Document:

fs8ex4i_chinadigital.htm

    
      Exhibit
4.1

      CHINA
DIGITAL COMMUNICATION GROUP

      2009
EQUITY INCENTIVE PLAN

      

      1.    NAME.

      

      The name
of the plan is "CHINA DIGITIAL COMMUNICATION GROUP 2009 EQUITY INCENTIVE
PLAN."

      

      2.    PURPOSE.

      

      The
purpose of this Plan is to provide incentives to attract, retain and motivate
eligible persons whose presence and potential contributions are important to the
success of the Company, and Subsidiaries (if any), by offering them an
opportunity to participate in the Company's future performance through awards of
Options, Restricted Stock and Stock Awards. Capitalized terms not defined in the
text are defined in Section 3.

      

      3.    DEFINITIONS.

      

      As used
in this Plan, the following terms will have the following meanings:

      

      "AWARD"
means any award under this Plan, including any Option, Restricted Stock or Stock
Award.

      

      "AWARD
AGREEMENT" means, with respect to each Award, the signed written agreement
between the Company and the Participant setting forth the terms and conditions
of the Award.

      

      "BOARD"
means the Board of Directors of the Company.

      

      "CAUSE"
means any cause, as defined by applicable law, for the termination of a
Participant's employment with the Company or Subsidiary of the
Company.

      

      "CODE"
means the Internal Revenue Code of 1986, as amended.

      

      "COMMITTEE"
means the Board of Directors.

      

      "COMPANY"
means CHINA DIGITAL COMMUNICATION GROUP, a Nevada corporation, or any successor
corporation.

      

      "DISABILITY"
means a disability, whether temporary or permanent, partial or total, as
determined by the Committee.

      

      "EXCHANGE
ACT" means the Securities Exchange Act of 1934, as amended.

      

      "EXERCISE
PRICE" means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option.

      

      "FAIR
MARKET VALUE" means, as of any date, the value of a share of the Company's
Common Stock determined as follows:

      

                 (a)
if such  Common  Stock
is  publicly  traded  and is
then  listed  on a national securities
exchange,  its closing price on the date of determination on the
principal national  securities  exchange on which the Common
Stock is listed or admitted to trading as reported in The Wall Street
Journal;

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      
 

                 (b)
if such Common Stock is quoted on the NASDAQ National  Market, its
closing  price on the NASDAQ  National  Market on
the date of determination as reported in The Wall Street Journal;

      

                 (c)
if such Common Stock is publicly  traded but is not listed or admitted
to trading on a national securities exchange, the average of the closing bid and
asked  prices  on the date
of  determination  as  reported  in
The  Wall  Street Journal;

      

                 (d)
the price per share at which shares of the Company's Common Stock are initially
offered for sale to the public by the Company's underwriters in the initial
public offering of the Company's Common Stock pursuant to a registration
statement filed with the SEC under the Securities Act if the Award is made on
the effective date of such registration statement; or

      

                 (e)
if none of the  foregoing  is  applicable, by the
Committee in good faith.

      

      "INSIDER"
means an officer or director of the Company or any other person whose
transactions in the Company's Common Stock are subject to Section 16 of the
Exchange Act.

      

      "OPTION"
means an award of an option to purchase Shares pursuant to Section
7.

      

      "PARENT"
means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the
company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such
chain.

      

      "PARTICIPANT"
means a person who receives an Award under this Plan.

      

      "PERFORMANCE
FACTORS" means the factors selected by the Committee, in its sole and absolute
discretion, from among the following measures to determine whether the
performance goals applicable to Awards have been satisfied:

      

                 (a)   Net
revenue and/or net revenue growth;

      

                 (b)   Earnings
before income taxes and amortization and/or earnings before income taxes
andamortization
growth;

      

                 (c)   Operating
income and/or operating income growth;

      

                 (d)   Net
income and/or net income growth;

      

                 (e)   Earnings
per share and/or earnings per share growth;

      

                 (f)   Total
stockholder return and/or total stockholder return growth;

      

                 (g)   Return
on equity;

      

                 (h)   Operating
cash flow return on income;

      

                 (i)   Adjusted
operating cash flow return on income;

      

                 (j)   Economic
value added; and

      

                 (k)   Individual
business objectives.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      "PERFORMANCE
PERIOD" means the period of service determined by the Committee, not to exceed
five years, during which years of service or performance is to be measured for
Restricted Stock Awards or Stock Awards.

      

      "PLAN"
means this CHINA DIGITAL COMMUNICATION GROUP 2009 Equity Incentive Plan, as
amended from time to time.

      

      "RESTRICTED
STOCK AWARD" means an award of Shares pursuant to Section 8.

      

      "SEC"
means the U.S. Securities and Exchange Commission.

      

      "SECURITIES
ACT" means the Securities Act of 1933, as amended.

      

      "SHARES"
means shares of the Company's Common Stock reserved for issuance under this
Plan, as adjusted pursuant to Sections 4 and 19, and any successor
security.

      

      "STOCK
AWARD" means an award of Shares, or cash in lieu of Shares, pursuant to Section
9.

      

      "SUBSIDIARY"
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.

      

      "TERMINATION"
or "TERMINATED" means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an
employee, officer, director, consultant, independent contractor, or advisor to
the Company or a Parent or Subsidiary of the Company. An employee will not be
deemed to have ceased to provide services in the case of (i) sick leave, (ii)
military leave, or (iii) any other leave of absence approved by the Company,
provided that such leave is for a period of not more than 90 days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute or unless provided otherwise pursuant to a formal policy adopted from
time to time by the Company and issued and promulgated to employees in
writing.  In the case of any employee on an approved leave of absence,
the Committee may make such provisions respecting suspension of vesting of the
Award while on leave from the employ of the Company or a Subsidiary as it may
deem appropriate, except that in no event may an Option be exercised after the
expiration of the term set forth in the Option agreement.

      

      The
Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "Termination Date").

      

      4.    SHARES
SUBJECT TO THE PLAN.

      

                 4.1
Number of Shares Available. Subject to Sections 4.2 and 19, the total aggregate
number of Shares initially reserved and available for grant and issuance
pursuant to this Plan will be 1,000,000 Shares and will include Shares that are
subject to: (a) issuance upon exercise of an Option but cease to be subject to
such Option for any reason other than exercise of such Option; (b) an Award
granted hereunder but forfeited or repurchased by the Company at the original
issue price; and (c) an Award that otherwise terminates without Shares being
issued. At all times the Company shall reserve and keep available a sufficient
number of Shares as shall be required to satisfy the requirements of all
outstanding Options granted under this Plan and all other outstanding but
unvested Awards granted under this Plan.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      
 

                 4.2
Adjustment of Shares. In the event that the number of outstanding shares is
changed by a stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in the capital
structure of the Company without consideration, then (a) the number of Shares
reserved for issuance under this Plan, (b) the Exercise Prices of and number of
Shares subject to outstanding Options, and (c) the number of Shares subject to
other outstanding Awards will be proportionately adjusted, subject to
any
required action by the Board or the stockholders of the Company and compliance
with applicable securities laws; provided, however, that fractions of a Share
will not be issued but will either be replaced by a cash payment equal to the
Fair Market Value of such fraction of a Share or will be rounded up to the
nearest whole Share, as determined by the Committee.

      

      5.    ELIGIBILITY.

      

      ISOs (as
defined in Section 7 below) may be granted only to employees (including officers
and directors who are also employees) of the Company or of a Parent or
Subsidiary of the Company. All other Awards may be granted to employees,
officers, directors, consultants, independent contractors and advisors of the
Company or any Parent or Subsidiary of the Company, provided such consultants,
contractors and advisors render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction and do not
directly promote or maintain a market for the Company’s securities. A person may
be granted more than one Award under this Plan.

      

      6.    ADMINISTRATION.

      

                 6.1
Committee Authority. This Plan will be administered by the Committee or by the
Board acting as the Committee. Subject to the general purposes, terms and
conditions of this Plan, and to the direction of the Board, the Committee will
have full power to implement and carry out this Plan. Without limitation, the
Committee will have the authority to:

      

                  6.1.1
construe and interpret this Plan, any Award Agreement and any other agreement or
document executed pursuant to this Plan;

      

                  6.1.2
prescribe, amend and rescind rules and regulations relating to this Plan or any
Award;

      

                  6.1.3
select persons to receive Awards;

      

                  6.1.4
determine the form and terms of Awards;

      

                  6.1.5
determine the number of Shares or other consideration subject to
Awards;

      

                  6.1.6
determine whether Awards will be granted singly, in combination with, in tandem
with, in replacement of, or as alternatives to, other Awards under this Plan or
any other incentive or compensation plan of the Company or any Parent or
Subsidiary of the Company;

      

                  6.1.7
grant waivers of Plan or Award conditions;

      

                  6.1.8
determine the vesting, exercisability and payment of Awards;

      

                  6.1.9
correct any defect, supply any omission or reconcile any inconsistency in this
Plan, any Award or any Award Agreement;

      

                  6.1.10
determine whether an Award has been earned; and

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

                  6.1.11
make all other determinations necessary or advisable for the administration of
this Plan.

       

            6.2
Committee Discretion. Any determination made by the Committee with respect to
any Award will be made at the time of grant of the Award or, unless in
contravention of any express term of this Plan or Award, at any later time, and
such determination will be final and binding on the Company and on all persons
having an interest in any Award under this Plan. The Committee may delegate to
one or more officers of the Company the authority to grant an Award under this
Plan to Participants who are not Insiders of the Company.

      

      7.    OPTIONS.

      

      The
Committee may grant Options to eligible persons and will determine whether such
Options will be Incentive Stock Options within the meaning of the Code ("ISO")
or Nonqualified Stock Options ("NQSOs"), the number of Shares subject to the
Option, the Exercise Price of the Option, the period during which the
option

      may be
exercised, and all other terms and conditions of the Option, subject to the
following:

      

            7.1
Form of Option Grant. Each Option granted under this Plan will be evidenced by
an Award Agreement which will expressly identify the Option as an ISO or an NQSO
(hereinafter referred to as the "Stock Option Agreement"), and will be in such
form and contain such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this
Plan.

