product to
Distributor to meet the requirements of such contracts.

 

(d)       The Term of this Agreement shall be
extended by all periods of Force Majeure affecting Company. Company shall not
be entitled to terminate this Agreement as a result of Force Majeure affecting
Company, regardless of duration. Either party may terminate this Agreement as a
result of Force Majeure affecting the other party for a continuous period of
more than one year.

 

23.       CONDITION PRECEDENT

 

This Agreement is
subject to the condition precedent that the Company shall acquire majority
ownership of the Thompson Creek Mine, pursuant to the Acquisition or otherwise.
Promptly following the closing of such transaction, Company agrees at the
request of Distributor to cause TCMC and its subsidiaries to execute an
acknowledgment and ratification of this Agreement.

 

24.       EXECUTION; COUNTERPARTS

 

This Agreement may
be executed in one or more counterparts, all of which together shall constitute
one and the same agreement. Once executed, the parties may exchange executed
signature pages by facsimile transmission; and upon receipt by each party
of the signature page duly executed by the other party, the parties shall
be bound as fully as if each party was in possession of a fully-executed
original of this Agreement. Promptly following such exchange by facsimile
transmission, if made, the parties agree to exchange the executed originals of
this entire Agreement by U.S. Mail or overnight mail, so that each party
ultimately is in possession of at least one fully-executed original hereof.

 

25.       MODIFICATION; WAIVER

 

This Agreement
shall not be modified or amended, and no term, condition or provision hereof
shall be waived, in whole or in part, except in a writing executed by a duly
authorized representative of each party hereto.

 

9

 

26.       MUTUAL AGREEMENT

 

The terms and
conditions of this Agreement have been determined by the mutual negotiation of
the parties hereto, and no provision hereof shall be construed against one
party or in favor of another party merely by reason of the party who prepared
or was responsible for the draftsmanship.

 

27.       SEVERABILITY

 

In the event any
provision of this Agreement conflicts with the law under which this Agreement
shall be construed, such provision shall be deleted from this Agreement, and
the Agreement shall be construed to give effect to the remaining provisions
hereof.

 

28.       HEADINGS

 

The headings in
this Agreement are inserted for convenience of reference only, shall not be
considered a part of this Agreement, and shall not affect the validity or
interpretation of this Agreement.

 

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

 

	
  SOJITZ
  CORPORATION

  	
   

  	
  BLUE
  PEARL MINING LTD.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
  /s/ Illegible

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
  Chairman &
  C.E.O.

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
  September 1, 2006

  

 

10

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