      

            7.2
Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, unless otherwise
specified by the Committee. The Stock Option Agreement and a copy of this Plan
will be delivered to the Participant within a reasonable time after the granting
of the Option.

      

            7.3
Exercise Period. Options may be exercisable within the times or upon the events
determined by the Committee as set forth in the Stock Option Agreement governing
such Option; provided, however, that no Option will be exercisable after the
expiration of ten (10) years from the date the Option is granted; and provided
further that no ISO granted to a person who directly or by attribution owns more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of any Parent or Subsidiary of the Company ("Ten Percent
Stockholder") will be exercisable after the expiration of five (5) years from
the date the ISO is granted. The Committee also may provide for Options to
become exercisable at one time or from time to time, periodically or otherwise,
in such number of Shares or percentage of Shares as the Committee determines,
provided, however, that in all events a Participant will be entitled to exercise
an Option at the rate of at least 20% per year over five years from the date of
grant, subject to reasonable conditions such as continued employment; and
further provided that an Option granted to a Participant who is an officer,
director or consultant may become fully exercisable, subject to reasonable
conditions such as continued employment, at any time or during any period
established by the Company.

      

            7.4
Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and may be not less than 85% of the Fair
Market Value of the Shares on the date of grant; provided that: (a) the Exercise
Price of an ISO will be not less than 100% of the Fair Market Value of the
Shares on the date of grant; and (b) the Exercise Price of an Option granted to
a Ten Percent Stockholder will not be less than 110% of the Fair Market Value of
the Shares on the date of grant. Payment for the Shares purchased may be made in
accordance with Section 10 of this Plan.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

            7.5
Method of Exercise. Options may be exercised only by delivery to the Company of
a written stock option exercise agreement (the "Exercise Agreement") in a form
approved by the Committee, (which need not be the same for each Participant),
stating the number of Shares being purchased, the restrictions imposed on the
Shares purchased under such Exercise Agreement, if any, and such representations
and agreements regarding the Participant's investment intent and access to
information and other matters, if any, as may be required or desirable by the
Company to comply with applicable securities laws, together with payment in full
of the Exercise Price for the number of Shares being purchased.

      

            7.6
Termination. Notwithstanding the exercise periods set forth in the Stock Option
Agreement, exercise of an Option will always be subject to the
following:

      

                  7.6.1
If the Participant's service is Terminated for any reason except death or
Disability, then the Participant may exercise such Participant's Options only to
the extent that such Options would have been exercisable upon the Termination
Date no later than three (3) months after the Termination Date (or such longer
time period not exceeding five (5) years as may be determined by the Committee,
with any exercise beyond three (3) months after the Termination Date deemed to
be an NQSO).

      

                  7.6.2
If the Participant's service is Terminated because of the Participant's death or
Disability (or the Participant dies within three (3) months after a Termination
other than for Cause or because of Participant's Disability),
then the Participant's Options may be exercised only to the extent that such
Options would have been exercisable by the Participant on the Termination Date
and must be exercised by the Participant (or the Participant's legal
representative) no later than twelve (12) months after the Termination Date (or
such longer time period not exceeding five (5) years as may be determined by the
Committee, with any such exercise beyond (i) three (3) months after the
Termination Date when the Termination is for any reason other than the
Participant's
death or Disability, or (ii) twelve (12) months after the Termination Date when
the Termination is for Participant's death or Disability, deemed to be an
NQSO).

      

                  7.6.3
Notwithstanding the provisions in paragraph 7.6(a) above, if the Participant's
service is Terminated for Cause, neither the Participant, the Participant's
estate nor such other person who may then hold the Option shall be entitled to
exercise any Option with respect to any Shares whatsoever, after Termination,
whether or not after Termination the Participant may receive payment from the
Company or a Subsidiary for vacation pay, for services rendered prior to
Termination, for services rendered for the day on which Termination occurs, for
salary in lieu of notice, or for any other benefits. For the purpose of this
paragraph, Termination shall be deemed to occur on the date when the Company
dispatches notice or advice to the Participant that his service is

      Terminated.

      

            7.7
Limitations on Exercise. The Committee may specify a reasonable minimum number
of Shares that may be purchased on any exercise of an Option, provided that such
minimum number will not prevent the Participant from exercising the Option for
the full number of Shares for which it is then exercisable.

      

            7.8
Limitations on ISO. The aggregate Fair Market Value (determined as of the date
of grant) of Shares with respect to which ISO are exercisable for the first time
by a Participant during any calendar year (under this Plan or under any other
incentive stock option plan of the Company, Parent or Subsidiary of the Company)
will not exceed $100,000. If the Fair Market Value of Shares on the date of
grant with respect to which ISO are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the
first $100,000 worth of Shares to become exercisable in such calendar year will
be ISO and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSOs. In the event that the Code or
the regulations promulgated thereunder are amended after the Effective Date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISO, such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      
 

            7.9
Modification, Extension or Renewal. The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution
therefore, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant's rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.
The Committee may reduce the Exercise Price of outstanding Options without the
consent of Participants affected by a written notice to them; provided, however,
that the Exercise Price may not be reduced below the minimum Exercise Price that
would be permitted under Section 7.4 of this Plan for Options granted on the
date the action is taken to reduce the Exercise Price.

      

            7.10
No Disqualification. Notwithstanding any other provision in this Plan, no term
of this Plan relating to ISO will be interpreted, amended or altered, nor will
any discretion or authority granted under this Plan be exercised,
so as to disqualify this Plan under Section 422 of the Code or, without the
consent of the Participant affected, to disqualify any ISO under Section 422 of
the Code.

      

      8.    RESTRICTED
STOCK.

      

      A
Restricted Stock Award is an offer by the Company to sell to an eligible person
Shares that are subject to restrictions. The Committee will determine to whom an
offer will be made, the number of Shares the person may purchase, the price to
be paid (the "Purchase Price"), the restrictions to which the Shares will be
subject, and all other terms and conditions of the Restricted Stock Award,
subject to the following:

      

            8.1
Form of Restricted Stock Award. All purchases under a Restricted Stock Award
made pursuant to this Plan will be evidenced by an Award Agreement (the
"Restricted Stock Purchase Agreement") that will be in such form (which need not
be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of this
Plan. The offer of Restricted Stock will be accepted by the Participant's
execution and delivery of the Restricted Stock Purchase Agreement and full
payment
for the Shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person
does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within thirty (30) days, then the
offer will terminate, unless otherwise extended by the Committee.

      

            8.2
Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted Stock
Award will be determined by the Committee on the date the Restricted Stock Award
is granted and may not be less than 85% of the Fair Market Value of the Shares
on the grant date, except in the case of a sale to a Ten Percent Stockholder, in
which case the Purchase Price will be 100% of the Fair Market Value. Payment of
the Purchase Price must be made in accordance with Section 10 of this
Plan.

      

            8.3
Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to
such restrictions as the Committee may impose. These restrictions may be based
upon completion of a specified number of years of service with the Company or
upon completion of the performance goals as set out in advance in the
Participant's individual Restricted Stock Purchase Agreement. Restricted Stock
Awards may vary from Participant to Participant and between groups of
Participants. Prior to the grant of a Restricted Stock Award, the Committee
shall:
(a) determine the nature, length and starting date of any Performance Period for
the Restricted Stock Award; (b) select from among the Performance Factors to be
used to measure performance goals, if any; and (c) determine the number of
Shares that may be awarded to the Participant. Prior to the payment of any
Restricted Stock Award, the Committee shall determine the extent to which such
Restricted Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Restricted Stock
Awards that are subject to different Performance Periods and have different
performance goals and other criteria.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

            8.4
Termination During Performance Period. If a Participant is Terminated during a
Performance Period for any reason, then such Participant will be entitled to
payment (whether in Shares, cash or otherwise) with respect to the Restricted
Stock Award only to the extent earned as of the date of Termination in
accordance with the Restricted Stock Purchase Agreement, unless the Committee
determines otherwise.

      

      9.    STOCK
AWARDS.

      

            9.1
Awards of Stock. A Stock Award is an award of Shares (which may consist of
Restricted Stock) for services rendered to, or to be rendered to, the Company or
any Parent or Subsidiary of the Company. A Stock Award will be awarded pursuant
to an Award Agreement (the "Stock Award Agreement") that will be in such form
(which need not be the same for each Participant) as the Committee will from
time to time approve, and will comply with and be subject to the terms and
conditions of this Plan. A Stock Award may be awarded upon satisfaction of such
performance goals as are set out in advance in the Participant's individual
Stock Award Agreement (the "Performance Stock Award Agreement") that will be in
such form (which need not be the same for each Participant) as the Committee
will from time to time approve, and will comply with and be subject to the terms
and conditions of this Plan. Stock Awards may vary from Participant to
Participant and between groups of Participants, and may be based upon the
achievement of the Company, Parent or Subsidiary and/or individual performance
factors or upon such other criteria as the Committee may determine.

      

            9.2
Terms of Stock Awards. The Committee will determine the number of Shares to be
awarded to the Participant. If the Stock Award is being earned upon the
satisfaction of performance goals pursuant to a Performance Stock Award
Agreement, then the Committee will: (a) determine the nature, length and
starting date of any Performance Period for each Stock Award; (b) select from
among the Performance Factors to be used to measure the performance, if any; and
(c) determine the number of Shares that may be awarded to the Participant. Prior
to the payment of any Stock Award, the Committee shall determine the extent to
which such Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Awards that
are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with
such
performance goals and criteria as may be determined by the Committee. The
Committee may adjust the performance goals applicable to the Stock Awards to
take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.

      

            9.3
Form of Payment. The earned portion of a Stock Award may be paid to the
Participant by the Company either currently or on a deferred basis, with such
interest or dividend equivalent, if any, as the Committee may determine. Payment
may be made in the form of cash or whole Shares or a combination thereof, either
in a lump sum payment or in installments, all as the Committee will
determine.

      

      10.   PAYMENT
FOR SHARE PURCHASES.  Payment for Shares purchased pursuant to this
Plan may be made in cash (by check) or, where expressly approved for the
Participant by the Committee and where permitted by law:

      

            10.1
by cancellation of indebtedness of the Company to the Participant;

      

            10.2
by surrender of shares that either: (1) have been owned by the Participant for
more than six (6) months and have been paid for within the meaning of SEC Rule
144 (and, if such shares were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such shares); or (2) were
obtained by the Participant in the public market;

      

            10.3
by waiver of compensation due or accrued to the Participant for services
rendered or to be rendered to the Company;

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

            10.4
with respect only to purchases upon exercise of an Option, and provided that a
public market for the Company's stock exists:

      

                  10.4.1
through a "same day sale" commitment from the Participant and a broker-dealer
that is a member of the National Association of Securities Dealers (an "NASD
Dealer") whereby the Participant irrevocably elects to exercise the Option and
to sell a portion of the Shares so purchased to pay for the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or

      

                  10.4.2
through a "margin" commitment from the Participant and a NASD Dealer whereby the
Participant irrevocably elects to exercise the Option and to pledge the Shares
so purchased to the NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Company; or

      

                  10.4.3
by any combination of the foregoing.

      

      11.   WITHHOLDING
TAXES.

      

            11.1
Withholding Generally. Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan, the Company may require the Participant to remit
to the Company an amount sufficient to satisfy federal, state and
local withholding tax requirements prior to the delivery of any certificate or
certificates for such Shares. Whenever, under this Plan, payments in
satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.

      

            11.2
Stock Withholding. When, under applicable tax laws, a participant incurs tax
liability in connection with the exercise or vesting of any Award that is
subject to tax withholding and the Participant is obligated to pay the Company
the amount required to be withheld, the Committee may allow the Participant to
satisfy the minimum withholding tax obligation by electing to have the Company
withhold from the Shares to be issued that number of Shares having a Fair Market
Value equal to the minimum amount required to be withheld, determined
on the date that the amount of tax to be withheld is to be determined. All
elections by a Participant to have Shares withheld for this purpose will be made
in accordance with the requirements established by the Committee
and will be in writing in a form acceptable to the Committee.

      

      12.   PRIVILEGES
OF STOCK OWNERSHIP.

      

            12.1
Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and will have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock.

      

            12.2
Financial Statements. The Company will provide financial statements to each
Participant prior to such Participant's purchase of Shares under this Plan, and
to each Participant annually during the period such Participant has Awards
outstanding; provided, however, the Company will not be required to provide such
financial statements to Participants whose services in connection with the
Company assure them access to equivalent information.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      13.   NON-TRANSFERABILITY
OF AWARDS.

      

            13.1
Awards of Stock and Restricted Stock granted under this Plan, and any interest
therein, will not be transferable or assignable by the Participant, and may not
be made subject to execution, attachment or similar process, other than by will
or by the laws of descent and distribution. Awards of Options granted under this
Plan, and any interest therein, will not be transferable or assignable by the
Participant, and may not be made subject to execution, attachment or similar
process, other than by will or by the laws of descent and distribution, by
instrument to an inter vivos or testamentary trust in which the options are to
be passed to beneficiaries upon the death of the trustor, or by gift to
"immediate family" as that term is defined in 17 C.F.R.
240.16a-1(e).

      During
the lifetime of the Participant an Award will be exercisable only by the
Participant. During the lifetime of the Participant, any elections with respect
to an Award may be made only by the Participant unless otherwise determined by
the Committee and set forth in the Award Agreement with respect to Awards that
are not ISOs.

      

            13.2
This restriction shall cease to apply to Shares received as a Stock Award or
Restricted Stock Award under this Plan at the time ownership of such shares
vests in the recipient of the Award. Similarly, this restriction shall not apply
to shares of stock received upon the exercise of vested Options.

      

      14.   CERTIFICATES.

      

      All
certificates for Shares or other securities delivered under this Plan will be
subject to such stop transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.

      

      15.   ESCROW;
PLEDGE OF SHARES.

      

      To
enforce any restrictions on a Participant's Shares, the Committee may require
the Participant to deposit all certificates representing Shares, together with
stock powers or other instruments of transfer approved by the Committee
appropriately endorsed in blank, with the Company or an agent designated by the
Company to hold in escrow until such restrictions have lapsed or terminated, and
the Committee may cause a legend or legends referencing such restrictions to be
placed on the certificates. Any Participant who is permitted to execute a
promissory note as partial or full consideration for the purchase of Shares
under this Plan will be required to pledge and deposit with the Company all or
part of the Shares so purchased as collateral to secure the payment of the
Participant's obligation to the Company under the promissory note; provided,
however, that the Committee may require or accept other or additional forms of
collateral to secure the payment of such obligation and, in any event, the
Company will have full recourse against the Participant under the promissory
note
notwithstanding any pledge of the Participant's Shares or other
collateral.  In connection with any pledge of the Shares, the
Participant will be required to execute and deliver a written pledge agreement
in such form as the Committee will from time to time approve. The Shares
purchased with the promissory note may be released from the pledge on a pro rata
basis as the promissory note is paid.

      

      16.   EXCHANGE
OF AWARDS.

      

      The
Committee may, at any time or from time to time, authorize the Company, with the
consent of the respective Participants, to issue new Awards in exchange for the
surrender and cancellation of any or all outstanding Awards.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      17.   SECURITIES
LAW AND OTHER REGULATORY COMPLIANCE.

      

      An Award
will not be effective unless such Award is in compliance with all applicable
federal and state securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or quoted, as they are in effect on the
date of grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan
prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.

      

      18.   NO
OBLIGATION TO EMPLOY.

      

      Nothing
in this Plan or any Award granted under this Plan will confer or be deemed to
confer on any Participant any right to continue in the employ of, or to continue
any other relationship with, the Company or any Parent or Subsidiary of the
Company or limit in any way the right of the Company or any Parent or Subsidiary
of the Company to terminate Participant's employment or other relationship at
any time, with or without cause.

      

      19.   CORPORATE
TRANSACTIONS.

      

            19.1
Assumption or Replacement of Awards by Successor. In the event of (a) a
dissolution or liquidation of the Company, (b) a merger or consolidation in
which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 19.1,
such Awards will expire on such transaction at such time and on such conditions
as the Committee will determine. Notwithstanding anything in this Plan to the
contrary, the Committee may provide that the vesting of any or all Awards
granted pursuant to this Plan will accelerate upon a transaction described in
this Section 19. If the Committee exercises such discretion with respect to
Options, such Options will become exercisable in full prior to the consummation
of such event at such time and on such conditions as the Committee determines,
and if such Options are not exercised prior to the consummation of the corporate
transaction, they shall terminate at such time as determined by the
Committee.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

         

      

            19.2
Other Treatment of Awards. Subject to any greater rights granted to Participants
under the foregoing provisions of this Section 19, in the event of the
occurrence of any transaction described in Section 19.1, any outstanding Awards
will be treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation, or sale of assets.

      

            19.3
Assumption of Awards by the Company. The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either;
(a) granting an Award under this Plan in substitution of such other company's
award; or (b) assuming such award as if it had been granted under this Plan if
the terms of such assumed award could be applied to an Award granted under this
Plan. Such substitution or assumption will be permissible if the holder of the
substituted or assumed award would have been eligible to be granted an Award
under this Plan if the other company had applied the rules of this Plan to such
grant. In the event the Company assumes an award granted by another company, the
terms and conditions of such award will remain unchanged (except
that the exercise price and the number and nature of Shares issuable upon
exercise of any such option will be adjusted appropriately pursuant to Section
424(a) of the Code). In the event the Company elects to grant a new Option
rather than assuming an existing option, such new Option may be granted with a
similarly adjusted Exercise Price.

      

      20.   ADOPTION
AND EFFECTIVE DATE.

      

      This Plan
is effective as of October 22, 2009, the date it was adopted by the
Board.

      

      21.   STOCKHOLDER
APPROVAL.

      

      This Plan
shall be approved by the stockholders of the Company within twelve (12) months
before or after the date this Plan is adopted by the Board.

      

      22.   TERM
OF PLAN/GOVERNING LAW.

      

      Unless
earlier terminated as provided herein, this Plan will terminate on October 22,
2019. This Plan and all agreements thereunder shall be governed by and construed
in accordance with the laws of the State of Nevada.

      

      23.   AMENDMENT
OR TERMINATION OF PLAN.

      

      The Board
may at any time terminate or amend this Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Board will not, without the
approval of the stockholders of the Company, amend this Plan in any manner that
requires such stockholder approval under the Code, if applicable, or by any
stock exchange or market on which the Common Stock of the Company is listed for
trading.

      

      24.   NONEXCLUSIVITY
OF THE PLAN.

      

      Neither
the adoption of this Plan by the Board, the submission of this Plan to the
stockholders of the Company for approval, nor any provision of this Plan will be
construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

       

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      
 

      25.   ACTION
BY COMMITTEE.

      

      Any
action permitted or required to be taken by the Committee or any decision or
determination permitted or required to be made by the Committee pursuant to this
Plan shall be taken or made in the Committee's sole and absolute
discretion.exh10_1.htm

    MINERAL
PROPERTY

     

    OPTION
AGREEMENT

     

    

     

     

    THIS
AGREEMENT is dated as of the 26 day of October,
2009.

     

    BETWEEN:

     

    THUNDER BAY MINERALS INC., a company incorporated pursuant to
the laws of Alberta with an office at 81039 755 Bonavista Drive SE, Calgary,
Alberta T2J 7C9

     

    (“Thunder”)

    AND:

     

    SOURCE GOLD
CORP., a company
incorporated pursuant to the laws of Nevada with an office at Suite 100 – 11245
Valley Ridge Drive, Calgary, Alberta, T3B 5V4.

     

    (“Source”)

     

    WHEREAS:

     

    A. Thunder
is the owner of an undivided 100% legal and beneficial interest in those 19 mineral claims
located north of Thunder Bay, Ontario, more particularly described in Schedule A
to this Agreement (the “Property”);

     

    B.           Thunder
has agreed to sell to Source an undivided 50% legal and beneficial interest in
the Property on the terms described herein.

     

    THEREFORE in consideration of
the mutual covenants and agreements in this Agreement, the Parties agree as
follows:

    

    

    
      	
              1.  

            	
              Definitions
      and Interpretation

            

    

     

    1.1 For the
purposes of this Agreement:

     

    “Affected Party” has the
meaning set forth in section 12.1;

     

    “Affiliate” means any person,
partnership, joint venture, corporation or other form of enterprise which
directly or indirectly controls, is controlled by, or is under common control
with, a party to this Agreement.  For purposes of the preceding
sentence, “control”
means possession, directly or indirectly, of the power to direct or cause
direction of management and policies through ownership of voting securities,
contract, voting trust or otherwise;

     

    “Agents” mean servants,
employees, agents, workmen and contractors;

     

    “Closing” has the meaning set
forth in section 4.5;

     

     

     

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    “Data” means all information
and data, including without limitation, topographical data, which is in digital
form and is in the possession or under the control of Thunder or its Affiliates
relating to the Property;

     

    “Deed” has the meaning set
forth in section 5.1;

     

    “Effective Date” means the
date of execution of this Agreement;

     

    “Encumbrances” mean any and
all mortgages, pledges, security interests, liens, charges, encumbrances,
contractual obligations and claims of others, recorded and unrecorded,
registered and unregistered.

     

    “Environmental Laws” means any
and all federal, provincial and local laws, statutes, regulations, ordinances,
bylaws, orders, permits, licences and approvals currently in effect or
subsequently enacted that regulate or provide liabilities or obligations in
relation to mining, mine development and mineral exploration or the existence,
use, production, manufacture, processing, distribution, transport, handling,
storage, removal, treatment, disposal, emission, discharge, migration, seepage,
leakage, spillage or release of Hazardous Substances or the construction,
alteration, use or operation, demolition or decommissioning of any facilities or
other real or personal property in relation to the foregoing or otherwise in
relation to the protection and preservation of the life, health or safety of
persons, or to the protection and preservation of the environment, including but
not limited to, air, soil, surface water, ground water, wildlife or personal or
real property;

     

    “Environmental Liabilities”
means any and all costs, expenses, damages, losses and liabilities of
whatsoever kind, direct or indirect, including but not limited, to fines,
penalties, settlements, interest, property damage and economic loss and costs
and expenses incurred for investigation, study and monitoring and removal,
treatment, storage, disposal, remediation, clean-up, abatement, reclamation or
other activities, for breach of or failure to comply with, or otherwise suffered
or incurred under, or incurred in order to comply with, any and all
Environmental Laws, whether statutory, in contract or in tort, including
negligence and strict liability, or howsoever otherwise, pertaining to the
Property;

     

    “Escrow Agent” has the meaning
set forth in section 5.1;

     

    “Escrowed Documents” has the
meaning set forth in section 5.1;

     

    “Expenditures” means any and
all direct and indirect expenses of or incidental to Operations conducted by or
on behalf of Source or its Affiliates together with any and all costs, fees and
expenses that may be paid to obtain a NI 43-101 compliant technical report,
feasibility, engineering or other studies or reports on or with respect to the
Property.  For greater certainty and without limitation, the costs,
fees and expenses of recording work for assessment credit under applicable
legislation for the benefit of the Property are included in
Expenditures.  There shall be added to and included in “Expenditures”
a charge for Source’s administrative overhead and corporate, technical and
business expenses equal to 9%
of all direct and indirect
expenses and charges;

     

    “Hazardous Substance” means
any substance or material that is or becomes prohibited, controlled or regulated
by any federal, provincial, municipal, local or other level of government and
any government agency, body, corporation, organization, department, official or
authority responsible for administering or enforcing any law and includes any
toxic substance, waste and dangerous goods;

     

    “Joint Venture” means the
joint venture to be formed between Thunder and Source in respect of the Property
(upon payment in full of the Purchase Price) pursuant to the Joint Venture
Agreement;

     

    “Joint Venture Agreement”
means the joint venture agreement to be entered into between Thunder and Source
upon the payment in full of the Purchase Price, substantially in the form
attached as Schedule B hereto;

     

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

     

    “Losses” mean actual losses,
liabilities, damages, injuries, costs or expenses;

     

    “Net Smelter Return Royalty”
means the maximum
three
percent (3.0%) net smelter return royalty in favour of Wheeler provided
in the royalty agreement attached as Schedule C;

     

     “Operations” means any and
every kind of work which Source in its sole and absolute discretion elects to do
or to have done to conduct mineral exploration of the Property during the
Purchase Period;

     

    “OTC BB” means the Over the Counter
Bulletin Board

     

    “Party” means either of Source
or Thunder; and “Parties” mean both Source and
Thunder;

     

    “Person” means any individual,
partnership, company, corporation, unincorporated association, person,
government or governmental agency, authority or entity howsoever designated or
constituted;

     

    “Property” means those claims
more particularly described in Schedule “A” hereto, together with all
prospecting, research, exploration, exploitation, operating and mining permits,
licences and leases associated therewith, mineral, surface, water and ancillary
or appurtenant rights attached or accruing thereto, and any mining licence or
other form of substitute or successor mineral title or interest granted,
obtained or issued in connection with or in place of or in substitution for any
such Property (including, without limitation, any Property issued to cover any
internal gaps or fractions in respect of such ground), and includes any
renewals, extensions or replacements thereof; and includes any claims or lands
acquired within the area of mutual interest as contemplated in section
15.1;

     

    “Purchase Period #1” means the
date hereof through to and including December 31, 2010;

     

    “Purchase Period #2” means
January 1, 2011 through to and including December 31, 2011;

     

    “Rule 144” means Rule 144 of the United States
Securities Act of 1933 (as amended)

     

    “Shares” mean common shares in
the capital of Source;

     

    “Termination Notice” has the
meaning set forth in section 14.1;

     

    “Transfer” when used as a
verb, means to sell, grant, assign, encumber, pledge or otherwise commit or
dispose of, directly or indirectly, including through mergers, consolidations or
asset purchases.  When used as a noun, "Transfer" shall mean a sale,
grant, assignment, pledge or disposal or the commitment to do any of the
foregoing, directly or indirectly, including through mergers, consolidations or
asset purchases; and

     

    “Wheeler” means William James
Wheeler, President of Thunder.

     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

     

     

    1.2 For the
purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:

     

    
      	
              (a)  

            	
              “this Agreement” means
      this Option Agreement and all Schedules attached
  hereto;

            

    

     

    
      	
              (b)  

            	
              any
      reference in this Agreement to a designated “section”, “Schedule”, “paragraph” or other
      subdivision refers to the designated section, schedule, paragraph or other
      subdivision of this Agreement;

            

    

     

    
      	
              (c)  

            	
              the
      words “herein” and
      “hereunder” and
      other words of similar import refer to this Agreement as a whole and not
      to any particular section or other subdivision of this
      Agreement;

            

    

     

    
      	
              (d)  

            	
              the
      word “including”,
      when following any general statement, term or matter, is not to be
      construed to limit such general statement, term or matter to the specific
      items or matters set forth immediately following such word or to similar
      items or matters, whether or not non-limiting language (such as “without limitation” or
      “but not limited
      to” or words of similar import) is used with reference thereto but
      rather refers to all other items or matters that could reasonably fall
      within the broadest possible scope of such general statement, term or
      matter;

            

    

     

    
      	
              (e)  

            	
              any
      reference to a statute includes and, unless otherwise specified herein, is
      a reference to such statute and to the regulations made pursuant thereto,
      with all amendments made thereto and in force from time to time, and to
      any statute or regulation that may be passed which has the effect of
      supplementing or superseding such statute or such
    regulation;

            

    

     

    
      	
              (f)  

            	
              the
      headings in this Agreement are for convenience of reference only and do
      not affect the interpretation of this
Agreement;

            

    

     

    
      	
              (g)  

            	
              words
      importing the masculine gender include the feminine or neuter gender and
      words in the singular include the plural, and vice versa and “shall” has the same
      meaning as the word “will”;

            

    

     

    
      	
              (h)  

            	
              all
      references to currency refer to Canadian
  dollars;

            

    

     

    
      	
              (i)  

            	
              all
      references to business days are to days excluding Saturdays, Sundays and
      banking holidays in the Province of British Columbia;
  and

            

    

     

    
      	
              (j)  

            	
              when
      calculating the period of time within which or following which any act is
      to be done or step is to be taken pursuant to this Agreement, the date
      which is the reference date in calculating such period shall be
      excluded.  If the last day of such period is a non-business day,
      the period in question shall end on the next business
  day.

            

    

     

    1.3 The
following are the Schedules to this Agreement, and are incorporated into this
Agreement:

     

                   Schedule
“A”                               The
Property

                   Schedule
“B”                               Form
of Joint Venture Agreement

                   Schedule
“C”                               RoyaltyAgreement

     

    1.4 Wherever
any term or condition, expressed or implied, in any of the Schedules conflicts
or is at variance with any term or conditions of this Agreement, the terms or
conditions of this Agreement will prevail.

     

     

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    
      	
              2.  

            	
              Representations
      and Warranties

            

    

     

    
      	
              2.1

            	
              Thunder
      represents and warrants to Source
that:

            

    

     

    
      	
              (a)  

            	
              Thunder
      is a valid and subsisting corporation duly incorporated and in good
      standing under the laws of the Province of Alberta.  Thunder has
      full power and authority to carry on its business and to enter into this
      Agreement and any agreement or instrument referred to or contemplated by
      this Agreement and to carry out and perform all of its obligations and
      duties hereunder.  Thunder has duly obtained all corporate and
      all regulatory authorizations for the execution, delivery and performance
      of this Agreement.  This Agreement has been duly executed and
      delivered by Thunder and is valid, binding and enforceable against Thunder
      in accordance with its terms;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Thunder
      is the owner of an undivided 100% legal and beneficial interest in the
      Property, free and clear of any and all Encumbrances
      save and except for the Net Smelter Return
      Royalty.  Thunder has the full power to hold its interest
      in the Property;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Property has been properly staked, located and recorded pursuant to
      applicable laws and regulations of the Province of Ontario and all mining
      claims comprising the Property are in good standing and no event,
      condition or occurrence exists that, after notice or lapse of time or
      both, would constitute a default under such mining claims and all required
      assessment work, reports, fees and payments have been filed or made and
      are current;

            

    

     

    
      	
               
      

            	
              (d)

            	
              there
      is no adverse claim or challenge against or to the ownership of or title
      to any part of the Property and, there is no basis for such adverse claim
      or challenge;

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      consummation of the transactions contemplated by this Agreement does not
      and will not conflict with, constitute a default under, result in a breach
      of, entitle any Person to a right of termination under, or result in the
      creation or imposition of any Encumbrance or restriction of any nature
      whatsoever upon or against the Property or other assets of Thunder, under
      its constating documents, any contract, agreement, indenture or other
      instrument to which Thunder is a party or by which Thunder is bound, any
      law, judgment, order, writ, injunction or decree of any court,
      administrative agency or other tribunal or any regulation of any
      governmental authority;

            

    

     

    
      	
               
      

            	
              (f)

            	
              all
      taxes and charges with respect to the Property have been paid in full as
      of the Effective Date.  Subject to the provisions of section 9,
      no Person has any proprietary or possessory interest in the
      Property.  Save and except for the Net Smelter Return Royalty,
      no Person is entitled to any royalty or other payment in the nature of
      rent or royalty on any minerals, metals or concentrates or any other such
      products removed or produced from the
Property;

            

    

     

    
      	
               
      

            	
              (g)

            	
              there
      is no legal, administrative, arbitration or other proceeding, claim or
      action of any nature or investigation pending or, to the best of Thunder’s
      knowledge after reasonable inquiry, threatened against or involving the
      Property or which questions or challenges the validity of this Agreement
      or any action taken or to be taken by Thunder pursuant to this Agreement
      or any other agreement or instrument to be executed and delivered by
      Thunder in connection with the transactions contemplated hereby and
      Thunder does not know or have any reason to know of any valid basis for
      any such legal, administrative, arbitration or other proceeding, claim,
      action of any nature or investigation.  Thunder is not subject
      to any judgment, order or decree entered in any lawsuit or proceeding
      which has had or may be expected to have an adverse effect on the
      Property;

            

    

     

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (h)

            	
              there
      are no actual or pending proceedings for, and Thunder is unaware of any
      basis for, the institution of any proceedings leading to the placing of
      Thunder in bankruptcy or subject to any other laws governing the affairs
      of insolvent parties and Thunder’s interest in the Property does not
      represent all or substantially all of Thunder’s assets and/or
      undertaking;

            

    

     

    
      	
               
      

            	
              (i)

            	
              to
      the best of Thunder’s knowledge after reasonable inquiry, no Hazardous
      Substance has been placed, held, located, used or disposed of, on, under
      or at the Property by Thunder or any of its Agents.  To the best
      of Thunder’s knowledge after reasonable inquiry, no claim has ever been
      asserted and there are no present circumstances which could reasonably
      form the basis for the assertion of any claim against Thunder for Losses
      of any kind as a direct or indirect result of the presence on or under or
      the escape, seepage, leakage, spillage, discharge, emission or release
      from the Property of any Hazardous
Substance;

            

    

     

    
      	
               
      

            	
              (j)

            	
              there
      are no outstanding work orders or actions required or reasonably
      anticipated to be required to be taken in respect of the rehabilitation or
      restoration of the Property or relating to environmental matters in
      respect of the Property or any operations thereon, nor has Thunder
      received notice of same;

            

    

     

    
      	
               
      

            	
              (k)

            	
              to
      the best of Thunder’s knowledge after reasonable inquiry, all previous
      exploration on the Property has been carried out in accordance with
      applicable law and sound mining, environmental and business
      practice.  Thunder has not received notice of any breach,
      violation or default with respect to the Property.  The
      prospecting work, processes, undertaking and other operations carried on
      or conducted by or on behalf of Thunder in respect of the Property have
      been carried on or conducted in a sound and workmanlike manner and in
      compliance with sound geological and geophysical exploration and mining,
      engineering and metallurgical
practices;

            

    

     

    
      	
               
      

            	
              (l)

            	
              Thunder
      has not received notice of the existence of any condemnation,
      expropriation or similar proceedings affecting the
    Property;

            

    

     

    
      	
               
      

            	
              (m)

            	
              all
      of the buildings, fixtures and improvements located on the Property or
      comprising the Property are in good condition and repair, ordinary wear
      and tear excepted and are usable in the ordinary course of
      business;

            

    

    

    
      	
               
      

            	
              (n)

            	
              Thunder
      has made available to Source all material information in its possession or
      control relating to the Property and throughout the Purchase Period,
      Thunder shall continue to make available to Source all information in its
      possession or control relating to the
Property;

            

    

     

    
      	
               
      

            	
              (o)

            	
              Thunder
      does not have any information or knowledge of any facts pertaining to the
      Property or substances thereon or therefrom not disclosed in writing to
      Source, which if known to Source might reasonably be expected to deter
      Source from completing the transactions contemplated
    hereby;

            

    

     

    
      	
               
      

            	
              (p)

            	
              Thunder
      is not a non-resident of Canada within the meaning of the Income Tax Act
      (Canada); and

            

    

     

    
      	
               
      

            	
              (q)

            	
              there
      is no Person acting or purporting to act at the request of Thunder who is
      entitled to any brokerage or finder’s fee in connection with the
      transactions contemplated herein.

            

    

     

    2.2 At
Source’s request Thunder shall take all action reasonably necessary (including
judicial proceedings) to pay any outstanding fees, taxes, mortgages or liens
against the Property, or remove any doubt from or cure any defect in their title
to the Property or the ground covered thereby.  If Thunder fails or
refuses to take action, Source may take action in Thunder’s name and Thunder
agrees to cooperate with Source in any action taken.  Source may
recover from any payments thereafter to become due to Thunder hereunder all
costs and expenses (including attorneys’ fees) incurred by Source in any such
action, or is no further payments are due, then such payments made by Source
shall qualify as Expenditures hereunder.  Any improvement or
perfection of title to the Property shall inure to the benefit of Source in the
same manner and to the same extent as if such improvement or perfection had been
made prior to the execution of this Agreement.  If any third person
attacks the validity of any of the claims (or portion thereof) for any reason
except Source’s failure to comply with its obligation to pay annual fees and
maintain the Property pursuant to this Agreement, Source shall have no
obligation to defend the validity of the claims.  If Source elects not
to defend the validity of the claims, it shall release and reconvey its interest
therein to Thunder, free and clear of liens and encumbrances arising by, through
or under Source.

     

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

     

    2.3 All
payments and Expenditures payable by Source hereunder are based upon Thunder’s
warranted ownership of the entire undivided interest in the minerals included
within the boundaries of the Property.  If Thunder are found to own
less than 100% of the mineral interests, then all payments payable to Thunder
hereunder including Royalty payments shall be reduced
proportionately.  Such reductions in payments shall not waive or
eliminate any other rights or remedies Source may have in connection with the
extent of Thunder’s actual interest in the Property.

     

    2.4 The
representations and warranties contained in section 2.1 are provided for the
exclusive benefit of Source and the correctness of each such representation and
warranty is a condition upon which Source is relying upon in entering into this
Agreement.  A breach of any one or more of the representations or
warranties may be waived by Source in whole or in part at any time without
prejudice to its rights in respect of any other breach of the same or any other
representation or warranty and the representations and warranties contained in
section 2.1 will survive the execution and delivery of this Agreement
notwithstanding any independent investigations Source may
make.  Thunder agrees to indemnify and hold harmless Source from all
Losses actually incurred by Source in connection with a breach of any
representation or warranty made by Thunder and contained herein, provided that
such representations and warranties shall only have a survival period that
terminates two years following: (i) the payment in full of the Purchase Price;
or (ii) the termination of this Agreement.

     

    2.5 Source
represents and warrants to Thunder that:

     

    
      	
              (a)  

            	
              Source
      is a valid and subsisting corporation duly incorporated and in good
      standing under the laws of the State of
Nevada;

            

    

     

    
      	
              (b)  

            	
              Source
      has full power and authority to enter into this Agreement and to carry out
      and perform all of its obligations and duties
  hereunder;

            

    

     

    
      	
              (c)  

            	
              Source
      has duly obtained all corporate authorizations for the execution, delivery
      and performance of this Agreement;

            

    

     

    
      	
              (d)  

            	
              this
      Agreement has been duly executed and delivered by Source and is valid,
      binding and enforceable against Source in accordance with its
      terms;

            

    

     

    
      	
              (e)  

            	
              there
      is no person acting or purporting to act at Source’s request who is
      entitled to any brokerage or finder’s fee in connection with the
      transactions contemplated herein;

            

    

     

    
      	
              (f)  

            	
              the
      consummation of the transactions contemplated by this Agreement does not
      and will not conflict with, constitute a default under, result in a breach
      of its constating documents or entitle any Person to a right of
      termination under any contract, agreement, indenture or other instrument
      to which Source is a party or by which Source is bound or to any law,
      judgment, order, writ, injunction or decree of any court, administrative
      agency or other tribunal or any regulation of any governmental
      authority;

            

    

     

     

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (g)

            	
              Source
      is a "reporting issuer" within the meaning of the  United States
      Securities Act of
      1933 (as amended), is not in default of any requirement of applicable laws
      and no material change relating to Source has occurred with respect to
      which a requisite material change report has not been filed and no such
      disclosure has been made on a confidential basis.  The common
      shares of Source are listed for trading on the OTC bulletin
      board;

            

    

     

    
      	
               
      

            	
              (h)

            	
              no
      securities commission or similar regulatory authority has issued any order
      preventing or suspending trading in any securities of Source and to the
      best of Source’s knowledge after reasonable inquiry, no such proceeding
      for such purposes are pending or
threatened;

            

    

     

    
      	
               
      

            	
              (i)

            	
              upon
      issuance, the Consideration Shares shall be fully paid and non-assessable
      and shall form part of a class of shares that is listed on the OTC BB,
      subject to Rule 144; and

            

    

     

    
      	
               
      

            	
              (j)

            	
              there
      are no actual or pending proceedings for, and to the best of Source’s
      knowledge after reasonable inquiry, there is no basis for, the institution
      of any proceedings leading to the placing of Source in bankruptcy or
      subject to any other laws governing the affairs of insolvent
      parties.

            

    

     

    2.6 The
representations and warranties contained in section 2.5 are provided for the
exclusive benefit of Thunder and the correctness of each such representation and
warranty is a condition upon which Thunder is relying upon in entering into this
Agreement.  A breach of any one or more representations or warranties
may be waived by Thunder in whole or in part at any time without prejudice to
its rights in respect of any other breach of the same or any other
representation or warranty and the representations and warranties contained in
section 2.5 will survive the execution and delivery of this Agreement
notwithstanding any independent investigations Thunder may
make.  Source agrees to indemnify and hold harmless Thunder from all
Losses actually incurred by Source in connection with a breach of any
representation or warranty made by it and contained herein, provided that such
representations and warranties shall only have a survival period that terminates
two years following: (i) the exercise of the Option; or (ii) the termination of
the Option.

     

    
      	
              3.  

            	
              Purchase
      and Sale

            

    

     

    3.1 In
consideration of the covenants and agreements of Source herein contained,
Thunder hereby agrees to sell, transfer and assign to Source 50% of Thunder’s
right, title and interest in and to the Property for and in consideration of
Source paying the Purchase Price to Thunder.

     

    3.2 The
Purchase Price payable by Source shall be (i) the payment of an aggregate
$110,000 (the “Cash Purchase
Price”), (ii) incurring Expenditures in
the aggregate amount of $1,000,000 on the Property, and (iii) issuing 2,000,000
Shares, as follows:

    

    
      	
               
      

            	
              (a)

            	
              Paying
      a total of $110,000 to Thunder as
follows:

            

    

     

    
      	
               
      

            	
              (i)

            	
              upon
      execution of this Agreement, Source will pay to Thunder the sum of
      $50,000, as a non-refundable deposit toward the Purchase Price, in advance
      of Source commencing its due diligence investigations of the Property as
      contemplated in section 4.1 below;
and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              on
      or before December 1, 2009, Source will pay to Thunder the sum of
      $60,000;

            

    

     

     

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    
 

    
      	
              (b)  

            	
              Source
      shall incur a minimum of $500,000 of Expenditures on the Property on or
      before the expiry of the Purchase Period
#1;

            

    

    

    
      	
              (c)  

            	
              Source
      shall incur a minimum of $500,000 of Expenditures on the Property on or
      before the expiry of the Purchase Period #2;
and

            

    

    

    
      	
              (d)  

            	
              Subject
      to section 3.3 below, Source shall allot and issue 2,000,000 Shares to the
      shareholders of Thunder, which shares shall be subject to the restrictions
      under Rule 144.  In this regard, Thunder covenants to deliver to
      Source, on or before 24 hours following the Closing Date, a list of the
      shareholders of Thunder and instructions as to how the Shares will be
      issued, registered and delivered to each
  shareholder.

            

    

     

    3.3 Thunder
acknowledges that the Shares to be received as part of the Purchase Price will
be subject to resale restrictions in accordance with applicable securities
legislation and the rules of the OTC BB.

     

    3.4 The
Purchase Price will be effectively paid, and the purchase and sale of a 50%
interest in the Properety shall be deemed closed and completed when Source has
made Expenditures which total $1,000,000 and the 2,000,000 Shares have been
issued.  The due date for the making of Expenditures as well as the
Purchase Period shall be extended for such time as access to the Property and/or
work on the Property is prevented by any condition of Force Majeure as described
in section 12.1.

     

    3.5 Notwithstanding
anything herein contained and in addition to any other rights Source may have
under the circumstances, if exploration and development work intended to be
conducted on or for the benefit of the Property is mistakenly conducted outside
the boundaries of the Property as a consequence of it being subsequently
discovered or determined by survey or otherwise that the Property boundaries are
not located where the Parties understood them to be on the Effective Date, such
exploration and development work shall constitute Expenditures hereunder and
Source shall suffer no forfeiture with respect to any interest earned or to be
earned hereunder.

     

    4. Conditions
Precedent

     

    4.1 The
obligation of Source to consummate the transactions contemplated under this
Agreement is subject to the following conditions which are for Source’s sole
benefit and may be waived in writing by Source:

     

    
      	
              (a)  

            	
              Source
      will have received all requisite regulatory approvals to the transactions
      contemplated in this Agreement; and

            

    

     

    
      	
              (b)  

            	
              Source
      will be satisfied as to the title to the Property and its due diligence
      investigations as against Thunder.  Source will have a period of
      30 days to complete its due diligence investigations; and shall at any
      time on or before the expiry of such 30 days notify Thunder as to whether
      it is (i) satisfied with its investigations and that it will proceed to
      Closing in accordance with section 4.5 below, or (ii) not satisfied with
      its investigations and that it will not be proceeding to Closing and that
      the provisions of section 4.3 below will
apply.

            

    

     

    4.2               For
purposes of Source undertaking its due diligence investigations, Source shall be
entitled to: (i) full access to all Data, records, maps, reports, drill core,
documents, and files in Thunder’s possession or to which it may have access,
relating to the Property (“Property Information”); (ii) complete such field
investigations on the Property as Source considers necessary to verify
historical work represented as having been done on the Property; and (iii)
complete its review and investigation of legal title and ownership of the claims
comprising the Property, (collectively the “Due Diligence Review”).

     

     

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    
 

    4.3               If
Source determines, for any reason, to deem its Due Diligence Review
unsatisfactory, it will provide notice to Thunder of the same, at which time (i)
Source will return the Property Information to Thunder together with all new
information gathered by Source pertaining to the Property within 48 hours of
such notice being sent, (ii) Source will remediate any and all disturbances it
made to the Property within 30 days of such notice being sent; and (iii) this
Agreement will terminate without any liability of further obligation whatsoever
on the part of either Party.

    

    4.5               Subject
to compliance with the provisions of section 4.1, upon five days notice from
Source to Thunder, closing shall occur (the “Closing”) at the offices of
Source. On
Closing:

     

    
      	
               
      

            	
              (a)

            	
              Source
      and Thunder shall execute and deliver an acknowledgement to the effect
      that the conditions precedent set forth in section 4.1 have been
      satisfied; and

            

    

     

    
      	
               
      

            	
              (b)

            	
              Source
      shall deliver to Thunder (i) , on or before the date that is 30 days
      following Closing, a share certificate or certificates (as directed by
      Thunder) representing the 2,000,000 Shares; and (ii) a cheque, bank draft
      or wire transfer for $60,000.

            

    

     

    4.6               Source
and Thunder will use their best efforts to assist each other in obtaining the
requisite regulatory approvals required in connection with the execution,
delivery and performance of this Agreement.

     

    4.7               prior
to paying the portion of the Cash Purchase Price identified in subsection 3.2
(a)(ii), Thunder shall have provided evidence to Source, acting reasonably, that
all of the subject claims on the Property are in good standing.

     

    4.7               This
Agreement will terminate if the conditions described in section 4.1 are not
satisfied on or before 7 days from the Effective Agreement.

     

    
      	
              5.  

            	
              Property
      Title and Joint Venture

            

    

     

    5.1 During
the Purchase Period, recorded title to the Property shall remain in the name of
Thunder.  Notwithstanding the foregoing on Closing, Thunder shall
deliver to an independent party to be agreed upon
by and acceptable to both Thunder and
Source (the “Escrow
Agent”) to hold in trust pending payment in full of the Purchase Price or
other termination of this Agreement (the “Escrowed Documents”): (i) a
duly executed copy of a deed/transfer of a 50% interest in the mineral claims in
respect of the Property in registrable or recordable form (the “Deed”) and in content
sufficient pursuant to the laws of the Province of Ontario to transfer a 50%
undivided interest in the Property to Source free and clear of any and all
Encumbrances, subject to the Net Smelter Return Royalty.  The Parties
shall also deliver to the Escrow Agent an indemnification agreement, as required
by the Escrow Agent, on terms and conditions satisfactory to the Escrow
Agent.  The Escrowed Documents shall be held by the Escrow Agent
pending either: (i) termination of the Option in accordance with section 14.1,
in which case the Deed shall be released and delivered to Thunder and the
provisions of section 14.2 will apply; or (ii) upon payment of the Purchase
Price in accordance with section 3.2, the Escrowed Documents shall be released
to Source, and the Parties shall forthwith execute and deliver the Joint Venture
Agreement substantially in the form set out
in Schedule “B”.

     

     

     

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    5.2 During
the Purchase Period, Thunder shall not transfer any of its interest in the
Property and/or this Agreement other than to Source as provided herein, and
shall not grant, create or allow any Encumbrances on the Property.

     

    5.3 Upon
Source having performed all of the requirements of section 3.2, Source will have
paid the Purchase Price in full and have purchased an undivided 50% legal and
beneficial interest in the Property as at such date free and clear of any and
all Encumbrances, subject only to the Net Smelter Return Royalty; and Thunder
and Source will constitute a Joint Venture for the purpose of carrying out
further exploration, development and production work on the Property, and the
provisions of the Joint Venture Agreement will then apply.

     

    
      	
              6.  

            	
              Property
      Exploration and Maintenance

            

    

     

    6.1 During
the Purchase Period Thunder will act as operator, and be entitled to conduct
title management and to lead, define the nature of and execute all exploration
programs and subsequent phases of development on the Property.

     

    6.2 Thunder
shall submit such reports of its exploration activities on the Property to the
appropriate governmental authorities as may be required to maintain the Property
in good standing during the Purchase Period.

     

    
      	
              7.  

            	
              Right
      of Entry

            

    

     

    7.1 Throughout
the Purchase Period, Thunder and its Affiliates and Agents shall have the sole,
exclusive and immediate right in respect of the Property to:

     

    
      	
              (a)  

            	
              enter
      the Property, to have quiet and exclusive possession of the Property and
      to act as operator of the Property;

            

    

     

    
      	
              (b)  

            	
              do
      such prospecting, exploration, development and/or other mining work on and
      under the Property so as to incur
Expenditures;

            

    

     

    
      	
              (c)  

            	
              bring
      erect and install upon the Property such buildings, plant, machinery and
      equipment as Source may deem necessary or desirable in its sole
      discretion; and

            

    

     

    
      	
              (d)  

            	
              remove
      from the Property all metals and minerals derived from Operations on the
      Property as may be deemed necessary by Source for assay and testing
      purposes.

            

    

     

    For
greater certainty and without limitation, it is understood and agreed that
Thunder as operator shall be under no obligation whatsoever to place the
Property into commercial production and if the Property is placed into
commercial production, Source shall have the right at any time to curtail or
suspend such commercial production as Source in its absolute discretion deems
advisable.

     

    8. Recording
of Agreement

     

    8.1 At all
times during the Purchase Period and from and after Closing, Thunder and Source
will execute and deliver such additional documentation as legal counsel for
Thunder and Source determine is necessary in order to duly register and record
in the appropriate registration and recording offices notice that Thunder’s
interest in and to the Property is subject to and bound by the terms of this
Agreement.

     

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

     

    
      	
              9.  

            	
              Obligations
      During Purchase Period

            

    

     

    9.1 During
the Purchase Period, unless this Agreement is terminated in accordance with
subsection 14.1, Source covenants and agrees with Thunder that Source
shall:

     

    
      	
              (a)  

            	
              provide
      to Thunder copies of all correspondence and other written communications
      by Source to and from government authorities with respect to the Property,
      including without limitation, any default notice given to Source,
      forthwith on receipt by Source of such correspondence or written
      communications; and

            

    

     

    
      	
              (b)  

            	
              provide
      to Thunder all technical data and any interpretation or reports on such
      data in its possession relating to the
Property.

            

    

     

    9.2 During
the Purchase Period, unless this Agreement is terminated in accordance with the
provisions hereof, Thunder covenants and agrees with Source that it
will:

     

    
      	
              (a)  

            	
              maintain
      the Property in good standing by doing and filing all assessment work or
      making payments in lieu thereof and by performing all other acts which may
      be necessary in order to keep the Property in good standing and free and
      clear of all Encumbrances arising from or out of its activities on the
      Property;

            

    

     

    
      	
              (b)  

            	
              do
      all work on the Property in a good and workmanlike manner and in
      accordance with sound mining and engineering practices and in compliance
      with all applicable laws, bylaws, regulations, orders and lawful
      requirements of any governmental or regulatory authority and comply with
      all laws governing the possession of the Property, including without
      limitation, those governing safety, pollution and environmental
      matters;

            

    

     

    
      	
              (c)  

            	
              deliver
      to Source within 30 days after receipt by Thunder all engineering and
      geological reports and assay results in respect of samples taken from the
      Property (together with reports showing the location from which the
      samples were taken and the type of samples) and report to Source on a
      monthly basis in respect of all data relevant to the Property, including
      without limitation, opinions and field results, provided that Source will
      indemnify and save Thunder and its Agents harmless with respect to any use
      made by Source of interpretive data prepared by and received from Thunder;
      and

            

    

     

    
      	
              (d)  

            	
              permit
      Source and its duly authorized representatives, at their own sole risk and
      expense, access to the Property at all reasonable times and to all records
      prepared by Thunder in connection with Expenditures.  Such
      access shall not obstruct or interfere with the operation or activities
      conducted by Thunder.

            

    

     

    10. No
Encumbrances Against Property

     

    10.1 During
the Purchase Period, neither Source nor Thunder will be entitled to grant,
create or allow any Encumbrance of or upon the Property or any portion thereof
without the prior written consent of the other Party, which consent may be
unreasonably withheld.

     

    
      	
              11.  

            	
              Royalties
      Encumbering Property

            

    

     

    11.1 Source
acknowledges that the Property is subject to the Net Smelter Return Royalty in
favour of Wheeler to be calculated and paid in accordance with Schedule
“C”.

     

     

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

     

     

    12. Force
Majeure

     

    12.1 If at any
time during the Purchase Period either Party is prevented or delayed in
complying with any of the provisions of this Agreement (the “Affected Party”) by reason of
strikes, lockouts, labour unrest or shortage, power or fuel shortages, fires,
wars, terrorism, acts of God, civil disturbances, governmental regulations
restricting normal operations, shipping delays, title disputes, Native land
claims, or any other reason or reasons beyond the reasonable control of the
Affected Party (provided that lack of sufficient funds to carry out exploration
on the Property will be deemed not to be beyond the reasonable control of the
Affected Party), then the time limited for the performance by the Affected Party
of its obligations hereunder will be extended by a period of time equal in
length to the period of each such prevention or delay.  Nothing in
this section 12.1 or this Agreement will relieve either Party from its
obligation to maintain the mineral claims comprising the Property in good
standing and to comply with all applicable laws and regulations, including
without limitation, those governing safety, pollution and environmental
matters.

     

    12.2 The
Affected Party will give notice to the other Party of each event of force
majeure under section 13.1 within seven days of such event commencing and upon
cessation of such event will furnish the other Party with written notice to that
effect together with particulars of the number of days by which the time for
performing the obligations of the Affected Party under this Agreement has been
extended by virtue of such event of force majeure and all preceding events of
force majeure.

     

    12.3 Should
Source pay any amounts toward settling a title dispute (which it may only do
with the consent of Thunder), such amounts will be deducted from and will reduce
the next payments due by Source to Thunder pursuant to sections 3.2, or if no
payment is then due the same will constitute “Expenditures”
hereunder.

     

    13. Confidential
Information

     

    13.1 The terms
of this Agreement and all information obtained in connection with the
performance of this Agreement will be the exclusive property of the Parties
hereto and except as provided in section 13.2, will not be disclosed to any
third party or the public without the prior written consent of the other Party,
which consent will not be unreasonably withheld.

     

    13.2 The
consent required by section 13.1 will not apply to a disclosure:

     

    
      	
              (a)  

            	
              to
      an Affiliate, consultant, contractor or subcontractor that has a bona fide need to be
      informed;

            

    

     

    
      	
              (b)  

            	
              to
      any third party to whom the disclosing Party contemplates a transfer of
      all or any part of its interest in this
  Agreement;

            

    

     

    
      	
              (c)  

            	
              to
      a governmental agency or to the public which such Party believes in good
      faith is required by pertinent laws or regulation or the rules of any
      applicable stock exchange; or

            

    

     

    
      	
              (d)  

            	
              to
      an investment dealer, broker, bank or similar financial institution, in
      confidence if required as part of a due diligence investigation by such
      financial institution in connection with a financing required by such
      Party or its shareholders or affiliates to meet, in part, its obligations
      under this Agreement.

            

    

     

     

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

     

     

    14. Default
and Termination

    

    14.1               Thunder
shall have the right to terminate this Agreement as a result of a breach of
section 3.2, subject to section 3.4, on prior written notice to Source (the
"Termination Notice"), if, within 60 days
after receipt of the Termination Notice, Source shall fail to incur the
requisite Expenditures set forth in section 3.2.

    

    14.2               Upon
termination of this Agreement the provisions of section 4.3 shall be operative,
and Source shall:

     

    
      	
               
      

            	
              (a)

            	
              deliver
      to Thunder all maps, reports, results of surveys and drilling and all
      other reports of information provided to Source by Thunder, as well as
      copies of any and all assay plans, diamond drill records, information,
      maps and other pertinent exploration reports produced by Thunder its
      Affiliates or its Agents regarding the Property;
  and

            

    

     

    
      	
               
      

            	
              (
      (c)

            	
              deliver
      a deed of quit claim or other appropriate instrument to Thunder in
      recordable form whereby Source will acknowledge and agree that it has no
      interest either legal or equitable in and to the
  Property.

            

    

     

    
      	
               
      

            	
              (

            

    

    

    15.           Area
Of Mutual Interest

    

    15.1           An
area of mutual interest shall exist for all lands within that area being within
seven kilometres of the outer boundaries of the Property.  If Thunder
acquires any mineral interests within the lands lying within the area of mutual
interest, or if it enters into any type of agreement by which such an interest
may be earned or otherwise acquired therein, then Thunder shall promptly notify
Source of such acquisition or such agreement, and upon Source reimbursing
Thunder for its staking, filing and other acquisition costs incurred, this
Agreement shall apply thereto, and such lands or interests within the area of
mutual interest shall form part of the Property.  Any mineral interest
acquired by Thunder in lands outside of the area of mutual interest shall not be
subject to the terms hereof, but may be the subject of that separate agreement
between the Parties whereby Thunder has agreed to grant to Source a right of
first refusal to acquire all mineral property interests acquired by Thunder
during the six years following the Effective Date.

     

    16.               Indemnities

     

    16.1               Thunder
covenants and agrees with Source (which covenant and agreement will survive the
execution, delivery and termination of this Agreement), both before as well as
after Closing, to indemnify and save harmless Source, its Agents and Affiliates
and their respective officers, directors, employees and representatives from and
against:

    

    
      	
               
      

            	
              (a)

            	
              any
      and all Environmental Liabilities which may arise as a result of
      Operations prior to the start of the Purchase Period;
  and

            

    

    

    
      	
              (b)  

            	
              any
      and all Losses which may be suffered by Source arising out of or in
      connection with or in any way referable to, whether directly or
      indirectly, the entry on, presence on, or activities on the Property by
      Thunder or its Agents on or before the Effective
  Date.

            

    

    

    16.2               Source
covenants and agrees with Thunder (which covenant and agreement will survive the
execution, delivery and termination of this Agreement) to indemnify and save
harmless Thunder, its Agents and Affiliates and their respective officers,
directors, employees and representatives from and against:

    

    
      	
               
      

            	
              (a)

            	
              any
      and all Environmental Liabilities which may arise as a result of
      Operations during the Purchase Period;
and

            

    

    

    
      	
               
      

            	
              (b)

            	
              any
      and all Losses which may be suffered by Thunder arising out of or in
      connection with or in any way referable to, whether directly or
      indirectly, the entry on, presence on, or activities on the Property by
      Source from and after the Effective Date and during the Purchase
      Period.

            

    

     

     

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    
 

    17.               Relationship
and Other Opportunities – General

    

    17.1               The
rights, privileges, duties, obligations and liabilities, as between the Parties
shall be separate and not joint or collective and nothing herein contained shall
be construed as creating a partnership, an association, agency or subject as
herein specifically provided, a trust of any kind or as imposing upon either of
the Parties any partnership duty, obligation or liability.  Neither
Party is liable for the acts, covenants and agreements of the other Party,
except as herein specifically provided.

    

    17.2               Each
of the Parties shall have the free and unrestricted right independently to
engage in and receive the full benefits of any and all business endeavours of
any sort whatsoever whether or not competitive with the endeavours contemplated
herein without consulting the other Party or inviting or allowing the other
Party to participate therein.  Neither Party shall be under any
fiduciary or other duty to the other Party which shall prevent it from engaging
in or enjoying the benefits of competing endeavours within the general scope of
endeavours contemplated by this Agreement.  The legal doctrine of
“corporate opportunity”
sometimes applied to persons engaged in a joint venture or having fiduciary
status shall not apply in the case of a Party.

     

    18.               Assignment
and Right of First Refusal

     

    18.1               This
Agreement and Source’s rights hereunder may be assigned, either in whole or in
part, by Source to an assignee provided that:

     

    
      	
              (a)  

            	
              Thunder
      gives its prior written consent to such assignment, which consent not to
      be unreasonably withheld by
Thunder;

            

    

     

    
      	
              (b)  

            	
              Source
      at the time of assignment is not in default of any of the obligations,
      warranties or representations given hereunder or to be performed by it
      pursuant to this Agreement;

            

    

     

    
      	
              (c)  

            	
              Source
      will not be relieved of any duty or obligation hereunder unless Source has
      assigned its entire interest in this Agreement;
  and

            

    

     

    
      	
              (d)  

            	
              each
      assignee prior to the effective date of the assignment agrees in writing
      with Thunder to be bound by the terms and conditions of this
      Agreement.

            

    

     

    Thunder
shall not be permitted to Transfer any of its rights hereunder or in the
Property except as provided in section 18.2 below.

     

    18.2           In
the event Thunder wishes to sell, assign or dispose of any entitlement or rights
hereunder, or any of its 50% interest in or to the Property, or any of its
rights in or to the Royalty, to any other party (a “Third Party”), then and in any
and each such event Thunder shall first offer to sell such interest to Source on
the same terms as offered to (or by) the Third Party.  Source shall
have a period of 45 days to determine if it will acquire such interest, and to
provide notice to Thunder of its intentions.  If Source elects to
acquire such interest, closing will occur on the same time frame (subject to the
additional 45 days noted above) and on the same terms and proposed with the
Third Party.

     

     

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    
 

    18.3           Should
Thunder sell to a Third Party, it will:

     

    
      	
              (a)

            	
              furnish
      to the Third Party a true copy of this
  Agreement;

            

    

     

    
      	
              (b)

            	
              obtain
      the Third Party’s written agreement in favour of Source that the Third
      Party shall be bound by the terms of this Agreement as if it were a party
      thereto in the place and stead of Thunder;
and

            

    

     

    
      	
              (c)

            	
              ensure
      that any agreement between the Third Party and Thunder contains provisions
      similar to those set forth in this section 9 of this Agreement, to be
      binding upon the Third Party and any successor or assign, and that such
      agreement is registered at the public registries in which it is required
      or customary to register mining agreements pertaining to
    land.

            

    

    

    19.               Governing
Law

    

    19.1               This
Agreement will be construed and in all respects governed by the laws of the
Province of Alberta and the federal laws of Canada applicable
therein.

    

    20.               Arbitration

     

    20.1               In
the event of any dispute between Thunder and Source with respect to this
Agreement or any matter governed by this Agreement which Thunder and Source are
unable to resolve, the matter shall be settled by arbitration as
follows:

     

    The Party
desiring arbitration shall nominate one arbitrator and shall notify the other
Party of such nomination and the other Party shall within 30 days after
receiving such notice nominate one arbitrator and the two arbitrators shall
select a third arbitrator to act jointly with them.  If the said
arbitrators are unable to agree upon the selection of such third arbitrator, the
third arbitrator shall be designated by a Justice of the Supreme Court of
British Columbia.  If the Party receiving the notice of nomination of
an arbitrator, does not nominate an arbitrator within 30 days of receiving such
notice, then the arbitrator nominated by the Party desiring arbitration may
proceed alone to determine the dispute.  Any decision reached pursuant
to this section 20 shall be final and binding upon the
Parties.  Insofar as they do not conflict with the provisions hereof,
the provisions of the Arbitration Act (Alberta) as
amended from time to time shall be applicable.

     

    21.               Notices

     

    21.1               All
notices, payments and other required communications and deliveries to the
Parties will be in writing and will be addressed to the Parties at the address
and fax number appearing on the first page of this Agreement or at such other
address as the Parties may specify from time to time.

     

    Notices
must be delivered, sent by telecopier or mailed by pre-paid post and addressed
to the Party to which notice is to be given.  If notice is sent by
telecopier or is delivered, it will be deemed to have been given and received at
the time of transmission or delivery, if transmitted or delivered during regular
business hours, or the next business day, if not transmitted or delivered during
normal business hours.  If notice is mailed, it will be deemed to have
been received ten business days following the date of the mailing of the
notice.  If there is an interruption in normal mail service due to
strike, labour unrest or other cause at or prior to the time a notice is mailed
the notice will be sent by telecopier or will be delivered.

     

     

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

     

    21.2               Either
Party may at any time and from time to time notify the other Party in writing of
a change of address and the new address to which a notice will be given
thereafter until further change.

     

    2.               Good
Faith

     

    22.1               Each
Party shall at all times during the currency of this Agreement and after the
termination of the Option, act in good faith with respect to the other Party and
shall do or cause to be done all things within their respective powers which may
be necessary or desirable to give full effect to the provisions
hereof.

     

    23.               Entire
Agreement

     

    23.1               This
Agreement constitutes the entire agreement between Thunder and Source and will
supersede and replace any other agreement or arrangement, whether oral or in
writing, previously existing between the parties with respect to the subject
matter of this Agreement.

     

    24.               Expenses

     

    24.1               Each
of the parties will bear their own respective costs and expenses incurred in
connection with this Agreement, and specifically Source will be responsible for
the costs of its due diligence.

    

    25.               Consent
or Waiver

     

    25.1               No
consent or waiver, express or implied, by either Party hereto in respect of any
breach or default by the other Party in the performance by such other Party of
its obligations under this Agreement will be deemed or construed to be a consent
to or a waiver or any other breach or default.

    

    26.               Further
Assurances

     

    26.1               The
Parties will promptly execute, or cause to be executed, all bills of sale,
transfers, documents, conveyances and other instruments of further assurance
which may be reasonably necessary or advisable to carry out fully the intent and
purpose of this Agreement or to record wherever appropriate the respective
interests from time to time of the Parties in and to the Property.

    

    27.               Severability

     

    27.1               If
any provision of this Agreement is or will become illegal, unenforceable or
invalid for any reason whatsoever, such illegal, unenforceable or invalid
provisions will be severable from the remainder of this Agreement and will not
affect the legality, enforceability or validity of the remaining provisions of
this Agreement.

    

    28.               Enurement

     

    28.1               This
Agreement will enure to the benefit of and be binding upon the Parties hereto
and their respective successors and permitted assigns.

    

    29.               Amendments

     

    29.1               This
Agreement may only be amended in writing with the mutual consent of both
Parties.

     

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

     

    30.               Time

     

    30.1               Time
will be the essence of this Agreement and will be calculated in accordance with
the Interpretation Act
(Alberta).

    

    31.               Counterparts

     

    31.1               This
Agreement may be executed in any number of counterparts and by facsimile
transmission with the same effect as if the Parties hereto had signed the same
document.  All counterparts will be construed together and constitute
one and the same agreement.

     

    IN WITNESS WHEREOF the Parties
have executed this Agreement the day and year first above written.

     

     

    THUNDER
BAY MINERALS INC.

    

     

    per: /s/James
Wheeler

                   James
Wheeler, President

     

    

     

    SOURCE
GOLD CORP.

    

    

    per:/s/Harry Bydgnes

          Harry
Bydgnes, Pres.

    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    

    SCHEDULE
“A”

     

     

    DESCRIPTION
OF THE PROPERTY

     

    (attached)

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SCHEDULE
“B”

     

     

                                                                                                                                              

     

    JOINT
VENTURE AGREEMENT

     

    

     

    (attached)

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SCHEDULE
“C”

     

     

    

     

    NET
SMELTER RETURN ROYALTY

     

    

     

    (attached)

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